On the softer side of marketing, it’s grade school all over again and you want your company to run with the cool kids. Ecosystem matters now more than ever, and the right partnerships can really elevate your company and your brand through positive associations. Try to align yourself with the best-of-breed leader in each of the adjacent segments to you and partner with them, host hackathons together, use each others’ products, and cross promote as much as possible. However, don’t overthink the relationships and try to force channel deals too early in the life of your company. Informal co-selling and referral deals are much less effort and typically result in equal effective- ness in the early stages. Therefore, it is still the case that most cloud businesses have to be comfortable with the fact that they will live or die by their ability to sell directly. #8 The most important part of Software-as-a-Service isn’t “Software” it’s “Service” The only acceptable reason to lose a customer is death (bankruptcy) or marriage (acquisition). Every cloud com- pany is in the service business, and therefore your customer service can be the difference between failure (churn) and huge success via high retention and upsells. Reliable delivery of your core ser- vice is a necessary but not sufficient condition for delighted customers. How your handle yourself in challenging or unique situations will truly define how they view you as a partner and a vendor. On the positive side, when they experience a massive business spike are you able to handle it flawlessly and without interruption or hiccups? When your customers launch new products or enjoy huge spikes in demand, are you able to stay at least one step ahead of them at all points? Unfortunately, there are also disaster scenarios to watch out for, such as system bottlenecks that weren’t properly load tested. There are painful examples where a customer received national TV coverage and experienced a flood of Todd Davis customer interest, only to have one key component of the customer facing system col- CEO, LifeLock lapse under the load. Even business processes can break down, as we have seen with (NYSE:LOCK) fatal examples of cloud companies actually intentionally capping the usage of their customers during these periods of hyper growth for fear of fraud, payables exposure, “Our business is all about or system abuse. Simple communication can usually quickly solve these problems, but trust and protecting your account management and support processes without proper escalation protocols can personal identity. We often amplify these breakdowns, and result in immediate account churn and vocal ex- proactively monitor our member’s identities. If you customer detractors in the market. are a LifeLock member and your identity is ever stolen, There are also service events that are significant negative events for you and your we are there to help and customers, but can be turned into positives if handled correctly. Outages are the most provide the support you need for your recovery.” notable, but bumpy product upgrades, faulty product configurations, and weak Bessemer Venture Partners 19