"We were both fresh graduates with a technology background," he says of himself and his co-founder. "We had little knowledge of the sales process and few industry contacts. We felt that attempting sales would not be the most effective use of our time to start with, and wanted to engage a partner who could bring in customers quickly."



Innove found its sales partner in a consultant whom Mr Jayaraman had met in a local entrepreneurship event. The consultant had the right level of sales expertise, focused on suitable target customers and segments, and employed a similar selling style. The partner also provided the company with infrastructure and office space in its first year.

The sales partner brought to Innove ready access to customers at a very early stage in the new venture's life, in return for technology expertise and attractive billing rates. But after a few months and a few customers, Mr Jayaraman realised that Innove's and the sales partner's priorities did not match very well: the partner wanted quick deals while Innove preferred to build long-term client relationships.

The constraints: At that stage of development, this difference was not a significant concern for Innove. But within a year, it was suffering from the constraints imposed by a middleman: longer cycle time in projects and loss of control over managing clients' expectations and decoding their requirements. "If we were serving the same client directly," he observes, "we would have delivered different things at different prices."

By recognising the limitations of the partnership and learning from the partner, Innove's sales skills and industry knowledge have improved greatly over the past two years. Innove now has other revenue sources, and its reliance on its sales partner has been drastically reduced.

Having gained a firm foothold in the market, Mr Jayaraman can now end this relationship if the partner's returns continue to dwindle.

Though Innove's critical external relationship was not as smooth as he hoped initially, Mr Jayaraman considers a sales partnership a worthwhile strategy for a new venture. "It is a great way to kick-start a business," he says.

In his opinion, it is better for new ventures to find a sales partner than an investor; investors just bring in money, but sales partners provide direct access to the market and knowledge of what clients want. This insight is invaluable in developing better products that are more likely to sell well.

But Mr Jayaraman warns that new ventures should not depend on sales partnerships alone for their bread and butter. Entrepreneurs, he believes, must learn along the way and develop their sales, as well as product or service expertise, to ensure that the end of their external relationship does not spell the end of the venture.