It has been a beautiful late Spring / early Summer in Utah. Enough rain fell that we have stayed pretty green for Utah.

I set a goal at the beginning of 2019 to try to listen (when it was my choice) only to music released in 2018 or 2019. At the time I felt like I’d become complacent with music, listening to tried-and-true albums and artists. It’s easy to put on Jason Isbell’s “Southeastern” for the 127th listen in the last few years, rather than hazarding a mediocre album from someone I haven’t listened to before.

So I’ve held to the standard for the last 9 or so months, and have a few favorites.

Andrew Bird, “My Finest Work Yet”

“Sisyphus peered Into the mist / a stone’s throw from the precipice, paused…”

The instrumentation is fun. Lyrics are great. The strings are a nice touch. Whistling is also nice as a start to the album.

Bedouine, “Songs of a Killjoy”

“Dragged my finger around the rim / Drag around a phantom limb / when you’re gone”

This one has a wispy vibe that could really have been released in any subsequent decade after the 1960s. It’s a charming album.

“Schubert: Piano Sonatas Vol. 5” by Vladimir Feltsman

I really don’t have much intelligent to say about this album, but it has become a staple in my 2019 diet, particularly at work or more thoughtful moments.

“When I Get Home” by Solange

Okay so I don’t have much intelligent to say about this either, but I appreciate the jazzy quality to it, the complex chords and concept-like feel at times. It’s not an album that panders. It’s probably a stretch to say it’s a revelation to me, but fascinating to listen to someone charting a musical path distinct from her sister.

“Alternator EP” by Twain

Probably my favorite album I’ve listened to this year, “Alternator” comes across like it emerged from a dusty road fully formed sometime in the last 50 years, and was rusty and broken the moment it began to exist. It’s heartfelt, raw stuff.

This is Part 3 in the Business Development and Partnerships Series. Here is Part 1 and here is Part 2.

SaaS companies do their best to avoid a perception that there is lock-in with their product. “Use us,” they say, “and if you decide later that you don’t like it, cancel at any time!” Netflix recently sent an email to users letting them know about a price hike and including a cancellation link in the email. Gutsy.

As a consumer I’m a big fan of not being locked into a long contract to use a given product. Of course, there are practical lock-ins that happen by way of reliance on a product that you can’t easily replicate elsewhere, or due to your data being tied into the product and not easily transferable. These types of lock-ins matter a lot, of course, sometimes much more than some theoretical obligation to pay.

On the B2B sales side, particularly the small-business end, there is also a trend toward easy cancellation. In my little world of payments, most competitive SMB offerings have no lock-in period due in part to competition from tech-heavy entrants to the market as well as sales and onboarding models that keep cost of acquisition low. As software increasingly is the offering and can be marketed and distributed without “feet on the street” salespeople (such as for online commerce businesses), you can get pretty aggressive with the contract model.

And of course there is a lock-in of its own when someone goes to the trouble of integrating your product into their stack–even for simple code changes, there are downstream effects to one’s way of doing business (how a report looks, how a given workflow happens) that can be hard to replace.

With all that said, let’s consider the case of a business partnership. As businesses consider whether to work together outside of a direct sales model (e.g., Business 1 buying widgets from Business 2), there is sometimes pressure to adopt this devil-may-care attitude about whether the parties owe anything to each other. And in the case of a distribution partnership, the distributing business may want the partner providing the product to make it available without much commitment.

The distributor is a fan of this model because they gain an option for distributing something that they might not be certain will work. If it’s hugely successful, great–they’ll use the service. If it’s not, they won’t. No harm, no foul.

If the cost of bringing on a distribution partner is quite low, this can be fine. No cost (though watch out for opportunity cost) means it’s relatively painless to let someone test the waters on distributing your product.

Costs to facilitate distribution partnerships are sneaky, though. There are a bunch of places where costs can creep into a relationship:

• You want to assign an account manager to help answer questions and chart the course of the partnership
• The parties have to do a technical integration for customer onboarding and/or orders to happen
• Tweaks or major changes are needed to make the product fit into the distributor’s plan
• You have a compensation structure that means you’ll be paying a business development person when the deal closes (a topic that deserves more lengthy discussion)
• You will be jointly marketing or otherwise promoting the partnership

If you have a material amount of cost to make a partnership successful (this is a subjective analysis to be sure), you need some measure of confidence that it will be worth it. And your partner needs some measure of confidence that whatever commitment they are making will be reasonably met with the revenue or other objectives they are trying to achieve, and that they won’t be locked into something that is harmful to their business.

Confidence in the success of a partnership can come from a number of places. It can come from the fact that there is a strong technical integration that will be difficult or otherwise unpleasant to replicate with another partner, making it likely that you’ll benefit from their distribution.

The partner may be willing to commit to distribute your product exclusively for a period of time, though businesses are pretty skittish these days about exclusivity. And exclusivity is by no means the end of the analysis: your confidence also needs to be high that the partner has the ability and the desire to sell.

The term of the agreement, when coupled with a real commitment to sell or otherwise be in business together, also establishes a critical pillar of the deal. The value of an exclusivity right is a function of the amount of time during which that right persists. Beware the seemingly sweet deal that has a termination for convenience.

Another way to deal with cost/commitment issues is to offset costs with direct payment by the distributor. For example, an implementation cost might be paid by the distributor at the outset of the deal, making the ensuing sales period a bit lower-stakes. This method depends heavily on knowing where the costs really are and will be. This can be guesswork at times.

A softer form of commitment is through pricing tiers. Establishing pricing with the partner that improves as their sales volume increases creates incentives toward doing more business together. It also acts as a way to fend off competitors in proportion to the success of the partnership–in other words, as the partnership is more successful, the pricing hurdle gets more challenging for a competitor because the tiers are improving.

The downside to pricing tiers is that it can make the early distribution efforts more shaky–they aren’t as profitable to the distributor for a while, right when building momentum can be critical. And in some cases the end customer may want to lock in their pricing at a certain rate, making it difficult for the distributor to pick the right retail price given the fluctuating underlying cost.

Another soft commitment is for the distributor to agree to implement the product for sale–to train their salespeople, create marketing materials, and generally get out into market with your product. I am a big fan of this type of commitment because it is usually just reflecting back exactly what the partner has said they want to do, does not carry specific revenue obligations, and also creates practical momentum for the partnership that raises the odds of it being successful. Sometimes this is worth coupling with an ongoing commitment for sales training (or where there’s a technical integration, requirement to remain certified).

While this post is primarily from the perspective of someone doing a partnership on behalf of the company with the product/solution to be distributed, there are symmetrical concerns on the distributor side: what kind of pricing am I being offered? Who can I call when I have a problem? Will they help me get my sales team ready to sell? What are my opportunity costs for using this product versus another one? What happens if I get into the partnership and it’s not a good fit?

The most important discussions in a good partnership center on (a) what the parties are trying to accomplish in the partnership and (b) the mutual commitments they will make to raise the odds of success as defined. There’s no right answer, of course, but it’s helpful throughout negotiation to zoom out and ask, “Does the balance of commitments on both sides feel like a good deal for each party and create the right incentives throughout the partnership?” If the answer is no (which it often is, depending on the demands from each side at any given point), it’s worth continuing the negotiation to find a better place.

It is difficult not to be excited about the progress of the Utah tech scene over the last 10 years. There were some very early wins well before that (WordPerfect being the showcase), but to me, the real magic started when Adobe bought Omniture in 2009. Josh James did something really incredible.

Then Vivint sold to Blackstone in 2012. I hadn’t lived in Utah since 2006, when I went off to law school, so the news hit me like an asteroid–how could a bunch of security system dudes build something worth $2 billion?! I had held the flat-brimmed guys in low regard, honestly, but I was wrong in many ways. I had underestimated the power of directing that sales force toward higher goals than $30k over a summer between years of college.

Meanwhile, a rash of buildings had begun to appear in Lehi at Thanksgiving Point. Whenever I would visit I would involuntarily tell someone how I remembered as a kid when it was all farmland from 90th south in Salt Lake County to North Orem in Utah County.

I didn’t land back in Utah until 2014, but by the time I did, the tech scene was in full swing with Domo, Qualtrics, and Instructure leading the way. Pluralsight and others followed along with a host of would-be champs.

The name “Silicon Slopes” has become synonymous with the Utah tech scene. It’s hard to be bitter about that. The folks who have championed that name have done much, much more for Utah’s tech ecosystem than I ever will, I assume.

But the name does the area a disservice. It incorrectly puts Utah in comparison with Silicon Valley, the most productive tech ecosystem ever created. It makes Utah instantly feel derivative and glosses over the unique characteristics that have become so attractive to investors, customers, and workers in the last 10 years:

• A critical mass of business-to-business software tech and expertise
• A relentless sales culture
• A not-too-dense urban location sitting on the doorstep of world-class outdoor recreation and beauty
• A family-friendly place
• A reasonable cost of living
• A generally happy bunch of people (really)

It’s not Silicon Valley. No place is. Instead, it’s an awesome place, doing great, capable of exponential growth for a long time to come.

So what should we call the scene? If not “Silicon Slopes,” then what would capture it?

I have a modest suggestion: call it Utah. That’s it. We don’t have to be anybody but exactly who we are. Get rid of the artifice, the pretense, the wannabe cool. Just be who we are.

I operate with the general assumption that government institutions are, on balance, very good for society. Michael Lewis nicely captures this in his book The Fifth Risk.

Maintaining our institutions can be boring work, and candidates whose primary skill is improving existing institutions are at a distinct disadvantage to candidates whose primary message is more inflammatory. Overthrowing a broken system sounds slightly more fun than reforming a system in disrepair. Why not scrap this machine and trade it for something new?

These more outrageous candidates are often funded by wealthy donors with a variety of their own interests. Some believe that the government is the problem and that eliminating large swaths of it would be a good thing. Others believe that upheaval from weakened institutions will create openings to obtain and consolidate power.

In short, extremism fundraises pretty well these days, and in the post-Citizens United world where a single source of funding can provide unlimited support to a candidate, it is possible for an extreme candidate to turn their own single source of funds into an advantage in a race against a traditional (more boring) candidate.

Rather than throwing up our hands at the role of money in politics, it might be better to consider how funds might find their way into the hands of reasonable candidates who are lacking in star appeal.

Money from smaller donors is one antidote to single-donor largesse, though they gravitate to someone with that star appeal (Obama, Beto O’Rourke, Bernie Sanders, etc.)

Another approach, and the main point of this post, might be to fund an organization–what I’m loosely calling the Common Ground Initiative (something taken by several organizations of varying kinds)–that works to support reasonable, boring candidates against extreme candidates who crop up in various races.

The vision is that the Initiative would work a bit like an immune system, identifying and then counteracting extremist candidates of all kinds as they emerge in various areas throughout the United States. It would then deploy funds toward the more reasonable candidate. The process might look something like this:

• An extreme candidate enters a race and begins to make noise
• It becomes apparent that that extreme candidate has significant financial support (whether their own funds, money from a donor, or even grassroots support)–this is not a necessary step, but one that might indicate a risk of the extremist candidate succeeding
• The Initiative infuses the more reasonable candidate with funds and helps them counter media buys, campaign staff, and other trappings of a candidate

Over time, I believe that the mere presence of the Common Ground Initiative would have several important effects. First, it would reduce the expected value for a large donor to support an extremist candidate. Second, it would reduce the incentives for extremist candidates to be openly extremist. This would in turn reduce the opportunity for those candidates to win adherents to extremist ideologies. Third, it would become a place for people who have moderate, institution-friendly positions to donate money. And fourth, it would increase incentives for reasonable politicians to double-down on reasonableness.

So how does the Common Ground Initiative decide what is “extreme?”

One starting point for identifying extremism is the presence of a clear belief that major parts of the government or our existing system should be abolished–the Federal Reserve, the Department of Education, the military, or capitalism, to name a few. Mere criticism of the government’s performance or the desire for more or less regulation would not be considered “extreme.” The Initiative would also counteract anti-democratic extremism, such as voter suppression and partisan gerrymandering.

The Initiative will not take a stance on every individual issue, though undoubtedly there will be difficult decisions to make about what is extreme and what is not. And the Initiative will likely undertake an updating process in reaction to shifting viewpoints in the population.

Like any undertaking, there will no doubt be problems, but there is a chance to have a better hedge, a better immune system, against political extremism than there is today. Grassroots efforts will always play a role, of course, but an organization like the Common Ground Initiative might be a way to even the playing field for reasonable politicians who want to be good stewards of our institutions and who deserve our more active support.