Almost all startups that early on try to rely on a partnership go-to-market motion don't end up working, but Guideline was an exception to this rule. Partnerships didn't just accelerate Guideline's growth—they fundamentally changed the entire trajectory of the company. "The Gusto integration was the biggest unlock for us," Kevin B. reveals about partnering with payroll providers. The insight came after failed attempts at direct sales: "We brought in a few sales folks... I was like, you guys sell 10 plans this year, I will take you to Mexico. We didn't sell 10 plans. Nobody went to Mexico." The epiphany? Payroll companies had a hidden problem Guideline could solve: "Payroll in the United States is incredibly fragmented... They have high churn, 25-35% on the higher end of their annual logo churn." Kevin's breakthrough insight: "When you attach a 401(k) or an integrated 401(k) solution to the payroll product, it cuts it in half, right? So their LTV doubles, which is fantastic for them." This created a perfectly aligned partnership where Guideline paid payroll companies for API access, making it "a hundred percent margin business for them." The results speak for themselves. Guideline now has almost 60,000 small business customers and 15 billion dollars invested in retirement. If you're interested in learning all the subtle moves Guideline made to reach product-market fit, check out my full conversation with Kevin Busque linked in the comments.
definitely rare to have a partnership work - usually the partner is bigger, such that they are really plotting to build their own and using you as R&D, or they just do not actually end up having enough incentive to drive it since it is not core. I'd be curious to read the insider story from Gusto side to understand why it worked for them; and understand what is replicable as a takeaway here.
Alation used this strategy, and it got quite a bit of market share. When it works, it works.
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Partner at First Round
3dInside Guideline's mission to modernize 401(k)s: https://review.firstround.com/podcast/inside-guidelines-mission-to-modernize-401-k-s-building-from-first-principles-finding-strategic-edges-and-rewiring-retirement-kevin-busque-co-founder-and-ceo/