Stop me if you’ve heard this one before.
A third party solutions provider has successfully deployed their merchant product with POS partners. They see the rise in cloud POS and look to expand their footprint by partnering with new cloud POS companies (AKA independent software vendors, or ISVs).
Cloud ISVs tell them they will work together only when they overlap on a customer.
Cloud ISVs will not share a customer list.
Cloud ISVs will not share a reseller list (if they even have one).
Cloud ISVs will gladly charge the third party a hefty fee for app store participation, even though they know no customer has ever self-discovered sh*t on their app stores.
There are 27.9 million businesses in the US.
3.8 million identify as “retailers” which includes 1 million “restaurants”.
A leading cloud POS ISV might have 10,000 installs. Half are almost guaranteed to be international since the US POS market is so competitive, but we’ll ignore that for a second.
The odds of a third party happening to “find” and then sell a merchant using a specific cloud POS is 10,000 out of 3.8M, or 0.25%.
You have TWICE THE CHANCE OF DYING IN A CAR CRASH THAN STUMBLING INTO A MERCHANT ON A PARTICULAR CLOUD POS.
If we consider that most cloud ISVs do not have nearly 10,000 installs, and many of the ones they do have are international, you’re more realistically at a 0.00625% chance of finding a merchant with said POS.
So why the hell would any third party even waste their time with cloud ISVs that think this way?
For legacy POS companies, third party provider assessments was one of the greatest value adds of their dealer channel. While most legacy ISVs wouldn’t share lists of their dealers for unreasonable concern that a competitor would “steal their dealer”, a third party need only Google XYZ POS in a major metro area to find the relevant dealer.
In this way, the good POS dealers (few in number, but they exist) were doing all the entrepreneurial work of shepherding the future of the POS industry. They were fielding calls from potential partners. They were running lean trials with forward-thinking customers. They were iterating with the solution provider and lending critical feedback for changes. If all were successful, the dealer would share the product with other dealers in their network, or even their ISV (though most legacy ISVs couldn’t be bothered).
You can say what you want about POS dealers, but the active few are justifiably responsible for nearly all of the innovation the industry has seen.
That’s about as American as apple pie.
Maybe that’s why the newer cloud ISVs have such a lopsided (and patently unrealistic) model for approaching third party partnerships today – they haven’t figured out a way to tap into the know-how of the good POS dealers.
Cloud ISVs: continue down this path at your own risk…