Partnerships lessons from Stripe & Notion - Cristina Cordova on creating win-win deals

[00:00:00] There isn't really ever a holy grail deal that makes or breaks your company. And I don't think you would ever want that to be the case. Personally, I very much believe that as a BD person, I want to join a company that's probably going to be successful without me. It would be great if I made this company more successful, but the reality is that I want this company to be successful even without this function.

And so the other functions within an organization, whether it's sales or marketing or other things that can kind of make things happen, those functions need to be performing well. And if they're not, I don't think you can depend on BD to just be the only thing that makes your company. And that's true of every other function.

[00:00:51] Welcome to in depth, a new show that surfaces tactical advice, founders and startup leaders need to grow their teams. Their companies and themselves. I'm Brett Berson, a partner at first round, and we're a venture capital firm that helps startups like notion, roadblocks, Uber, and square tackle company building firsts through over 400 interviews on the review.

We've shared standout company, building advice, the kind that comes from those willing to skip the talking points and go deeper into not just what to do, but how to do it with our new podcast. In-depth you can listen into these deeper conversations every single week. Learn more and subscribe today@firstround.com.

Christina joined. Nosha a first round back company this year as their first head of platform and partnerships right on the heels of a seven year stint at Stripe, where she was the 28th employee and first partnerships hire. She built the team from scratch oversaw partnerships with companies like Shopify Squarespace and apple and led stripes, new corporate card effort.

Now in a role at notion, she's building out a team that focuses on their forthcoming API, third-party embedded content and integrations and the overall notion ecosystem. What I most appreciate about our conversation today is how Christina immediately gets down to the brass tacks of how to be successful in BD and partnerships.

It's role that doesn't always get as much attention as other functions like product or engineering. And while it can be critical to a startup's growth journey, there are also so many mistakes and pitfalls to be wary of. In today's episode. Christina shares her guide to being a startup's first partnership hire, including three critical areas to focus on first, she shares the mistakes she's learned from and common traps such as going after the biggest potential partner on your wishlist.

First. Or failing to codify your principles before pursuing deals from what to do when a partner tries to push you around and how to craft a win-win deal to the first steps you can take early on to smooth the path to success. She's full of actionable tactics. I particularly love how Christina shares the inside scoop on deals that had an unexpected outsized impact, as well as the ones that went sideways.

We dive into the team building side of things as well, such as how the BD org chart evolved at Stripe and how she's approached building out her team at notion, including what she looks for when hiring the interview questions she asks and the practical exercises she assigns. Of course today's conversation is a must listen to, for folks currently in or hoping to break into partnerships platform or BD roles, but Christina shares great tactics for getting better at negotiating, as well as some fascinating stories of how Stripe and notion scaled, meaning there's tons here for just about anyone.

I hope you enjoy the episode. And now Mike session with Christina. Well, thanks so much for joining us, Christina, glad to be here. One of the sort of ideas with this podcast is to give folks that are listening sort of a front row seat in conversations that happen in Silicon valley, sort of coaching conversations.

And one of the things we were talking about is you often have people reach out as the, in their role. They're the first partnerships person, and they're trying to get a download from you on what to do traps and pitfalls to try to avoid. And so thought maybe that would be a great place to start sort of when you think about all those conversations or zooms or long ago, when you met people for coffee in person, what's the stuff that you kind of have found yourself saying over and over again, in those conversations when somebody sort of joining in that first partnership, 

[00:04:46] I would say first is that with a lot of these new companies, you haven't necessarily found product market fit yet.

And so in a lot of ways, partnerships comes on board. You have a pretty small team with few resources to be able to do what you're looking to do. And maybe you have some initial ideas for what partnerships would be effective for your organization, but maybe you haven't really tried those out. You don't know if they're going to be successful and you don't really know if those are the right ones.

So very often I would say the person who starts in BD at an organization is often a generalist. Maybe they started in one function. Marketing or sales, and it was clear that there was an opportunity for BD and then they moved into that function or they were hired straight into it. And I think the biggest challenge is really kind of testing and iterating on what is going to work for a given organization.

So early on, you might talk to the first few potential partners, but they don't really know your company very well. And startups often, they've never heard of you before have some hesitancy in building a relationship with you. And there, I would say my biggest advice was very much kind of thinking about how you could start with probably not the most important partners that you could potentially work with, but maybe let's say third, fourth or fifth, kind of down on the list of potential partners and really kind of building a case with those folks before you go to your most prominent potential partner in a given space.

And that way you could really learn exactly what the objections might be from a big partner and figure out what the right path forward would be. If you were a pitch that big company, five, six months from now. And I thought that was very helpful for me generally, because with a lot of people in these kinds of new functions at a new company, you don't know the space very well.

You don't necessarily know what you're doing. And I think being able to kind of read the people who you are pitching to in those very early days, and then just try and figure out well, what's working. What were the parts of this that they liked, that they didn't like? And how can you kind of iterate on that before you get to the next person, both within that organization and then kind of moving on to bigger and bigger partners.

So that was very big for me. And I think you can take it down to the smallest task. So. When I joined my first startup, I was just out of undergrad. I knew no one, I didn't have any of the connections I do today. And as a result, I had to cold email people. So I was cold emailing publishers in New York, primarily cold emailing, the likes of like Samsung and Amazon and at and T and all of these companies and trying to find who is the right person who would talk to me.

And in those cases, I would try one email to one person. And that was just me, just trying to hack around what their email address was. Now there are tools for this, which is nice, but in those days there weren't, and then just figuring out what were the things that people responded to. So looking at the emails where people didn't respond to me, looking at the emails where people did and just kind of doing your own internal AB test, what was the.

32nd elevator pitch within an email that worked and what didn't work. And then moving on to doing that in every single aspect of the deals that you do, where, what are the tactics to the first pitch meeting that work really well? What are the tactics to the deal negotiation that tend to work? Those are the kinds of things that I would say were really critical for me early on.

And then second, I would say two typically, I mean, often you're doing partnerships as a smaller organization and you want to partner with larger organizations and I would say. A lot of my advice in those situations are that the other organization is going to try and extract as much value as possible from you and your organization, and think that they can kind of push you around because they're bigger.

And in those scenarios, I had partners that I was working with in other countries that would call me in the middle of the night. And I have to like wake up at three in the morning and take these calls, these kinds of things, or a partner that would try to insert like a very onerous deal term that would really make you kind of question the entire partnership.

And in general, I would say you want to push for a partnership that feels very much like a win-win for both parties. And that's not because it's just going to be easier for you to give away things, but. Also because you want to feel like if this is successful, both parties are in it together and happy with the general outcome and not just happy because they extracted more value than the other party.

And finding partners that are amenable to that I think is going to be very critical to doing good deals. There are definitely deals I've done in my history where I didn't think we were particularly aligned. And I felt that a company wanted to kind of extract a lot of value and you put a lot of work into those negotiations.

And then it turns out that you're six months into the deal being live. And there's. Too much value that you're giving away and you're not happy with it. And you terminate that deal or try to end it or renegotiate it. And it's a huge mess. And so when you're really early on, I would say I was later on at Stripe when some of those deals happened.

But I think early on, I would look at partnership opportunities where you feel like you're still getting a lot of value and not feeling like the goal isn't to just release a press release that says your company and this big company are working together. It really does have to work at the end of the day.

And it's not just about the headline of the partnership. So I would say, be weary of some of those larger companies that may want to push you around and try to find a way to work together, where there can be kind of mutual value that both companies are extracting from the relationship. And that way you can have these relationships that last.

Seven nine, 10 years. And aren't these kind of quick partnerships that feel good in the moment, but then die a year or two later. And then I would say last but not least would be trying to figure out how you can as a person doing partnerships, start out by doing some kind of first unkind deals. So these are partnerships that your company has never done before.

There's no kind of existing agreement. There's nothing off the shelf that already exists for what you kind of want to do with this organization. And then when it's clear that you want to start working with other partners, continuing to find ways to make this repeatable and scalable, even if that means the partnerships no longer belong in your team.

So, as an example at Stripe, we did a number of different distribution partnerships, where we would partner with a company like Shopify and have them. Automatically include Stripe as a payment offering for all of their merchants. And after a while, we went just down the list of every e-commerce platform, every invoicing platform, and just kind of category by category, knocking them all down.

And after a while, the deals became pretty repeatable where we had the kind of like template contract. The pitch was pretty stellar and straightforward and easy to replicate. And it made sense to say, well, this isn't really BD work anymore. This is actually now something that is a little bit more akin to sales, where you are selling something that's off the shelf.

And so we had to figure out, well, if we're going to be a team that does kind of highly strategic first and kind deals, then this doesn't really fit into that category anymore. And even if it was something that produced billions of dollars in payments processing revenue for Stripe. It made sense to move it to a team that was more scaled and did more repeatable deals.

And so I think the other thing that I would think about is as you start doing deals and things become kind of different than they were at the beginning and require maybe a different skillset, find a home in your organization for that work. I think generally BD teams should be small. You shouldn't necessarily have hundreds of people doing BD.

I've never seen that in an organization. And if you do see it, it's typically that they're like not actually doing BD. So that would be kind of what I would look at in an organization for the most part. When I see the ability to scale a particular set of deals, that's a really good sign and you shouldn't be afraid of giving away your Legos in a sense to kind of grow that effort within an organization.

So those would be my kind of three areas that I would focus on as an early person doing BD within an organization. 

[00:14:21] So building on that, I think a lot of small teams when they start trying to do partnerships, think that one of these deals is going to be some sort of holy grail that, oh, it's gonna unlock distribution or transform the company.

And often to your point, they go after companies that are never going to do a deal with a 15 or 20 or 25 person company, or if they are to get it implemented and actually working is just phenomenally challenging. And so to your point about maybe starting with smaller deals and then working up, are there other approaches to.

Sort of sanity check or to increase the odds that deals actually drive tangible business value. 

[00:15:05] I would say in a lot of ways early on, it really helps to set a good framework for how you're going to do these deals. And I think a key component of that framework is really setting out what your principles are.

So what are the things that you really care about as an organization? What are the things that you're not going to give on? So for example, with our distribution deals at Stripe, we tended to not do anything related to exclusivity. So if Shopify wanted to work with us, great, if Squarespace wanted to work with us to awesome, we were never going to sign anything related to just working with one single company.

And that was because we viewed ourselves from a principal's perspective as an open platform that wanted to support all types of commerce. And I think if you are a BD person within an organization you're coming in fresh, I think it's good. Before you start engaging with any partners to take a step back and really figure out what your principles are within an organization, so that you can go into these negotiations and say, it's great that you want exclusivity, but that doesn't really align with what our principles are as an organization.

And that's not something I'm going to be able to get done for you. And it's much easier to do that from a place of having principals versus having. Very strict. Yes. I can give this away. No, I cannot because you don't know what you're willing to give away right. At the beginning, but having a good sense of what are these things that we think might lie in one category of yes, we can do that versus no, we can't.

I think is really something that you should do early on and making sure that your leadership team isn't supportive, that, that your product and engineering team are in support of that because often you're going to be negotiating their time and their ability to kind of make things happen for you. And then at the same time, I would say in working with these larger organizations, I think you're right there.

Isn't really ever a holy grail deal that makes or breaks your company. And I don't think you would ever want that to be the case. Personally. I very much believe that as a BD person, I want to join a company that's probably going to be successful without me. It would be great if I made this company more successful, but the reality is that I want this company to be successful even without this function.

Sales can only do so much when you have a bad product, et cetera. So when I think about partnerships that work really well, often a lot of the, what seemed like a small partnership at the time, but those partnerships tend to grow with your company. So, as an example, I've mentioned this a few times before and mostly because it's a public company.

So a lot of the data is public, but Shopify has started out as a company that was roughly the same size of Stripe. When we were doing our first partnership together. And so they didn't necessarily seem like this big company that was going to do amazing things, but I think one of the reasons why we invested in them and when they asked us to do things that were maybe not standard or not something that we had done yet, I think you could really tell from their motivations that what they cared about was really building a best in class experience for their customers.

And we were in the way of that. So we needed to change and we needed to move. And as a result, I think all of those decisions made sense at the time to kind of push the relationship forward. And then Shopify became a really kind of breakout company. But it took a long time for that to happen. And I think what we saw on the Stripe side was that just as Stripe was growing up into the right Shopify was growing up into the right.

So it wasn't a company that made or broke Stripe at the time. It was a company that very much added a lot of value, but we were on a trajectory that was already going in a particular direction and Shopify added to that. And so I think in a lot of ways you can find companies that you can take a bet on from a partnerships perspective that actually add a lot of value to your company over time.

But to your point, they're not necessarily going to be these, make it or break it type of deals and nor should they be. Are 

[00:19:52] there other examples of those types of deals that you've done? That seemed interesting at the time, but it was not some make or break deal that ended up having a disproportionate 

I would say the other partnerships. We tended to work on that we decided to invest in, but we didn't exactly know what we were going to get from it. A good example of this would be our partnership with apple pay at Stripe. So very early on apple had decided to kind of launch apple pay, but they kind of only let in some kind of payments industry kind of long-standing organizations into that process.

So the visas and the MasterCards and those kinds of folks were in on it, but they came to us kind of last minute and said, Hey, we know you work with a lot of mobile first companies. Maybe we should talk to you about this. And we kind of had to stop everything and say, okay, we're going to put two engineers on this.

And we're going to build an integration that just kind of works off the shelf for every single user on Stripe. And that seemed like in a lot of ways. Okay. We're going to work with a big company and this big company is going to potentially let us in early on some new technology and that could potentially push us forward and make us be seen as a market leader in mobile commerce.

But at the same time, we actually had to work with a bunch of small companies to make that happen. So at the time it was kind of like we're going to make apple pay available, but we need businesses to actually activate it and potentially do their integrations earlier. And so this was kind of in classic apple mode.

It was like you would have all of these companies that use Stripe kind of come into the office and they would be locked in a room with no windows and a phone that was chained to a desk and they would program their integrations in that room, test it out on the device. And then hopefully when they actually shipped.

That integration, it would work. And I think that was a really cool experience, actually less so because of apple, because very much a big company that was kind of gonna go in a particular direction regardless of what we thought. But more so because of the startups that we got to work with that in a lot of cases were smaller than Stripe at the time.

So this was working with Instacart and Postmates and a bunch of these companies that were relatively new, maybe like a year or two old at that time. And just betting on the companies that we thought were interesting and could really get value from this experience. And it turned out that it ended up being over.

I think 50% of the apps that were apple pay enabled on day. One of the apple pay launch were actually powered by Stripe. So the fact that these kinds of small businesses at the time were able to just. Completely build these integrations in these tiny rooms and stripes office and be ready so quickly was such a surprise and delight for apple, which was great.

But then more importantly, those companies ended up building really strong product experiences and are very much doing well today. And as a result, I think those companies said, well, why not stay on Stripe? Where I'm going to use a partner. That's going to have access to some of this innovative technology very early on, rather than working with someone else.

And I think that ended up working out really well for us. What 

[00:23:29] about deals or partnerships in the other direction across some of the companies that you worked, where you thought it was going to be really impactful and then ended up sort of not delivering in a way that you thought, are there any patterns or stories that come to mind?

[00:23:42] The biggest one was certainly later in my time at Stripe. And there are actually two that come to mind. One is an example of a very large public company in kind of the FinTech space. And we were thinking of about doing a distribution partnership with them to access a large number of small businesses that could process payments on Stripe.

And I think the biggest sign there was actually a lack of cultural similarity. So as an example, when we would do meetings together, it would be me one engineer on our product team and maybe one other person on the partnerships organization in a room. And then they would come with a bus of people, 20 people into this room, and it was unclear.

Who's the decision maker who's doing? What, why do they need this many people in a room to do a deal like this? And that was a really early sign that. We probably should have paid attention to that. This company just operates very differently from us and it was going to be hard to actually get stuff done.

And it proved to be true throughout the negotiation process. You would negotiate with one person and then like another person would say, actually, no, I know we already agreed to that, but we can't do it anymore. And it just became this long protracted negotiation. And I think we gave up a lot just to release the deal and get the deal done.

And nine months later we ended up winding the deal down because it was so in favor of the other partner that it just didn't make sense for us financially. And I think the good part of that is that they agreed. It was pretty obvious that it wasn't kind of a good deal for us. And as a result, we weren't motivated to do other things that they wanted to do.

Why invest more efforts and the kind of like throw more good money after bad. Into a particular partnership that just clearly was one-sided and not really working. And I think you can tell when that's happening in a negotiation, when it just feels like you're kind of giving more and more away, and it just feels like in a lot of cases, you don't want to give up on that deal because you've already spent so much time on it.

You've spent so much time pitching and getting them to buy in and you've spent so much time on the negotiation. And I really do think you should be willing to walk away. And I think a good example of when we did walk away was just kind of like another, again, large public company that wanted to do a deal with us.

And there was a competitor of ours that was actually willing to do that deal and give away a lot more financially than we were willing to give up. And I think it went back to the principles at the end of the day that we were not going to sign a deal that was unprofitable for us. I'll give you a good example of where other companies have decided maybe that they want to take a different approach.

So square, for example, had in the past, signed a deal with Starbucks to process all of the transactions within Starbucks, retail locations. And in that deal, they were basically kind of giving away their product at cost. So they weren't making any money on it. And then when you factor in the time of the BD people and the legal people and everyone else who had to make this deal happen, you're losing money on that deal.

And that's the price you pay to be able to get the Starbucks logo on your website and kind of make that deal happen. And I think in working with some of those larger customers or partners and stripes time of kind of similar stature and brand. We very much took a step back and said, do we need more logos?

Is that really something we need at this stage are more people going to use Stripe because we have that partner logo or customer logo, or put out this press release and really realizing at that point that that is pretty unnecessary. We have a pretty strong brand without it. And. We don't need to give a lot away in order to be able to get something like this done.

So in that scenario, once we realized the deal was going in a certain direction where you just have to give up a lot in order to kind of win it, we said, actually, this probably isn't a good fit for us. And we pulled out and our competitor is now paying a lot for that deal. And I think that was ultimately the right decision.

We realized that it was going to be a lot of investment in terms of engineering and product, and that we weren't going to get much back in terms of revenue because of the brand of this particular business. So I think in those situations, you always have to figure out before you ever started deal. What are the things you're really willing to give away?

And for us, I think even if it's at a slim margin, we have to do deals that are profitable. And even if you're a company that maybe wants to take a bet and say, let's do a deal that is break, even figure out what are the three customers or the three partners where you'll do that kind of deal, put their names down on paper and say, only for these partners, will we do a deal that is a little more on their side than on our side.

And that way, if someone comes along and wants that and is not on that list, you can say, well, sorry, we don't do that. And you can agree as an organization that that's not something you do, unless it's. Very much this kind of like top tier partner or customer. 

[00:29:20] You mentioned this a couple of times, the idea of starting with sort of deal principles.

And one of the examples you gave was how do we think about exclusivity? What are other things that either you've put in to ideal principal doc or that others might consider putting 

[00:29:36] in there? Number one would be, what is the kind of ecosystem you're looking to build around what you do? So some of this can be revenue related.

Like I mentioned, we'll never take a deal. That's a new margin deal for us. And some of it can be related to what the partner is doing to your ecosystem. So as you think about building a partner ecosystem for the first time, in a lot of cases, you want to think about all the things that can go wrong.

Ultimately. So for example, a lot of companies that have put out API APIs for the first time, Release a lot of functionality all upfront. And then they kind of see what developers do with their API APIs. And then when developers start doing things that they don't like, they start cutting off access to those developers or just pulling those features from the API altogether.

Thankfully I've never had to work for an organization that had to do that because I really think it just reduces the confidence that developers have in your ecosystem. And instead, I believe that you should take a step back and say, well, to your point, what are the principles that you have? So maybe a principle in that scenario is we want every partner to be giving value to the ecosystem.

And that could be giving value to us as a company, as an organization or giving value to my customers, which then gives value back to me because they're happier with my experience, but they can't only be extracting value. So a good example of this. I think at some point Twitter didn't have like a mobile app.

And so there were a bunch of developers who built mobile apps off of Twitter's API APIs. And then eventually Twitter was just like, Hey, we have our own mobile app now. So we're going to say that no developers can build copycats of an app that we already have because they're just extracting value our users aren't in our experience anymore.

They're in someone else's experience. And so what values do you have there, maybe the value is that you want your customers to be in your own product experience at the end of the day. So for a lot of companies, the principal, there would be the customer must be in our experience and not necessarily in a white labeled experience.

So we're not going to sell our data for example, and give it away to somebody else who can then put it into another experience. We can only really sell the full end to end product experience. So thinking about what are all the crazy things that someone might ask you for, and then trying to put that example into some principles, whether it's about value extraction within your ecosystem and where the value has to sit, whether it's about.

Things like privacy or security. I think that's a big thing that tends to come up. So there are a lot of partnerships that die once you get to the legal teams, trying to decide who owns the data. I think the really great thing for Stripe was that because we had very sensitive data, a lot of people didn't want to own it.

And in other companies that's not necessarily the case. So figuring out is this data that you want to share is this data that you want to own, that someone else can borrow if they're working with you, et cetera, I think is a very kind of key thing to think about. And then just think about all the kind of nefarious things that people might want to do if they abused your platform or your service in certain ways.

Or tried to create a competitive service with your functionality at some point, I think those are all things that you have to think through at some point. And it's certainly good if you think through those things much earlier than thinking through them in the middle of a deal process, because if you're thinking about it in the middle of a deal process, in a lot of ways, you're just so motivated to get the deal done.

You're just so motivated to sign it, that you're going to give things away because you didn't kind of set those principles down in stone in advance. 

[00:33:48] So going back to your comment, you made a little while ago about tactics in the first conversation you have with a potential partner. I'm curious, we could spend a little bit of time there and either if you're doing some icy deal-making today, or you can think back in the past, when you think about your process for preparing for a first meeting with a potential partner, And then how you want to design or use the time with someone.

Can you share what you've learned about that, or what's worked for you? 

[00:34:20] I would say earlier in my career, I had a tendency to, if someone wanted to meet with me, I would meet with them and not really think too hard in advance about all the ways in which we could work together, which was very much a mistake because you're walking into situations where you're not able to necessarily make progress, or you might have to say like, oh, I have to go back in.

Think about that a little bit. Whereas you should have done probably the work going into it to really understand what a partner might want. So I would say really investing in that upfront, even if it's just a first kind of get to know you meeting what. Is this partner, what do they do? Who are their customers?

Do we have any shared customers? Do they have partners today? Do they have an app marketplace, some kind of ecosystem that exists around their product? And did they have particular ideas as to how we would work together or did they just kind of want to meet? I also get a lot of folks who just kind of want to maybe do a little information slew thing and just try to understand what is my company doing?

What are they up to, but they don't actually want to do a partnership. So I would say try to be weary of those situations as well, and try to be firm about what are the things that this company wants and how can we very much discuss that explicitly, especially meeting with larger companies early on.

I've found that when you tend to work for a startup and this very large company wants to meet with you, and doesn't really give a lot of explanation as to why, and then asks you to share all of your company secrets with them, definitely something you don't want to do. They might be thinking about acquiring you, or just trying to duplicate the technology within your service and their service.

Today's episode is with Cristina Cordova, who spent 7 years at Stripe (as the 28th employee and first partnerships hire), and is now the Head of Platform & Partnerships at Notion. Cristina is full of actionable tactics on crafting win-win deals and building out this oft-overlooked org. She helpfully shares the inside scoop on deals that had an unexpected outsized impact - as well as the ones that went sideways.