Technology advisor upstarts are thriving despite a challenging sales environment.
A cohort of TAs entered the channel in the last five years, drawn by the opportunity to set up their own shop and reap the rewards.
The earning potential is tantalizing. Many of the new firms are starting their businesses with mid-market customers, Telarus CEO Adam Edwards told Channel Dive. It was previously common for TAs to start with SMBs.
“With much larger deal size comes much faster growth,” Edwards said.
There are, nonetheless, significant challenges for TA startups, as they start knocking on doors.
“My first year, I cried a lot,” said Minerva Tec Group CEO Anita Patel, who founded the TA firm in 2023. “It is tumultuous. I think it takes a certain person to know and understand that.”
The TA business model can be a blessing and a curse.
Agents earn their revenue through monthly commissions paid by vendors. Partners and investors prize recurring revenue, but it takes years to stack. Technology Advisor Alliance co-founder Ashley Rowland and other TAs liken the early days in the TA business to a walk through the desert.
“Everyone says to me, 'The third year is the big year. Third year in the TA world is the make-or-break,' and I'm like, 'OK, here we go,’” Patel said.
Lead generation
Developing a customer base is the first major hurdle TA entrepreneurs face.
Established agents expand their businesses by cross-selling to existing customers that want to add technologies. TAs with more than $5 million in annual revenue derive nearly 70% of new revenue from established customers.
TA startups lack the luxury of an existing base. Reaching out to potential new customers is more difficult than ever, according to TopSpin Tech President and Founder Aram Bolduc.
CIOs are inundated with product pitches from salespeople and aren’t picking up the phone. Large agencies are pouring funds into marketing to scale their lead generation and avoid relying on coldcalling.
“It's very difficult right now to start a business from scratch, create pipeline and sell deals if you don't have the right rolodex of contacts,” said Bolduc, who left a tech services distributor to found TopSpin in 2023.
Relationships pay off
Patel and Bolduc reported success using their social networks to increase their visibility. A small customer base can grow into a blossoming business.
Bolduc’s first chance to help an enterprise customer with an IoT project took four months to materialize.
It was a lucrative opportunity — the type of deal that can springboard a TA — but TopSpin’s rookie status was a liability. The company was a one-person shop trying to sell to a corporation, and Bolduc had barely put the finishing touches on its website. If the customer had Googled his company, they might have questioned its legitimacy, he said.
Bolduc opted to split the deal with a more established TA that specialized in the customer’s vertical. “Fifty percent of the deal is better than 0% of the deal,” he said.
TopSpin has been riding momentum of that initial deal ever since. Bolduc estimated that 95% of his current clients were referred by an existing client. At the beginning of each customer engagement, Bolduc regularly asks for referrals and receives up to four every week, he said.
It’s a virtuous cycle. It took Bolduc 23 months to compile his first $100,000 in monthly vendor billings. The second $100,000 landed in eight months.
Patel relied on a similarly tenacious networking operation to develop a customer base after moving to Florida from the U.K. She attended networking events in her region and handed out business card after business card.
Some of Minerva Tec Group’s first deals were in the senior living market. Patel doubled down on verticalization.
“I think you just need to go with your wins and know that you can't service everything,” she said.
Establishing the model
One of the biggest problems TAs face is explaining their business.
Advisors sell products and services from vendors, but they are not technically resellers. The vendor pays the advisor a commission as it would pay one of its own sellers. TAs, however, typically earn less on the front end in favor of monthly commissions that last for the lifetime of the customer. Vendors handle billing, implementation and support.
The description is hard to shorten to an elevator pitch.
Bolduc often compares his business to that of an insurance broker. Patel noted that some clients call her a vendor matchmaker.
“I feel like there still isn't an understanding of what a trusted advisor is or how we support and hold value to businesses,” Patel said.
TAs have certain advantages in the service provider sphere, NobleOne Consultants President Nabila Lulow said, noting that agents often provide consulting services for little or no cost.
“A lot of clients are tired of getting nickeled and dimed by the Deloittes, the Accentures, the PwCs,” Lulow said. “Using a technology broker or trusted advisor is really underunderrated.”
