Last year, the doctor ran a 5-part series on 12 best-practices for success, in an effort to let you know, in a very polite way, things you needed to do for your business to grow and be successful.

This was based on his experience as an analyst who has been consistently researching, engaging, covering, and providing due diligence on vendors for the past 18 years (having covered over 350 publicly on Sourcing Innovation and Spend Matters and researched and/or engaged with over 500 on/in projects).

However, one thing that has become clear to him over the past year is that many founders did not read this, or if they did, missed one or more of the key points. So, as per our introduction yesterday in Mayday! M’aidez!, he’s going to be a lot more direct and instead focus on the same old, same old mistakes he’s been seeing for 18 years as an analyst and over 20 years as an independent consultant. This is because if some of you don’t stop making these mistakes, and, more importantly, another founder tries to enter this very crowded space (don’t believe me? check out the SI Source-to-Pay+ Mega-Map with 666 clickable logos) making these same old, same old mistakes, the company is never going to grow and reach its potential, and this is a shame considering there are some really great solutions that should be market names but are not (and will not be) because one or more of these mistakes are preventing these companies from growing. the doctor wants your well intentioned innovative start-up to grow. Think about it. Why else would he cover 50 to 75 vendors a year FOR FREE? It’s because he wants to educate potential buyers on the value of these new solutions and ensure the message gets out there.

So please, please, please read this series carefully, admit the mistakes you are making (if only to yourself), and stop making them.

1. Assume that because you were a CPO, you don’t have to do your market research.

the doctor has talked to too many founders / CXOs who believe they know almost everything important with respect to what their product needs to do, how, and why and don’t need to do any market research or engage with any expert analyst or consultant because they did the job at 1 to 3 companies for X to Y years and know what those companies needed to do and, also, what the products they used were missing. Nothing could be further from the truth.

Yes, you know intimately what the companies you worked for needed, but do you know why Coupa brags about their millions of configuration options? It’s because every single company does things a bit differently. There are also more variations between what a company classifies as “indirect”, “direct”, “services”, and “[complex] project” spend, as well as even more variations by category and even Procurement size than you think. the doctor the guarantees you don’t know everything.

Futhermore, as the doctor recently stated in a LinkedIn comment, just because the two or three big name companies you looked at didn’t solve your problem, that doesn’t mean one of the other 20 to 200 companies already out there delivering solutions don’t. Over the past five years, the doctor has heard statements like:

• we started our AP/Payment company because bill.com didn’t solve our problems
• we decided to build a new supplier management solution because supplier on-boarding sucked in all the solutions we used
• etc.

And while

• bill.com and other, simple, payment platforms don’t do detailed I2P/AP, there are over 100 platforms that do
• first generation suite providers had very clunky supplier on-boarding, some have improved but, more importantly, over the past few years, we’ve seen a few dozen SXM players start or re-focus their offering because of that
• etc.

Your experience only means you have the capacity to understand what your customers need, not that you know everything or what is out there on the market (and how to effectively compete). That’s why recommendation #2 was to do your market research, focused on identifying more than just the top 10 companies on the Gartner or Forrester maps or the first few solutions that popped up in a Google Search (likely as the result of paid advertising).

However, as hinted at above and made clear in yesterday’s article, this is just the first of many mistakes. Stay tuned over the next couple of weeks as we work our way through at least 15 mistakes (of various levels of criticality) that the doctor has seen over and over and over again for almost two decades.

Dear Sourcing / Procurement / Source-to-Pay+ Vendor,

Are you struggling to grow in the stagnant economy brought on by rising consumer debt, unemployment rates, elevated interest rates, and recessionary fears which is contributing to the ongoing reduction in overall spend on software and SaaS solutions, including yours (even though they are desperately needed by companies reliant on consumer spend to minimize their costs, optimize their buys, and survive until the next growth period in the oscillating economic boom-bust cycles brought on by allowing billionaires^* to play with monetary markets with little regulation)? You’re not alone! Dozens of companies fail or voluntarily close their doors in our space every year and dozens more need to get acquired to survive.

While there is no guarantee of success (at least until you get funded by a large VC or PE with very deep pockets and the ability to insert you into their other businesses or get acquired by a company too big to go anywhere for two decades [i.e. a failure of that company would result in an acquisition because too many companies depended on them]), there are ways to greatly increase your odds. Especially since there are ways to guarantee failure in our space. (Remember, when you are delivering product, it has to do something. You can’t really be The Producers when you’re selling a product versus IP.)

So, what can you do to increase your chances?

1. Ensure you have a core team that covers all the bases.

Read a few good books on building a successful startup (which didn’t really exist 20 years ago, so while founders in the early 2000s in our space had an excuse for not knowing what to do, you don’t). Definitely include Garry Mansell’s Simplify to Succeed on your list as he goes great job of describing the core roles and skills the founding team must share between them.

2. Follow and Implement Best Practices

the doctor penned a series last year that chronicled 10 + 2 best practices that will help increase your chances for success. While the list is not exhaustive, it’s a great start. If every company did all of these, they’d at least be more prepared out of the gate for the harsh reality of a back-office SaaS startup.

3. Stop making the same mistakes that keep being made over and over and over again!

the doctor has been an analyst for eighteen (18) years and an independent consultant for over (20) years. As he noted in a previous post, during that time he’s reviewed/researched over 500 software/SaaS companies in Source-to-Pay+ in-depth, and (co-)written up over 350 of them here on Sourcing Innovation or on Spend Matters between 2016 and 2022.

(Let’s spell it out so it sinks in. FIVE HUNDRED PLUS software/SaaS vendors reviewed/researched and THREE HUNDRED AND FIFTY PLUS software/SaaS vendor solutions written up for public access! How many analysts still active in our space can make that claim?) (The answer, just a few. the doctor believes you can count them on one hand.)

As the doctor has reviewed, followed, done diligence, and/or worked with these companies, and seen them grow, get acquired, fail, or voluntarily shut their doors, he’s seen the best practices they adopted and the mistakes they make. And some of these mistakes he’s seen over and over and over again for the past two decades. And he’s tired of them, not just because there’s likely a dozen business books out there that will tell you not to do them (although they’ll probably spend a whole chapter you don’t have time to read to get to the point), but because they are preventing companies with good solutions and good intent from going anywhere.

So, in the hopes that he can prevent even a handful of companies from making these same old mistakes again (and limiting their chances of success), he’s going to cover fifteen (15) mistakes he sees over and over again in every generation of founders in the hope that the next generation of founders stops making them!

So be sure to follow Sourcing Innovation / the doctor closely this month!

^* And if our governments won’t heavily regulate the ability of billionaires to manipulate markets or hire and fire tens of thousands of people at a time just to maintain unsustainable growth rates in large enterprises, maybe Robert Reich is right and they shouldn’t exist. After all, at the 100M mark you can literally own everything you could ever need and use for a lifetime as that’s enough for a personal plane and a personal yacht in addition to a couple of nice houses and a few nice cars …