And, more importantly, will you be among the 20% who will be completely gone within two years (as per the doctor‘s predictions, and remember that he has been following this market for almost 25 years and seen all the ups, down, startup explosions, M&A manias, and the following implosions) or the 75% who won’t last in their current form (as per THE REVELATOR‘s predictions).

the doctor first asked this question to the space on November 7, 2008 when he saw the first implosion (which had all the signs of the first major enterprise back office tech implosion in the 2000 crash) coming (which wasn’t the last, as there was another one in the latter part of last decade that followed the next big wave of M&A and startup mania), but this time the forthcoming implosion looks to be the biggest our space has ever seen (and while the space is too crowded with vendors who aren’t actually providing any new, solid, innovative Procurement solutions, this implosion could also wipe out a large number who are, and that would not be a good thing).

So, it’s time to ask this question again, except this time we’re focussed entirely the vendors. Last time, it was directed at all organizations generically, including buying organizations that, sensing a market correction (which was worse than expected in 2008 and 2009, were putting off much needed Procurement technology purchases which could have saved their hides during the crash) as well as poorly run vendors. But this time, it’s all on the vendors and the investors (namely VCs and PEs investing way too much in companies without any real solutions, hoping to profit from the hype cycle before it crashes). So, without further ado, here are 10 of the most common dumb mistakes we’re seeing.

1. Doing Away With the Perks

Even if money is getting tight (or the PEs are telling you to tighten your belts because they just realized they aren’t going to sell low value solutions for a Million bucks a pop), this is the last thing you want to do. For an employee, it’s the first sign the company is in trouble and for a good employee who is talented and in demand enough to get a job elsewhere, the first sign to accept the next offer that is more-or-less equal to her current renumeration package.

2. Delaying Time-Saving Technology Purchases

Your developers, back office, sales, and marketing personnel need tools too, not just your potential customers. This doesn’t mean that you should buy the first tool they request, because if everyone is on a different tool you’re not achieving economies of scale and spending 30% to 40% more on SaaS than you should be, but that for every task they do regularly that they could do much faster with an appropriate tool, they get an appropriate tool. For e.g. SalesForce isn’t the only CRM, there are a lot of marketing tools for expediting content to multiple business and social networks, and a lot of back office suites that are quite affordable, especially in the small business / mid-size business market. You just have to take the time to look.

(As we all know, just like you’ll never get a Mega-S2P Suite in our space for less than 1M a year, you can get mid-market suites with all the functionality a mid market actually needs 90%+ of the time for less than 250K. The same holds true in other enterprise technology markets too.)

3. Postponing Actual New Product Development

Remember, business need actual solutions more than ever — and this doesn’t mean wrapping a shiny new third-party Gen-AI tool and claiming success. This means researching their problem, identifying actual process-bases solutions, and coding those processes (with configurable rules-based workflows) in an easy to use manner. Now, you can use ML/AI as appropriate to analyze data and trends, and even Gen-AI to summarize available natural language documents and data, and present these insights to a user as intelligent augmentation to help her make a decision, but the tool works without it in a way everyone can trust.

4. Strangling the Travel Budget

National and global business requires national and global travel. There’s only so much that can be done (or that old school business people will allow to be done) over Zoom and Teams. Now, this doesn’t mean that travel should be granted willy nilly for every prospect, conference, etc., but at key points during the marketing, sales, and implementation cycles, on-sites will be needed. (Nor does it mean that travel budgets should be fully unsupervised, for anything over a trivial amount, at least one other employee at an equivalent or higher rank should agree it’s worthwhile.)

5. Cutting 10% above the Board

Now, the Big X like to to this, but this is one of the reason the majority of their remaining AI and analytics teams are just a bunch of f6ckw@ds who are not delivering value relative to the price tag the Big X charge. (Because the Big X kept hiring whomever they could during a tech boom and then kept cutting the worst as an ongoing “correction” to their over-hiring of under-skilled, under-educated, and/or under-experienced individuals, the best know that just one mistake, or one bad quarter for their team, and they could get the axe no matter how good they are, so they all left for better opportunities as soon as those opportunities came their way). That’s one of the two reasons the bloodbath started earlier this year (and is still ongoing). You can’t continue to charge 2X (or more than) the niche firms while continually delivering 1/2 the value (or less) and expect customers to keep putting up with that, especially during non-growth and recessionary times.

Only cut people who aren’t working out (and only after giving them time or support to find a job more appropriate to them elsewhere), and avoid hiring people who aren’t likely to fit in the first place!

6. Killing the Training Budget

In fact, you need to double or triple it. If you think that Gen-AI, intake-to-orchestrate, AI-backed/AI-driven/AI-enabled/AI-enhanced/AI-powered, supplier insights, or some other overhyped buzzword is the answer, then you don’t actually know what the majority of Procurement organizations need and what you should actually be building. So train your product managers on real Procurement practices and processes and how to do actual market research (or at least identify a niche consultant who can help them).

7. Shifting Focus from Infinite-Growth to Indefinite Belt Tightening

Just because you overspent on marketing hype and a sales force (who couldn’t sell because you didn’t actually have anything worth selling, or at least worth buying at the ridiculous price tag the investors hoped for), that doesn’t mean that you’ll survive if you just cut costs across the board. The only way to survive is to start building actual process-based solutions now that take a people and process centric first approach (what do our target users need to do everyday and how can we best enable that in an easy, minimal, step-by-step process with an intuitive UX), and educational messaging that will help hit this point home (and make your solution stand out from all the other hogwash that these businesses are fed up with hearing about).

8. Freezing the Marketing Budget

Just because you overspent like Montgomery Brewster in Brewster’s Millions and have nothing to show for it, that doesn’t mean you’ll do any better with $0 in the budget either. The key is to do consistent educational marketing that informs your audience not only that you exist, but on what your solution does and how it will help them solve their daily problems. And to do it through channels relevant to your industry, geography, and the communities these buyers are a member of. (Not one-time “look how great we are” conference booths that no one remembers, or one-time “groovy vendor” write-ups with limited reprint rights from overpriced analyst firms, or splashy advertising in the biggest publication you can afford.) Consistent, month after month education in small pieces such as short webinars or podcasts, bite-sized white-papers (with an e-book on your site if they are interested and/or for your sales people to use during a sales cycle), info-adverts in targeted publications. By the time the next budget season hits, you should be a name they know and trust because you took the time to learn about problems, instead of pushing magical solutions that will never work (the new silicon snake oil).

9. Stifling Real Innovation to Reduce Risk

Because optimization, machine learning, analytics, and other “real” methodologies that, with a lot of blood, sweat, and occasional tears, will actually produce solutions that actually work, is hard, requires top people (who command top salary), and has some risk (in that it could take a lot more time to get it right than you think — but at least you can get it right and it will work, as some of the best minds at the best companies in our space have demonstrated for over two decades). The biggest risk is not advancing towards a solid, trustable, usable, solution that the market will actually want!

10. Retreating into your Moated Castle

This is still the doctor‘s personal favourite. Often the first thing to go these days after the employee perks is the consulting budget — and it’s often by far the dumbest thing your average newly funded company can do (because, as has been repeatedly stated, just because you can sell an investor on what you think a buyer needs doesn’t mean you can sell a buyer, especially if you don’t really know!). Often the only way of introducing significant, meaningful, cost-saving revenue-generating improvements into your company is to bring in an outside consultant who specializes in one or more types of solution-based business innovation. A consultant who can tell you what technology roadmap is right for you, even during a recession. A consultant who can help you maximize your marketing budget. A consultant who can help you save money and avoid unnecessary costs in an intelligent, non-destructive, fashion. And a consultant who can keep you on the innovation path and out of the cost-cutting abyss that ultimately spells a cruel demise to what could have been a very successful business model with just a few tweaks.

And, FYI, the doctor has seen a lot of dumb over the years. That’s why he did a 5-part series on 15 common mistakes in hopes some of these founders would read it, reflect on it, and not make the same mistakes over and over again.

Fortunately, the corporate intelligence scale from 16 years ago doesn’t need updating. Start with 10 points and subtract 1 point for each of the above that you are currently doing (and be honest):

Score	Rating	Comments
10	Genius	Congratulations! You are a true market leader.
9	Intelligent	Quite Good! You’re best-in-class.
8	Smart	Not Bad. You’re above average and on the road to stardom.
7	Average	You’ve got some work to do, but if you set your mind to it, a bright future awaits. In fact, with the right effort, you just might have to wear shades!
6	Dull	You’ve got your work cut out for you.
5	Deficient	You’re handicapped, but if you’re handi-capable, with hard-work, perseverance, and a devout focus on change, you can be average in no-time!
4	Feeble	You’re seriously lacking in corporate know-how, but if you open your heart to innovation, and bring in some expert consultants, you might just be able to get back on the right track.
3	Dumb	You’re going to need a serious corporate make-over to survive. the doctor wishes you the best of luck!
2	Moron	Find a Leprechaun! You’re betting on Lady Luck at this point!
1	Imbecile	Start writing your corporate obituary. It’s just a matter of time.
0	Complete Idiot	Congratulations! The Sourcing Maniacs lay their bells at your feet. It should be impossible to be this idiotic and still be alive (and you must have received an absolute shipload of private funding to still be around), but you’ve proven that nothing’s impossible. Have some bubbly before the money runs out.

For those of you who score 6 or below, please get help now to avoid being a casualty!

For those of you who score 3 or below, your theme song is still in the archives!