Why Are There So Many Undifferentiated ProcureTech Startups That Still Don’t Solve My Problems? Part I

Preamble: When the doctor started his influencer series on LinkedIn (with Top 10 Ways To Be A Procurement Influencer), one of the first comments he received was that it won’t get many likes. This was his expectation, especially considering he posted a partial summary of his final installment, One Final Piece of Advice, where he basically told wanna be influencers to find their next job sooner than later. However, that series was tame compared to this one, which definitely won’t get any likes. In fact, it is almost guaranteed to get the doctor a few more haters, but some things need to be explained. (And there’s no need to point out the obvious to him!)

Just Why Are There So Many Undifferentiated ProcureTech Startups That Still Don’t Solve My Problems?

After all, with over 666 solution providers out there, I should be in solution utopia, right?

There are three big reasons for this, they are people-centric, and they all start with F!

  1. Founders
  2. Financiers
  3. Fashionistas

Founders

There are many different types of founders who get into it for many different reasons, but the reality is that the majority of founders of ProcureTech fall into two categories:

Procurement Practitioner

Typically, a practitioner who was stuck in the dungeon of the Tower of Spend with outdated tools, insufficient support, a crushing workload, a belief there has to be a better way, and enough will to quit and try to find it.

Tech Guru

Typically, a tech guru who invented a great new piece of tech which they think will revolutionize the Procurement space or has a history of “transforming” different back-office areas and believe that, if they tackle Procurement, they can solve it too.

But they both have one thing in common:

They don’t know the space. They don’t know the terminology, the vendors, the solutions (beyond the antiquated ones they used), or the unsolved problems (as they haven’t even looked beyond the basic problems that their tech didn’t solve). They Don’t Know. And it’s hard to build a good solution when you don’t know. When you don’t know what your competition does (because you don’t even know who your competition is). When you don’t know what problems your competition is not solving (and what you should be building). And you don’t know what your target customers would pay the most for, now, without having to go through a year-long sales cycle. This holds true for both of these categories of founders.

Let’s take practitioners. They don’t know the terminology, think it’s still purchasing, and don’t know how to do proper research. They’ll do a few Google searches, find a few mass market simple finance payment platforms (such as ramp.com for billpay, airbase, etc.), think they’ve found everything, and start designing their solution. They’ll add a few additional features, basic e-Procurment/catalog support, maybe an RFP, and think they have the best Procurement solution ever designed and run with it. Or, stuck using spreadsheets and email for RFPs, design a simplistic RFP solution, add in some Gen-AI to auto generate requirements from spec sheets and auto-parse RFP responses, and think they’ve revolutionized strategic sourcing.

the doctor is not being melodramatic here. Having analyzed over 500 solutions in his career as an (independent) analyst, he’s talked to well over 500 companies, and asked quite a few of them how they started, especially when he was doing due diligence projects. And when the company was founded by a practitioner, this was the story all too often — that they started the company because the solution they had wasn’t doing the job, the 2 or 3 solutions they looked at (which weren’t at all relevant) weren’t doing the job either, and they believed the market needed a better one. Not knowing the market (beyond maybe what they saw in the odd Gartner or Forrester report), they believed there were next to no modern, affordable solutions for small-to-midsized companies that did what they believed needed to be built, so set out to build one. The good news is that they usually designed a decent solution (as they started with great intentions and built something they felt they could use). The bad news, there are twenty others that more or less do the same thing (already existing and designed by a couple dozen other founders who had more or less the same idea before them or at the same time around the world) and it’s hard to get the message out.

Then there are the tech gurus, who believe there is no modern tech in Procurement, and that the optimization, analytics, automation, and, today, AI they can bring will revolutionize our space! That all the current solutions are missing is modern tech, and if you just inject a bit of it, miracles will happen. This group of founders typically builds really cool analytics-based apps, but tends to miss a lot of the basics or ignore the 80% of the workload an average Practitioner does on a day to day basis, either because they assume the existing platforms do it well (and the existing platforms usually don’t do it well enough) or because it’s not cool. They tend to build better tech but worse solutions.

Short story is that, the majority of the time, neither of these groups do proper research before they start, or when they launch. Not only into competitors, but into the analyst firms (beyond Gartner, Forrester, and IDC), the professional organizations, or the independent experts who they could ask for advice and help. Research that could help them create a solution that checks all the base boxes, tackles some of the thornier problems, and that actually does something different from their competition.

And if this was the worst of it, the situation would not be so bad. It would barely be a problem. The worst of it is that many of these founders not only believe they know everything they need to know about how to build a great solution, but also on how to market and sell it, package and deploy it, build, and run, a company around it. But they don’t. Sometimes, not even close.

And even worse, they won’t admit it. They won’t look for the help they need, and, even worse, they won’t accept it if you offer, even if you offer to help them for free! Some will even get very defensive, double insist they know everything they need to know, and cut off communication. (Fortunately, this particular situation only happens a small percentage of the time. But still.) This is the problem. Not all founders have this level of ego, but some do.

the doctor has direct and indirect evidence for and (personal) experience with the situations described above. Even when the doctor has tried to help indirectly, such help has been ignored. There’s a reason that the doctor wrote a series on Ten Best Practices for (Software) Vendors, a series on iZombie, and two series on Dumb, Dead, and Smart Companies. To politely, less politely, and when they still wouldn’t take the hint, bluntly tell them what they needed to know in the hopes that, since they didn’t have to admit to anyone they didn’t know everything, they would heed some sound advice and not join the ranks of the vast majority of their peers, which, over time, eventually disappear. Having followed this space for over two decades, one thing the doctor knows is 90% (or more) of companies WILL disappear. Not the typical 70% that the statistics tell you for startups. 90%! The lucky will be acquired on terms they can accept, the survivors will be acquired on terms that a decent percentage of their staff continue to be employed, and the rest will just disappear. And the companies with great solutions WILL NOT be spared. Success requires a lot more than a great solution.

The majority of founders just aren’t up to the task. And that would be totally fine if they’d admit it, because not everyone has the skills it requires to grow and run a company, but anyone with the skills to found one obviously has a valuable set of skills the startup still needs, and there’s nothing wrong with stepping back to the COO, CTO, CSO, or CRO role you’re best at, especially if it’s for the greater good. But with a number of these founders, ego gets in the way. But they aren’t the only problem!

Pretty Fly That Gen-AI!

To the tune of Pretty Fly for a Rabbi by Weird Al.
[Which is to the tune of Pretty Fly (For a White Guy) by The Offspring.]

A I, A I!
(How ya doin’, Schulman?) A I, A I!
(How ya doin’, Schulman?) A I, A I!
And all my rabbis say it’s pretty fly that Gen-AI!

Meccha Gen A I, meccha technologica!

Our space has had a fair share of tech hype in the past
But most of it was nudnik and none of it would last
But our new tech’s real kosher, we think it’ll do the trick
I tell ya, it’s to die for, it really knows its shtick

So how’s by you? Have you seen this tool?
Reads the Reddit, does its own synopsis too
Working’ like a dog at a synagogue
It scans all day, it scans all day

Just type “Vay is mir!” and it will kick into gear
And bring you lots of fear and tell you the world’s end is near
Just grab your shelter kit and
Hey! Hey! Do that Prepper thing!

A I, A I!
(How ya doin’, Schulman?) A I, A I!
(How ya doin’, Schulman?) A I, A I!
And all my rabbis say it’s pretty fly that Gen-AI!

It learns from the forums, not just any will suffice
It has to find extremist views ’cause that’s what masses like
Doesn’t care if it’s a fact, as long as you come and play
Hallucinations plenty, just eat one rock a day!

People used to scoff, now they say “Mazel tov!”
It’s so attractive ’cause they think they can lay you off
It computes non-stop and outputs slop
What’s not to like? What’s not to like?

For endless days, it works without complaint
And never asks for pastrami on white bread with mayonnaise
Just grab your vacation thong and
Hey! Hey! Do that Celeb thing!

When it’s computing your new payroll, now that you shouldn’t miss
It’ll happily add a Billion when the dot it skips
It’s got a lot of chutzpah, and it really is quite daft
The coders pay the moyl and then you just get the shaft!

A I, A I!
(How ya doin’, Schulman?) A I, A I!
(How ya doin’, Schulman?) A I, A I!

Meccha Gen A I, meccha technologica!

It’s doin’ well, I gotta kvell
The yentas love it, even shicksas think it’s swell
For your mental health, it is top shelf
It don’t care if you go and off yourself

Yeah it calls the shots, we really bow down lots
Oy gevalt, I’m so ferklempt that I could plotz!
Grab your pasta strainer
Bow down to the sphaghetti god!

Put on your pasta strainer and
Hey! Hey! Join the FSM!

Dedicated to THE PROPHET.

Yes I’m Okay, But I Am Very Angry. You Should Be Too! (Part 2)

… it’s about getting it right (and not being right) … and all these influencers care about is what gets the clicks, whether it is right for Procurement or not, because whatever gets them likes and subscribes in their book is being right. Unlike THE REVELATOR, they’re not interested in meaningful discussion, constructive debate, educating you, or at least inspiring you to think critically and improve your knowledge and understanding of your field. Influencers only want the clicks, like, and subscribes that give them their next dopamine hit (and strengthen their belief that fortune will follow fame) and metrics that will allow them to get sponsors (whose messages they’ll never question) to keep going.

But, now more than ever, you need to make the right decision for you. Not only are you

  • under-staffed,
  • under-tooled, and
  • under-resourced

in Procurement, but expected to deliver with constant change in the

  • economic landscape,
  • political landscape,
  • technology landscape,
  • services landscape, and
  • funding landscape

which will often entirely invalidate everything you did and knew yesterday. More specifically:

  • an unexpected trade war will decimate a carefully crafted supply chain you’ve been curating for over a decade,
  • a geopolitical dispute, special military action, attack, or war will spark sanctions and totally close borders
  • companies come, merge, get acquired, and go every day; changing, replacing, and then taking their technology to the grave
  • services companies keep popping up, changing the toolsets they use, altering the toolsets (via partnerships) they offer you, as well as their roster — and just like it’s not the analyst firm, it’s the analyst, it’s not the firm, it’s the consultant (you want an experienced consultant, at least intermediate, and definitely not a junior consultant fresh out of grad school with no real world experience and nothing but a Chat-GPT subscription — which you are very likely to get at a Big X training so many “consultants” on AI)
  • funding mania comes and goes; when it comes, money flows like a waterfall; when it goes; it dries up like a desert; this hastens both new product development and productization as well as company bankruptcy (when the firm over invests, doesn’t see the growth, and drops the tech company faster than a hot potato)

You need insight. You need knowledge. You need education. Not influence bullshit. Because without the insight, knowledge, and education, you have no chance of making a decision that will:

  • identify the possibility of tariffs decimating a particular supply chain, so you know where to focus your risk mitigation efforts (it’s too late if you’re just reacting post tariff because, by then, there ain’t much you can do about it)
  • have the right systems in place to switch to secondary sources if a sanction or border closure comes into effect
  • select a technology provider with a solution that solves the majority of your day-to-day problems efficiently, effectively, and empathically (that works with your business model and mindset)
  • select a services provider with personnel with the right experience and toolset to support you
  • select a technology provider at an appropriate risk threshold; for example, a P2P provider that you depend on for daily transactions needs to be stable; an auxiliary experimental analytics/fraud identification solution is not as critical, if the provider disappears, you will be okay while you select and implement a replacement (although you may want to delay the actual payments until you get a new fraud detection solution in place, but with SaaS, that can be done in a week or two if you maintained the RFP information and just go to your 2nd or 3rd choice)

We need to remember that technology project failure rates have reached an all time high of 88% (in the two and a half decades of project failure the big analyst firms and consultancies have been tracking technology project failure since the late ’90s), inflation is back with a vengeance, consumer demand is flatlining in most first world countries with declining birth rates, non-renewable raw material supplies are getting scarcer and scarcer, and your job is only going to get harder with each passing day.

You need help, not bullshit. And the fact that all these influencers is doing is echoing the

  • soundbite driven drivel vendor marketing
  • analyst firms pushing the current hype and the unproven claims
  • vendors shoving Gen-AI into every nook and cranny and down your throat (whether it is appropriate or not)
  • consultants only spreading the FOMO and FUD

and collectively drowning out the few remaining educators left is just appalling. So, yes, I’m angry. And you should be too!

(And yes, I can curate my feeds to keep influencer content mostly out of them, and do, even going so far as to potentially remove you if you push their drivel my way, but that’s not the point! I know the difference between insight and drivel. Without education, a junior buyer / new Procurement professional doesn’t! And that’s why these influencers make me mad and need to go!)

Yes I’m Okay, But I Am Very Angry. You Should Be Too! (Part 1)

Apparently my influencer rants last week caused some concern among my fellow educators with regards to my health, or at least my mental health, so I’d like to assure you all that yes I am okay, but yes I am very (VERY) angry … and you should be too!

As I pointed out in some of my responses to the three LinkedIn posts that advertised my influencer week content, namely:

It’s bad enough we have to deal with:

  • a constant stream of sound-bite driven, education free marketing
  • analysts pushing these unproven claims (and then telling the buyers it’s their fault when the technology fails for buying into the technology their analyst firm relentlessly promoted)
  • vendors shoving (Gen-)AI into every nook and cranny, which not only fails to add value, but often decreases it (see: Mythbusting 2025 2015 Procurement Predictions and Trends! Part 12, for example)
  • consultants spreading the FOMO-FUD at constant Red-Alert levels

 

but now we have to deal with wannabe influencers with very little knowledge and experience in Procurement inundating social media/LinkedIn with obvious statements at best, useless content most of the time, and aggravated FOMO once they get hired by a vendor(‘s social media marketing company).

And that doesn’t help you. Not one bit. In fact, it hurts you. As the doctor wrote in Why the doctor is NOT an Influencer! Part I, as a Procurement professional, you’re unappreciated, overworked, denied the tools that would make your job easier, and blamed for everything that goes wrong. You laugh when you see the Monday.com commercial that shows people underwater by 10 am because you’re underwater 24/7/365 days a year (366 in leap years). You struggle to find a few minutes a day to read something that isn’t one of the three hundred new messages that hit your inbox overnight. If you’re dedicating a few minutes a day to read something, there better be a reward in it for you. It better at least spark a usable idea if it doesn’t give you one. You don’t need to spend 20 minutes reading five posts that tell you less than you already know. You need insight.

And, if you’re at the top of your game, like the doctor, you’d happily spend 8 to 12 minutes to read a deep 4 page article that actually makes you think or gives you real insight on a vendor’s platform than read 4 short LinkedIn posts that give you nothing more than recycled marketing sound bites. Because you need information. You need insight. You need education. Not bullshit laden clickbait designed to get the influencer likes. After all, as THE REVELATOR says …

Has Procurement Tech Peaked?

If you’ve been following along, you know the following:

  • the doctor is very disheartened at the lack of innovation, and even direction, among the major suite players
  • the doctor is tired of the nth solution popping up that does the same thing as solutions 1 through n-1 (which is why SI doesn’t even try to review every solution of the 666+ solutions that exist, but only those with actual improvement or innovation)
  • the doctor is fed up with the fact that almost every vendor has been blinded by the hype of Gen-AI and are focussed on shoving it into every virtual nook and cranny they can find in their product (whether or not it provides any value whatsoever)
  • the doctor is fed up with the constant claims that we will soon have Agentric AI that will solve all of our problems and eliminate the need for Procurement professionals

Which begs the question. Why is all of this happening?

  • why is there a lack of noticeable innovation, and even direction, among the major players (besides cramming Gen-AI into all of the nooks and crannies)?
  • why are there so few new, innovative solutions (and 40 carbon calculators when one will do)?
  • why are so many vendors jumping blindly on the Gen-AI bandwagon (heading straight for a cliff with no steering and no brakes)?
  • why are so many vendors claiming that the next generation of tech is Agentric AI?

Is it because Procurement Tech has peaked?

Sadly, for the time being, the answer is … YES!

Even though there is sill much that can be done, for the time being, procurement tech has peaked. There appears to be three major reasons for this:

  • an almost all-in focus on Gen-AI, a technology that has not delivered on its vast over-promises and likely never will;
  • an emerging focus on Agentric AI in the hopes of replacing people, instead of augmenting them; and
  • an over-focus on orchestrating what is there, instead of orchestrating what is missing.

Each of these reasons prevents the necessary innovation that is needed to take Procurement Tech to the next level.

  • As the doctor has repeatedly told you, Gen-AI is only useful if the problem at hand can be reduced to either large document search and summarization or natural language translation of inputs and outputs. The continued quest to force this technology to solve problems it fundamentally can’t is preventing any research and development on tech that would actually advance Procurement.
  • As the doctor has repeatedly claimed, the answer is not in Artificial Intelligence but in Augmented Intelligence
  • As it stands now, orchestration is just gluing best of breed systems together, it’s not really enhancing any ProcureTech.

And until

  • Gen-AI is relegated to just another AI tech that is only used where appropriate,
  • we stop trying to replace people and start trying to make them productive at a super human level, and
  • we stop gluing and start truly enhancing

ProcureTech is stuck where it’s at. That’s just how it is. For now. Maybe someday it will change. But not before you insist you want it to change, and do so loud enough that maybe a few vendors will hear you and listen and stop wasting all their time and all your money chasing the wrong tech for problems you don’t actually have.