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 …