Dear Sourcing/Source-to-Pay/Procurement Founder: Please STOP Making These Mistakes! Part 1

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 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

  • 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.