After Sunday’s lyrical Coupa Cabana, you knew something was coming. But you probably weren’t sure what, since the tone was a bit different than the Coupa songs the doctor used to publish back in the day when it was Coupa Time and he sung the praises of the Coupa Store (and even gave the farmers their own Hoe-Down so they knew that even they could embrace the tech).
In comparison, the Coupa Cabana is pretty lamentful, but not entirely unexpected, as the doctor did foreshadow this 18 years ago (yes, eighteen years ago — feels like coverage has been ongoing for my whole life) in his tribute to Procurement Independence at the Coupa Cabana Cafe. (For a brief instant, Coupa completely changed the game, and when you change the game … )
Back in the Day, before this make margins multiply marketing malarky, and well before the Business Spend Management of its second act, it had a, now long forgotten, first act where Davie wanted to change the Procurement world with an affordable user friendly e-Procurement solution that could be used by anyone anywhere in any assembly.
And that was Coupa’s first act. A pure multi-tenant SaaS application that could be licensed for low five figures by any organization that wanted it, turned on with the flip of the switch, easily populated with an xml or csv upload, integrated with your favourite punchout sites, and rolled out to every single employee in the organization, with appropriate controls to make sure they could only request what they had access to and buyers had the ability to accept, modify, or reject as needed. That’s right. Real “intake” back in 2006 with a real procurement app to back it up. (And built in an unassuming, affordable, non-glitzy strip-mall office, down the street from the Amazon Motel, where it didn’t cost a million dollars to dance on the roof.) In the slang of the day, it was sick.
And if you were small and couldn’t afford a few grand a month, or wanted to try it for free, no big deal — a stripped down version was offered as open source, and as long as you were technically inclined (and knew Ruby on Rails), you could download it, install it, play with it, and even use it if you wanted to. (It was way more economical to get a SaaS license then devote your own IT staff to supporting it, but the free version allowed you to verify that it would work for you and wasn’t silicon snake oil.)
It was simple, but effective, and, most importantly, game-changing. And investors noticed. And they invested, but with big dollar signs in their eyes (which they knew the rich and filthy would pay). And this meant bringing in a visionary with even bigger dollar signs in his eyes. Davie was ditched (and Noah was set adrift on the ark) and Robbie was bought in to lead the Coupa Factory for the second act.
Robbie dreamed of a day where a client could manage all spend through Coupa, making it indispensible, and bringing in the Salesforce sized contracts he used to. But all Coupa did was core e-procurement, so off on an acquisition spree he went. And a spree it was. By 2021, in an effort to build a platform that could do everything, it had made twenty (20) acquisitions across the Source-to-Pay spectrum, including a couple in Finance (Bellin) and Supply Chain (Llamasoft). And while it still doesn’t quite fulfill the entirety of Business Spend Management (because it doesn’t do payroll, and doesn’t do advanced financial planning), it can literally track most of the dollars that flow through a third party if enough modules are obtained (and enough dollars are shelled out).
But you need a lot, which costs more than all but the largest enterprises can afford, and it has to be appropriately configured, which requires expertise that few have.
And this is the crux. While acquisitions boosted Coupa capability and talent in the early days, lending credence to the promise of Business Spend Management (which later became known as
B6llsh!t Spend Management in some private circles) which never fully materialized (and still causes some of us to twitch, but not in a good way), as time went on, the inevitable happened. The top tier talent they acquired, when their options vested or hiring bonuses became non-repayable, moved on or retired from Procurement on the windfall. (Were they the lucky ones?) And the majority of the talent that knew how to not only enhance, but help a client take full advantage of their top tier advanced spend analysis (Spend360), sourcing optimization (Trade Extensions), or supply chain planning & optimization solution (Llamasoft) moved on (as did their 1st employee and CTO). This also happened at their other 17 acquisitions, and I’m betting at this point that for most of the advanced features in most of their advanced modules, there are at most 2 people who can demo them. And none that can even demo half the end-to-end Coupa solution.
However, as you know, the second act came to a close last year when Thoma Bravo bought the Coupa Factory, showed Robbie and a good portion of the management team the door (before they could get Inspired from the acquisition), and sat idly by as the rest of the senior management team moved on of their own accord, along with a significant number of the long-time employees. So many have left over the years that, at this point, of the 3,000 employees LinkedIn says they still have (which might not be entirely accurate as many who leave don’t update their LinkedIn until they get a new position), as of one week ago today, it would appear that there is not a single employee left who knows the potential platform capabilities better than the doctor. (Who is not only one of the only two remaining independent analysts in our space who have been covering Coupa since Procurement Independence day, but someone who has also advised, consulted for, or done diligence on half of their acquisitions — which is a heck of a lot more than their current stable of developers and managers can say. And yes, he’s choking on the truth at this realization!)
And the third act is not off to a great start. First of all, it took them a long time (almost a year) to find a new head of the Coupa Factory, leaving 3,000 poor, scared Oompa Loompas wondering about their future. Second, their management team is brand new and many don’t know the full history or power of the platform at their disposal. Third, their “make margins multiply” rebrand is the biggest marketing malarkey out there today (and the doctor hopes it’s just a moment of weakness and that they’ll move on from it quickly) and, to top it off, their new homepage is among the most uninformative buzzword-filled page you will find in Source-to-Pay. Fourth, there’s no centre anymore. It’s Finance. And Procurement. And Supply Chain. And IT. It’s not just a letdown, it’s the saddest part of all!
It’s important to remember that, unlike almost all of its competition that went on M&A sprees, Coupa’s philosophy was to integrate everything into the Coupa platform as natively as possible. If it was built on the same stack, in it went. If not, it was refactored into a (micro) service architecture with the front end UI rebuilt in the core and the back-end run in a service container, so it was one platform with one consistent UI for their customers. As a result, they are sitting on a powerhouse, and all they have to do is pick a direction and configure it as one. But this is not likely to happen, because it’s unlikely anyone left at Coupa can see what that direction is and could be. (So while this should be my greatest masterpiece when it comes to Coupa coverage, it is also a letdown.)
While no one can predict what the future holds, we can say that if Coupa doesn’t learn what they have, center on a direction, educate the next next generation on what Coupa can actually do, and come up with a meaningful message soon, there’s a good chance that the King of Karma may decided to collect his toll and this could be Coupa’s final act before it is folded into an amalgamated ThomaBravo FinTech platform designed to replace the ERP that currently powers the finance back office. (ThomaBravo have 80 companies in the portfolio, including a number in FinTech. If anyone was going to build the first FRP [Financial Resource Planning] solution designed to replace the ERP, it could be them.)
Thoughts to the contrary?
