Editor’s Note: On November 26th, 2013 I had the opportunity to interview Year in the Life candidate Scout, a New Wave company that provides “painless” RFP capability to its clients. In the post-show commentary, our Dragon’s Den (or Shark Tank if you prefer) panel of experts will provide their take on the interview and offer advice to the company. Today’s guest panelist is Kelly Barner from Buyers Meeting Point. Here is what Kelly had to say about Scout;
What lingered in my mind after hearing the interview was the idea of searching for a market to build Scout to support. I can appreciate that they are looking for an end market (Andrew gave the examples of universities and architectural design firms) that presents a good opportunity. I would counter that the market they select should be supply based rather than industry based. So, for example, rather than helping companies in higher education run RFPs for the myriad of things they buy, they should specialize in companies of any industry that want to purchase a product or service.
Companies have long been able to differentiate themselves in this way – CombineNet was the transportation and logistics master until they were purchased by SciQuest earlier this year, and Directworks (formerly co-eXprise) specializes in manufacturing companies’ direct materials sourcing needs. In both cases, the solution was designed to excel in a specified category – or at least a category profile.
The risk of being a general RFP solution, even if it is for an industry, is that there are already a wide range of alternates on the market. Staying too simple would put Scout into competition with some of the free solutions available (WhyAbe) and trying to be too complex would require them to face off with companies like Coupa, Emptoris (IBM) and Ariba (SAP).
From what I heard, there is an interesting opportunity being overlooked and that is the founding team’s background in Finance (traditionally procurement’s arch nemesis in the organization). If Scout is going to specialize, finding a way to leverage their established expertise would be the preferable approach. Although Finance teams are not the largest consumers of specialized products and services in the company, what they do buy is highly sensitive and can be complex.
If Scout were to take a Finance angle, to Andrew’s comment about ‘lay purchasers’ or non-procurement team members responsible for sourcing/spending, they might build a solution around Finance’s needs for accounting, specialized consulting, auditing, benefits, banking, or regulatory services. RFP templates could be built and maintained, and lists or databases of suppliers and service providers could be made accessible and kept current. This would allow Scout to differentiate on their intellectual property rather than the development of a solution that risks being lost in the crowd.
I do have a few other questions:
1. I certainly appreciate the value of fresh minds being applied to an old problem, that RFPs can always be faster, simpler, better. But what was the moment or the primary driver that led the founders of Scout to believe there is a place in the market for their solution.
2. What is the intended process range of the solution – is it just an RFP tool or will it accommodate the entire P2P process? Less and less companies are cherry picking their solutions, opting to go with one general solution that has broader functionality instead.
3. Does Scout plan to have a services component to their offering or will the RFP be positioned as ‘so simple you don’t need our help’?
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