Perhaps I'm difficult to impress. That's because after meeting most CEOs of Spend Management related vendors, I come away with a positive impression of them as executives and individuals, yet I'm not often sold on their ability to thrive and lead in what has proved a tough market over the past decade for vendors. Often times, this comes down not to the general characteristics that make a good CEO (e.g., management style, strong executive track record, etc.), but the challenge of creating and executing on a winning business model that maps to what procurement organizations are willing to pay for (which is not much, and you better negotiate "not much" down from there ...) This skepticism is founded on watching so many vendors flounder over the years in the sector. Indeed, far more Spend Management providers have failed, in fact, than those which have had strong exits.
But some leaders you just want to bet on. One of those is Mitch Free, of MFG.com. Mitch is incredibly passionate about his company, and even though I have some questions about whether MFG.com should serve as a stand-alone direct materials sourcing application for organizations, I have no doubt his model is creating tremendous value and is resonating in the manufacturing world by taking supplier search capabilities to the next level, offering a true "parts marketplace" approach that is free to buyers. And you can't help but love his story and gritty style. Perhaps this explains why Jeff Bezos volunteered to put his own money into the venture. Mitch's success is a wonderful *&$#-you to all of the HBR graduates who wrote B2B business plans in hopes of taking over the world, but knew about as much about procurement and supply chain as they could cram into a few study sessions. Mitch is the opposite of the b-school type -- gritty, school of hard knocks, and personally knowledgeable about how a machine shop actually works (and how to get the attention of their owners). Yet he's also humble and inquisitive. He cares so much about improving what he has that he reaches out to even small customers soliciting feedback and input directly, wanting to genuinely know how he can improve his sourcing mousetrap.
Most recently, MFG.com announced its acquisition of Sourcing Parts, a European-based provider with similar marketplace capabilities on the Continent. This should help MFG.com take its model to Europe, yet it appears to do little to address the need to help companies with how best to balance spend aggregation with individual piece-part purchasing -- a topic for future debate and discussion on this blog for sure. I'd also love to see MFG.com continue to build out a capability for working with Indian and Chinese suppliers as well, including technology and services to help manufacturing companies transition parts into the region -- not just to identify suppliers in the first place. But perhaps that is in the works as well.