Jason: Even though you're infamous in Chicago (all those You-Tube clips don't help), Sean, could you share with our readers a bit about your background and John's?
Sean: Well, if I'm infamous in Chicago, just imagine what the cities that I lived in for more than a year think of me!
In late 2000, after I left RxCentric, I accidentally found my way into the strategic sourcing world. I reconnected with Greg Mauro and Rob Hutter of Revolution, business friends of mine who had recently teamed up with Tuomas Sandholm, a professor at Washington University in St. Louis who had developed some innovative algorithms for solving combinatorial challenges (i.e., complex decision and negotiation problems, involving more than one party and more than one possible ideal outcome based on the combination of the inputs and real-world requirements). Greg had teamed up with Brian Jacobsen from Harvard Business School to create a business plan to commercialize the technology. At that point, the business was still called Annapurna Technologies -- but it would go on to become CombineNet.
I joined the team at the very beginning. We started as an optimization components provider with a proprietary solver and an XML API for solving complex sourcing and auctions challenges. After selling a license to Raytheon for a defense-related project, we somehow convinced Margaret McGrath at PPG to become our first procurement customer. I can only imagine how bad our sales pitch was. We had zero experience in sourcing, and no web-based software developed. But, she liked something about us, and asked for us to help them source electrical supplies.
It was the first time that any of us had heard the term MRO, and in support of that project we learned the first lessons of many about strategic sourcing. We learned that business constraints (e.g., awarding no more than a certain percentage of business to one supplier) mattered and eventually had to abandon our proprietary solver for off-the-shelf components that could better handle real-world problems. Other early lessons included the problems with dirty data, the need to provide clear feedback to suppliers, the concept of scenarios, the importance of Excel, the value of statistics in strategic sourcing and countless others. We may have been pretty bad at first, but we eventually learned.
Customer projects taught us a lot, as did our partnership with Tigris (eventually purchased by Verticalnet and now BravoSolution), as did our familiarity with Freemarkets (which is how Jason and I met). We found there was a lot more money in solving sourcing problems than in solving math problems, and thereby developed a unique premium service and technology offering for high-spend strategic sourcing projects, particularly around transportation sourcing, both in the US and in Europe. Truckload and ocean were the most successful categories, but we did some work in just about every area.
After wearing out my welcome in Pittsburgh and at CombineNet, I left for Boston. While my non-compete was still active with CombineNet, I spent nine months as Director of Marketing at Open Ratings. They sold a few products and services around supplier risk and performance management, and were moderately successful. A few days after my non-compete ran out, I was back in the sourcing game at Emptoris. Open Ratings eventually was sold to D&B.
I really had no idea about what I was getting into at Emptoris, and they may look back on the decision to hire me thinking the same thing. I was brought on to create a management consulting division to complement their enterprise software business. We developed a mix of spend analysis, strategic sourcing, and procurement transformation consulting capabilities that we sold to both their existing account base and to new accounts as part of packaged solutions.
We also did a fair bit of work making up for some gaps in Emptoris' feature set at the time by providing consulting support to muscle through big projects, and by working with the product team to design a more robust version of their solutions. Despite some quibbles with the company and product strategy, I think that many of the choices that Avner Schneur (the original CEO) made during those years were quite good given the early chosen strategy, and the company's relative longevity is a testament in large part to his boldness.
Shortly after I was promoted to VP of Consulting at Emptoris, I received an incredible job offer from Con-way, one of our bigger consulting customers. I took it.
Stay tuned for the next post in this series, where we follow Sean through his time at Con-way and through to what made him start Partage.