Apexon Lays off Staff — A Sad Day for Supplier Performance Management

I was out in the Bay Area last week for a thirty six hour whirlwind series of meetings, and had the chance to catch up with an old friend -- and my Spend Matters co-founder (or co-conspirator, depending on your perspective) -- Kevin Brooks. Up until a few days earlier in the week, Kevin had been Vice President of Marketing for Apexon, a supply performance and quality management vendor that I've spoken of at length on Spend Matters previously. But along with the rest of the Apexon staff, Kevin was longer employed by the time of my arrival. Apparently, the company is in the midst of a sale of its assets -- Kevin assured me that Apexon would continue to support its current customers -- and a buyer has been identified (whom, I do not know).

The plight of Apexon is an example of a company who was ahead of its time in offering an overly focused Spend Management solution. Towards the end, Apexon had gone down the path of providing a very low-cost, monthly subscription model (seats for less than $100 per person) for focused performance and quality applications -- a great idea. But this move was too little too late for the investors who were looking for more rapid growth (and a way to achieve a desired $50 million in forecast revenue within three years, versus five, which the management team had proposed with its new offerings).

Another challenge the company faced was that throughout its existence, it lacked an evangelist for supplier performance and quality (Emily Liggett, who was most recently their CEO, had a soft-spoken leadership approach). I can't over emphasize the importance of evangelical leadership and fervor in defining a sector. Even though many criticized Glen Meakem, founder of FreeMarkets, for having an ego the size of the New World -- and more than a streak of paternalism to match -- I highly doubt that FreeMarkets would have gotten past the early challenging days of 1995-1997 without such a personality and fervent leader of a cause (not just a company).

For me, another clear lesson of Apexon is that most procurement and operations organizations are unlikely to self identify themselves as needing specific performance and quality tools (unless there is a burning platform or the sale is part of a broader suite). And this, of course, is very unfortunate, because a number of macro factors such as global sourcing, an increasing number of "buy" vs. "make" decisions, and higher quality demands in the manufacturing world specifically point to the need for focused performance and quality technology solutions. But unless another start-up pops up targeting this area specifically, it will be up to the broader suite -- and possibly the ERP -- vendors to deliver on these capabilities.

As a last point, Apexon had excellent talent in its ranks. If you're looking for marketing, product management, sales, or development talent with a deep knowledge of manufacturing, supplier performance, and quality, drop me a line. I'd be happy to put you in touch with a number of colleagues from Apexon who would make outstanding members of any top rate organization.

Jason Busch

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