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10 Theories on Procurement Technology Venture Stage Investment (Thesis 3: UI/UX & Adoption)

08/06/2020 By


In a series of columns this summer, I’ll share 10 theories that I believe will drive investments in earlier-stage (angel/seed and Series A/B) start-ups in the procurement technology market. Thesis 1 looked at automation and vendors in that space. Thesis 2 looked at providers of marketplace solutions. Today, we’ll look at user interface technology in the start-up stage.

I’m old enough to remember when mastering a complex user interface in a technology application at work was a right of passage, something that felt good — as if you had actually accomplished something (lassoing that bull!). Like many non-millennial readers of Spend Matters, I have battle scars from 20-year-old versions of Excel, PowerPoint, Lotus Notes, Siebel and SAP (R/3). In these applications, mastery — such as knowing a secret command or knowing where to click — was an accomplishment in itself! My, how a decade or two changes everything. Today, many tech firms that we track are competing almost entirely based on their UI. 

Need proof? 

Remember Coupa from 5+ years ago? Before it was able to build out a full suite offering and deep functionality across all aspects of procure-to-pay, early customers were willing to overlook Coupa’s gaps because the UI was so much better than the alternative. And it has maintained its edge in part by continuing to deliver a great user experience. 

And Scout RFP — now part of Workday, which purchased Scout at a premium SaaS multiple (20X revenue territory) — never set the world on fire for overall sourcing depth (or breadth). Granted, it did RFI and RFI scoring quite well. But most important, it was a solution that people loved to use (and still love to use). Simply put: Usability put Scout on the sourcing map, helping it achieve the impressive growth rates and customer retention that drove its great exit. 

With the latter of these vendors, we helped guide a CPO through a selection process a year or two back, and he ended up going with the solution almost entirely because it was so darn usable — not because it burned brightest in SolutionMap analyst scoring for depth. Usability won the day! 

The great majority of the next generation of procurement technology are being built with usability in mind. 

But who in the market do we admire today at the seed/venture start-up stage? 

I asked the Spend Matters analyst team for their thoughts and jotted down a few of my own as well. Note, all of the vendors can win on usability as the primary buying criteria — which can open doors, speed sales cycles and ultimately drive higher levels of adoption. 

While far from comprehensive, here is a list of vendors that the team came up with: 

  • Bonfire — has a “Scout RFP-like UI” according to one of our analysts. It is incredibly easy to use with team-based collaboration designed from the foundations. As we have noted before, “Usability is proving the single most important killer app for the next wave of sourcing technology adoption. And providers such as Bonfire are proving that absolute feature/function capability alone is less important than providing an optimally rich user and customer experience that will maximize adoption and customer satisfaction.” See: Bonfire Customer Experience: What Makes It Great (SolutionMap Analysis)
  • Outlaw — the Outlaw solution provides a modern, intuitive interface for contract management that addresses the core pain points of contract creation and negotiation today. It expands upon the standard features expected in collaborative document authoring (think Google Docs) by adding contract-specific functionality where needed. Quick and easy contract element editing is a plus, as are the clutter-free workflows for redlining and issue resolution. This is precisely the experience for creating and negotiating a contract that the archetypal “millennial” user would expect. See: Outlaw Inc: Vendor Introduction, Analysis and SWOT
  • Renhead — a provider that will be the subject of upcoming PRO coverage, Renhead is an upstart VMS that delivers other workforce management capabilities. It offers a very intuitive UI, including leveraging a design that allows users to navigate to different pages with a minimum number of clicks.
  • SupplyHive* — the SupplyHive approach to UX/UI development almost religiously focuses on being as modern and user friendly as possible. The whole experience is artfully rendered and decidedly more B2C-like than B2B. But beyond visual elements alone, SupplyHive also puts a smart focus on applying automation where appropriate, asking users to interact with the platform only when absolutely needed. See: SupplyHive: Vendor Introduction (Part 2): Product Strengths, Weaknesses
  • Teampay — this “lite” P2P solution exemplifies the maxim that “the best UI is no UI.” One of the more impressive aspects of Teampay is how little it feels like an enterprise purchasing application. The integration into Slack, while not unique in the P2P world (e.g., Tradeshift, Coupa and Procurify all support Slack integration), is quite seamless. End users and approvers can not only make purchase requests but, based on the rules executed, actually perform purchases via a virtual card. And rather than have a separate system for handling disputes, team members can simply discuss the transaction in the same collaboration tools they’re already using. See: Teampay: Vendor Analysis — Solution Overview, Strengths/Weaknesses, Opportunities/Threats, Tech Selection Tips
  • Tealbook — find relevant suppliers, fast. See: Tealbook: Vendor Introduction (Part 2) — Product Strengths, Weaknesses. As we have noted in deeper coverage of Tealbook on Spend Matters PRO, it is one of a few providers that offer a “social media-like” user experience that underpins their solutions. It drives buyer-supplier collaboration and adoption of the resulting networks by applying widely used features of social networks in a B2B context. … Tealbook (encourages) internal stakeholders to discuss suppliers and collaboratively evaluate prospective partners.” 

This subject is by no means a complete list of upstart procurement technology providers with a unique user experience that can help “sell” all other aspects of the solution. There are dozens of other providers leveraging the power of walk-up UI to drive adoption. 

Other shout-outs include: 

  • Amazon (Alexa) — the antistart-up but with the best UI of all — no UI (i.e., voice). Just make sure that the “voice” price is the same as the mobile or web price for Amazon Business! 
  • BuyerQuest and Vroozi — two independent e-procurement providers with excellent (albeit different) user experiences 
  • Celonis — re-inventing process analytics with a powerful user interface
  • SAP Concur — far from a start-up, but also a great mobile-centric (and platform-centric) T&E-based app 
  • SourceDay a direct materials procurement technology provider that is reinventing the buyer-planner workbench
  • Spendata* — because simple should also apply to professional users, not just requisitioners or other “frontline” users. Offers easy spend slice-n-dice for the power user.* 
  • Uber for Business — not a start-up by any means, but the quintessential example of a provider putting mobile entirely first.

* Disclosure: Jason Busch is an investor in SupplyHive and Spendata. He did not contribute to writing these sections of the analysis or recommending that these vendors be included in the list.