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
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
Sad news, indeed. But somehow not surprising giving the challenge of getting traction in the supplier performance management space.
In our free online class "Managing Supplier Performance," we feature a hands-on supplier performance management software simulation that we built.
We always get people asking "Where can I buy that software?"
Our answer: "You can't."
Their response: "You should market it!"
Our response: "No we shouldn't."
There hasn't been a shortage of people who have tried to market this type of software. But few have succeeded. It is a tough market.
And every time I try to refer someone to a provider, it seems that the provider has either gone away or no longer offers a supplier performance management solution.
I just spoke to a woman last week who called about the software in our class. She seemed to think that, because we're not marketing it, she could create something similar and succeed.
I hope she does. But my feeling is that she won't.
Technology to better enable supplier performance management is needed among procurement professionals. I hope that someone can crack the code of how to consistently convince the budget approvers that it is worth the investment and be able to profit by doing so.
Great thoughts. Unfortunatley, I think we're on the same table here, although I will say that I've stories about a few progressive companies approaching vendors to build custom solutions that bridge the performance and risk areas. Ask anyone on UTC's old supplier development team how they used Open Ratings in a customized way, and you'll hear some amazing stories. The opportunity is real. Unfortunately, it's just not a mass market one at this point in time.
This reminds one of the perils of accepting VC money. I don't know if it applies to this situation or not, but when investor money comes in, management is often pressured to grow the business rapidly when it might be best to allow it to run for a while as a smaller enterprise. Certainly it is quite difficult to grow a business that's still in the process of trying to create a market for its product.
A friend of mine has made millions buying up small software companies that were grown beyond their means/revenue by VC's and their big plans. He buys them for chump change, cuts them back to profitability, and suddenly they are thriving businesses again instead of money-losers.
I have been closely following this space and hope we hear of more vendor success stories in this niche.