Editor’s Note: This is an edited transcript from an interview with Denis Chen, co-founder at SiRP– the supply chain software that makes life easier for enterprises, no integration necessary. It automates your procurement processes including placing purchase orders, tracking delivery timelines, and reviewing supplier performance. You can learn more at sirp.ca
Identifying the enterprise supply chain problem, and having dinner
We’re all McGill Engineering graduates and met at school. We’ve known each other for 8 years now and we were friends first.
Everyone on the founding team had experience in the supply chain industry. It’s a very traditional field that’s process-oriented. And the older generation in this field hasn’t been quick to upgrade their tech. As millennials we realized that the status quo — which involved lots of manual processes and redundancies in communication, didn’t make sense. We struggled with that while we were working in the field, so we felt the frustration ourselves. We saw the opportunity to fix the problems that came with that status quo, by digitizing supply chain tech.
Some of us had founded companies together beforehand which helped us fund this one. We were always thinking about what was next – we’d have dinner once in a while and talk about our work or different ideas we had. One night, we just had a venting session about our work and thought “Why don’t we do something about this? How can we build it better? Is there a market for it?” And then it just spiraled out of there.
Going from a dinner conversation to a prototype
It was a painful process because we pivoted at least 4 times, and all within the same idea! The changes we made were about how to deliver it, some specific details, and just reprioritizing. Sometimes we’d think “Oh yeah we have a prototype!” But it really wasn’t one. Last May (2019) is when we had our first beta and went live with our current version.
When it comes to product development, there was a shift in mentality we had to make because of the differences between B2C and B2B. In B2C businesses, you can take small steps and iterate on them quickly. But with B2B you need to take larger steps, but they need to be steady – you need to have a higher degree of certainty in your product when you’re delivering to large enterprises that are trying to minimize their risk.
Why they’re going after enterprises
We’ve always worked in the B2B market in our professional lives, which means we naturally had conversations at work that led to us noticing problems in the enterprise market. We decided to target them because it played to our strengths – we understood the industry and we were familiar with their decision-making process, which was a clear and logical one: your clients have a problem, and you build a solution for them. When you’re doing B2C, the same principles apply but it’s a lot more ambiguous. But with enterprises’ clear decision process, you can work with it to figure out what they need and how to sell them.
Senior leadership is fully aware of the problems that their organization is facing. So when you go to sell them, it’s a simple calculation of return on investment for them, which makes it clear how to make a business case to them. You just have to understand how much money they’re leaving on the table by letting that problem go unsolved, and then clearly present how much you can capture for them.
One of the things I’ve had to learn firsthand is that each person in the organization’s hierarchy has different pain points and potential benefits from using your solution. So you need to know who you’re talking to in this organization, and make sure that your entire message is framed and fitted to one key message: your value proposition to that person – what pain can you relieve for them?
Their biggest struggle – the founding team changing
When one of our co-founders decided to pursue other opportunities, that was a big hit for us emotionally. We had to find other people and fill the specific skill set that he had. But it wasn’t about the skill set. It was harder emotionally than the solution part because he was a founder – we questioned our commitment as well.
The tough part is that there wasn’t a clear date when they said they were going to leave. It happened gradually, which was painful because we saw that their commitment was going down over time. We tried the “wait and see” approach, but then we had to have the tough conversation. Afterward, my other co-founder Zhen and I sat down and looked at each other in the eye and asked each other if we were still committed. And we were. That really helped us move forward.
Looking back, their biggest waste of time
Not being clear about what we wanted to do was a huge trap we fell into. We had a vague idea in our heads, but we didn’t have clarity on how the product would really work at a nitty-gritty level. Everyone sort of had their own idea, and that wasted some time.
When you start with an idea but you don’t really think through how the interface is going to look and how your user is going to use it, you’re missing a lot of the details. A lot of things go unconsidered. I wish we’d sat down and sketched out a prototype, even on paper. The first MVP that we had, if you look at the back-end of that product it was like an excel sheet with all the formulas typed in instead of linked. So when we made changes to a cell, the changes didn’t get linked either. So our database structure could have improved we had spent some time thinking about it up front, to save time down the line.
What’s next: 150K ARR, US & China expansion
We’re focused on reaching 150K in annual recurring revenue, then we’re going to raise capital to expand into different markets more quickly – especially the US. We’ve been closely looking at the Chinese market as well and we’ve got some interest from programs and angel investors there. We’ll be launching our platform there one year from now.