Vetting Vendors in the Cloud
Picking vendors can either be very simple or very complicated depending on your approach. Some firms trust what they hear and read from the vendor and simply trust that it is all true. Others are more pragmatic and choose to validate everything they hear to ensure that the marketing groups are not overstating the firm’s capabilities or trustworthiness. The reality is this: In the cloud, you can’t trust what you read, you have to verify for yourself.
The most amazing thing that the web did for marketing was to create a very inexpensive way to exaggerate a firm’s capabilities. In the old days, you could look at a building or office space and literally see that the firm was successful and thus could be trusted to provide a quality product or service. On the web, $5,000 goes a long way in terms of producing a very impressive storefront full of marketing information that was written by a professional copywriter. Bottom line, you can’t trust what you read, you need to look under the covers to verify that you can trust the firm and trust the firm’s products and services before you entrust your client’s business to them. If they fail, you fail and your clients will hold you accountable for it.
To properly vet a vendor, you need to perform a comprehensive assessment on every one. Below are some questions you should ask.
Business — You need to ensure that the leadership is strong, the business model is sound and that the firm has the financial stability to survive the stressors of a product launch. Do they have a burn rate where they are making less than they are spending? If so, how long is their runway where they can survive at that pace without an infusion of capital? Is the firm’s leadership rounded and truly qualified? If there is a brilliant technologist at the helm, has he surrounded himself with the operational, financial and sales expertise to turn a great product into a successful company?
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Technology — You need to test each product for yourself to ensure it works as described. Are there any gotchas? Will it fit into the environment(s) you expect it to? Will it work with every platform and impacted software product you need it to? If your not an engineer, be sure to bring one in (business guys are not equipped to assess the technologies behind great products to ensure they are ready for your clients). Do they have a culture of innovation that will ensure they product remains relevant?
Customer Service — Are they ready to handle you as a client? Be sure to speak to other partners about their service and product to ensure it is on par with what you would expect. Don’t settle for the few they give. Socialize at trade shows and vendor events to see if you can find partners that are not raving fans. Have a skeptical stance — look for issues. You may choose to ignore them in the end, but knowing them will help prepare you for them.
Don’t be surprised if the aforementioned steps take 20 to 200 man hours to achieve and require inputs from finance folks, technical folks and sales folks. To do it right, you have to really assess more than just the technology in place today. If they have great engineers but horrible salespeople, they will fail. If they are great at sales and engineering but lack the financial team and capital to ensure they don’t run out of cash, they will fail. You owe it to your clients and team to do a very comprehensive assessment of every technology you bring on. Take it from a guy that did it both ways: Spending more time up front will save you a great deal of time in the end.
Distribution partners can and should play a role here. The reality is that they can make one investment in the above and all of their clients will benefit. They have the personnel and capital to do it right. Doing this for us will lead us to leverage their experience to ensure that our clients, and our businesses, are protected from firms with great marketing but poor business acumen. Don’t get burned by slick marketing, trust but verify.
How can you tell if a prospect is just trying to get you off the phone? What do you do to keep them interested?
