Do you want to know how to really the quickest way to determine how much your founder knows about their customer? Ask them about their customers technology stack. What I mean by tech stack is the list of software companies their customer utilizes to complete their workflow. This seems like a super easy question to ask but the level of detail is the most important.
The most obvious answer to this is to simply list the the software vendors. This is a good start to start jotting these names down. In this day in age pretty much every vertical has at least one vertical-specific SaaS/on-premise platform that helps their customer operate their business. For the purposes of generalization usually the stack will include the following core workflows – customer facing (CRM, EHR etc), labor facing (HCM, payroll, LMS), internal operations (inventory/resource management, process management, accounting/finance) etc.
After listing the different companies that service your founder customers the next question is to find out what they charge. This approach offers a valuable opportunity to assess whether the founder can accurately infer their customers’ software budget. This is where founders miss all the time. They do not understand what a customers perceived value is for the software they are using. It is hard to charge 5x more for your product when their “mission critical” platform. All of these things all come down to the ROI statement of the founders product.
After reaching this stage of the discussion with the founder about their customers’ software spend, the subsequent step is to evaluate the market share held by these players. As you can observe, these questions become increasingly challenging, and providing definite answers may prove extremely difficult. Nonetheless, it is imperative for the founder to possess an estimate or, at the very least, demonstrate thoughtful consideration of these questions.
The ultimate challenge in this gauntlet is to determine the level of integration between different entities. Our world thrives on interoperability, and it’s common for larger vendors to seek strategic partnerships with others, allowing them to avoid the need to invest resources in building additional features. Analyzing platforms with seamless integrations becomes crucial, as these companies join forces, pooling resources to acquire customers and jointly penetrate the market.
In the whirlwind tour of a founder’s understanding of their customer’s tech stack, we’ve witnessed the gamut from the basics to the brain-tinglers. It’s not just about rattling off software names like you’re reading the menu at a tech buffet. Nope, it’s about digging deeper, understanding not just what’s on the plate, but also the recipe behind it. Founders, listen up! Knowing the software spend, gauging the ROI, and unraveling the Gordian knot of market shares and integrations isn’t just smart – it’s essential. This isn’t about playing tech stack trivia; it’s about demonstrating a profound, almost Sherlockian insight into your customer’s world. So, the next time you’re asked about your customer’s tech stack, remember: it’s not just a question. It’s an opportunity to show that you’re not just in the game, but you’re playing to win, with a strategy as robust and interconnected as the very tech stacks you’re discussing. Here’s to the founders who get it and to those on their way – may your insights be as deep as your ambition, and your growth as vast as your market!
