For many startups, it all starts with a great product idea. But how do you approach large customers? What are big enterprises looking for? Are they startup friendly? What aspects of your product, business or supply will be most important for them?
In our new interview series, we spoke with Rohit Sathe, Chief Procurement Officer (CPO) of a world-leading manufacturing company. One of our topics was how he views startups from the perspective of the buyer — and his top considerations.
Spoiler alert : it is not all about the price!
Note : in this interview, Rohit is speaking from his own perspective, not as a representative of his company.
Welcome Rohit! Please describe your role.
I’m responsible for global procurement and supply chain for a world leading designer, manufacturer and distributor of bespoke wheel chairs, seating systems and mobility aids.. We operate in 18 countries, distribute in 130 countries and we employ 2200 associates worldwide.
What does a startup need to think about, before approaching you with a new product?
You know, for me the single biggest priority is the safety of my users and the second is the ability to manage a high mix/low volume supply chain at the desired competitiveness.
Even if I have the slightest margin of doubt that this supplier is not ready to guarantee the safety of my user I am going to say : I don’t feel comfortable, I need you to sharpen the knife on these 20 things. And I need you to bring the use case whereby you can tell me that you know it 99.9999% certain that my product is in no way going to compromise our user.
“You know, for me the single biggest priority is the safety of my users…”
So it is product quality that is number one for you?
When I say quality, what’s more important is the consistency — a part to part consistency. Every single part that you ship to me needs to be consistent and compliant to our regulatory requirements. What you have to keep in mind is when you and I drive cars and if the car stalls, we’ve got an engine failure light and we can just simply get out of the car, put on an orange vest, make a couple of phone calls and make things happen. This is much different for my users, and I do not want them compromised in any shape or form.
Do you get approached by many startups currently?
A number of companies (start-ups included and we encourage more to do so) contact me with some novel ideas and innovative products that they want to bring into the market. And that is always my challenge to them: can you guarantee consistent quality at a competitive price point, is your product fully vetted, are trials properly documented, fully developed and are you willing to work with low volumes and high complexity? I am a tad averse to trials and errors, so I may have a tendency to err away from working with a startup. However, if I see a mutual win we are open to help the startup validate and commercialize the offering.
“…if I see a mutual win we are open to help the startup validate and commercialize the offering.”
What else do startups need to consider when approaching your company?
Another challenge of working with startups is : is this whole thing going to be consistent? Is this entrepreneur going to stay at it, or is it going to be that six months down the line she or he is going to have some new fancy idea and this whole thing becomes history and they move on to something else.
I need to get that feeling that this is something stable, something sustainable, something consistent. When I start to buy a product there are a lot of resources that my engineers are going to put into the project. The time of my engineers is money, that I could be deploying somewhere else to develop something new. So I need to be taking solutions to my engineers that have a very high likelihood of success.
Needless to say, I expect the start up to conduct a proper market scan, competitor benchmark and explain why they think their solutions would be superior / breakthrough.
“I need to get that feeling that this is something stable, something sustainable, something consistent.”
Anything else that startups should consider?
The last thing is that the startup should not forget that it’s my credibility which is at stake. If I bring a solution to an engineer and am able to convince the engineer that this is a fantastic product, and they invest 200 or 2000 hours in the project, and then the entrepreneur finds a new idea or pivots to something else — the engineer will not say anything about the startup. They are going to say — hey Rohit, I trusted your judgement on this and went along with it, and look what happened. So I have to be super careful about who I put up in front of my engineering community.
So overall, startups are encouraged that can assure product reliability?
We have an appetite to work with young companies, but I have to have that warm and fuzzy feeling that there’s a 99.9% probability of success. There are a couple of young but reliable companies that we are working with, and we want to give them a chance, because young companies bring innovative ideas and solutions. But I need to have that feeling that these are not just ideas — there is substance behind them and there is reliability that can be secured.
Thank you Rohit!