A decade ago, as a favor to Coupa’s founders, I participated on calls with several VC firms who were looking at investing in the new start-up (Coupa). The discussions focused on market growth and general opportunities for new cloud software companies in the supply management space and in the eProcurement market in particular. Much as I am now, I was optimistic about the opportunities in this space for the right types of solution with the right approaches and management (some, not all, new companies can chart a fast growth trajectory). I also believe that I was (and remain) very realistic about the growth and expansion potential of the supply management solutions market (it is and has been a consistent and steady growth market; it is also a market overdue for a catalyst or two to drive new growth). I was very optimistic about Coupa’s potential back in 2006 and 2007, but it is safe to say that Coupa has wildly surpassed my expectations. It is also safe to say that Coupa has probably surpassed the expectations of everyone involved with the company at the very beginning… That brings us to yesterday and day one at Coupa’s fourth annual Coupa Inspire user conference.
Coupa Inspire 2016
Three years after Coupa hosted its impressive first event in 2013, Coupa Inspire has become a major procurement industry event from a size, attendee, and content perspective. This year’s event in San Francisco brought in an estimated 1,500-1,800 attendees, including many prominent CPOs and procurement executives and 30 sponsors and/or partner companies. The event agenda blends together main stage keynotes and panel discussions with deep dive customer and best practice presentations across a full spectrum of supply management topics. The event also offers numerous sessions led by the Coupa team and has dedicated the third full day of the agenda to “Technical Classes” and “Leading Practices.”
In a relatively short amount of time (3-4 years) Coupa was able to become a disruptive force in the industry, capturing the attention of both procurement organizations and its rivals. At times, its bark may have been louder than its bite, but along the way, Coupa has stayed true to its original vision of developing a cloud-based eProcurement solution that was highly usable and easy to deploy. It has since built an entire suite of solutions around that product vision (cloud, usable, deploys fast) and sits today as a major industry player.
If the company was at times aggressive in its approach and bravado-filled in its view of self, the fact is that these traits are needed by new technology companies if they are actually going to make a big mark. Unfortunately, what frequently happens with bold, new tech companies is that their software/technology capabilities never quite catch up to the vision and those companies soon fade. I saw this first hand in my time at Commerce One. But Coupa’s customers, partners, and investors need not fear — Coupa has more than arrived and is now a full-fledged market leader in the space.
Opening Keynote: Value-as-a-Service
As has become custom at the event, Coupa’s clever and charismatic CEO and President, Rob Bernshtyen, kicked off the event with an engaging welcome address. This year Rob shifted away from the forceful tone of an evangelist to that of a warmer and engaging visionary, beginning with a humorous anecdote about ordering a hotel breakfast and the gap between what was needed for success (a few spoonfuls of oatmeal) and what was actually delivered (a full tray of extras and accessories) and used that as an example to criticize the enterprise software world for over-developing solutions in a feature-functionality battle that loses focus on the main objectives of using the software in the first place — to achieve objectives and generate returns. Ardent’s research has shown that many enterprises struggle to drive full value from their technology investments and a sizable number face major problems when trying to align their processes and systems. Sometimes this occurs because a system cannot support specific activities. But as frequently, and to Rob’s point, these challenges are created by needlessly complex processes. This helps to explain Coupa’s approach and why it prioritizes usability over functionality in its solution development strategy. Of course, that does not mean that it forgets about new features and important functionality.
Rob says that Coupa is succeeding because it (1) focuses on results (2) ensures customer success and (3) strives for excellence. He then discussed each of these areas in depth. Fundamental to his discussion and each of the items listed above is Coupa’s drive to deliver “Value-as-a-Service” (this is also the name of Rob’s new book). What this means to Rob is that as customers (in this case, procurement departments) continue to move away from buying outputs or things but rather look to buy “outcomes” or “results,” sellers must rethink how they approach the development and delivery of their solutions. In Coupa’s case, they focus on delivering value to their customers by defining success during the pre-sales process and then working with their customers to focus on and track that value throughout the deployment process and post launch.
Coupa’s Solution Suite
Coupa’s initial solution strategy focused on procure-to-pay followed by expense management. These areas remain the company’s strengths. But, over the past few years, Coupa has worked to build out a suite that now includes sourcing, contracts, supplier management, analytics, inventory, and storefront components and links to its Open Business Network which Rob says now has hundreds of businesses, millions of users, 2 million suppliers, and supports billions in spend. Rob said that on day two (today), Coupa will make a series of announcements related to its products including contract collaboration, invoicing, expense management integration, and services procurement (or complex spend management).
Coupa’s bold market approach is now matched by a strong suite of solutions and an ability to deliver. Its 2016 user conference is testament to Coupa’s leadership in the market and how far it has come in a decade. No longer the rising upstart, Coupa’s second decade from a both an operational and competitive standpoint will be very different than its first. After all, as companies grow and mature, it becomes harder for them to stay innovative and disruptive.
Coupa has great opportunities to continue to expand geographically and build out the capabilities of its newer products, but it won’t be easy. The entire supply management solutions market is now focused on improving usability, placing more pressure on Coupa to build out its functionality and innovate in other areas (like breadth of solution suite and its emerging network). One day, Coupa may even face an upstart inspired by Coupa’s own success. Focusing on value, customer results, and excellence have them prepared for that day, if it should ever come.