The economics of the bundling/platform model make a lot of sense, but I'm not sure who the buyer is. Is it the CTO? The Chief People Officer? The CFO? Coordinating budgets across multiple functions is difficult, so who would be the ultimate decision maker?
You almost lost me with the Rippling reference, but that has to do with my concerns about their approach to privacy and security (and reputation about such). But kept me with the broader, re-aggregation trend.
Myself and my teams often start with a number of point solutions as the business grows and needs arise. But eventually the conversation will come up, often organically--is maintaining 4-6 point solutions that much better than one, turnkey platform?
The switch then comes down to thoughtful evaluation of the tradeoffs (what features are we actually using/getting value from), TCO estimate (maintaining integrations, overpayment for best-of-breed vs lower cost of platform), and how well the platform plays with point solutions.
This last point is where many platforms fall short. For obvious reasons, they want you go all-in on their ecosystem vs bringing a few of your favorite point solutions. The best platforms are agnostic as to whether you use their product to perform a task or bring a few of your preferred alternatives.
Excellent article, as always. Another angle to consider is the impact of CAC inflation over recent years. As CAC climbs, focusing on selling more to existing clients becomes an increasingly smart and profitable strategy.
Earlier this year, I co-authored an article with Prof. McCarthy delving into this concept. You can check it out here:
Great article, as always, thanks!
The economics of the bundling/platform model make a lot of sense, but I'm not sure who the buyer is. Is it the CTO? The Chief People Officer? The CFO? Coordinating budgets across multiple functions is difficult, so who would be the ultimate decision maker?
Definitely requires some coordination. I often see the effort led by a CFO and/or whoever is over IT to coordinate
Love this article, thanks for sharing!
Thanks, Richard!
The Single Pane of Glass is back!
You almost lost me with the Rippling reference, but that has to do with my concerns about their approach to privacy and security (and reputation about such). But kept me with the broader, re-aggregation trend.
What is your process on evaluating the many point solutions at companies? Do you have a process/target aimed at consolidation?
Myself and my teams often start with a number of point solutions as the business grows and needs arise. But eventually the conversation will come up, often organically--is maintaining 4-6 point solutions that much better than one, turnkey platform?
The switch then comes down to thoughtful evaluation of the tradeoffs (what features are we actually using/getting value from), TCO estimate (maintaining integrations, overpayment for best-of-breed vs lower cost of platform), and how well the platform plays with point solutions.
This last point is where many platforms fall short. For obvious reasons, they want you go all-in on their ecosystem vs bringing a few of your favorite point solutions. The best platforms are agnostic as to whether you use their product to perform a task or bring a few of your preferred alternatives.
Excellent article, as always. Another angle to consider is the impact of CAC inflation over recent years. As CAC climbs, focusing on selling more to existing clients becomes an increasingly smart and profitable strategy.
Earlier this year, I co-authored an article with Prof. McCarthy delving into this concept. You can check it out here:
https://techcrunch.com/2024/01/14/look-at-your-startups-cac-to-decide-if-you-should-launch-another-product/
Thanks! I’ll check it out