Changing the way enterprise technology is bought and sold
In our effort to learn more about modern companies one thing has become very clear, the way people select products and services has changed. In both the business-to-consumer and business-to-business worlds, people rely more than ever on information they get from non-brand internet sites, customer reviews and recommendations from friends and colleagues. This has undoubtedly led to more informed and better decisions in many cases, but free flowing information can also be confusing and misleading. How do you know who to trust, especially when making a large purchasing decision? We spoke with Vinay Bhagat, Chief Executive Officer of TrustRadius, a company that has set out to answer that question for the enterprise software market. Here’s some of what he told us.
Hi Vinay. Can you tell me a bit about TrustRadius?
TrustRadius is bringing the power of consumer reviews to the enterprise. As consumers, we are blessed with easy access to first hand insights about the products and services we buy. For example, you can get detailed reviews of hotels, restaurants, auto mechanics, contractors, home appliances, you name it. There is a wealth of information available to help you make an informed decision. But in business, where we are making large, expensive, and consequential decisions, we often have comparatively little first-hand data. We often rely on our own experiences, limited personal networks from whom we can ask advice, but the information we get back is ad-hoc and unstructured. Sometimes there are technology analyst reports available and of course, vendors are always willing to provide information, but as a consumer you wouldn’t go to Best Buy and ask which refrigerator to buy. You’d research your options online and read credible reviews from customers. We think that the same opportunity exists in the $3.8 trillion dollar enterprise technology and services sector where decisions are often made with limited or biased data.
As the founder of a successful technology company (Vinay founded the SAAS company Convio which went public in 2010 and was acquired in May 2012 for $325m), my team bought lots of software and often struggled to find authentic information. In one situation, we purchased a very expensive HR software package, relying primarily on guidance from a rep that didn’t end up having features critical to our business. In another situation, we bought an accounting package that was a good match for our needs, but it took two years to realize a return because we went down the wrong implementation path. I believe we could have avoided both of these mistakes if we had access to authentic insights from peer companies. In situations like these, the stakes are high and decision makers need a network they can trust to be candid. They also need a simple way to determine the trustworthiness of each reviewer, just like eBay provides “Positive Feedback” scores. We’re taking that approach so that it becomes easy to discern the validity of someone’s view based, not just on demographic information, but also the trust they have built up within our network.
What makes TrustRadius different from the other software review sites that are out there?
Most other sites are built around the directory model. They are primarily listing services, paid by a subset of vendors for lead generation. Although some include user reviews, they are more of an afterthought and not the primary focus. Others are more about reviews, but it is a more superficial “Yelp” like approach. They focus on quantity of ratings rather than depth of content. Our audience doesn’t want to read 100 reviews; they want quality insights from people like them that they can trust. So far, we don’t think anyone has achieved the robust, enterprise quality experience we intend to provide.
What challenges do you face in growing your community?
The main challenge is that most people aren’t wired to look for user reviews when they are making enterprise software decisions. It is amazing how few people do a search that says, “Product A + Review.” We do that all the time as consumers, but business buyers aren’t trained to do that yet.
We’ve built a platform that we think has the right feature set to build authority and trust. We’ve been in a private beta since November and have just launched our public site. We are laser focused on understanding how to engage people and to get them comfortable with writing high quality review content. We are taking a market focused approach to getting critical mass. We are focusing initially on a few domains so that we can maximize value to our members and attract new people through search, media coverage etc.. We’ve also reached out to major vendors in those segments to encourage their customers to contribute to the community.
Who is your typical user?
Our users include IT and line of business professionals at both an executive and hands-on technology user level. The product category often drives who will be reading and contributing reviews. We hope to offer a variety of points of view. It is nice to hear about products and services from executives, but sometimes the people who work more hands-on bring the most meaningful content. Our site is really for anyone involved in the purchase, implementation, or heavy use of business technology applications
We are really interested in the way business and work, in general, has changed in the last 5-10 years. What has changed in how you do business and how your employees work?
As a small company we are much more mindful about finding the best people and are geographically agnostic. In fact, I just hired someone in Iowa (we are in Austin, TX) and he will work completely remotely. We are very willing to find ways to work with remote people if they are the very best. There is still value in being in the same office and having remote workers is a bit more burdensome, but it is far offset by being able to attract the best talent. I’m even considering someone in the UK. A quality individual trumps proximity.
Another important trend is that enterprises are increasingly social. Companies are embracing social networks as a way of helping people find trusted connections and get advice. Even in businesses where people were historically more guarded about sharing information, social media has started to make an impact.
Has anything changed about what you expect from your vendor partners?
We live in a world of transparency and we believe in the free flow of information both as a buyer and as a vendor. These days the onus is on vendors to embrace and provide transparency and set realistic expectations. With more and more products being sold on a subscription basis, vendors will churn customers quickly if the actual experience does not match what customers expect. Word of mouth discussion about products/services is going to happen whether the vendor likes it or not, so vendors must win customers every day, not just at the initial sale. Another trend is that people are becoming used to the “freemium,” or a try-before-you-buy model. But even that requires a commitment of time and resources and people want some guidance to help them decide where to invest their time.
So, in short, the modern buyer wants detailed intelligence from non-biased sources that can be proven to be trustworthy. It’s a tough, but interesting challenge that we are excited to be taking head on.