“We have this idea of permissionless procurement where it’s not actually procurement doing the purchasing when it comes to longtail anymore. It’s the business.” –Natasha Foster, co-founder and COO of Paid
This blog post is part of Art of Procurement’s ongoing Startup and Growth series, where we aim to shine a light on the early stage and growth companies who are changing the way that leading procurement teams are 10X’ing their impact.
Philip Ideson recently interviewed Natasha Foster, co-founder and COO of Paid, a solution that automates the process for purchasing from tail spend suppliers. Here are a few highlights from the conversation.
Q: What was the trigger to found Paid? What pain point did you want to solve for that you didn’t think was being solved in the right way?
A: Both myself and [Paid co-founder] Tom Howsam have been small suppliers. I’ve also been on the big buyer side, but we both have felt that pain of trying to work with a large enterprise when you’re a small supplier.
We were talking to procurement directors at large companies when we realized what we had actually built was a reverse P2P workflow and that it would actually work very well to put the control in a buyer’s hand to help them work well with their small suppliers.
To take an example of a company we work with, they’ve got 2,000 strategic suppliers that they spend over 12 billion with a year, and they’ve got 12,000 suppliers they spend 200 million with a year, and they’ve got the same process that they go through to onboard and contract with and pay those suppliers – be they strategic or not.
You know who your supplier is. You just want to get to it and work with them. You know you need to be compliant because you’re a large enterprise, but you don’t want to go through all the manual processes to stay compliant.
We turned the automated workflow we’d already built around and now we can facilitate a buyer doing exactly what we had intended the supplier to do. They have the process readily available to do it themselves.
Q: Could you walk us through the example of the client with the 12,000 small suppliers? How would they interact with one of those 12,000 suppliers through Paid?
A: Absolutely. Let’s say that client is looking to onboard a new supplier to provide marketing event services. The marketing team knows they want to use this supplier. They’re not looking in the market. They need to use this specific supplier and it needs to be for an event next week. Normal scenario: panic. They would probably just get the marketing supplier to deliver and then worry about the PO later.
Because they’ve got Paid, they can say, “For this supplier, I’m spending less than the threshold amount that categorizes the supplier as longtail. I’m going to use Paid.” We are the master vendor in the client’s ERP system. They can easily raise a PO with us using the right details of what they want the supplier to do. That gets communicated via our system and the supplier gets invited.
We’ve already preconfigured the client’s process for supplier onboarding. We just need their email address and their name. They gain immediate access to a dashboard with all the information they need to provide to become a supplier to this client. We do standard sanctions checks, bank account verification, and so on, then we layer on any additional information that the client needs through questionnaires and standard policy acknowledgements.
People want transparency into the longtail without spending all their time trying to find it. We purposefully partner with companies that recognize that and want to make use of their time in the most efficient way.