Doing one thing really well, and thinking about the science.
There is an obvious attraction to buying a broad suite solution. The benefits are oft repeated, and range from end to end user experience, global consistent processes, broader insights through suite wide analytics, vendor viability, lower integration costs, to more coherent procurement leverage. The market has rewarded those vendors that have built compelling suite products with handsome valuations and revenue.
At times though, it is good to challenge the suite default thinking. The technical barriers to entry for specialist niche vendors are lower than they have ever been. Amazon, Azure and Google Cloud provide technical platforms that remove the competitive advantages of the large enterprise application vendor on the infrastructure side. On the front end, tools like Power BI and Tableau provide compelling frameworks to visualize analytics. The building blocks and operating mechanisms of enterprise software used to be exclusively proprietary, today they are far more open and commoditized. Integrating specialized vendors with suites has become easier, witness the growth of marketplaces, partner ecosystems and standardized, more open integrations, and the active investment of the suite vendors in corporate VC.
What isn’t commoditized is deep subject matter expertise. I’m becoming more interested in the science and business knowledge behind products than I am in the technology that builds them. Someone with generic machine learning competency doesn’t get the complex subtleties of skills matching, for instance. It takes a couple of years or more to figure this out. As we apply more machine learning to HR data, I’m convinced that the specialized industrial psychologist is going to be more crucial to long term product success than the traditional technology driven PM.
I like to meet the people behind the science in the product, and I want to understand how much thought and research has gone into the theories upon which the product rests. When a vendor says that their product reduces workplace bias, identifies top talent or increases employee engagement, I’m not that interested in how cool the UX is, I really want to know how they can make that claim with something approaching validity and reliability. Show me the science first.
A dedicated organization focussing on solving one problem is more likely to have thought through the science and obsessed over the details than a suite vendor covering many business problems.
If I were leading an HR function today, I’d make sure that my organization was constantly monitoring the niche specialist vendors, especially those that have a laser focus on a specific business problem. I’d be especially interested in the vendors that can clearly explain the science behind their products. I’d want to deploy the ones that help solve my most pressing problems. I’d aim to be clear about what I want to do in the suite, and where I want innovative experiments. I’d cultivate and curate that portfolio.
Over the next month or so I’ll blog about some of the specialized niche vendors have impressed me recently. If you are a specialized niche vendor, solving a specific HR related problem, I’d love to hear from you. If you plan to be at Unleash Paris, let’s meet there.
I'm a venture capitalist at Acadian Ventures, investing in the future of work.