Launch HN: Procoto (YC W21) – Procurement SaaS for SMB | Hacker News Reader

Launch HN: Procoto (YC W21) – Procurement SaaS for SMB

52 pointsmichaelotis38 comments

Hi HN! Ryan and Michael here. We’re the founders of Procoto (https://procoto.com). We help small and mid-sized companies organize their vendor rates, vendor contact info, and vendor contract terms.

Most growing companies find themselves juggling different systems/spreadsheets and overspending with their vendors. Procoto replaces the multiple systems to become their central hub while identifying savings opportunities based on historic rates.

Why us? We come from the procurement world and spent time in 30+ procurement platforms as both vendors and users. But when we went to switch from spreadsheets to a centralized solution, we couldn’t find what we were looking for. Our only options were to stay in spreadsheets or to jump to a six-figure platform. We’d be forced to pay for more features than we needed in an outdated UI/UX.

So we left to build Procoto for people like us – procurement pros at small and mid-sized companies (25-1000 FTEs) looking for a simpler, smarter way to manage their sourcing process. We help our users get there in three ways:

Savings. By standardizing and leveraging historic pricing data, Procoto identifies savings opportunities to drive down third-party spend.

Automated Databasing. Every contract, vendor, and price point is systemically stored in Procoto.

Collaboration. Procoto fosters internal communication and collaboration across teams and remote workers. It’s not a tool built just for the procurement team. It delivers status updates and reporting to all stakeholders in the organization.

In short, we’re building the procurement solution we couldn’t find. What do you all think? We’d love your feedback. For any procurement pros out there, what would make your life easier?

If you are selling to SMB you need to put your pricing on the website.

I'm your target, but lost interest because not disclosing pricing usually means it's expensive.

Hope this helps!

It does! Thank you. Something we've debated internally. Really good to hear it from a potential user.

As someone who has worked in SaaS pricing, definitely agree that you should add a nice pricing page. :)

Otherwise, there's a funny sort of irony in being a spend management tool for other SaaS products without clear pricing on your own.

That's a great callout and definitely been part of the discussion internally. We'll get a pricing page up there in the near future... Been holding out until we have the self-service version up and running, but you make a good case to openly address it now.

Sort of a meta play here to let another one of the negotiation-as-a-service vendors take charge :)

Hi,

I'm still not quite clear on what service you're offering.

Are you saying you will help me find the right vendor for certain services/procurement needs that I would have as a company? For example, instead of me having a contract with Office Depot to supply all of my 'Office Supplies' purchases at X dollar, you would recommend for me another supplier who would do the same for lower figure? Same thing for service vendors?

Do you also handle systems/software for the individual employees to buy stuff against those contracts?

Hey there, no not in the current state... We don't identify vendors for you. Long-term, we'll pool data across industries to help you make those decisions.

Today, the tool tracks your vendor pricing, contract terms, and vendor profile information via sourcing 'projects.' So the app can compare vendors and pricing if the data is available, but it can't outright recommend a vendor with whom you've never interacted.

For your second question... You're asking if the app serves as a POS solution as well? No, but potentially down the line depending on user need. Most of our customers today use the tool for major product/service purchases that are made directly with their vendors.

I believe gp is asking if your platform can be used by employees to issue purchase orders to against the procurement for immediate fulfillement.

I happen to run a startup that does just that (among other services provided by our inventory management platform). Do you have any APIs we can hook to?

Not currently... Still trying to figure out which pieces makes sense to expose to external systems. But the PO and inventory management pieces may make more sense to integrate rather than build out internally. Feel free to shoot me a note if you want to chat further... michael@procoto.com

Looks cool! I use to work with some procurement groups. How is this different from the current rfp software out there rn (Scout, Ariba, Bonfire)? What makes it so that it’s for smb because I feel like theres a lot of similarity in the rfp process in enterprise and smb.

Definitely similar and that's part of the problem. Scout, Ariba, Bonfire, Coupa, Jaggaer, etc. prefer to stay upmarket. Longer sales cycles, onboarding processes, training sessions, and pricier annual agreements.

We're taking a simpler, more user-friendly SaaS approach so that similar tools/processes become more accessible to smaller companies that may not have dedicated procurement functions or the budget for one of the big guys.

Very cool, can you give details about the monthly costs?

Reluctant to give a quote without knowing whether there'd be any custom buildout, integrations, etc. If you're interested in learning more and talking pricing, feel free to shoot us a note at info@procoto.com. I'll personally respond and we can take it from there!

No problem, but this feels more like an enterprise process than a self serve SaaS solution. I'm not saying that is bad, but had the impression it is more self service such as I could select needed integrations and see pricing. I'd consider that more user friendly than contact sales.

You're right and we're in the midst of transitioning to a self-service approach from enterprise. Much more in line with what we're trying to accomplish.

Great. Take a hypothetical $20M annual revenue client (or opex, if easier), no build out; your bread and butter sweet spot client. What's their cost, or how do you think about it in concrete # / $s without any email or phone being involved?

That's a great question and one we're answering ourselves as we launch the self-service piece. The usability of the app is really similar to an Asana or Trello but still provides similar value to the base version of an enterprise procurement tool. So the goal is to find that sweet spot in the middle with pricing too.

Ok so specifically, using your range of "Asana to higher", the "business" tier of Asana [O] is $24.99 per user per month, and something like Vendr [1] (and I apologize if this is not the correct compqrison) is $78k / year for the middle tier. Let's assume 3 users for Asana, that's $900 per year vs ~85x that for the competitor. That's probably missing some nuance but there's a ton of vagueness / purposeful opacity in the response above, so that's range is a best guess of sorts which you can correct if you choose.

1. https://asana.com/pricing 2. https://www.vendr.com/pricing

Won't deny the intentional opacity. We haven't launched the self-service piece nor firmly defined its features. So definitely haven't solidified pricing yet.

That said, in the interest of giving you a real answer... The numbers we've thrown around for the base package are sub-$100/user/mo and the mid-tier sub-$500/user/mo. Tailored pricing for custom solutions.

Helpful thank you!!

Of course!

Hi there - Bonfire founder here - this is firmly SMB which is a distinct category. Bonfire is gov focused, Scout was mid-market focused (trying to get into enterprise, and now owned by Workday), and obviously Coupa and Jaggaer are F500 focused (with Jagger also having a footprint in state gov / academia). Also note that Coupa/Jagger are really more of P2P platforms with some light sourcing and CLM in there. Bonfire and Scout are very Sourcing focused. There is MAJOR differences between these markets. None of Bonfire’s gov clients, for instance, would be a good fit for a sourcing platform meant for, say, small rubber manufacturers. Conversely, Bonfire probably isn’t a great fit for a logistics company that mostly procures transport services.

IMO there really is very little in the SMB space for Sourcing and CLM. Procurify is likely the closest but it’s more P2P focused (great company and team though).

Up until recently, I think most players in the space struggled to figure out SMB Sourcing or rather don’t think it’s a huge opportunity on its own. Smaller companies typically don’t do much sourcing volume, so providers that try to play in that space tend towards P2P. And the mid market is HUGE for sourcing.

Now it could be classic innovators dilemma, and these guys will figure it out and then move upmarket to mid-market. I hope they do! The world needs better buying tools, regardless of size.

A new flavour are the full-service procurement vendors out there. The idea being you basically outsource your procurement to them on specific categories (like IT, SaaS, etc). They offer some compelling value to SMBs.

Anyways, I wish these guys luck - it’s an exciting opportunity if they can crack the SMB nut.

Hi Corry, I’ve worked with Bonfire in the past. You guys have a great product and excellent customer service/success!

I don’t want to out my prior employer, but just wanted you to know we thought the pricing was very good. Maybe it’s different for other gov entities, but we were definitely open to paying more.

Thanks Bryce! Small world for sure. :) Appreciate the pricing comment. We subscribe a bit to the Amazon philosophy around value-generating: i.e. we want it to be no-brainer great value, and for every client that would be fine paying more, we have some who would struggle (given the fragmentation of gov agencies and their widely different priorities/budgets).

This is low-value advice, but I'd add some periods to the copy on your site - right now it feels a little unpolished. Compare to Stripe's homepage (or similar).

E.g.:

"We get you out of multiple systems and spreadsheets without the cost or feature bloat of the big guys[.]"

"Procoto drives down vendor spend, streamlines the sourcing process, and automates purchasing, contract, and vendor data[.]"

Sounds like a cool idea, best of luck to you both!

Done. Appreciate the feedback.

Do you allow for customization of fields and workflows?

From my understanding of the ERP/CLM space - the reason SAP or coupa etc are expensive is because of the customization and implementation costs associated with deployments.

Even 50-100 person companies have highly customised procurement processes with inter location approvals, transfers etc. How does the system handle all of that?

Do you integrate with other modules like finance & accounting, budgeting, inventory?

There is really a need for a self service SAAS in this space..but this is a very difficult segment to compete in with the majors due to implementation complexities. Wishing you the best!

100% accurate with all of that. Exactly the challenge we're trying to solve.

We do allow some customization of fields and workflows already, but there's plenty more to come. We want the UX to be similar to that of an Asana or Trello but with the available feature set of a P2P, CLM, VRM.

No integrations on the finance side yet, but it's one of the recurring asks that comes up in conversations and is on our roadmap. We don't want our customers entering cost info twice just as much as they don't want to do it.

Really appreciate the kind words at the end there. It's something I would have loved to have in a past life so trying to make it happen for others.

FYI there seems to be something wrong with your registration flow. I entered my email on the homepage, was brought to a login page (https://app.procoto.com/Identity/Account/Login?ReturnUrl=%2F) Click "Sign Up" under don't have an account, created an account, clicked the verification link, brought back to login page, when I try to login nothing happens - page just refreshes, no error message of any kind.

Thanks for pointing out. Should redirect to a page letting you know our onboarding team will reach out shortly.

As a small vendor, I hate procurement platforms. Vendor UX always seems to be an after thought, since you’re the pipe between our customer and getting paid, why care about us. I hope you guys do it differently, maybe be so good to vendors that we champion you to your prospective clients. I hope you put bill.com and buy2pay out of business

What size SMB are you targeting?

Largely going by FTEs at this point... 50-500 employees

Are you acting as a reseller?

Not today, but we think there's a potential for a marketplace/catalogue type approach in the long-term as we build out both the customer and vendor sides.

Honest question: If you are backed by YC, it means you got some money, so why you don't spend more on design?

The design looks a little bit basic, and the animated boxes are annoying. Sorry for the negative feedback.

Fair feedback. Just a team of two at the moment and we've prioritized building out a couple of integrations and adding modules to the app. Revamping the UI is on the shortlist too.

I believe one of the sentiments of YC is to launch early and the landing page can sometimes reflect that.

I also don't think it's as bad as you make it sound - the product images could be sharper though.

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