Launch HN: Vendr (YC S19) – Buying software so you don’t have to

[saasbuyer]

Hey HN: I’m Ryan, the founder of Vendr (https://vendr.com).

We buy and renew software for companies. Why? Because the way it's done now is a pain. Stakeholders, especially engineers, are required to spend unnecessary time with software salespeople. We believe that the buying process should be dictated by the buyer. For example, if you want to procure New Relic, you should be able to do it your way, not the salesperson’s way. Vendr was created so that companies can get the SaaS they need without needing to invest the time to procure.

My background is in software sales. Previous to founding Vendr, I was head of enterprise sales for InVision and director of SMB sales for HubSpot, so I've learned how to buy and sell software. I’ve witnessed that many salespeople are really good at wasting customers' time (unnecessary qualification calls, demos, etc). Buying and renewing software is complicated, and even more if you want to get the best deal. We take care of all that and get you the software you need, fast, and at the best possible price. We also handle renewals and are able to reduce the price per seat as a company grows.

Vendr is currently buying and renewing software for many fast-growing companies. We are currently working with Canva, GitLab, Brex, Drift, HubSpot, InVision, and others. These companies have hired us to save time and money. And it’s working. For example, in our first 12 months working with InVision, we saved them over $1.5M. Many of our customers are good negotiators, but they’ve realized that spending the cycles is not a good use of their time.

Here’s how it works: We are typically hired by the head of finance or engineering. We analyze and organize your current SaaS purchases and renewal dates. You introduce Vendr to your vendors and we manage the procurement process from start to finish—getting you exactly what you need without ever having to pick up the phone. We are integrated into your Slack environment to keep you posted along the way.

We make money via a monthly subscription to buy and renew all of the SaaS in your stack. Our subscription fee is based on your company size and ranges from $2k-10k+. Happy to chat directly at ryan@vendr.com.

Have you experienced specific issues buying software? How have your experiences been working with software salespeople? We’d love to hear your feedback and ideas, and your experiences!

[Benjammer]

Have you talked to any government agencies about using this for larger, public sector, software procurements? I've worked for a govt software vendor in the law enforcement space for a few years, and it's very difficult to actually sell anything real, because the clients don't understand anything and fall for every single marketing/sales tactic from the big vendors. If there were a technically knowledgable middle-man company involved, it would actually be a huge boon for my company because we could focus more resources on building good product that the middleman would understand is better for the client versus fighting the legacy vendors with big marketing budgets and very low engineering support/talent.

[joe_lind → Benjammer]

Technology advising as a value-add for less technical buyers definitely sounds like a great opportunity, but it isn't on our roadmap yet. Government contracting and procurement (especially at the federal level) is very complicated, so we've focused initially on high-growth private sector companies.

Thanks a lot for bringing this up! We'll reply back to your comment if our strategy evolves to include this.

[Benjammer → joe_lind]

Thanks for the thoughtful response!

>Government contracting and procurement (especially at the federal level) is very complicated

Tell me about it... ha

I saw your founder Ryan say this in another comment here:

>we are testing non-SaaS purchases. As an example, we recently helped one of our customers save a bunch of money on their SOC 2 audit fees

My company also spends a significant amount of money on SOC2 audit every year. Feels like another synergy point here with public sector procurement and software vendors. You can theoretically help agencies find good software products at the right price-point, coming from certified vendors who you've already helped manage all their certifications and audits in an efficient way.

I know this is all pretty ambitious and not super well-aligned with what you guys are doing right now with private, growth companies, but I'm just spitballing here because this type of thing would have some really interesting effects in the govt software space.

[cedricd]

Back when I was at a largish company as an engineering manager I had to negotiate these sorts of contracts all the time. Would have paid for this in a heartbeat. You guys are definitely on to something.

We eventually had an in-house person do it and they didn't love managing it either. The hardest part of their job honestly was tracking all the ones we had, ensuring we renewed on time, and talking to the procurement department to get everything squared away. When we had to move off credit cards to more corporate billing it was a nightmare to update everything.

And even when it was all buttoned up I still had to review that list quarterly to ensure we could drop old stuff, maintain which team(s) owned what service from the technical side, etc.

Next time I'm at a bigger company I'm using you for sure.

[saasbuyer → cedricd]

We've observed the same. Even at bigger companies, the procurement team tends to focus on the most expensive/riskiest/sensitive vendors. That means that multi-millions dollar purchases are prioritized over $100k engineering SaaS purchases, for example.

We think that software buying needs to exist as an external function. There are too many products for internal teams to tackle this alone.

[ninetax]

Interesting! Have you bought and sold between any two of your customers? For example, have you bought a GitHub enterprise license for InVision, and procured InVision for GitHub?

[saasbuyer → ninetax]

Yes-we have procured between customers. Most negotiations are rational (ie: the license count is growing, so it is reasonable to improve the price per license). However, there are also times when mutual customers have issues, are looking to churn, or downsell. In those scenarios, we play match-maker to the customer success Director or VP. That way, they can get involved early, in order to hopefully save the relationship.

[lykahb]

It is not clear how Vendr avoids the conflict of interest when negotiating.

[saasbuyer → lykahb]

Gain-share models are inherently biased, because you make more money as you save more money. This also leads to conflict with vendors, since the incentives are tied solely to financial outcomes.

We took a different approach. We charge a fixed subscription fee and we negotiate towards the outcomes of our customers, not our own.

Our stance is that our customers are great negotiators, they just don't have the time or interest to do it. So, if they were on the phone for the negotiation, they'd be saying the same thing that we are saying.

[koolba]

How much of the value provided here is by combining the custom offer information given to each of your customers into one pool to use as leverage against the individual suppliers?

Also, wouldn't the customer sharing that pricing information with you violate some (most? all?) NDAs?

[saasbuyer → koolba]

Yes, we are accumulating buying power as we sign on additional logos. However, that is not our north star. Instead of working towards supplier leverage, we are trying to find the equilibrium price for all enterprise software. That way, companies can buy software with confidence and certainty that they are paying a reasonable price. As long as "Contact Us for Enterprise Pricing" exists, pricing will be variable.

The vendors are the ones that share pricing information with us and we are under NDA with our customers. The reason that the vendors share the information is because companies have indicated that this is the way that they want to buy.

[fillskills]

This is awesome. Even at a small/mid size startup we struggled with buying software. Wasting so much time across the board from engineering, engineering management, analyst and finance. Brillaint pain point to solve.

[joe_lind → fillskills]

This is exactly why I joined Vendr. I've been in CTO/tech leadership roles at quite a few companies now, and have never particularly enjoyed having to negotiate with sales people. It always seemed like it was a timesink that was distracting me from building the best product/service/company that I could.

[ildon]

> We make money via a monthly subscription to buy and renew all of the SaaS in your stack.

I find this a bit ironic. To solve the pain of purchasing SAAS, you need to subscribe to a SAAS. Additionally, I think it would be much more convincing if you offered an option in which there's a small upfront fee (or even none) and then you make money on how much you can make your client save.

[quickthrower2 → ildon]

I thought the same at first but it’s not ironic really. No more than loan consolidation ie taking a single loan to pay off your various debts.

[codingdave]

A couple questions came to mind:

1) "ranges from $2k-10k+" -- What is the smallest company size for which you anticipate delivering a positive ROI on those fees vs. the time spent handling purchasing on their own?

2) Do you handle purchasing of non-SaaS software?

[saasbuyer → codingdave]

1. The subscription price is tied to headcount. If you're below 100 employees, we charge $2k per month and it scales up based on # of employees. We tied pricing to headcount because it is a solid indicator of quantity of products and total $ spend. At these levels, we are to maintain a positive ROI. I'm open to suggestions and improvements with the pricing model!

2. Our sweet-spot is SaaS but we are testing non-SaaS purchases. As an example, we recently helped one of our customers save a bunch of money on their SOC 2 audit fees. Do you have specific non-SaaS purchases in mind?

Also, within our customer base, there is significant overlap in products. Meaning, most companies use G-Suite, Slack, Sfx, and others. So, we've learned how to buy those products efficiently and have a good understanding of what it should cost. This saves everyone's time (including the salespersons).

[codingdave → saasbuyer]

Thanks for additional info.

As far as the pricing model, what you say makes sense for larger companies. I'm thinking of small companies, say 10-20 people. Big enough that they do have some purchasing pain, but not $2k/month worth of it. Setting a low price point for them might get growing companies on board early, becoming larger clients as they grew.

For non-SaaS, I didn't have anything specific in mind. I know that my teams have purchased, at various times, IDE licenses, "Pro" versions of various libraries and tool, and even licenses to run various servers that aren't free/open source. The catch in my mind is that if "procurement-as-a-service" covers all my bases, it may make sense. But if I need an internal procurement person anyway, the value prop of your service diminishes a bit.

I like the idea overall. I'm a believer in hiring for the core product, and outsourcing the rest, and this idea fits in nicely with that philosophy.

[saasbuyer → codingdave]

Today, we aren't built for 10-20 person companies, but it is definitely top of mind. We are working on productizing some of our knowledge to solve for this use case, but we aren't there yet.

In terms of non-SaaS, yes, we could handle those examples. But, we don't do your cable bill and things like that. Technology procurement, yes.

[PeterisP → codingdave]

Do 10-20 person companies generally have the same purchasing pain? I mean, small purchases (no matter if licenses or saas or whatever) are done with off-the-shelf prices, you pick out a plan and just buy it; you're not going to have the time-consuming enterprise sales dance with vendors refusing to name a price until they've had a sales team visit you in person to give a demo and negotiate a custom deal etc - that kind of high-touch sales inevitably requires the price to be large, and if you're not paying these large prices, then you aren't going through all this interaction with vendors and you simply don't have the problem that Vendr is solving.

[temuze]

My father once told me - if one of my sons was a drug dealer and the other was in procurement, I'm not sure which one I'd be more disappointed in.

[bit_4l]

Is that what SHI does?

If yes, hope you can do better than them. As a product owner, I've been working with many resellers and most of time it's not worth it.

[saasbuyer → bit_4l]

Music to my ears! SHI and other resellers (like CDW) work for the supplier, not the buyer. That means that when you use SHI or CDW to buy software, you are likely paying list price. Or, you're at least paying more than you should.

Vendr works for the buyer and does not receive reseller commission. That means that we are strictly aligned to your price outcomes, not the supplier.

[gxespino]

Do you negotiate for marketplace apps also? Like Slack apps, Github apps, etc. or is that too small fries for this?

[calto → gxespino]

If there is a salesperson involved then definitely. If there is a salesperson and it is a larger transaction, there will typically be an opportunity to save $$. If it's a smaller deal, there may not be a whole lot of room to save $$, but our goal would be to get on the phone and save time.

[gxespino]

But who manages renewing Vendr’s subscription? Lol, just messing. Great idea!

[bryant]

Nice. Vendor reviews too? Or do you integrate with other vendors who perform said reviews (e.g. Whistic)?

[saasbuyer → bryant]

Great idea. We don't do reviews today but are considering integrations like Whistic, G2Crowd, and others. That would help stakeholders get evaluation information before they commit to buying.

[erichurkman → saasbuyer]

I think you can do better than the public review systems that exist today: you can authenticate the buyers, which improves the usefulness of the reviews. Your reviews cannot be stuffed by hyper aggressive sales members posing as fake customers.

And, a step above: you can show how ratings from the same buyer change over time as their price point, scale, and features evolved. (Solve for: would you rather buy a piece of software that makes you happy as hell on day 1 but miserable on day 366, or one that makes you modestly happy on day 1 but blissfully happy on day 366?)

[rajacombinator]

I don’t know anything about this space or problem but I like this pitch. Good luck.

[saasbuyer → rajacombinator]

Thank you!!! Demo day pitch is next week, so that gives us a nice confidence boost!

[arak_shan → saasbuyer]

I think what you're doing is super interesting but I'd be curious to know who your biggest competitors are. How are you positioning yourself against Intello or Zylo?

[milesward]

Can you partner up with F5 ASAP? The pain! (Insert Spock or Dune meme here)

[dsl]

Do you protect/mask the identity of your clients?

[sgorgone → dsl]

We haven't found that to be necessary. Typically our customers welcome the idea of introducing us as their partner who will be handling the commercial logistics of their contracts.