I can say that my close friend, Tayfun, was a good choice to ask about our project. He currently works in IBM and worked in KocSistem for 1.5 year. His advices may change and resolves so many issue of our service. The rest of the writing is what I learned from him:
Michael said shrink your target market and it seems we have to do it by excluding governmental organization. They cannot use any application rather than government provides with Kamu İhale Kurumu (Public Bid Organization). It is an organization to manage government bids. If we cannot work with government, then who else we can sell out product? The answer is companies. The side of commercial organization are still empty in terms of e-bid web based applicaitons.
We could create side incomes by taking money for entering bid; since they already pay for it without e-bid application. additionally, we led companies to set a bottom price. By this method, if our applications manages to get lower than that price, we are going to get some percentage of the difference between bottom price and actual price. Last but not least, we may decide taking money for subscription of the firms that enter the bid.
We were planning to take money for upgrades and maintainance of application. But; It would be meaningless since the application will be installed to our cloud servers. We should not discourage customers with that additional price. They will just buy membership and hence their links to reach application.
So many points of this interview have to be taken seriously, Thanks Tayfun :)
Efekan GÜVEN
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ReplyDeleteInterview with Carl Greppin
ReplyDeleteI am glad that I could find a chance to talk with Carl Greppin on 21 June. He used to work for Free Markets which is acquired in 2004 by Ariba which is a SAP company. In other words, company provides software solutions and services. We had our conversation via Skype which, I believe, is the one of the best ways of communication, if you cannot find a chance to talk in-person.
I have sent our business canvas prior to our conversation. He liked it, found it very organized and even asked whether we have done it for class or we are trying to start our own business. It has been so beneficial that I could walk through our business canvas with such a experienced entrepreneur.
First, he has informed me about the business briefly and advantages of the online auction system such as lower prices and faster process. He mentioned about the criteria which is generally different for each market. 1) If there is enough amount being purchased to make the suppliers interested. For instance, for manufacturing it is 0.5-1 million dollars to be attractive. 2) You need competitive suppliers, at least 2. 3) You need to describe exactly what you need. 4) You need a committed buyer willing to give information about what they want to buy. Advantages of online bidding according to him: Generally lower prices and reduced cycle time.
He expressed that since people are very familiar with online bidding software and it is usually pretty easy to use, it is hard to differentiate it. They expect cheaper prices for their basic needs. At the beginning, the customers wanted to see different options, but now cheaper prices and usability are more important.
I learned that the most of their customers come from referrals. They come from people who recommend them, almost all from recommendations. He thinks that the best way to communicate with them is the face to face meetings, so they travel. Sometimes they talk via Skype or phone. They usually do not prefer e-mails, since it is difficult to express all details and small points.
They have a partnership with Ariba. Ariba provides the software and they provide the service on that software.
He thinks that the most important key resource in this business is the people with knowledge, specialists. For that reason, employees are the most expensive cost unsurprisingly.
He mentioned about different models on the revenue stream. The subscription model is the most preferred one as we chose. However, they pay different price with respect to number of people use the software in the company unlike our model that charges for each bid. Extra prices for each bid may limit the flexibility of the company that makes the bid.
In addition to these, I asked his advice on entrepreneurship. He gives very valuable advices such as keeping the costs low(inexpensive office), specialty, small thing that they are very good at and gaining experience in a big company first.
It has been very beneficial and fun to have a conversation with Carl Greppin.
Arda UNAL