“Vendor First” buyers [Marketplace #4]

Hey friends, 

Last week, we summarized the ‘Category First’ buyer—the ones who start the buying process by assessing an entire category of technology vendors. Only after validating that the category moves the needle do they engage the marketplace in a serious way. 

This might seem obvious, but the opposite approach also exists. That’s when the buyer starts by engaging a vendor. For simplicity, let’s call them ‘Vendor First’ buyers. Our buyer interviews have revealed this approach is much more common than I thought… and it really surprised me. 

How does it work? First, buyer meets seller. Maybe they meet at a conference, through a cold call or warm introduction, via the vendor’s website, or the Nexus Marketplace. Second, after a few meetings, buyer asks seller to do a pilot project. After that, it’s sink or swim for the seller.

This approach surprised me because it doesn’t feel very strategic. It feels like starting with technology for technology’s sake, when we should be starting with a business problem to solve. 

What we’ve found in our interviews is that some buyers view vendors as the innovators. We can’t argue with that. Therefore, starting the journey to digital, decarbonized buildings by talking to them is the best way to go. 

Plus, the marketplace is so confusing. Comparing apples to apples is messy. Vendors act like they’re alone in their category in an attempt to position themselves against their competitors. “We’re the only decarbonization digital twin operating system in the marketplace!” 

Therefore, it might seem easier to run pilots as a way to cut through the hype. Throw some spaghetti at the wall and see what sticks, right? 

Sure… but only if you’re mitigating your risks. With the Vendor First approach, you’re at risk of: 

• Doing a project that doesn’t move the needle for your business 
• Paying too much because you don’t have competitive bids 
• Wasting the opportunity cost of selecting the wrong vendor and then having to start over 
• Wasting the time you spent 
• Delaying benefits of the project (e.g. carbon reduction) as a result of selecting the wrong vendor 

And after too many of these unstrategic, unsuccessful pilot projects, your smart building program itself is at risk. 

Vendors: this approach might sound like the ideal scenario for you. No competition! But, if the buyer hasn’t taken the time and effort to validate that your category will move the needle for their business, how urgent is it? Every vendor in the marketplace has been in “pilot purgatory”, that hellish place where momentum goes to die. 

Our thesis: the marketplace will accelerate—meaning buyers and the best sellers will both get what they want—when we: 

• Define the categories in the marketplace, including the criteria the vendors in that category need to meet 
• Group the vendors in the marketplace into those categories and vet their claims  
• Partner with those vetted vendors to educate buyers on those categories to help them determine which move the needle for their organization

What do you think? Want to join us?

Does this resonate?

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Until next week, 
—James Dice, Founder and CEO, Nexus Labs