26 Jan 2011 Tradeshift: Catching the Wave Just Right

Tradeshift, the new kid on the e-invoicing block, is making itself conspicuous by offering free electronic invoicing. But there’s more to Tradeshift than a headline grabbing feature like that and no-one should dismiss them as too good to be true.

When it comes to e-Business, I have a long memory. I conceived, designed and built one of the first B2C e-Commerce sites in the world. It wasn’t the first but it was the first in it’s industry to actually sell – for money – a real product to a real consumer over the internet. Quite an impressive claim to fame you might think but 1994, it was a little ahead of its time. “Pioneer and disappear.” “The second mouse gets the cheese.” In other words, being first isn’t always best. You have to catch the wave at the right time.

And having a strong or even monopolistic position in your market doesn’t always guarantee continued success. In the pioneering days of the 1990s Barnes and Noble were dismissive of the technology company that started to sell books on-line. It took them several years to climb out of their pit of denial and recognise that Amazon was a force to be reckoned with.

So when a start-up starts to change the rules, it’s not always a safe bet to dismiss them as an upstart. Peter Smith (Spend Matters) described Tradeshift as either a “game changer” or a “flash-in-the-pan” – he’s right.

Catching The Wave

There has been for a long time a question that hangs over the concept of electronic invoicing and that is: “why pay for it?”. Once the infrastructure costs are covered, email is free. The internet is free. So why pay a premium for transmitting or receiving invoices? It’s a naive question of course but it is there and so the “free e-invoicing” carrot offered by Tradeshift has an appeal. They’ve got that right.

The other thing that Tradeshift appear to have got very right is their timing. 2011 is looking like the year that electronic invoicing takes off big time. There’s a perfect storm –  the cost control imperative; the maturation of the technology; the innovative legislation (in Europe for example) and the environmental agenda – they’ve all combined to make now the time to invest.

And then there’s the Tradeshift approach. Embracing the social media concept and the skype/facebook  style organic growth model could put Tradeshift way ahead of their competitors if it works. And if it does work, we’ll look back a see that part of the Tradeshift genius was the art of catching the wave at just the right time.

But it might not work of course. The social media model is proven in the B2C world for sure but I’m not entirely sure that the big bad B2B world is convinced. The “free” e-invoicing is likely to emerge as free on a small scale only. Small suppliers may get it for free but if you’re a large organisation do you really want to just address your tail of supplier or do you want to get your key strategic suppliers into your e-invoicing programme? And when it comes to your key suppliers, will Tradeshift be able to support you in the same way that Ariba, OB10 or Basware could?

The jury’s still out on Tradeshift. They have certainly got a few things right but whether they’ve got the right things right remains to be seen.