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Some companies in our industry might encourage you to “hurry up” while you’re in the procurement phase but maybe it’s because there’s something they don’t want you to stop and think about. For example, the question of business models. In what we do, you have two options. The first is pretty simple: make your money from enterprises in proportion to the value you create for their business. That means putting in a solution that makes their supply chain more efficient and accompanying it with the processes and technology that makes suppliers want to use it too. The second is a bit more old-fashioned, a bit less elegant, indeed, somewhat parasitic. This way involves using the enterprises you’re supposed to be helping as a direct sales route to their suppliers, where you’ll make most of the money. Basically turning your customer into your sales channel and pushing the majority of the financial burden down the supply chain to the guys it’s going to hurt most.

"What a tangled web we weave when first we practice to deceive" Walter Scott I am a fan of supply chain finance. Executed properly it can allow buyers to optimise their DPO without painful extensions to payment terms for suppliers and it can lower the cost of working capital to suppliers. But it doesn't always work like that. There isn't a simple definition that covers all interpretations of supply chain finance but at a high level it involves the collaboration of a strong buyer extending their superior financial strength to their buyers to allow them to borrow on the strength of approved invoices. That sounds very worthy doesn't it? But let's look at what can really happen. Let's listen in to the conversation between a buyer and supplier. The supplier is on 30 day terms and his his generous customer offers to allow him to borrow money for 30 days at a favourable rate.

Most software sales people are like ventriloquists. They demonstrate software that looks the part but is often pretty dumb. They make it look clever by presenting it professionally and filling in any gaps in actual functionality with promises and distractions. We've all seen it before - software solutions that run best on PowerPoint. But occasionally you get to see a solution that stands up by itself and delivers. It just works.

In my last piece I finished with a throwaway remark “And there’s another thing: social media – don’t get me started….”. That quip generated more private correspondence than the rest of the article. I have been around the internet for a long time – long enough to remember when Mosaic was the hot new kid on the block. Many of my attitudes were formed then, by the absorption of ‘netiquette’ (remember that?) through cultural osmosis and also through a willing acquiescence in the projection of West Coast psychedelic world views onto the emerging medium (feed your head with John Markoff: What the Dormouse Said). To this day the ongoing bending of the internet to the will of corporate and political interests is a continuing source of profound disappointment.

Startups and young businesses thrive when their people do their jobs because they want to change the world, they want to get rich or they want to do what they love to do. But as they grow, founders execute their exit plans, hopefully happily, and the accountants move in. The business drivers change. The raison d’etre becomes about numbers and regulation. They’re either fixated on quarterly earnings figures or obsessed with compliance. They get third parties in far flung places to run their back office, even core business activities get outsourced and offshored. The business stops being about the hopes, dreams and ambitions of its people. They even outsource them.

[caption id="attachment_6736" align="aligncenter" width="480"] Bertram Meyer - CEO Taulia[/caption]

The British can make strong claims to the invention of the computer (Babbage) and the World Wide Web (Tim Berners-Lee) but examine the DNA of the modern world of technology and it's mainly American with a strong Northern Californian flavor. Ariba, Oracle, Google, Twitter - Silicon Valley born and bred.

But it's not just Americans that are behind this innovation. This phenomenon has more to do with geography. Two of the most interesting innovators in the P2P space, Taulia and Tradeshift, although San Francisco based, are European - well their founders are. Why is it so important, indeed, is it important, for tech start-ups to have a Bay Area address? I was in San Francisco a few weeks ago and took the opportunity to speak to Christian Hjorth, Head of Sales at Tradeshift and Bertram Meyer, CEO of Taulia to understand why Silicon Valley is still important.

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