Meet Inkef’s Senior Advisors series Part IV — Volker Pyrtek
In continuation of our “Meet Inkef’s Senior Advisors” series, I had the pleasure to interview Volker Pyrtek, a seasoned veteran of the procurement function. Volker takes us through his journey in organizations of all shapes and sizes and the key learnings companies should keep in mind.
Over three decades with cross-industry heavyweights like Bayer (Pharmaceuticals), Sputz AG (Financial Services), T-Mobile, Deutsche Telekom (Telecom), founding your own company Goodex, and then setting up BuyIn — take us through time!
I’ve been working for very large global players and for small and medium enterprises. All of those had two things in common (i) driven by entrepreneurs who wanted to shape the industry and (ii) ambition to grow internationally and become the market leader. It all started at Bayer where I was the first commercial hire in a tech department with over 10,000 engineers. As the Head of Controlling of the group technology, I worked at the crossroads of commercial and technology operations. This then became a common theme throughout my career. At the time, one would start at a large corporate and stay at a large corporate, but this wasn’t for me. I always had an entrepreneurial spark and once an opportunity arose for me to join a small company as a board member to drive the company strategy, I decided to take the leap. For me, it was an extremely tough decision to let go of a steady career and say goodbye to my Bayer family. It eventually turned out for the best as the company in 2.5 years became the #1 bond broker in Europe and went public at $1bn+ valuation.
After the IPO, I decided to continue the entrepreneurial journey and found my own company Goodex — eAuctioning of industrial products. Although a great product, commercialization was challenge as it was a SaaS product in a time when the market did not understand SaaS. This meant selling a SaaS contract with efforts of professional services, a challenge I see startups struggle with to date. We sold Goodex, and shortly after I was approached by the co-founder of T-Mobile, to set-up the international HQ in Europe. I was given the freedom and the trust to build the team from scratch, which I did. My journey with T-Mobile continued into the merger with Deutsche Telecom as the Chief Procurement Officer of the joint entity. Eventually, it led me to set up BuyIn, the largest telecommunication procurement alliance in the world with an annual spend of EUR 20bn. After a long and rewarding career, today I spend my time as an advisor with Oliver Wyman and Inkef.
What would you advise startups to keep in mind when starting to sell to enterprises?
First and foremost, it is critical to identify the type of enterprise you want to sell into. I broadly see them as (i) large enterprises which are high value — low volume and require a tailored approach, and (ii) SMEs that are high volume — low value and require an efficient, standardized go-to-market.
When it comes to large enterprises, there is enormous level of complexity to deal with and stakeholder management is key. The most important advise here is to find the internal champion who wants your product and is willing to short-cut the normal decision processes. My strong belief is that official processes of large companies don’t represent the real decision procedures. If a startup will rely on official processes, which are primarily in place for compliance guidelines, you will be lost. This is where the internal champion comes in. For technology products, it is typically the Chief Technology/Product/Innovation Officer who is the one to convince that the product is a need to have and the that the incumbents don’t have such a product.
Often startups look to bridge the long sales cycles of the large enterprises by selling to SMBs. This strategy can work well if the offering is pure SaaS. However, as the offering tilts more towards services that require larger sales efforts, selling to SMBs in parallel is a road to be tread with caution.
Having led multiple procurement offices, what are some of the biggest pain points in enterprise procurement that you believe will be tackled by startups?
In my perspective, the biggest pain point and the most promising opportunity in enterprise procurement is the long tail, which aggregate to over millions in annual spend. The ambition of procurement teams in large enterprises is to cover all the purchasing activities, but realistically this does not happen. A few years ago, internal systems were built by enterprises to tackle long tail by negotiating frame contracts would work. However in today’s dynamic markets and marketplaces, a static approach will not work. If a startup can offer a lean, dynamic, and reactive purchasing process for the long tail, you can replace these internal systems. A word of caution here is that there is no one solution fits all. Long tail spends spans across hundreds of different verticals and the procurement architecture for each of these could differ.
The other interesting opportunity in procurement is the use of AI. The potential use cases of AI span across the lifecycle of procurement, right from supply market intelligence, vendor selection, and even in negotiating purchases. With the increased use of AI in sales and customer functions there is no reason why the adoption will not grow on the buying side as well. The solutions although need to come from horizontal software platforms rather than individual buyers building their own solutions. Two bots negotiating with each other would be an interesting sight to see!
What was your biggest surprise moving from the corporate giants to founding a start-up?
The biggest positive difference in working at a startup was the speed of decision making. Corporates are organizational structures that make them super super slow. On the other hand smaller companies have very short decision processes and whole company depends on a handful of stars which drive success. This is why whenever I meet with a startup the first thing I ask myself is can this team build and lead a market leader?
My experiences have been shaped by working on both ends of the spectrum. I often recommend larger companies to hire talent from smaller companies who have the entrepreneurial spirit. Else, it is difficult to become an entrepreneur at a large company because the structure and processes don’t motivate you to do so. What large companies do have though is a strong reputation and brand value, which are two very strong levers to make a product or a service successful and should not be underestimated.
What caught your interest in Inkef and what are some areas in which you support Inkef and our portfolio companies?
I knew Frank (Partner at Inkef) from my former life, when we jointly worked on a project to design AI bots in procurement. I guess my appetite for innovation and entrepreneurship was clear to Frank, who when I retired from BuyIn, approached me to join Inkef. As an advisor I’m on one hand involved in the identification of the most promising startups and on the other hand I advise portfolio companies on a range of topics. With all my years as a buyer of technology products and services, I can say a thing or two about how startups should sell to enterprises. With one of the portfolio companies, I also took a more active role by joining as an interim CFO.
My decision to join Inkef was all about the people. The Inkef team has a strong enterprise background and an industry network which allows them to find and select promising start-ups. What I like about Inkef is the operational approach they have to investing and the support they offer to companies, in times bad and good. After 2 years of working with Inkef, I can attest that Inkef walks the talk and I look forward to continuing this journey!
