EDITOR’S NOTE: Here is a comment regarding yesterday’s post asking why companies aren’t giving demos. If you haven’t already, read that post before reading today’s post.
“I love the Jon W. Hansen takes! unapologetically puts a scope on the truth (asking ‘boots on the ground’ so to say type of questions when it comes to tech and solution providers. I’m sure Jon W. Hansen loves the movie Jerry McGuire (the famous saying by Tom Cruise)!!!!” – Tahj B.
Here are my usual reader demographics – I am sharing these numbers with you because this is who is reading and following my posts:
As a solution provider, what are you saying to them (see above) beyond the buzzwords, sales, and marketing babble that shrouds the “real” results of GenAI procurement initiatives?
Many providers are reluctant to give demos despite multiple requests. Some refuse to provide access to client/case study references, and others backtrack on publicizing interviews initially approved by their “own” internal experts. Some even try to dictate what I write – which would result in little more than a “puff piece” of buzzwords and empty promises if I followed their direction. One solution provider even told me not to ask so many questions and just let their “salespeople” do the talking.
Is it any wonder why we are heading toward an AI Bubble Burst in which 75% of the logos on these solution maps will be gone by the end of 2025? Remember, I have been in this industry for over forty years and have seen up close and personal what happened during the dot-com Boom to Bust.
So, how do you wade through the morass of GenAI hype to identify the players who will be around to celebrate the New Year in 2026? You ask and record the tough questions!
In today’s post, I will share my assessment of a solution provider that, provided I see a demo sooner rather than later, could survive the 2025 “industry shake-up.”
Here is one excerpt from my screening process. If you want access to the full recording and assessment document, DM me here or on LinkedIn.
Assessing Aerchain
On Tuesday, August 16th, I had a preliminary call with Aerchain.io’s co-founder and CEO, Harsha Kadimisetty. The recording and copy of the transcript are available on request.
While I have yet to receive the demo videos discussed in the session, I am prepared to make an assessment focusing on three specific excerpts from the call.
After reviewing these excerpts, I will provide my summary assessment and determine if Aerchain.io is a company I can work with to help achieve its corporate goals financially.
Excerpt No. 1
Link to excerpt video #1 – https://app.fireflies.ai/soundbites/FPCZ0Fkx5xi
Transcript
Harsha:
Now, all of these might not work across all categories.
Certain categories could be rule based, and like you said, certain categories are agent based. It keeps learning through multiple interactions. It’s not given definite set of rules, but it keeps learning from the context, from the intake, to sourcing, to techno commercial evaluation, to the final negotiation, how the vendor is responding. Right. It’s an agent based interaction where it keeps learning the more and more about how this is, how this transaction is proceeding and try to close the deal in this. And if it is not able to, yeah, of course you will get it routed to, let’s say, human buyer to close the deal, right? But at least we have seen 60% to 70% of the transactions of any organization can be truly automated using AI. And that’s what we are doing. And we have done successful pilots, good implementations. As I said, across the globe, we have a lot of customers in place and we have been able to deliver the value consistently and not lose one customer in this entire journey of ours.
Why I Chose This Excerpt
At a high level, you talk about using an agent-based model in which you do not lead with technology but solve customer challenges in targeted areas.
You readily acknowledge where it does and does not work regarding categories and have developed an “off-ramp” hand-off to allow human intervention.
While I will want to verify the 60% to 70% automation claim, depending on the spend category, e.g., Direct or indirect, I see this as an achievable target working with the right practitioner customers.
The fact that the company has generated an estimated annual revenue of between $10 to 20$ million and has successfully completed several pilots demonstrates that Aerchain.io has moved beyond the conceptual bootstrapping phase to an active production environment.
Cautionary Considerations
While the successful pilots are encouraging as they demonstrate success in a production environment, research consistently shows that transitioning from a targeted pilot program to a broader enterprise implementation is where most ProcureTech, e.g., ERP, SaaS, AI, and GenAI transformations run off the rails.
For example, with my success with the Department of National Defence, the following outcomes were achieved:
- Improved SLA Performance within 3 months (51% to 97%)
- Delivered significant COG savings within 3 months and consistently maintained them for seven consecutive years (avg. savings 23%
- Reduced collective buying group FTE within 18 months (23 down to 3 buyers)
Until Aerchain.io can demonstrate success beyond the pilot phase, the mid to long-term growth goals remain questionable.
Another potential concern is that even though I have little doubt that the strategy and technical capability of its core team to deliver on its promise to its customers, bench strength – or the depth of talent within the enterprise is still in question.
For example, one of the biggest challenges the big consulting firms face is that their expertise is concentrated in their “A-Team” group, which is used to deliver on the pilot objectives and then assume a primary sales/pilot launch role. Depending on the depth beyond the core, the more customers Aerchain.io attempts to onboard, the likelihood of comparable and continued success notably decreases if said depth is low or non-existent.
Closing Comments/Assessment
I usually choose closing excerpts such as the one above because they tell me where a prospective solution provider’s mindset is positioned regarding the tension between the immovable force of solving problems and the irresistible force of revenue generation and scalability demands.
After rewatching the video interview multiple times, here are my conclusions:
- There is no doubt in my mind about your expertise and unwavering commitment to problem-solving and delivering maximum value to your customers.
- I can’t comment on your technology because I have not seen a demonstration. That is not necessarily bad, although I want to see your video demos at least because if the first point is missing, then what you say about the technology does not matter.
- I also see that you are at a critical stage where pilot success – which I still need to determine, is an essential springboard to client and revenue growth. My concern is the depth of your bench strength and ability to scale your experience and expertise versus scaling your technology.
Cautionary Considerations
Over the past five decades in high-tech and procurement, I have seen many companies similar to yours have tremendous promise. In the late 1990s and early 2000s, with funding from the government’s Scientific Research & Experimental Development program (SR&ED), I introduced one of the first self-learning algorithm AI platforms to procure MRO parts to support the Department of National Defence and the NYCTA.
I ultimately sold it and the patent to a public company for $12 million. So, I have literally walked in your shoes.
Based on the above, I want to provide a cautious balance to your enthusiasm regarding pilot projects, big company practitioner logos – which are somewhat of an overused commodity, and the fact that you are now dealing with an increasingly skeptical market in which both practitioner and provider failures are common knowledge.
It is also worth noting that 75% of current solution providers will be gone by the end of 2025 due to the pending AI Bubble Burst through absorption, acquisition, or folding. As a side note, not all will be new companies—some will be long-established providers who bet heavily and lost on the GenAI craze.
You can’t chase the market in the next 6 to 12 months, looking to double or triple revenue. You need deep pockets and a market presence to even try.
As previously stated, I do not doubt your level of sincerity and commitment to customers or your ability to deliver optimal value to a limited base. If I did, we would not be talking. Your focus should be on ensuring pilot success across the board and simultaneously building essential connections and rapport with new high-level practitioner executives to achieve respectable growth while laying the groundwork for accelerated growth after the “AI Bubble Burst” dust settles.
30
Procurement Insights
In Search of The 25%: The Optimal Solution Provider Screening Process
Posted on September 14, 2024
0
EDITOR’S NOTE: Here is a comment regarding yesterday’s post asking why companies aren’t giving demos. If you haven’t already, read that post before reading today’s post.
“I love the Jon W. Hansen takes! unapologetically puts a scope on the truth (asking ‘boots on the ground’ so to say type of questions when it comes to tech and solution providers. I’m sure Jon W. Hansen loves the movie Jerry McGuire (the famous saying by Tom Cruise)!!!!” – Tahj B.
Here are my usual reader demographics – I am sharing these numbers with you because this is who is reading and following my posts:
As a solution provider, what are you saying to them (see above) beyond the buzzwords, sales, and marketing babble that shrouds the “real” results of GenAI procurement initiatives?
Many providers are reluctant to give demos despite multiple requests. Some refuse to provide access to client/case study references, and others backtrack on publicizing interviews initially approved by their “own” internal experts. Some even try to dictate what I write – which would result in little more than a “puff piece” of buzzwords and empty promises if I followed their direction. One solution provider even told me not to ask so many questions and just let their “salespeople” do the talking.
Is it any wonder why we are heading toward an AI Bubble Burst in which 75% of the logos on these solution maps will be gone by the end of 2025? Remember, I have been in this industry for over forty years and have seen up close and personal what happened during the dot-com Boom to Bust.
So, how do you wade through the morass of GenAI hype to identify the players who will be around to celebrate the New Year in 2026? You ask and record the tough questions!
In today’s post, I will share my assessment of a solution provider that, provided I see a demo sooner rather than later, could survive the 2025 “industry shake-up.”
Here is one excerpt from my screening process. If you want access to the full recording and assessment document, DM me here or on LinkedIn.
Assessing Aerchain
On Tuesday, August 16th, I had a preliminary call with Aerchain.io’s co-founder and CEO, Harsha Kadimisetty. The recording and copy of the transcript are available on request.
While I have yet to receive the demo videos discussed in the session, I am prepared to make an assessment focusing on three specific excerpts from the call.
After reviewing these excerpts, I will provide my summary assessment and determine if Aerchain.io is a company I can work with to help achieve its corporate goals financially.
Excerpt No. 1
Link to excerpt video #1 – https://app.fireflies.ai/soundbites/FPCZ0Fkx5xi
Transcript
Harsha:
Now, all of these might not work across all categories.
Certain categories could be rule based, and like you said, certain categories are agent based. It keeps learning through multiple interactions. It’s not given definite set of rules, but it keeps learning from the context, from the intake, to sourcing, to techno commercial evaluation, to the final negotiation, how the vendor is responding. Right. It’s an agent based interaction where it keeps learning the more and more about how this is, how this transaction is proceeding and try to close the deal in this. And if it is not able to, yeah, of course you will get it routed to, let’s say, human buyer to close the deal, right? But at least we have seen 60% to 70% of the transactions of any organization can be truly automated using AI. And that’s what we are doing. And we have done successful pilots, good implementations. As I said, across the globe, we have a lot of customers in place and we have been able to deliver the value consistently and not lose one customer in this entire journey of ours.
Why I Chose This Excerpt
At a high level, you talk about using an agent-based model in which you do not lead with technology but solve customer challenges in targeted areas.
You readily acknowledge where it does and does not work regarding categories and have developed an “off-ramp” hand-off to allow human intervention.
While I will want to verify the 60% to 70% automation claim, depending on the spend category, e.g., Direct or indirect, I see this as an achievable target working with the right practitioner customers.
The fact that the company has generated an estimated annual revenue of between $10 to 20$ million and has successfully completed several pilots demonstrates that Aerchain.io has moved beyond the conceptual bootstrapping phase to an active production environment.
Cautionary Considerations
While the successful pilots are encouraging as they demonstrate success in a production environment, research consistently shows that transitioning from a targeted pilot program to a broader enterprise implementation is where most ProcureTech, e.g., ERP, SaaS, AI, and GenAI transformations run off the rails.
For example, with my success with the Department of National Defence, the following outcomes were achieved:
Until Aerchain.io can demonstrate success beyond the pilot phase, the mid to long-term growth goals remain questionable.
Another potential concern is that even though I have little doubt that the strategy and technical capability of its core team to deliver on its promise to its customers, bench strength – or the depth of talent within the enterprise is still in question.
For example, one of the biggest challenges the big consulting firms face is that their expertise is concentrated in their “A-Team” group, which is used to deliver on the pilot objectives and then assume a primary sales/pilot launch role. Depending on the depth beyond the core, the more customers Aerchain.io attempts to onboard, the likelihood of comparable and continued success notably decreases if said depth is low or non-existent.
Closing Comments/Assessment
I usually choose closing excerpts such as the one above because they tell me where a prospective solution provider’s mindset is positioned regarding the tension between the immovable force of solving problems and the irresistible force of revenue generation and scalability demands.
After rewatching the video interview multiple times, here are my conclusions:
Cautionary Considerations
Over the past five decades in high-tech and procurement, I have seen many companies similar to yours have tremendous promise. In the late 1990s and early 2000s, with funding from the government’s Scientific Research & Experimental Development program (SR&ED), I introduced one of the first self-learning algorithm AI platforms to procure MRO parts to support the Department of National Defence and the NYCTA.
I ultimately sold it and the patent to a public company for $12 million. So, I have literally walked in your shoes.
Based on the above, I want to provide a cautious balance to your enthusiasm regarding pilot projects, big company practitioner logos – which are somewhat of an overused commodity, and the fact that you are now dealing with an increasingly skeptical market in which both practitioner and provider failures are common knowledge.
It is also worth noting that 75% of current solution providers will be gone by the end of 2025 due to the pending AI Bubble Burst through absorption, acquisition, or folding. As a side note, not all will be new companies—some will be long-established providers who bet heavily and lost on the GenAI craze.
You can’t chase the market in the next 6 to 12 months, looking to double or triple revenue. You need deep pockets and a market presence to even try.
As previously stated, I do not doubt your level of sincerity and commitment to customers or your ability to deliver optimal value to a limited base. If I did, we would not be talking. Your focus should be on ensuring pilot success across the board and simultaneously building essential connections and rapport with new high-level practitioner executives to achieve respectable growth while laying the groundwork for accelerated growth after the “AI Bubble Burst” dust settles.
30
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