Venture Capitalist at Theory

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2 minute read / Jul 29, 2024 /

Rewriting the RFP for AI

My first job as a teenager was a dishwasher in a local coffee shop, earning $6 per hour. With my first paycheck, I bought a portable CD player & a pair of yellow Sony Sport headphones to listen to music. I asked the manager for a better scrubber, different soap, & a three-part sink for rinsing, scrubbing, & rinsing again. Then I fell into a groove washing dishes.

Until the owner bought a commercial dishwasher. It changed the the way the kitchen worked. Within 90 seconds, the new Hobart washer cleaned & dried the plates, cups, & silverware that would have taken me 30 minutes. I spent my time loading & unloading instead of scouring : managing the inputs & outputs of the machine.

The workflow software of the last 20 years will see a similar change.

Since Salesforce catalyzed the SaaS movement with its IPO in 2004, software companies have been hard at work identifying & optimizing components of workflow. In sales, some of the workflows include lead capture, enrichment, scoring, outreach sequencing, CPQ (cost-per-quote), pipeline management, call recording/conversational intelligence, pipeline review, & forecasting.

Some of these will become the sponges & three-part sinks of the future. As AI capabilities improve, software RFPs will change because the buying criteria will change.

That’s an opportunity for startups : to redefine how software is bought. I wasn’t there when the salesman pitched the cafe owner on the Hobart. But that account executive rewrote the RFP - changed the buying criteria.

Unlike the scrubber maker or the soap producer, a new dishwasher upstart doesn’t manage a legacy business. Older software companies have spent years and hundreds of millions of dollars training buyers to buy software in a particular way and much of that will change soon.

As every great salesperson knows, the person who writes the RFP is most likely to win a prospect’s business. The RFP is the blueprint for the buying process.

The dishwashing budget in the cafe remained & so did I, but our money shifted to mainitaining the machine to ensure maximum throughput : spare parts, maintenance, special detergent. My role was to keep the machine running.

The Hobart is coming for workflow software. The companies that define the RFP - the new criteria for evaluating the software - will be the ones that thrive in the next era.


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