Past Experience Can Be Misleading

Many startups begin with simple ideas based on personal experience. A lot of the startups we meet with have founders who quit their regular jobs, determined to fix the human capital issues they experienced during their tenure as members of the everyday workforce. Sometimes their worldview is limited or biased by their previous work experiences. For example, I have seen many founders launch businesses based on pains they experienced working for companies that simply didn’t have the solutions in place that other companies do. You would be surprised, for example, how many companies I have met with recently that truly believe they invented the employee recognition space (which is more than 100 years old) or the applicant tracking space (which is more than 20 years old). The fact is, they simply never worked for a company that had implemented these solutions. Admittedly, their products are more elegant than older versions (mostly due to modern design and technology), but they often lack critical features and benefits that earlier products delivered.


HCM tech startups frequently underestimate the importance of understanding the HCM ecosystem and the position of their solution within the ecosystem. This failure point frequently presents itself as a product with minimal functionality attempting to displace entire category solutions or platform solutions. For example, many free or relatively inexpensive applicant tracking systems are headed toward failure because they honestly believe they have a comprehensive talent management platform — or that comprehensive talent management platforms are not necessary. Their inability to assess where they fit in causes them to approach the market with the wrong sales and marketing strategies. It doesn’t even matter if they’re right. What matters is what the buyer believes. And right now, HR buyers believe they need a talent management platform and they have strong views of what comprises a comprehensive talent management platform. In other words, you can be right and still lose.

Action: Set Reasonable Expectations

Take the time to map out the ecosystem you play in. Differentiate between point solutions, categories, and platforms. Based on your product capabilities, make an honest assessment of your position. Are you really a platform? Are you a category solution? Or are you a point solution that may be adopted alongside a platform or category solution? It helps to understand what buyers expect from different levels in the ecosystem and what other vendors are providing at each level. If you’re a point solution, go be a point solution! You can always grow into a category solution or a platform solution if that’s your goal. But if you present yourself as something you’re not based on a lack of understanding of the existing HCM ecosystem and the position of your current solution, you’ll fail to earn the trust of buyers.