Podcast Summary:

Podcast: Metrics that Measure Up
Episode Title: The Future of SaaS Spend Management – with Ryan Neu, Founder and CEO Vendr
Date: March 28, 2023
Host: Ray Rike
Guest: Ryan Neu

Episode Overview

This episode explores the rapidly evolving landscape of SaaS (Software as a Service) spend management through the lens of Ryan Neu, Founder and CEO of Vendr. Ray and Ryan dive deep into what SaaS spend management means in today’s decentralized world, recommendations for embracing SaaS spend programs, the tension between buyers and sellers of software, and how transparency and data will shape the future of SaaS buying and selling. The discussion is packed with practical insights for SaaS leaders – especially CFOs, GTM execs, and sales professionals navigating the procurement and vendor negotiation world.

Key Discussion Points and Insights

1. Ryan Neu’s Journey and Motivation (01:16 – 04:01)

• Background: Ryan explains his Midwest roots, transition from public accounting to sales (notably at HubSpot), and witnessing firsthand the inefficiencies in SaaS sales cycles.
• Inspiration for Vendr:
  • "Why the heck is it so hard to sell these amazing products?" – his frustration around lengthy processes and low close rates inspired Vendr.
  • The solution: create a new, more efficient way to buy and sell software.

2. SaaS Spend Management Defined (04:25 – 05:36)

• Reactive vs. Predictive:
  • Ryan distinguishes SaaS spend management as a back-office tool for tracking historical and current spends, with insights to drive future savings.
  • "I actually think it's more of a reactive category…tracking what has already happened versus a predictive category." (04:34)
• Gaps in the Definition:
  • Current solutions often ignore the seller’s perspective; Ryan argues that effective management must connect buyers and sellers – it’s about partnerships and transactions, not just tracking.

3. The Decentralization of SaaS Buying (05:36 – 08:12)

• Shift of Power:
  • No longer centralized with IT; purchasing power has moved to department leaders and individual employees.
  • "SaaS is actually built for the department and it's built for the individual…decentralization of SaaS procurement" (06:33)
• Operational Challenge:
  • Rigid processes lead to "death by 1,000 paper cuts" – employees route around centralized procurement because vendors target them directly.

4. The Reality of Decentralized Spend (08:12 – 10:48)

• Expense Benchmarking:
  • Confirmed: 30-50% of SaaS spend is non-centralized, often via expense reimbursements, especially in PLG (Product-Led Growth) environments.
• Compliance Thresholds:
  • Once spend hits certain levels (e.g., $5k–$10k/year), procurement is triggered, adding review processes (finance, security, legal).
• Friction Point:
  • PLG creates natural friction: companies want speed, but must protect compliance and risk.
  • "There’s this natural friction…a world-class purchasing org has to account for that." (10:21)

5. Evolution from Managed Service to Platform/Marketplace (10:48 – 16:25)

• Origin of “Negotiation as a Service”:
  • Vendr started as person-driven service (due to limitations in product/data at launch), but the model is shifting towards data-driven, tech-first solutions.
  • "The natural evolution is to productize the experience...with the data." (12:59)
• Value of Data and Transparency:
  • Analogies: Real estate (Zillow), jobs (Glassdoor), travel (Expedia); SaaS needs transparency for both buyers and sellers.
  • "We’re doing the same exact thing for SaaS...data and insights actually power better decision making for the buyer, which then leads to healthier customers for the seller." (13:43)
• Impact on Price Negotiation:
  • Inefficiency and opacity drive distrust and longer sales cycles.
  • "The act of negotiations, the act of discounts, hurts sales. It doesn't help." (15:05)

6. Implications for SaaS Sellers (16:25 – 22:01)

• Transparency Will Force Change:
  • Wide disparities in pricing/discounting for the same SaaS product are unsustainable.
  • "For the same product...some people were given 80% discount, 20% discounts..." (16:30)
• Efficiency and Fairness:
  • As data and transparency rise, sellers must abandon old games and deliver consistent, fair pricing.
  • "Our bet is on that world, and we actually think we'll be one of the companies to ignite that change." (21:57)

7. Effect on Sales Value Creation (22:01 – 25:25)

• Value-based Selling vs. Standardization:
  • Ray pushes back with a sales-centric viewpoint: “Do you think in this transparent world that sellers are going to lose focus on creating value, both real and perceived?” (22:49)
  • Ryan agrees price should be variable, reflecting value delivered—but not negotiable via sales force skill.
  • "I just don't think [price] needs to be negotiable." (24:02)
  • "Fair pricing should come from the CFO’s office, not the director of sales based on their quarter." (24:24)

8. CFO/Finance Leader Advice: Starting with SaaS Spend Management (25:25 – 28:43)

• Current Adoption:
  • Most B2B SaaS orgs are still early adopters; 85% have no formal system, most use Excel, only 2-3% on platforms like Vendr. (25:56)
• When and How to Start:
  • "The earlier, the better...you can create processes for your company that don't feel like processes." (26:41)
  • Key threshold: ~ $400k/year in SaaS spend (excluding cloud infra).
  • Benefits: lets teams focus on building/selling vs. procurement admin; track all SaaS contracts, reviews, and compliance centrally.

9. Quick Personal Questions (Lightning Round) (28:43 – 31:36)

1. CEO to Follow:
   • Dave Kellogg; “I read his tweets—like getting an MBA in SaaS metrics.” (28:57)
2. Critical Tool (Other Than Own):
   • Vendr’s public data on LinkedIn—monthly top SaaS products list. (29:35)
3. Career Advice for Founders:
   • “Make yourself indispensable…companies need two things at the foundation level: you gotta build it and you gotta sell it. If you find yourself in one of those buckets and are excellent, you will be indispensable.” (30:34)

Notable Quotes & Memorable Moments

• On the pain point that started Vendr:
  “Why the heck is it so hard to sell these amazing products?” - Ryan (01:55)
• On decentralization and its effects:
  “...death by a thousand paper cuts, where you've got this rigid centralized process, but everyone's going around it because they're being sold to individually.” - Ryan (07:39)
• On pricing inequities:
  “As a CRO, I'm like, wow, this would be a great way to say we're not doing discounts for this particular size of deal over 40%...” - Ray (16:36)
• On the future of SaaS pricing:
  "Fair pricing should come from the CFO's office...not the director of sales office based on their quarter." - Ryan (24:19)
• On building or selling:
  “Build something or sell something. Right?” - Ray (32:02) “You got it.” - Ryan (32:04)

Timestamps for Major Segments

| Segment | Timestamp | |---------------------------|------------| | Introduction to Ryan & Vendr | 01:16 | | Defining SaaS Spend Management | 04:25 | | Decentralization of Buying | 06:22 | | Realities of Decentralized Spend | 08:12 | | The Evolution to Data & Marketplace | 11:30 | | How Sellers Must Adapt | 16:25 | | Value-Based Selling in a Transparent World | 22:01 | | CFO Advice: How & When to Start | 25:25 | | Lightning Round/Personal Insights | 28:43 |

Tone and Takeaways

The episode is conversational, data-driven, and forward-looking, with a practical edge for SaaS operators. Ryan’s vision is clear: as data and transparency spread through SaaS spending, buyers and sellers will partner more efficiently—and gamesmanship in negotiation will fade. The future, he predicts, is better for both.

Best for: SaaS founders, CFOs, GTM leaders, RevOps, and anyone involved in SaaS procurement or vendor management.