

Ask HN: Which segment of the ERP market is easier to attack? - DenisM

Suppose I am creating an ERP 2.0 startup, or another one where the data is coming to/from an ERP system. At the start I have two choices:<p>1. Target only clients with simple schema (simple CSV files or even manual entry) and modest budget.<p>2. Target only clients with complex schema and large budgets (bunch of data sources).<p>The former is more like a product business which later grows to provide customizations, the latter is more like a consultancy shop which later begets a product from common functionality.<p>Which approach has been more successful historically? Any pointers at all are greatly appreciated. If you're in Seattle, I'm buying beer! :)
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TWAndrews
I don't see how you can possibly target the second group of clients with a
startup. Organizations in the second category will by-and-large have the
following properties:

A) Already have an ERP implementation of some sort. It may be awful, and
difficult to manage, but it's there and most likely interfaces some important,
or even mission-critical systems in the company. It's much easier to sell to
an organization that is transitioning from ad-hoc/manual ERP to a systematic
approach than it will be to convince to replace SAP with your new stuff.

B) Be relatively risk-averse. Larger organizations just have more to lose from
a failed implementation. In a SMB, ERP often replaces manual process which can
be reverted to or extended in case of a failed implementation. At a larger
organization, you'll have mission critical processes interfacing with the ERP
system meaning that there's very much an "if it's not broken..." attitude.

C) Classic high-touch, expensive enterprise sales cycles. While there are
startups which have managed this, it's definitely the harder nut to crack than
the more high-volume, but shorter, sales cycle that you'll find in the SMB
market.

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DenisM
The startup I consider joining is not building an ERP system itself, but
rather something that will need to get the data from an ERP system. So I am
trying to get a sense of the field before I sign up, not even really knowing
which question to ask...

My concern is that if the ERP schemas turn out to be sufficiently diverse in
practice, the startup might end with high per-user implementation cost,
effectively turning into a consultancy.

~~~
TWAndrews
That's a very valid concern, even for smaller ERP implementations, I expect
that it will be the case that there will be quite a bit of diversity in the
schemas. It will certainly be true for larger ERP implementations.

