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Warm Commerce on Digital Wildcatters Oil & Gas Startups Podcast

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Charles Dauber

Not too long ago, I was lucky enough to be a guest on Digital Wildcatters Oil & Gas Startups Podcast. The Oil and Gas Startups Podcast showcases emerging technology and the stories of industry founders, investors, and leaders, and is hosted by Jake Corley and Collin McLelland  Digital Wildcatters is a website that has podcasts, videos, blog posts, and The Bullpen, which features demos of tech for the oil and gas industry. 

How did you identify the problem to come up with the solution of Warm Commerce?

About 10 years ago, I was running an industrial equipment manufacturing company, and we were selling to oil and gas companies. We had a bunch of issues in terms of our supply chain. We had all these important projects and were working with all these large oil and gas companies and power gen companies, and at least once a month, my COO would come to me and say, "Hey, Charles, sorry, we're going to miss the quarter because we have some part that's from some supplier that's late and we don't have any backups" and we would scramble and figure out what to do to make it work. Then the next month, he would say to me, "Hey Charles, sorry. We have some quality issue with some other big company and we can't make the quarter" and we'd scramble and go figure it out.

We were a mid-market company and it bothered me that there's all these consumer technologies that help consumers get better visibility into who are good people to work with, whether it's Angie's list or Yelp or things like that, but nothing existed like that in the industrial world - and certainly not in the oil and gas market.

Then there was the lack of data. We had a mid-market procurement system that should have told us as information. It didn't have any real concept of who our suppliers are, how they are performing, or if there were any other suppliers out there in the marketplace that we could use to replace them. Our team never had any time to go manage the suppliers because they were always running around crazy busy. We didn't know if our suppliers were at good financial health. We didn't know if they were sourcing from China and what was the quality of the products we needed.

And that was the Genesis of Warm Commerce.

What is Warm Commerce?

Warm commerce is a SaaS enabled marketplace or a SaaS enabled network. We sell software to oil and gas and industrial companies to use to better manage their current suppliers for risk and cost.  And then they can also use the software to source from our network of 600 pre-qualified suppliers with over 1,200 categories of products already on the platform.

In this environment with coronavirus and everything that's going on in the world, there's a huge increase in interest in what they call supply chain resilience. What's going on with my supply chain? Is my oil field services company that I'm working with getting ready to go out of business? Is the equipment provider that I'm counting on getting their material from someplace in that company shut down? Second tier supplier risk data is not available in the industry today. Warm Commerce brings that level of visibility of what's going on with your current supply chain for risk and performance with tools. When a company wants to go source, we actually help them connect them to qualified suppliers so they can then do business.

We're not a marketplace, meaning we're not conducting the transaction on the platform because most of our customers have spent lots of money on their procurement systems, and most of what we have listed are things from suppliers that require sales, they're not commodities. It's equipment and services and all sorts of other things that suppliers actually want to go sell. They don't want to be commoditized and put it on an Amazon type platform. Suppliers want to sell on value, qualifications, delivery, service and quality. We designed Warm Commerce in a way that fits with how customers do business, but we're replacing spreadsheets and SharePoint, which is where most companies are trying to manage suppliers, and replacing Google and lots of emails and phone calls to source new suppliers.

Another major factor in our particular model, is our 'Yelp' like ratings. If you're a millennial, who's in procurement at an oil and gas company, you're used to using Yelp to go and figure out where you're going to go to dinner. Using a tool like Yelp is cool, and we're trying to help adopt some of this new technology to the oil and gas market. We believe we are the first industrial platform that actually does supplier ratings. The supply chain and the category managers want this information. They can rate their suppliers either publicly or privately, but they can't actually issue reviews for the public, just internally for their team. What we're doing is bring transparency to service providers, which what Yelp has done for restaurants. If you're a restaurant that has bad ratings, you have choice between that one and a restaurant that's got good ratings, where are you going to go eat? It's the same on Warm Commerce. Which supplier are you going to use?

Explain the network effect of Warm Commerce.

We sell our SaaS platform to oil and gas and industrial companies, they then require their suppliers to join. For every company that works with us we onboard their suppliers onto the platform. The suppliers join for free. The company can then effectively manage them. The suppliers are accessed by other buyers on the platform. 

The network effect is really where the value gets created in a platform like this. It's not a hundred percent around the monetization from the marketplace. The value of the platform goes up every time a company invites suppliers, which helps other companies. Every time suppliers invite their customers to give them a rating, it brings more companies to the platform, which helps other suppliers. More companies on the platform helps both sides and more suppliers on the platform helps both sides.  That data asset makes it very, very valuable for both sides of the platform. 

Why Warm Commerce?

The largest companies have SAP or Ariba, which are their purchasing networks, but they are very complicated systems. Mid- market has nothing. We give very high end functionality to the rest of the industry at an effective price that they can go deploy easily and quickly while keeping their current procurement system. There's no reason that these midsize and smaller companies can't be as innovative as larger companies. They can have the same tools for cheaper and be faster.  We can help them cut their costs and optimize their supply chain for working capital, help them with diversity, and help them with supplier performance. Those are the things needed to help this industry get through this downturn and make it through to the backside.

What about this market environment with COVID-19 compares to the .com bubble?

As we think about this market environment, there's clearly different things at play. This environment we're in is not because of overvalued startups. We're here for a whole variety of reasons that would take up the entire podcast. Right. But it doesn't matter. We're still here. Right. And so what a company is do about it, how do they make sure that they're focusing on the right problems and that people are willing to give them money and things like that. That's our job as CEOs is to go figure that out, make sure that we're doing things that regardless of the market environment or the price of a barrel of oil, we're still getting through when we're still, we're still having a successful company and that's our job.

Speaking of COVID-19, how does Warm Commerce solve supply chain issues for mid-market companies?

Here is an example. We have an automotive company that we're working with and they were getting emailed by their customers every day. What's going on with your supply chain? How are you doing? How many people are working? How are your employees? What's your COVID-19 thing? This company had to turn around and go to their suppliers and ask, what's happening, give me your daily update, etc. We call that operational readiness, which is built into the platform so that companies can get visibility into their suppliers and their suppliers, suppliers. 

Which markets does Warm Commerce serve?

We say we are focused on the industrial market, which would be oil and gas, industrial manufacturers, construction companies, and other companies that are mid-market. What works well with our platform is many of our markets share a similar set of suppliers. This helps build a commonality to get to the network effect. 

How can you get started on Warm Commerce?

If you're a supplier you register for free to get listed on the platform. We help suppliers get the profile going, and when they're live they can go market themselves to to the companies on the platform.

If you work at a company that could potentially use Warm Commerce to help reduce costs or manage your suppliers better, you can contact us and we'll get in touch and figure out what's right for your company based on your needs.

If you are interested in helping your suppliers by giving them a rating, then come to the website to sign up for a free license and we'll get you taken care of. Then you can also invite your suppliers to join, which gives them a free place to market their products and services, give them a rating to help them try to go get more business.

We want to help people help each other in this marketplace. And especially with a lot of salespeople at home, nobody's going in the office these days. This is a platform that you can easily join to help your company with their supply chain while helping your suppliers, and other suppliers on the platform as well. 

Want to listen to the podcast? Click here.

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