In this episode of the Sourcing Industry Landscape, Dawn Tiura interviews Nikesh Parekh. Nikesh Parekh is the CEO and Co-Founder of Suplari, an AI-powered spend accountability and financial performance system. Nikesh’s journey into procurement wasn’t a straight line.
Dawn Tiura: Folks, I am really excited to introduce you to a relatively new friend of mine and a business colleague of course, and that's Nikesh Parekh, but he also goes by Nicky. And before we get to what Nicky is doing today, Nicky, I'd love to just go through some of your background because... I mean Harvard undergrad, Harvard master's, but then you've been in startups, have been bought and you've done some interesting things. So first, I want to welcome you to the podcast. So welcome.
Nikesh Parekh: Thank you. I'm excited to be here.
Dawn Tiura: So let's take a little trip down memory lane if you don't mind. Folks, you really do need to look him up on LinkedIn and link in with him because he's got just an amazing background. But let's talk about after college; what was sort of the direction you thought you were going to go and why?
Nikesh Parekh: So I grew up in western Massachusetts, like literally cow country. Closer to Albany, New York than any other place in Massachusetts, frankly. I had an isolated upbringing. It was a GE town and there were very few other Indian people that I knew in Pittsfield. When I chose college, I chose a place where I get to interact with a broad, diverse group of people and get a lot of opportunities to meet an international group of people, particularly Indians. And so when I graduated from college, I got the opportunity to actually go back to India and do social service for a year. So I'd say in college I really didn't know what I wanted to do. I'm a biochemistry major. I thought I wanted to be a professor. I spent four years researching a very arcane piece of plant biology and realizing I didn't want to be a professor.
Nikesh Parekh: And then I was lucky in that I got an opportunity to do social service in India and I'd say that was one of the formative years of my life. So I literally picked up my things, moved to India, stayed in my grandfather's apartment in the heart of commercial Bombay, or Mumbai as it's called now. And I spent a year working in women and children's slum health clinics and researching vaccines for malaria and studying population science. And I came back to the US thinking I wanted to be a doctor, so I applied to medical school. I was applying to medical school, I ran into a friend of mine from my college fraternity at a party and he's like, "Well, you've got this year to kill while you're applying to medical school, why don't you try healthcare investment banking in New York?"
Nikesh Parekh: And in college I thought that business was kind of evil because I always wanted to be a professor and I kind of held up academic research on a pedestal. But then after actually doing a whole bunch of analytics and analysis on healthcare companies for this investment bank, I actually liked it a lot and I turned down medical school and applied to business school and ended up going to Harvard Business School.
Dawn Tiura: So I like how you say I chose my college because I wanted to have an international crowd, not I competed like heck to get into Harvard and it was such an accomplishment. And then I got into medical school and I decide not to go, so then I go back into Harvard for a master's. You do realize that you are that top tier of intellect.
Nikesh Parekh: Well, I actually don't think I'm that intellectually gifted, to be honest with you. I definitely like to read and I process information really quickly. I think the benefit I have at anything is I'm a really hard worker. So I'm hard worker, I put my mind to something. I kind of can set up a plan to achieve a goal. That I can do, but I'm definitely not the smartest person on the block, at least from a raw intellect. Everything that I would say that I've accomplished, good or bad, it's just all through perseverance.
Dawn Tiura: Well, that's always good for people to hear because it sounds like you just were naturally gifted mentally, but it's nice to know that you can be gifted mentally or smarter than the average, but still it takes hard work and perseverance.
Nikesh Parekh: Yeah, I'd say and that's mostly… And you know, there's a lot more research coming out about what's the key for successful people and you're hearing grit being talked about more and more, and grit and perseverance are kind of the same thing in my mind. But that's absolutely true is a lot of times in life when you try something, it doesn't work the first time or it doesn't work the second time or it doesn't work the third time. And sometimes you just got to keep going after it until you can figure out how to make it work.
Dawn Tiura: Yeah. Well, I just love the fact that you give back as well. That to me is absolutely critical for someone to be successful in my mind is somebody who can give back to the community. Some may have seen that you are still a volunteer. You're a volunteer consultant at DESC, Downtown Emergency Service Center, and adviser for Poverty Alleviation, Board of Directors for Bellevue Youth Soccer Club. I mean that stuff is really amazing. I think that's really great.
Nikesh Parekh: Yeah, I don't know if it's amazing because I do think those of us who have been lucky or those of us who... I guess one of the things that's really important also is just perspective. So after I was an executive at Trulia and it was sold to Zillow and I took some time off, and I'd always been really interested in social enterprise in terms of how can you build a business that helps the community and has social purpose in addition to having a profit motive. And so after Zillow I kind of went through a bunch of entrepreneurial cycles, trying to figure out is there a great opportunity for me either in the nonprofit sector or in social enterprise. And you just really come to appreciate how lucky you and I are that, one, we were born who we were born to when we were born.
Nikesh Parekh: For example, one of the organizations I'm passionate about, it's called Year UP. And Year UP basically is trying to bridge the opportunity divide. Generally they take kids who did graduate from high school but haven't gone to college, put them through a six month bootcamp and a six month internship and then try to get them into new economy jobs either in IT or analytics or customer service. And some of the stories and the challenges that these students face were literally they're the first person of their entire family who have even thought about going to college or who is not working for an hourly wage. It just really makes you appreciate just the advantages that you and I have and most people have with parents who are trying to push their kids to college versus either absent parents or just don't have the appreciation for education. And so Year Up I'd say is the one organization I'm most involved in that I'm most passionate about. I think there's so much opportunity.
Dawn Tiura: Oh, I love that. And so ironically, I came from a single parent household with a mother who did not understand why I wanted to go to college. Thought it was a ridiculous thing. So I went on and applied. I only knew of two schools, University of Michigan and Cornell, but I wasn't even sure where Cornell was. Got into both and then had to decide. I didn't know how I could afford to live away, so how could I afford to pay for college on my own? Every quarter I would talk about my grades and she'd say, "Well, why are you doing that? Why don't you just get a job and get a husband?"
Nikesh Parekh: Oh my gosh. Well, you ended up going to Michigan?
Dawn Tiura: I ended up going undergrad to University of Michigan, and then I got my... So I'm a complete nerd. So you did, what is it? Biochemistry, biomedical for four years. I have my master's in international taxation. I was a CPA in private practice for 10 years. So yeah, I'm a complete and total bean counter nerd.
Nikesh Parekh: And now we're both in procurement and sourcing.
Dawn Tiura: I know. So that's one of the things I want to talk about because for a while there you were at University of Washington and you were an advisor looking at innovation. Can you tell me about that?
Nikesh Parekh: The wonderful thing about living in a city like Seattle is that you have a university, and one of the companies I was CEO of was called Bio Architecture Lab. It was a spin-out from the University of Washington, trying to apply synthetic biology and computational enzyme design to make biofuels and renewable chemicals. So that was really cool. The benefit of it was that I got to know the intellectual property group at the University of Washington, it's called Commotion. There are always professors and students who come up with incredible ideas, but what do they do with those ideas? And if they really wanted to create a company, what's the next step?
Nikesh Parekh: And that's an area I have a lot of experience in is kind of taking a raw idea or taking a piece of intellectual property, building out a business case, raising venture financing, pulling together the team, kind of help charging the hill, figuring out the business model, getting the first customers. So before we started Suplari, I spent about 18 months working with professors and students and graduate students on helping them build out business plans and offering whatever little advice I could offer.
Dawn Tiura: Boy. So obviously you have a background in PE and venture capital. That must have been huge to help you be successful as well.
Nikesh Parekh: Yeah. So it's really useful to see, understand how the other side of the table looks at a startup or any deal and what are the things a venture capitalist looks for when they're thinking about investing in a company, like the team, the market and the strategy. But the real challenge, having been an entrepreneur and been at early stage companies, is really those first two to three years of really figuring out the business, raising initial financing and landing those initial customers are probably the most challenging and the most terrifying. And I'd say that's the period where I can really add the most value for another entrepreneur.
Dawn Tiura: You've had incredible experience, but I still don't see how you got over to the procurement world. There's a huge leap from what you were doing previously to starting your own company, Suplari. So can you take me through that journey?
Nikesh Parekh: Yeah, so I was CEO of a company that was purchased in a series of transactions in the internet real estate space. And after three acquisitions this company ended up being owned by Zillow. And at that point I decided I was ready for the next opportunity so I took my leave from Zillow. I then sort of cycled through ideas. So every three months I was partnering with a different entrepreneur and we would look at a different space or a different idea to see if we could work together. And there was a another entrepreneur named Jeff Gerber, who was the former software architect or chief architect at a company called Apptio, which is well-known here in Seattle, and Apptio is trying to be the... they're trying to be the dashboard for this chief information officer, or the CIO, of an organization.
Nikesh Parekh: And Jeff, he spent five years there and he had all this experience and he was like, "Hey Nicky, there's interesting problem where there's all this data that is siloed and segregated across the company, across all these different enterprise systems. You've got the ERP, the contract management system, the procure to pay, human capital management, IT asset management. Now you have SAS solutions. So anybody who wants to buy something can now buy the best point solution for him or her. And so you have all this data, it's sitting in a company, but nobody looks at it because it's all separated and it's not connected and you can't do analytics or you can't do machine learning on it."
Nikesh Parekh: So Jeff had this concept of like, "It's super easy. All we have to do is move this data to the cloud, connect it, and then run machine learning algorithms on it to basically help companies be more efficient." So we're like, "Okay, so what does that mean, help companies be more efficient?" And he was like, "Well, we probably could help companies save money, improve compliance, reduce risk, get insights into employee behavior, help employees be more productive." And that's really the core of how Suplari started. So, I as an entrepreneur, I like to do things... Each year I kind of pick that theme and I like to do something that keeps my learning curve as steep as possible. And I do believe the future of technology is artificial intelligence.
Nikesh Parekh: So I talked to Jeff and we were like, "Hey, that's really interesting and it's a really interesting opportunity to learn about artificial intelligence." And then we were looking at different parts of a company that we thought could benefit from connecting your data using analytics and artificial intelligence to drive insights. And procurement ended up being a really interesting area because one of the things about procurement that we really liked is that there are actually a set of underlying rules in terms of how procurement is done and how given a set of factors, what the next best action should be. We believe that a computer could be trained to basically augment and help procurement and sourcing professionals be more efficient. And that's where Suplari started from.
Dawn Tiura: So, you just realized that if you could just put up on the cloud and unify all of it, it would be an easy solution. It's not that easy though, is it?
Nikesh Parekh: No. So that is the big, "Oh man, I wish I had known this. If I had known what I know now back then, would we have done something differently?" But the the state of enterprise software and data is such a mess that we spend a lot... A lot of the value we add for organizations is really just on connecting the data and driving visibility and analytics so people can do their jobs better and faster. And the vision of insights is real and it's a huge opportunity, but for your typical immature procurement team, just having access to data that's clean and normalized and categorized with really easy to use analytics is a huge value add.
Dawn Tiura: That is so neat. I tell you, you have come onto SIG with just gangbusters. Everyone who has met you, seen your presentations, wants to try and do business with you and I have never seen a new provider come on like that. And you came out of the blue and thank goodness we were introduced into you, but through Siganova and then now within the rest of SIG, every time I go to one of our regional meetings or the summit, somebody is singing your praises.
Nikesh Parekh: Oh, that's wonderful to hear. I mean, we have been blessed by working with Eve Kessinger and the team at Nordstrom, with Greg and the team at VSP, and we have a number of additional SIG members that we're working with, like Mike Morsch and the team at CDK. We think we can add a lot of value and we're really fortunate to align with procurement leaders that really believe that the procurement team can have a material impact on the initiatives and the KPIs of leading companies and then Suplari can be part of that solution.
Dawn Tiura: Yeah. And you know, you were recommended in through two different ways, through Nordstrom and VSP Global. When you get these kind of recommendations, two coming in at once. It's like you know there's something really special there when two executives are saying, "You've got to look at this company. They're incredible." So that was really exciting. And then I just did a podcast with Michael Morsch and he's the perfect CPO for today's day, and so is Greg Tennyson. They represent people who are thirsty for new knowledge and their arms are wide open and they embrace it. And that's sort of the new genre of CPOs that we're trying to create and trying to find.
Nikesh Parekh: That's right. I was talking to Alberto who is our head of marketing here at Suplari on what makes a good Suplari customer? What's our prototype? The CPO that we know when we meet them we know that that person is a good fit for what we're doing in Suplari. And we're still kind of figuring out the words, but I always call the person a driver. It's like somebody who's not satisfied with the status quo; they don't want to be kind of sitting on the sideline. There's so much discussion at SIG and other conferences of how can procurement get a seat at the table, and the CPO that's a driver is always looking for ways to basically do things better and align to corporate initiatives and goals and then deeply understand how procurement and sourcing can help drive those initiatives. So if you look at Mike and you look at Greg, and these are guys that are proactively pulled in and take on more and more responsibility based on their ability to deliver results, and those are the that we want to partner with at Suplari.
Dawn Tiura: Yeah. And I always say about a third of the CPOs in my mind, they just want to skate off into the sunset, so they don't want to take on anything new.
Nikesh Parekh: The CPO and slash procurement team, where people who are transaction focused, they say, "Hey, it's not my job," and they want to go home at five o'clock. I'd say those are the people that, I don't want to say give procurement a bad name, I don't want to say satisfied, but they're resigned to the fate that procurement is kind of in this box and can't go beyond. And then you look at other leaders and many of the people featured at SIG conferences and there is so much more that procurement and sourcing can do to drive a company and actually partner with business leaders and be pulled in to hard problems. And I think that's where the future of procurement really sits.
Dawn Tiura: Yeah. And it's funny, we just recently had a regional event that you were at, but I was talking to a woman at the end of the day and I said, "How was your day?" And she said, "Oh, it was nice." I said, "Did you learn anything new?" She said, "Well, to be honest with you, I've been in this space for about 30 years." And I said, "So you've been talking about AI and machine learning and RPA for 30 years?" And she went, "Oh, oh. Oh yeah, I guess I did learn a few new things." And I thought, that's the person who just needs to retire. It's just, go on. And that's okay. And then about a third of our CPOs are a little bit more wait and see. They're the ones that kept saying it's not quite here yet and now they're starting to accept that it really is here and it's happening.
Dawn Tiura: And then we have that other third that are just thirsty for the change, and they embrace the ambiguity. It was interesting, I was at a conference recently and a gentleman coined a term, he said, "You know, we always talk about IQ and EQ." And he said, "I think there's AQ." And he said, "It could be agility, it could be ambiguity, it could be, I don't know... People just have to be able to change and adapt. So maybe it's your adaptive quotient." And I thought, what a great way to look at people, because you can have IQ and EQ, but if you can't adapt and accept ambiguity, this is going to be a very scary and frustrating and probably stressful place to be.
Nikesh Parekh: Right. And then you look at sort of the future and the change that's happening in the procurement function, and consistent across every conference we've been to over the last three years there's always this like, "How come we can't recruit new blood and new exciting go-getters into procurement and sourcing?" You would look at analytics, AI, data science, RPA, and on its face you would believe like there's no better place to be than procurement. The function needs to change, I don't want to say it's attitude, but it's approach towards the rest of the enterprise, to really help drive what's important instead of just check boxes.
Dawn Tiura: Yeah. And I think that's one of the areas that companies like you and people like you and leaders like you are helping people realize it's not that hard and let's just start small, do a small proof of concept, but just anything but stand still. And I've even told people in my own organization, I said, "I don't even care if you walk backward, but don't stand still. Go out in this direction. If it's not working, come back. Go out in this direction, but just don't stand in one spot because then you'll never have a breakthrough, you'll never get it." And I just want to keep encouraging people to do that with technology. And as you know, I always say you don't know what you don't know and if you haven't looked at technology recently, you surely are in the dark. So I love the fact that people are so open to talk about Suplari and invite you in and talk to you about your products. And it's just been really nice to see this whole new world being born right now.
Nikesh Parekh: Great. Have you heard about Amazon's approach toward like one-way doors and two-way doors?
Dawn Tiura: No. Tell me about it.
Nikesh Parekh: So basically Amazon, obviously it's a company here in Seattle and a lot of Amazon culture permeates Seattle, but one of the concepts that Jeff Bezos talks a lot about is whenever you have a decision, you want to think about whether it's a one-way door or a two-way door. So if it's a two-way door you could quickly make a decision and if it doesn't work or you learned it's not aligned, you can just walk right back. And in those scenarios let's make a decision, let's test, let's move quickly. If it's a one-way door, if you open up that door and you can't go back through it, those are times where you should probably think a bit harder about what you're doing as a company to make sure that when you make that decision it's the right decision. But most decisions are two-way doors, so as you said, keeping the company moving forward, keeping the department moving forward, optimizing, testing, trying different things, you're constantly learning and educating yourself about how you can be better and progress the function.
Dawn Tiura: I like that. I'm going to use that so thank you for sharing. I like that a lot. How long since you've started Suplari. How many years has it been now?
Nikesh Parekh: So we started in 2016, so we're just coming up on three years.
Dawn Tiura: Wow. That is incredibly successful in three years. But you also don't have a track record of staying more than three to five years. Are you loving it enough that you see yourself growing in this position as CEO and Co-founder?
Nikesh Parekh: Absolutely. Well, I would say that my career has been three to five year entrepreneurial sprints and oftentimes they end up being longer in different ways, and we can talk about that if that's interesting. Like I've probably spent more than 10 years in internet real estate, but just in different formats.
Dawn Tiura: Oh, that's true.
Nikesh Parekh: With Suplari, we're almost three years in and I think we're just at the beginning. Partly because the technology in AI, you look at what big companies like Microsoft and Google and Amazon are doing around AI, and then you combine it with the fact we're just getting to the point where the data is in a place where the data is unified and we can actually get good training data to help drive insights, I believe there's just so much more opportunity here. So hopefully this is a long term opportunity here at Suplari, and right now we see indications that we're on to something big.
Dawn Tiura: I could see you having a 10-year journey for sure, because I think we have in the next seven to 10 years, the C for CPO is going to be a capital “C” at majority of the companies, not a small “C”.
Nikesh Parekh: Yep.
Dawn Tiura: And that's my passion is to help elevate them and get them to truly having... So the way I see the world is that you have the CEO in the center. On his right hand is the CFO. And being a bean counter, I can throw a little shade there because they see things at the beginning and at the end, they don't impact play as it's happening. I think at the left hand side of the CEO needs to be the CPO because we can drive change. We see redundancy, stupidity, real time and we can change outcomes real time. We don't wait for the financials to be produced to see if we've made it or not. We can impact it and change the score at the end of the day. So I just see the strategic impact of procurement as being so powerful. And just get people to believe in it more and talk about it that way more is what we need to do and then demonstrate it with companies like Suplari.
Nikesh Parekh: Absolutely. I read an article about the CFO. And the CFO should become the chief data officer of a company because the CFO... Ultimately it all boils into a financial statement, but there are so many different various inputs and drivers and opportunities to predict the outcome based on the early stages that the CFO is seeing. And the chief procurement officer is no different because the chief procurement officer controls all the supplier side inputs into that equation. I believe your vision is correct, where the chief procurement officer should be the right-hand man or woman of the CFO, and it's our job to figure out how to achieve that vision.
Dawn Tiura: I agree. So I'm afraid we're going to have to cut this off. I promised people that these are going to be short enough to consume on a quick car ride. And I could talk to you forever. So with that can I invite you back again, Nicky, maybe in a year and see what you're up to?
Nikesh Parekh: Would love to do that. Thank you so much for your time and thank you for everything you're doing with SIG. The teams loved all your events and we get a ton out of them and it's just a great networking opportunity for the industry.
Dawn Tiura: Well, thank you. And you guys put a lot into it and that's why you get a lot out of it. So, you're the perfect kind of company that we want to have a part of SIG. So thank you so much.
Nikesh Parekh: Great. Thanks, Dawn.
Dawn Tiura: So folks, that is Nikesh Parekh, and also goes by Nicky. Co-founder and CEO of Suplari and just a man that you need to have in your network and you need to get to know. So Nicky, thank you so much.
Nikesh Parekh: Great. Thank you very much. Great talking to you.
Dawn Tiura: Thanks. And everyone have a great day.