TSN #25 - Negotiation as a Service

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Hey! 👋

This week's idea came from studying Tech Source and Tiny's Buyer service. They've found a brilliant way to monetize negotiation skills in the B2B space. The best part? No tech required, just smart positioning and good people skills!

Enjoy!

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🎬 The Pitch

Imagine building a business where you get paid to help other companies save money. That's the beauty of Negotiation as a Service. Companies are drowning in SaaS subscriptions, office leases, and vendor contracts, but lack the expertise or time to negotiate better deals.

Here's the concept: You position yourself as a specialized procurement team that guarantees savings. Focus on one niche (like SaaS) or specific vendor types where you can build deep expertise and vendor relationships. With the right approach, you could save clients 20-40% while taking a healthy cut of the savings. The best part? Zero inventory, no tech stack needed, just pure service arbitrage.

Think about it: When you save a company €50,000 on their annual software spend, charging 20-30% of the savings is a no-brainer for them. That's €10-15k for a single deal.

📊 Market Insights

The opportunity is massive and growing:

• Average company wastes 30% of their SaaS spend

• SaaS spend growing 18% annually

• 55% of companies lack dedicated procurement

• Enterprise software deals average 20-40% discount when negotiated Source: SaaS Spend Report 2024

💡 The Concept

Core Model (Apartment Complex):

• Complete audit of current subscriptions

• Identify overlapping tools and waste

• Negotiate with vendors for better rates

• Ongoing spend monitoring and management

• Guaranteed savings or no fee

Alternative Niches:

1. Office Space:

   • Lease negotiations

   • Furniture bulk purchases

   • Facility services contracts

2. Manufacturing:

   • Raw material contracts

   • Equipment leases

   • Maintenance services

3. Marketing Services:

   • Agency contracts

   • Media buying

   • Platform subscriptions

💰 Revenue Streams

• Primary: % of realized savings (20-30%)

• Secondary: Monthly retainer for ongoing management

• Success fees on new contract negotiations

• Annual audit and optimization services

🛠️ Bootstrappability Score: 9/10

Start with just a laptop and phone. Main investment is time building expertise and relationships. The first sales builds the business.

💻 Non-Tech Factor: 7/10

While you'll deal with tech products, the business itself requires minimal tech. Focus on relationships and negotiation skills. At some points you will have to automatise parts of the business to keep on top of all the portfolio of customer’s subscriptions

🚀 Getting Started

1. Choose Your Niche:

   • Pick one category (e.g., SaaS)

   • Research common pricing models

   • Build vendor database

   • Document typical discount ranges

2. Service Development:

   • Create audit templates

   • Build savings calculator

   • Develop negotiation playbooks

   • Set up tracking systems

3. Initial Client Acquisition:

   • Target companies with €100k+ annual spend, such as growing startups wanting to extend runway

   • Offer free spend analysis

   • Use "no savings, no fee" model

   • Document all wins for case studies

4. Scale Through:

   • Building vendor relationships

   • Creating repeatable processes

   • Hiring specialist negotiators

   • Developing proprietary data

💪 Pros & 😓 Cons

• Pro: High margins, low overhead

• Pro: Value easily demonstrated to clients

• Con: Need deep category expertise

• Con: Success depends on negotiation skills

🔍 Steal Somebody’s Homework & Dive Deeper

Want to explore this idea further? Check out:

• Tech Source - SaaS spend optimization

• Andrew Wilkinson’s take on the topic.

• Vendr - Enterprise SaaS buying platform

Know any other interesting "savings as a service" businesses? Share them!

- Slavo