When the going was good
Pros
Spigit as a startup found itself at the right place at the right time during 2009-13. Those years proved magical and transformative for the people who found themselves working there during that period. Cloud infrastructure as a reliable alternative to on premises computing had just come into its own. Enterprise clients were aggressively experimenting with collaboration apps to boost the bottom line. And, many industries, most notably financial services, were hungry to grow through innovation after a very rough couple of years. For a brief period of time some of the most talented, creative, and committed people in software convened to create something special. It’s with the benefit of hindsight that we can appreciate how rare those types of experiences can be during one’s career: that opportunity to be part of the next big thing.
Cons
Spigit’s ultimate demise was due to two factors. First, the enterprise clients after a time realized that crowd sourced innovation took work. Work to get people involved in campaigns. Work to manage the campaigns. And, work to do something with the ideas that people contributed. Organizations found that they had a limited appetite for this type of engagement, no matter how compelling the results. Further, the client executives who advocated for this approach to transformation would often shift in and out of their roles and organizations at a bewildering clip, leaving sponsorship in doubt. This dynamic created a natural, impenetrable ceiling for the upside of the business. Second, Spigit’s success naturally attracted the attention of competitors. Incumbents. New entrants. The barriers to entry in this space are low. And, no one firm achieved meaningful differentiation to staunch the flow and retain share. As a result, around 2012-13, the market experienced remarkable price erosion for licensing. At some point the services business became a more reliable source of revenue for the company, upsetting valuations.
