How do you size up a young software vendor, fairly?

Three things, and they fail in different ways.

People say they are betting on the vendor, which is true and too vague to act on. Underneath that sentence are three separate bets. A company can be a good bet on one and a poor bet on another, and they are not equally within your control.

Most buyers spend the meeting on the top layer and none of it on the bottom one, which is the only layer they own. Get the exit right and the size of the company matters much less. That is the most useful sentence on this page, and the rest of it is how to get there.

It is also why C1 and C2 sit on the same sheet as D3. If you can take everything with you, a vendor failing costs you an expensive quarter. If you cannot, it costs you a year.

Three numbers and a stage. That is all the question is asking for.

Notice what is not on that list. Total funding raised is not a safety measure. A large raise buys time, and time is not the thing you need. What you need is a company that still cares about freight forwarding in three years. Ask what the money is for instead, and listen for whether this market is the plan or a stop on the way to a larger one.

Ask the count twice, in two shapes. “How many forwarders are live” and “how many sent a quote out of it last week” should land on roughly the same number. When they do not, the gap between them is the real answer.

There are four. Two punish a young vendor unfairly and two flatter an established one, and all four feel like prudence while you are doing them.

One. The count that is not forwarders

“Hundreds of customers” is not an answer to D3. Warehouses, hauliers, shippers and brokers are all logistics companies, and none of them is you. Ask for the number of freight forwarders, then for the number of freight forwarders your size, and expect the second number to be much smaller than the first at any vendor.

Two. The funding round read as safety

A raise is a bet somebody else made, on a different question, over a different horizon. It says salaries are covered for a while. It does not say the product will still be maintained, and a company with more money sometimes moves away from a small market faster rather than slower.

Three. Punishing the vendor who answers

Ask three vendors how many forwarders are live. One says eleven. Two say “lots”. If you shortlist the two, you have run an experiment on candour and thrown the result away. Score the answer, not the number, or you will teach every vendor you meet to stop giving you numbers.

Four. Assuming an established vendor cannot go

Older software leaves too. It gets acquired, folded into something larger, or the module you bought quietly stops getting attention while the price moves at renewal. Ask an established vendor what they retired last, and what the forwarders on it were offered when they did.

Some of the answer is public, free, and takes about ten minutes at your desk.

Whatever the vendor tells you, the company behind them has a registered existence somewhere, and that record is usually open.

• The register where they are incorporated. The UK’s Companies House service publishes company information such as the registered address and date of incorporation, current and resigned officers, document images, mortgage charge data, previous company names and insolvency information, free of charge. Most countries run an equivalent.
• The legal name behind the brand. Ask for it, or find it in the terms of service or privacy policy on their own site. A brand and a registered company are often different names, and your contract will be with the second one.
• Recognition schemes, where a country runs one. In India, the Department for Promotion of Industry and Internal Trade issues a Certificate of Recognition that can be verified on its site to startups that qualify, and the number can be checked on the Startup India portal.
• The people. Look at who builds the product and how long they have worked on this particular problem. A three-year-old company whose team has spent fifteen years in freight is not the same bet as a three-year-old company with none.
• The product’s own trail. Release notes, a changelog, documentation with dates on it. Regular dated changes are evidence for bet two, and their absence is evidence too.

It is only fair to run that on the vendor whose website you are reading. FreighAI is the product of AggAiLabs Software Solutions Private Limited, based in Pune, India, holding DPIIT recognition DIPP232097. Those three facts are checkable in public records without asking us, which is the standard this section asks you to hold everybody to.

None of this stands in for the question. It changes what you do with the answer. Where the public record and the meeting agree, move on. Where they differ, ask about the difference, and pay more attention to how it is explained than to the difference itself.

One line per vendor the same day, and one clause before you sign.

There is one number worth writing before the meeting rather than after it. What does this cost you if the vendor disappears in a year? If the honest answer is a few weeks of work and your data back, you can afford to buy from a young company. If it is a year of your operations team, you cannot, and no amount of funding on their side changes that arithmetic.

The same question for both, and a different benchmark for each.

Fair to a young vendor is accepting small numbers. Eleven live forwarders, stated plainly, with the name of one you can telephone, is a real answer to D3. Accept that some processes are not written down yet. What you are testing at this stage is whether the founders say true things when the true thing is unflattering, because that habit is the only protection you have when something goes wrong later.

Fair to an established vendor is refusing to treat age as an answer. Ask which forwarders your size joined in the last year, ask who maintains the part of the product you are buying, and ask what they retired last. Longevity tells you they survived. It does not tell you they are still investing in the thing you are about to depend on.

Where a young vendor should lose is the exit. If they cannot describe how you get your history out, their smallness becomes a risk you are carrying for them. Where an established vendor should lose is relevance. If nobody your size has joined recently, you are buying somebody else’s product with your own money.

Read D3 beside D1 and D2. D1 puts a forwarder your size on the telephone. D2 tells you what the product cannot do. D3 tells you whether the company will be there long enough for either to matter. Part D is one question asked from three sides, and no single side of it decides anything.