When evaluating software, it's not just about the features—you also need to look at the company behind the product. Who are they, and why are they in this business? Are they privately owned, venture-backed, or supported by private equity? Each of these ownership structures influences how the company operates, their ability to innovate, and how they’ll support you in the long run. Understanding the company’s background helps you assess whether they’re in it for the long haul or if you might face challenges down the road.
Ownership structures can have a significant impact on the company’s direction, resources, and approach to growth:
Privately Owned
Privately owned companies often operate with limited resources and may experience slower growth. While they might offer more personal service and have a strong sense of ownership, their ability to innovate and invest in long-term product development can be limited.
Private Equity (PE)
Private equity-backed companies often face unique pressures. PE firms may focus on maximizing short-term profits and efficiency, which can lead to cost-cutting and reduced investment in innovation. In some cases, these companies may be driven more by financial incentives than by improving the customer experience or product enhancements.
Venture-Backed (VC)
Venture-backed companies tend to have more resources at their disposal, thanks to investor funding. This often translates to faster growth, aggressive scaling, and a focus on innovation and market disruption. However, there can be a strong emphasis on rapid growth and short-term metrics, which can sometimes come at the expense of long term stability.
Understanding these distinctions is crucial for assessing the stability of the company, whether their products will continue to be supported, and how committed they are to future upgrades and innovations. In my experience, companies with a clear and compelling vision of who they are and what they stand for—regardless of ownership structure—are much more likely to be proactive in improving their products and responding to customer needs.
Market Presence
Look into the vendor's market presence and reputation. There's a certain comfort in choosing established vendors with a large customer base. These companies often have well-established user groups that can help you navigate common issues others have faced.
However, market size isn't everything. Working with the “800-pound gorilla” in the industry has its downsides. If you have specific needs, large companies may be less inclined to accommodate them. Additionally, they might not value your business as much as a smaller provider would, which can result in less personalized support.
Reviews
While it’s important to check reviews for any software you’re considering, remember to take them with a grain of salt.
Many companies actively manage their reviews or engage in practices like "review gating," where only their happiest customers are encouraged to post reviews. They might also offer incentives for reviews, which tends to skew the results positively. This often leads to a mix of polarizing 5-star and 1-star reviews—those who love the product and those frustrated enough to speak out.
Though you shouldn’t take reviews at face value, you can learn a lot by identifying patterns in the negative reviews. This is where you’ll uncover insights about customer support, software reliability, and whether the product delivers on its promises.
For even more reliable feedback, try speaking directly with someone who uses the product at your next tradeshow or industry event. Face-to-face conversations are often more candid and informative than anything you’ll find online.
Looking at the company behind the software gives you a clearer picture of the kind of support and innovation you can expect over time. Whether it’s ownership structure, market presence, or user feedback, these factors all contribute to the long-term value you’ll get from the partnership. In the next article, I’ll tackle what software costs and we’ll explore the balance between cost and value.
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