PATIENT: 7-year old e-commerce company, first attempt at cross-industry business-to-business
TIME OF DEATH: Filed for Chapter 11 in May 1997
PRIMARY CAUSE OF DEATH: Mission not clearly defined
SECONDARY CAUSES OF DEATH: III-advised acquisition, and loss of investors' confidence with subsequent lack of new capital.
Founded originally in 1990 as a publisher of directory of manufacturers and distributors, Industry.Net became Nets Inc. in January 1996. Former Lotus Development Corp. chief Jim Manzi, 46, chosen as CEO to lead company to the forefront of on-line marketing - to become the premier electronic marketplace for industrial goods and services.
By early 1996 investors and entrepreneurs were consumed with the Internet, each capitalizing on this equity "Gold Rush". Manzi's strategy of rapid growth included in-house software development needed to facilitate an exchange model, building on its success with online catalogs for such products as ball bearings.
In July 1996, the company doubled in size to 300 employees by merging with an AT&T online business unit. The future looked bright. Nets Inc. then claimed as many as 4,500 paying customers. However, things began to unravel by spring 1997. Manzi's plan demanded large amounts of money and time
Source: Inc., March 1998 v20 n3 p23(1). "Freewheeling expansion
ends in free fall." Peter Carbonara
One of the first attempts to use electronic commerce for supply chain
management:
Trading Process Network (TPN) was developed by GEIS (GE Information Services, part of General Electric Company, USA, headquartered in Gaithersburg, Maryland,) as an internal solution to streamline procurement process with the firm's 55 machine parts suppliers by allowing them to make online bids on spare parts and electronic components contracts. In April 1997, TPN evolved into a public electronic commerce network as a joint venture with Thomas Publishing, publishers of the Thomas Register of American Manufacturers, is the leading provider of product information for industrial procurement professionals.. Its customers are primarily buyers and suppliers of MRO (maintenance, repair & operations) as well as indirect products and services in the industrial manufacturing, automotive and aerospace industries.
TPN Register integrated web technology with legacy systems, such as EDI, to host an online supplier catalog with robust search capabilities. TPN Marketplace supported indirect buying - from contracted purchasing with preferred suppliers, to ad-hoc spot-buying and strategic sourcing. Meanwhile, TPN Post enabled buyers to collaborate with suppliers electronically and to solicit bids from global, pre-qualified suppliers, matching their selection criteria. Managing bids and supplier communications this way offers savings in cycle time, improves productivity and increases quality by reducing human error.
"How can you streamline your supply chain to include business partners? The answer lies in electronic commerce: Just use your Web," Peter Fabris, June 15, 1997, CIO Magazine
Founded originally as an online trade publication in 1995, VerticalNet
changed strategy to building portals for the various industries after receiving
two major rounds of venture capital. Primarily a community builder they
have aggressively sought industries members to add to their online market
segments. Probably the first successful cross-industry intermediary, they
completed their IPO in Feb 1999.
Several players have since entered the picture, including companies we will be profiling:
This report was completed in October 1999 for the class
International
Electronic Commerce taught in
the program of Management
Of Global Information Technology at the Kogod
School of Business
at American University
in Washington D.C.
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