We Made The Cut

B2B Marketplaces

Bessemer Venture Partners starts their recent marketplace whitepaper with this paragraph "As consumers we can buy basically anything online: car washes, deodorant, home renovations, even Albino Pac-Man Frogs. So why do restaurants have to order their most basic supplies over the phone? Why don’t dentists have an easy way to compare latex glove prices from different vendors? And why do most gas stations manage their fuel purchases in email and Excel?"

"That last question is the exact question we ask ourselves everyday.....and candidly, why we exist. So what's driving this technology revolution in these industrial, B2B spaces.

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What's changed?

Some big startup trends happen overnight (remember when Apple opened its app store to third party developers?), while others, like B2B marketplaces, are a slower burn. We believe there are multiple underlying drivers creating new opportunity for B2B marketplaces:

• Millennials are taking the reins in legacy industries and hate clunky, offline workflows. The most frustrated millennials leave their industries to start software companies
• Integrated payments and lending are unlocking new business models for software companies and vastly improving the user experience. B2B marketplaces with “indirect” business models like invoice factoring can offer core workflow and ordering applications for free to drive adoption
• API-driven architecture is maturing as a paradigm and enabling more communication between applications across value chains. Open architectures allow B2B marketplaces to build real-time multi-vendor product catalogs with accurate SKU and pricing information
• Software development is getting easier, cheaper, and faster in general, enabling a wider set of founders to bring their ideas to life

‍Read the full article here.