Ep. 2 - Bob Solomon: Software, Scale, & the Long Game in B2B

Are you ready? I'm ready. Okay, as we were just discussing, um, I'm excited to have you here today because, uh, we should probably go over how we met as well, if you can recall.

But, uh, as you know, a three-way phone call.

It was a three-way unplanned three-way phone call. Exactly. But Bob Solomon, who I've come to know as an advisor and have helped us, Brazos, a lot in the way we're thinking about how to approach what is, I think, a complex problem, both behaviorally. How do you, you know, the creating a system that is an e-procurement system that allows buyers to buy quickly, sellers to sell quickly is, you know, easier said than done. That's for sure. And so you've been along the journey now for a handful of years, 4, 3, 4 years, something like that.

And you mean 25, right?

Well, you've been on the journey. Yeah. You know, I would say that we're just sort of joining the journey to a degree. But anyway, in my mind, you're one of a very, very small handful of people that I can sit down with and really be like, okay, that was both really helpful, interesting, informative. And you just know this digital space as well as anybody, or probably better than most.

That's nice of you to say.

And so, and you know that saying nice things like that To you in particular. No, it's dangerous. Well, it hurts. But, and that's the other part, is that you have this extreme expertise and great experience, but you're normal and are able to communicate what I think are complex issues in a way that, uh, can be understood, which is kind of the problem. Some people understand it, but I can't quite get it to you in a way that is actionable. You know what I mean? Yeah. So, as we're talking, you've done a lot in your career and where to pick up. And we decided that maybe at the point at which you finished your MBA at Stanford is really where you felt like your story, your journey starts. Yeah.

I think that's the most relevant part.

Um, and did you— I guess just to kind of tee it up, did you know when you went to Stanford to get an MBA where you would be? Did you kind of have your sights focused on digital monetizations and things like that, or is it like, I don't like what I'm doing now, I'm gonna go get that MBA and see what dumps out the other side?

Uh, I had no idea where I was headed, uh, when I got my MBA, and it certainly was not I mean, I did always like computers, but hard as this is to believe, this is all pre-internet, right?

So— Right. There's such a thing.

So, you know, I'm definitely watching the impact of the— this is mid-'80s, right? So I'm watching the impact of the PC.

Of VisiCalc and then Lotus 1-2-3, and eventually, believe it or not, big IBM sort of world, like, yeah, yeah, room-sized.

Yeah, I mean, their PCs were just coming out and you were just— they were just being integrated into the B-school curriculum at that point, believe it or not. So, and I, I had loved computers always, so I guess that part was always true. But I ended up, um, I ended up moving into the food industry.

Makes sense.

Yeah. And I— that's a long story for another day, but I spent 15 years in the food industry, um, most of that after, after business school.

And so, if I could ask, you say you always loved computers. Do you remember the first time you saw a computer?

Yeah, absolutely.

What was it?

Uh, well, it was a terminal, right? Um, you, you never really saw the, um, computer itself. I didn't see that till college, but it was a terminal that was set up, and we were programming in something called Fortran.

Okay.

And we had a little computer club.

Are these cards?

No, I, I did cards. I did the punch cards in college. Um, so I got very familiar with those. So this was a a white and green bar on pin scrolling sort of paper on a terminal, and you would type the instructions in and it would send it to the mainframe. Okay. And you would code little programs in Fortran. Okay.

So the UI hadn't really evolved yet.

Yeah, the UI. The UI looked like a typewriter.

Here, run this down to the mainframe. This is what I want it to do.

Yeah, no.

Okay, so what year was that that you saw your first?

'76. Okay, 1976.

Yeah, so roughly a year before I was born. Yeah, exactly.

Okay.

Yeah. Okay, so from that time, maybe you didn't know how much you liked it, but it was—

I knew.

I guess in retrospect, I was always kind of smitten with the power, the power of what was that able to do, by the way, that like what could you do with that?

You could do simple programming if-then statements, you know, and, and, and, um, and build little, little models, little computer programs. I wasn't great at it, but, you know, and I remember, um, one of the kids figured out how to hack in and change his own grades.

That didn't go so well. Yeah, did it really?

And one kid figured out how to, you know, look up all the salaries of the teachers and stuff like that. So yeah, you know, they got into trouble. We We got into— I didn't. I just observed and tried to—

So it's been cops and robbers since the beginning. Yeah, exactly. Of hackers and non-hackers. Yeah, exactly. Wow. That's brazen to go in and—

Yeah. Brazen is a good word for it.

Yeah. So the movie WarGames was loosely based on this experience.

Exactly.

Yeah. Well, he didn't get a lot of credit for it. Yeah. So I just took you off course, but Uh, so you're working with computers, you're in college or post-grad. Yeah. And then you go, you're into the food industry after. Yeah. So you get out of Stanford.

Yeah. Uh, I go into the food industry, the ingredients part of the food industry. And then I go from there, believe it or not, into food testing. And you would think that food testing has nothing to do with computers, but it actually had a lot to do with computers because If you think about a testing lab, the first thing is a lot of the testing was on behalf of the buyers of ingredients.

Okay.

And the suppliers were sending them the— they were getting the ingredients or requiring their suppliers to get the ingredients tested.

So you're not tasting the cuisine. Oh, we did drink vinegar and eating apples.

We did do sensory testing, but that was a small part of it. Most of it was, I got a sample of milk powder. I got to figure out if there's salmonella in it or not.

Oh, so scientific.

Science.

Yeah. Not qualitative.

Not qualitative. We did some of the qualitative stuff as well. You know, melt this cheese, see how it melts, how it looks, see if the—

The melt's on wrong.

Yeah. Believe it or not, there's a lot of money spent looking at that. But we were mainly doing testing for pathogens, stuff that could make you sick, or the nutritional label.

And did you, were there, I mean, was it pretty clean most times or were there like, Jesus, we're all gonna die?

I think what you learned is, you learned, when you first get into the industry, I think you learn, you're like, I'm never gonna eat anything again. And then you sort of learn, as long as it's cooked thoroughly, I'll be all right.

Right? When in doubt. Yeah. Torch it.

Yeah, exactly. So. Fire was invented for a really good reason.

Well, what was the food that you're like, Remember to kick, always overcook that one.

Well, what you learned, I think what you, what you learn, well, of course you learn about, you kind of know when you get involved like raw shellfish, you know, you see that now you see the warnings on all the menus and things. So the things you don't, the things that surprise you are things like the deli in the supermarket is like an is like a really good vector for getting sick.

It's like a kindergarten classroom in there.

Yeah. You know, you're slicing meats, you're slicing cheese.

A lot of sneezing going on.

They're sneezing. The person behind the counter has the gloves on, but then grabs the money from you, you know, with the gloves on. Yeah. You know, and what about—

is there such a thing as like meat cross-contamination? Yeah, sure. If you've got like bologna on your glove and you go touch some beef.

Uh, well, you don't really have to worry about the species as much as what's on it, right?

Understood. No, start a fire or something like that. No.

So you learn that, and then you learn like things like cert— food, you know, you got to keep hot foods hot and cold foods cold. That's what they teach you. And if you, if you don't keep them hot enough, you're, you're, you're creating the conditions for bad stuff to grow. Okay. If you don't keep stuff cold enough, you do the same thing.

So there's something about— is it shellfish? Where if the, if the temperature is fluctuating, there's something that happens from the time that it's caught. If it's not just kept at the perfect temperature.

Yeah.

Or if it rises and then freezes again, there's something Very wicked that can occur there.

Well, there's this thing called Listeria that grows at low temperatures, unfortunately. And so that's one of the main things that causes recalls these days. And it's not good for people who are immunocompromised, taking drugs, or pregnant, or elderly. So that's one of the main problems we have. But, you know, I learned, I worked for a bunch of microbiologists. They were all microbiologists at this company and they taught me.

Meaning they were small.

They were very small biologists.

Very small biologists.

Uh, they studied microbiology. Okay, okay. And they taught me food time— food, uh, time and temperature. That's what bugs need to grow. So you have to make sure they have no food, they have no time, and that the temperature's not good for them to grow in. But when all those break down, that's when you have real problems.

And it's, it's something that probably proliferates quickly.

It does. They, they, they grow in logarithmic cycles, I think.

You want to show me what that means? I mean, immediately thought of a fireplace. Fast.

Fireplace.

Just logs stacking up. So you were 15 years.

Yeah. In the food industry.

In a general sense.

Yeah. And the great part was, so I'm there like the whole decade in the '90s. Right? And now, and so first of all, when you're testing food, there's a big lab there and there's lots of chemicals and things going on, but the output is generally a certificate of analysis. Okay. And you're, which is saying, this is what we found in this sample, right? Either we found the pathogen or we didn't, or we, here's the nutritional profile of that.

Are you doing like gas chromatography?

Like, what do you get? Yeah, gas. Look at you with— yeah, we did everything from on the microbiological side. You just incubate it and put it on Petri dishes, believe it or not. On the chemical side, yeah, liquid gas chromatography. There's machines for doing the testing for the minerals. I don't even— infrared. I don't even remember all the names of the machines, but I used to—

you're being humble.

No, I don't. I don't. It's a long, long time ago. But the end product is a certificate of analysis that has data on it. Okay. And when I get there, where all of the labs are based on paper, and by the time I leave, the labs are all fairly electronic, and the calculations when I get there are human. Mm-hmm. They're not. And by the time I leave, you know, you can connect the computer to the equipment and you can connect the computer to the internet. And instead of— when I start, we're faxing, you know, right, certificates to people, which we sort of laugh at these days, but back then— oh no, the first thing, one of the first things I had to do is figure out, believe it or not, something called the AutoFax, which meant we could send from the computer straight to the fax machine so that someone wouldn't have to stand at the fax machine and feed the certificates in. That was a big thing.

That is a—

for the first 4 years. But then, then you get the internet in '95, sometime around—

I got it in '88, but okay.

Yeah, the last, the last 5 years were spent, how do I, how do we put this whole business online? And so I think that's where I started to get really interested. So now I'm in the— I'm in— I'm between buyers and suppliers. I'm looking at quality data.

Still in food?

Still in all food.

Okay.

Yeah, maybe a little cosmetics, but, and all of a sudden I'm getting, and I'm getting, and I'm sending data to big companies. And those big companies in the food industry are all starting to call me and say, have you heard about this thing called Ariba? And can you connect to it? And so I start learning about this thing called Ariba.

Can I jump back really quickly? Yeah, of course. Before you jump into Ariba, when you first saw the internet, so you guys are faxing, I'm assuming before you had paper and you were somehow getting that downstream to whoever needed it. And then you have faxes coming in, which, and then you had the AutoFax, that connection's made. And then the internet, were you, was it clear to you pretty quickly okay, this is different. This, this opens up an enormous amount of possibilities. I mean, was it pretty quick that you're like, okay, this, this is a game changer?

Yeah, it was, it was like a blinding light.

Was it?

I was like, okay, this— I mean, I remember saying to my dad, my dad at the time was, interestingly enough, who was a metals trader. Yeah. Um, was like, when I told him I, I really got to go pursue this internet thing, I got to leave the food industry, and he was like 'Are you sure you want to do this? This thing's kind of a flash in the pan, I think.' And I was like, 'I don't think you understand. This is going to change the way business is done.' You know, it just is, right?

Did he— did he— I mean, that was probably maybe a series of conversations you guys had. Oh yeah, about that. But did he, in over time— I mean, in a year, 18 months—

be like, 'Geez, this thing looks like it—' It took him a long time, I think, You know, he was trading metals and he was doing it the old-fashioned way, picking up the phone. We had a tele— I mean, he had a Telex when I was a kid, right? And he would pick up the phone and he would talk to people. There was, you know, and, you know, he's in his 60s, right, at the time. Maybe now he's in his 70s, I guess, when the internet hits. And it took him a long time to realize it. I think, He eventually realized it when he learned that the Daily Racing Form was available on the internet. Then— Literally racing? The horse— he loved to bet on the horses. And when he found out that he didn't have to go to the newsstand to get the Daily Racing Form, that's when I had to show him how to use the internet. So it took a while.

It needed something personal to drive him. Yeah, well, it got him there. It got him. Uh, so anyway, so you starting to see this and so Ariba is not in the food industry.

No, Ariba was a procurement tool that was across industries. It actually didn't fit all that well in, in my opinion, in the food industry for a variety of reasons. And I was getting calls though saying, can you upload your catalog? To Ariba and can you put your pricing on Ariba?

So what was Ariba when you joined? So Ariba had been around already. Did they reach out to you or you're like, I need it, I'm changing things up, I see the opportunity with the digital future and started making a move? Like, how did that transition occur for you?

Yeah, so Ariba starts in '96 and it's designed— it's e-procurement. It's designed basically I'll oversimplify it, but the, the general notion was, why should your suppliers be sending you catalogs for stuff when we can put a catalog on the internet and you can shop from that catalog? You know, we take for granted, you know, shopping carts today, but in '96, that's Amazon's just getting started, right? It's consumer. But for B2B, the first thing were, were REBA and a couple other companies.

So these physical catalogs that used to be distributed in stores.

The Granger catalog, the VWR catalog, the Uline catalog. You know, there was a, you know, catalog for every business that had a lot of products in it.

And so the— well, maybe the original idea was like, okay, first step, stop sending all these around. Let's just hub it.

Exactly. Somewhere. Yeah, let's just, let's just put it on the internet and I should be able to pick the product I want, put it in a shopping cart and create a purchase order and send that to you. That's really all Ariba was. Okay. When I got there, literally. And these things were priced. And they were priced, but they were priced based on the contract that you as the supplier had with that buyer.

Understood. Okay, so it wasn't one—

there was the ability to publish a public catalog, but no one used that.

That's the MSRP, right? Exactly, exactly.

But we were selling to— Ariba was selling to large enterprises, so gigantic buyers, right? Fortune 500 companies who were often supplied by other Fortune 500 companies. So think about you know, um, you know, let's say, uh, Kraft buying from not only from Grainger but from Dell, right, for all their PCs. Basically, if it could go in a catalog, we would encourage you to create an electronic catalog with your specific prices for that customer. Then that customer could go in have their employees buy the things they needed to buy at the price they were supposed to buy it from.

And the benefit to that buyer was kind of the one-stop shop concept is in there somewhere, which is you've got all these vendors. Exactly. And you can apply your POs how you like to these purchases and just really make an efficient thing occur?

Yeah, I mean, part of the value prop was, uh, no more catalogs, right?

Uh, and no more printing companies love—

yeah, no more catalogs that are out of date, right? Uh, the pricing is correct because it reflects the pricing that, that you agreed to with that supplier. So save money so that people aren't buying, you know, at list price when they should be buying off the contract. There was a workflow associated with it. So if I want to buy something and I want to buy a laptop, that's got to go auto— because I know it's a laptop and I've assigned some coding to it, I know who has to approve that. IT has to approve laptops. Okay. So based on the dollars and based on the commodity type. So there was workflow was a big part of it.. And then as you pointed out, a multi-vendor shopping cart, which was a new idea. I can buy something from Staples, I can buy something from Dell, I can buy something from IBM, all in the same shopping cart because maybe I need to put together a new employee starting. I gotta put together a little office for them. I gotta buy from a whole bunch of different people. Yeah. And, but I can put it all in one shopping cart and it'll get split up and sent to all those.

Now it's all a backend feature of how it got. Exactly. Okay. Yeah. So that— so the idea, as it often is, was sort of just this one change we're trying to make, which is get these, these catalogs online. And that's about the time you're showing up is when they're doing that.

Yeah. They're only 3 years into that when I'm doing it. And one of the things they realized was when they first started, they connected every buyer to every supplier. Each relationship was done one-to-one. But then they realized, wait a second, Dell is used by all of our buyers. Why are we not— why are we connecting them directly to each person when instead we could have Dell connect to a network and then the network could connect them to all the buyers? Okay, so it became one-to-N. Exactly. Okay. Um, and, um, and so I was getting calls back to the food industry. I'm getting calls saying, can you put your catalog up onto the, um, Ariba system? And I was thinking, I mean, I can, but I'm a food lab. It's a really, really complicated catalog. You wouldn't think it would be, but the way you test for salmonella differs depending, there's lots of different ways to test for salmonella in terms of the speed, in terms of the accuracy, in terms of the matrix of food you test for it, and the cost is different if it's peanut butter versus milk versus, so, I mean, it's amazingly complex. And I thought to myself, and they said, you know, please put your catalog up. And then they said, you're gonna get POs from us. And I was thinking, okay, I'm going to get a PO for every sample. Am I going to get a PO for multiple samples at once? Have you—

how much have you thought about this? So what are you guys selling? Because you're a lab effectively. Yeah. Or do you guys have your own commercial products, retail product that you're selling? We're selling a service. Okay. You're just selling a service.

You send us a sample or we pick it up from you. And what do we send you? We send you that certificate of analysis.

So it's like Coliguard. It's like Cola Guard. Oh God. Send us a sample. We'll check it out.

Sadly, it's incredibly like Cola Guard. Yeah, yeah, yeah. Yeah, well, let's not talk about how much it's like Cola Guard. Fortunately, it's food that's being sent to us, not stools.

Other things, yeah. So it's very much like that.

And to your point, it didn't— It was a service, not a product. And it was a complicated service. And the other thing was they told me, I'm gonna send you the PO. And then I said, well, I'm gonna, where am I gonna send the results? And they were like, well, you just send those directly to your customer, right? That doesn't go through Ariba. I thought, well, that's weird.

Okay, now how is it related to the PO? I feel like this is getting more complicated.

How are they gonna know that the PO that I did the test, they, they asked me to do a whole bunch of tests. How are they gonna know when I bill them that I'm billing 'em for the test that I did, not extra, right? And they, so I said to 'em, well, how do we send 'em the bill? And they said, well, we don't handle that. You send the bill separately. And I said, this is a really neat problem, really neat product that you guys have got that's solving like a third of the problem that buyers and suppliers—

this is not quite a solution. Yeah.

I mean this, and it was a solution and they were becoming very successful, but it was also clear to me that it was, talk about a minimum viable product, right? It was only solving a part of the problem.

And it wasn't enough of a solve yet.

Yeah, it was fairly clear to me that food testing was never gonna end up on the system. And to this day, it probably doesn't end up on the system.

Well, you ended up working there, right?

I ended up going, but I did end up going to Ariba 'cause I thought, Maybe I can help them turn this into a more functional product for buyers and suppliers.

So these guys reached out, kind of cold-called you effectively.

They had an ad. I knew it was a very high-flying company. It had gone public. It was, you know, your listeners are too young to remember the bubble era, but we had a market cap of $40 billion. We were the fastest growing company in the history of software at that point. '99, 2000. And was it this product that was driving that?

This product that was driving—

then they had some other products we'll talk about in a second, which is very funny. Um, but, uh, they wanted people to help them figure out how to adapt the product, or they actually— they wanted people to figure out not to adapt the product but to adapt the sales to different verticals. Okay, so they hired me to help them sell to the, uh, CPG and retail vertical, the— in that industry.

Okay, so they, they approached you?

Uh, well, they had an ad, I don't know, and then I applied. Oh, okay. Yeah. All right. It's not like they knew who I was.

They weren't like, get me Solomon. No, no.

Okay. I don't, I don't ever recall that happening.

Well, You know, maybe they don't talk about it.

Except for this podcast. Except for this podcast.

Yes. Yeah. Okay. So you reply to the ad.

Reply to the ad. I start there. And there's some really interesting things that they do that I think they have a different kind of software. So they have a procurement system, which I just described to you. They have a really interesting product that was more applicable to the food industry. Which was a sourcing product. Pardon me. The sourcing product was an electronic RFP. Okay. So instead of sending an RFP like people do to get bids, you would send it electronically. The suppliers would get on, onto the internet and they would respond through the portal. So you wouldn't get a bunch of emails that you then had to try to figure out how to compare the responses. You would constrain the responses and you can compare them. And then the ultimate thing that they— we did was something that really pissed a lot of people off, was called a reverse auction.

Um, race to the bottom. Race to the bottom.

Sure. So the suppliers would bid in real time with the prices going down, with their visibility, and they would see. And you could, as a buyer, you could set what they could see. So there were all sorts of— you didn't show them the act— if you were smart, you didn't show them the actual prices, you just showed them the ranking. Got it, right? Because you— there's all sorts of auction theory of how you set these up. Sure.

To, to brutalize it up to themselves to, to, to go to that low number.

Exactly, exactly. So that was a big, big part of the business as well. And then in around 2000, it's hard to remember, but at the time there were all sorts of people in, in every industry starting marketplaces. I mean, literally every industry, hospitality, chemicals, steel, oil and gas, and sometimes multiple marketplaces.

I think like, you know, so I was graduating college about this time, right? And I think because I had, because I'm a youngin', I think a lot of people think of that dot-com era very much as a consumer bubble. Bubble and don't realize how much industrial activity or commercial activity was being attempted at that, at that time.

It would— there was a consumer bubble, you're absolutely right, and the consumer bubble burst first, and then everybody said, oh, it's just a consumer bubble, but it's gonna really be big in B2B. Yeah. And so then About 9 months later, maybe 12 months, there was a run-up in B2B that was much bigger.

Like, the valuations—

the valuations got crazy, um, in late 2020. I remember it because the peak was the day I started, um, and then that bubble burst in 2021. Hard? Like, oh yeah. I mean, Ariba went I think Ariba, that's on the day I started, had a market cap of $40 billion. It's a real number. Yeah. I think, I'm not positive about this, but I think our market cap within a year or two was $500 million. Okay.

That'll close a person's throat. Yeah.

You know, and we, and we, that was not uncommon at the time. So yeah, it was an enormous bubble.

Uh, and, and was— I mean, when you're talking $40 billion, this company's at this point, what, 8 years old? Or— yeah, 4. 4 years old. Yeah. So that $40 billion was, was based largely on potential, maybe? Absolutely. Okay.

Yeah. So people thought that same blinding light that I had. Yeah. When I was in the food industry and said, this is going to be the biggest thing since sliced bread. Yeah. Turns out it is, and it was, but not immediately. Took a minute. It took 2 decades. Yeah, okay. Yeah, and that's pretty common, I think, you know, with— that's a common theme we can talk about. I think it's called something like Amara's Law, which is that we tend to overestimate the impact of new technology in the short run and underestimate it in the long run. And I think it's really true.

For some reason, when you're discussing that, my head went to lightsabers.

Oh, I love lightsabers.

Yeah. Can't wait till those happen. When they realized this technology and they were prototyping lightsabers, you know, they probably got really excited, got a bunch of, you know, Empire VC money for this thing and how dangerous the lab must have been with these prototype lightsabers. Uh, just people like— so I get your point. Yeah, in that— those terms.

Yeah. So, uh, so where were we? Yeah, the, the— so the, the— there was a B2B bubble, no doubt about it. And we— just to give you an example, we started selling, I don't know, marketplace software probably in '99. By 2001, we were basically out of the business.

Okay, and this was web-based stuff?

Web-based stuff. Many of them— some of the— there were two types of marketplaces. There were internet— there were like internet startups that started to create marketplaces. And then the fashionable thing to do by industry participants was say, oh, we're not going to let some Silicon Valley startup eat our lunch, we're going to form a consortium and we're going to form our own startup, our own, and, and we'll as a consortium build this business. So I'm sure all the steel companies got together and did this. Certainly all the airlines did, all the CPG companies did, all the retailers did, all the auto companies did, every— I mean, industry by— in all the chemical supply, petrochemical companies, it's a chain reaction. It was— they all had to form their own marketplaces, and 2 years later most of them were dead or zombies. Now, if you succeeded— and we can talk about the ones that succeeded—

so did the startups that were founded for the purpose of market— almost all of them fell apart. Okay, so it's just— it was like the killing fields. It was, it was, yeah, it was very high failure rate, super high failure rate, and the money going into that was astronomical.

Astronomical. Yeah, like the, the industry consortia were a little more conservative because those were big company, big public companies. So they had to be a little careful. But yeah, the amount of VC money that was destroyed was, was extraordinary.

You know, slightly on— it's on topic, but when I started Bryzos, it was leading up to it. That's an era that I read about exhaustively. Because there's so much information. There are all these postmortems— are there— that have been done on all these different industrial marketplaces or versions of marketplace. And we, you know, I think we've talked about that the term marketplace is many things. Yeah, absolutely. But ultimately the concept of transactional, right?

Many buyers to many suppliers on one platform.

Is about. And the same thing always kind of rose from the ashes, which was great underestimation of, you know, the buyer and the seller. Yeah. And the importance of, you know, creating a neutral place that is not tilting one way or the other, which I thought was really interesting because in the consumer world, it's very much tilted towards the buyer. Like those websites are created in a small place somewhere. It says, interested in being a seller? Yeah. You know, and from the jump, if something— it really just needs to be balanced in every aspect. Yeah. Because you need to know that there's fair treatment to the buyer and the seller and full recognition of how different these two entities, buyers and sellers, are. Absolutely. And if you think about it any way other than that, the recommendation is not to start. Absolutely.

I mean, it was just looking back, I mean, it was just amazing. I mean, I knew from coming from the food industry that big food companies did not just buy from any old supplier of whatever they were buying, right? I mean, heck, they were sending us samples for everything they got to test to make sure it wasn't, you know, that it was, that it was clean and safe. And, uh, what, and what they had specced out, they weren't just gonna like get on the internet. It's not like, let you know, like eBay was the big marketplace then. Yeah, so what if you're, if you're, um, you know, Pez dispenser? Yeah, your dice. Nobody was taking Pez dispensers, right? So But you weren't, it was just crazy to think that a marketplace for food ingredients was without like integrated quality testing was gonna succeed. I mean, that's just insanity. You would never buy a huge— That's so sensitive. Yeah, you're not gonna buy 1,000 pounds of milk powder from someone you've never met before, right? And just—

Just blend it with the other stuff.

Yeah, exactly, exactly. So it was silly. And when you think back also, there were, you know, nobody was, Like eBay didn't have payments when it started. You bought something on eBay and then you wrote the guy a check, right? That's how it worked. There was, right? PayPal wasn't even, PayPal grew up on the backs of eBay and then eBay bought it. But at the beginning there was no payments, right? And there were certainly no, you just hoped the guy mailed it, right? I mean, it was just, it was crazy at the beginning.

And was it, you know, we'll get your payment, we'll send it, or was it honor code?

Like, I'm trying to remember, 'cause I was on all these things early. I was excited by them. And I think, I can't remember if you waited to get the check before, I think you probably waited to get the check before you sent it. Otherwise you were probably an idiot. Yeah.

And that's like, that is the kind of the origin story for what later, much later becomes fintech. Absolutely. Of like the Plads of the world that are like, okay, if you want to send it prior to payment, you can take a look at some transaction history, aging reports, or whatever's going on. Like that is the moment.

Yeah. I mean, people forget— It spawns from that. Yeah. People forget that eBay was created basically to make eBay transactions.

Did I say it right? PayPal. PayPal.

Yeah. Yeah. Sorry. PayPal was created basically, pardon me, to make ePay transactions doable. And that was really their only customer. I may be slightly overstating. I mean, eBay, and then eBay tried its own, tried to kill PayPal 'cause they saw how strong it was getting, tried their own thing and PayPal had outmaneuvered them. And eventually they ended up buying them. You know, that's— Getting them off. It's just an incredible story.

And a common story, by the way, which is—

And I think PayPal's market cap's probably bigger than eBay's, right?

Yeah. Yeah. Probably. And what you just talked about is a theme in this digital evolution is that it's wise to stick with core competencies. Absolutely. Right? Like doing, especially in the digital world, doing one thing really well is really hard. And when we developed our product Gone in 60 Seconds, which you know about, but really the guiding lights were get good at one thing. Absolutely. Like, do not worry about the rest. And I always talked about DocuSign, which is they don't really give a shit where that document came from. They don't care really what it's for. Yep. They're not interested in really helping you edit it other than, you know, get it ready to sign. And that they, you know, recently they're going to get into contract management. Yeah, they're getting into it. But in AI, they'll be able to leverage AI so not to go nuts with building too much stuff out, but for 20 years or however long it was, and they became the standard in real estate is the first place I really saw it. Yes, absolutely. Grab ahold. Yeah. Because of all these passing around. But that's just such a great aspiration really to say, okay, they're a great example of do one thing. Like for example, PDFs, Adobe. I can sign my PDF in Adobe. I will still kick it out and sign it on DocuSign. That's hilarious. Yeah, which I think a lot of people do, or I tell myself that, 'cause I know it's nuts when I do it.

But anyway, I kind of pulled that story going. No, I think the irony of all of these businesses is exactly what you said. They start with one thing. And nail it. And often they start in one industry and nail it. So we were laughing about Ariba only did catalogs and POs, but that turned out to be pretty smart 'cause they nailed that. And that took a lot of effort, much more than you would think. Mm-hmm. Now we added invoices. That's part of what I was involved in. And we eventually added lots of other stuff, But you got to earn the right to add the other stuff by being so much better in the area that you start. And your example of DocuSign is the same thing.

And I think actually Apple is a good example of that. Think about how many years it's taken them to roll out their suite of products they now have. Yeah. Yeah. But they would really— sometimes they got it right, sometimes wrong, but they really put, okay, let's get this operating system, you know, early days. Let's just make this the best it can be. And once we get this pretty shored up, okay, we're going to move on to iPhones or whatever. But they've been very sequential in their progression. At least, you know, I'm not an Apple expert by any means. But looking out, it's like they really— they're not doing things. I don't see products coming out concurrently very much.

Right. No, these businesses are very much built sequentially.

Which takes a lot of discipline, especially in the world of if you have been really well funded, you know, there's a temptation to go get all this at once. Yeah.

One of my favorite stories, I won't name the company or the person, but that was one of the problems in the bubble era was they had taken a lot of money. And one of the ones that I was working with was trying to do one of them, it was a marketplace industry consortium. They were trying to do sourcing, they were trying to do collaborative planning between the buyer and the supplier. They were trying to do, um, e-procurement. They were trying to do logistics. I mean, and this is all, remember, this is all in 2000, right? Right. People barely know how to use the internet, and they're, you know, there's no speed, there's, you know, it's just way too early for all this. And I remember we're in a meeting and they're telling us all the stuff they want to do. And we were like, even, even though we could sell 'em software for all this, we're like, you know, we don't think you should be boiling the ocean. We were like, right. You should be nailing one of these value props and getting it right. And I'll never, I'll never forget the CEO said to me, you don't understand, we have to boil the ocean. It's a must. It's a must. I mean, they just felt like it was a rate, it was a race. It was the bubble era. They had taken on a lot of capital from all these companies and if they didn't, you know, do something fast, it was all going to be dead. And they were right, but they did— they didn't do anything well, and they were gone, uh, and merged into another.

You just said something, I'm going to pull us off— the idea of get to market, the race to market. In my opinion, I certainly understand that concept. I think the race to market is really governed by the sensitivity of the users. Meaning that take what we do, which is into the metals industry. You're going to get maybe one bite at the apple here kind of thing. Yeah. And if you go out to market and you're really shining the light on it, tons of marketing, you're going out there like, hey, we're racing the market. I have not seen that work. Me neither. And listen, B2C is different.

Different deal. And C2C is different. You don't have the transaction sizes are smaller. You can credit cards can be used for everything. The logistics are less of an issue. There's no security issues. There's no workflow issues. You know, it's just a whole different ballgame. In B2B, all those things that we just talked about don't exist or aren't applicable. And having any two companies who've never dealt with each other before do business is a very complicated dance. And there, there just aren't any B2B marketplaces that I can think of that didn't take years to develop. Yeah. Measured in years. And when— and some of them are— many of them are venture-backed, right? And venture capitalists are not known, especially if they do most of their investing on the consumer side, for understanding that it's going to take 7 or 8 years for me to build this market. If you go in and say, it's not their plan, give me your money and I promise you in 7 or 8 years I'm going to have something for you, they're going to laugh at you. Yeah, right. So you don't tell them the truth. If you tell them the truth, you're probably not going to get the money. So, right, right. So you got a real dilemma right there, right?

Yeah. Let me paint a picture of this trillion-dollar supply chain that we're going to go try and disintermediate. Yeah. That's, that's what you tell, you know, come back later. But, you know, we're going to need about another—

but if you look at— and there are a few modern exceptions, but if you look at some of the most famous public companies that have marketplace-like aspects, and then you go back and look at how long it's a, you know, Procore, everybody talks about Procore. Well, you know, the CEO who started it, you know, freely admits there was a 10-year period there where nothing happened because nobody had any internet access at construction sites. Right. So until that happens, Maybe we should have waited a little bit.

Yeah, that one guy with the saddle, I loved it. Exactly.

And you could just go on and on. There just aren't— there just aren't— they just take a long time to— because you're asking— I think people forget most software is built for use within one company, and that's tricky enough because different departments have different needs and different uses for the same software, need to have it presented differently. Everybody's special. But, but when you talk about now I've got to create a product that's going to work inter-enterprise as opposed to intra-enterprise across two companies who have two different, you know, ERP systems, two different nomenclatures, two different goals from the transaction, that is, you know much more complicated. And now I have to insert intermediaries for insurance or logistics or payments or a number of other services to make it all flow smoothly. And the complications just grow tremendously. And so you can't snap a finger and solve all those problems.

Yeah, I mean, it takes time. And as you know, when we started— or we started— when we met, our marketplace was much more full-featured than it is now. It was a behemoth. It was, as I say, it was like playing Zelda, which is you didn't know which room you were in sometimes. And I still think it's a great piece of software, but I don't, not everyone has to use it. And we fully retooled to your point. It takes, you know, it's kind of like fail, fail fast is kind of the learnings, which is, You know, if in my opinion, keep everything small till you're sure. Absolutely. Is really the way to do it because the challenge I think, and it's particularly pronounced in B2B, is it would be so easy to kill your company on your way to just getting to the starting line. Oh yeah, yeah. It wouldn't be hard and it happens a lot. Like a lot, a lot. But back to you, which is— I interrupted your— so you're at Ariba and you're seeing eBay and PayPal and seeing what's going on there, I think is where I pulled you off track. Yeah.

So, I mean, Ariba is— we start down this marketplace path for a little bit and we see that it's— the world isn't ready for it. Most of the consortia are not going to survive, and we get out of that business very quickly. I credit the CEO with, with that. He got the plug— he pulled the plug rapidly, saved the company. Um, we had a competitor who did not pull the plug, and they, they disappeared. Um, and we stuck with our core sourcing and e-procurement system, which continued to grow quite nicely. And then we built this network so that the suppliers could connect many-to-one, to many-to-the-network. Um, and that was— I ended up working on that part of the business, the network part of the business, for my last 7 of those 10 years.

And were you involved in that direction, the creation of that direction?

Well, the network was created. Um, I was very much involved. I recognized its value and very much involved in thinking about how it could, um, be monetized and how it could grow, how it could become more functional, especially for suppliers. Okay. Because, you know, from building your marketplace, people talk about personas, right? Even within an in, in intra-enterprise software. But we have different, not just personas, but companies. When you're building up the buyer and supplier interface are not the same. Right. Um, and we had this network and we had buyers on one side of it and suppliers on the other, and we had to recognize how do you build value for both sides to make it work? And that, that's fundamentally, that's something that I spent a lot, most of my time on the last 7 years I was at Ariba was how do you, how do you build a system that creates value for both sides? And I would—

how do you get the dance to happen? Exactly.

And I, I would say that I think You know, a lot of the early marketplace theory was, oh, we have one side and it's concentrated and we force the suppliers on, right? Yeah. And that can get you so far, but it's not going to get you where you need to go to build.

They have to want to be—

they have to want to be there. They have to see value in being there. Yeah. Um, and, um, now if you can have a chokehold on one side, you can maybe compete, like Amazon has a chokehold on the— and we're back to consumer, but they have a chokehold on the consumer. It's called Amazon Prime. Yeah. And since we all go to Amazon, and since they started earlier, the suppliers have to be there. And Amazon takes a huge percentage of the revenue from the suppliers, but they can do that because they have a chokehold on us.

I mean, they've really got everybody right where they want them. Exactly. Yeah.

I mean, sellers can't reasonably leave In B2B, that's really hard to do, right? So you have to figure out how to build value for both sides. And the great— the great— when I think about the great B2B networks that survived and thrived, they did that better than almost anybody else.

Right. And are they still alive and thrive?

Yeah, there are some. There aren't a lot of them, but there's one I'm actually on the board of, one called OEC. That's in the auto parts business. And it's also part owned by Ford and GM. Chrysler was in it originally. And it's done— it's built a beautiful business.

And that was born consortium, correct?

Born consortium. Yeah, I'm only thinking of ones that are born consortium. There's one called GHX that's in healthcare that was also born consortium. It was the suppliers. And it's been very successful. There have been a few more, but there aren't more than 5, I would say.

And are they— so is it OEX? Is that what it's called? OEC. OEC. That was started in opposition to something, though, wasn't it?

Yeah, I think there was— boy, it's hard to remember now. Well, there was another one that was also the auto— it was like Root, uh, guys, but that was for, um, this is for auto parts. So OEC is for the auto manufacturers to sell to the dealers who sell the repair shops. Okay, there was another one whose name I'm now forgetting, which is embarrassing. It's like Mopar kind of. That was, that was actually the Big Three and it was more about them buying from their suppliers, the tier 1 suppliers. Yeah, that one did not— didn't go— did not do very well. No, it ended up being— it got separate parts, got, uh, sold to different parties. Yeah. Okay, it had both of the sourcing and a procurement part.

Uh, so you guys started working your way towards a two-sided— or you'll call it a marketplace or network? Which one? Ariba. At Ariba, Ariba was a network.

Um, so for me, and, and for me, a marketplace— it— a network is a way of connecting buyers and suppliers who already know each other. Okay. For me, a marketplace is creating new relationships that didn't previously exist. Okay, so it's kind of a narrow definition, but the, the term gets so abused that I think you have to have a pretty tight definition.

It's been beat to death. Yeah, like, it's— I—

yeah, so we did have a marketplace.

We did create the one that got a bug, but it—

but the main thing was we were facilitating transactions between buyers and suppliers who were already doing business with each other, and pardon me, automating those relationships.

And what— so what we found, because that's similar to where we started, is that the amount of time it took, still, even though it was digital, just wasn't really fast enough. And so they ended up still working with each other offline. Like you said, they already know each other. Yeah. So, uh, that just ended up not being the right model for us ultimately. Right.

Well, you're, you're dealing with much larger transactions. Remember, we're automating, you know, people buying their stuff from Staples or from Granger or from Dell. High volume, low dollar transactions. The value of automation relative to the value of transaction is pretty high, right? People were calculating all this work just to buy a laptop. This is crazy. Or all this work just to buy office supplies. This is crazy. Right. I guess they used to have— You're buying important, larger quantities of stuff, and they're willing to put in a little work to do it.

A little bit of work. One interesting phenomenon that I really understood with our first marketplace was they're okay with adopting a technology or software So long as it does the whole thing. Meaning that— because you think this is all about trust and their willingness to trust that we can do what we say we're going to do. Absolutely. But there's this weird trust loophole, which is— it was this combination of, can it really do the whole job? If it does, I don't know. I mean, the trust bar kind of went down because the convenience went so far up that they were willing to. And with this new product that we have, like, it does the whole thing. Now, the scope isn't nearly as big. Like, we purposefully, back to DocuSign, said, okay, this is what we must do well. Yeah. But it does the whole thing. There's no— there's no gap in the service, if you will. Got it. So it's just weird that, oh, you know, we've got to trust you. Oh, you do the whole thing? I don't really trust you, but if you can really do that, that's fabulous.

Yeah, it's such a different use case. It's strange.

Yeah, that way.

Yeah, because, uh, it was just unexpected. And you're dealing with pure, unadulterated B2B buyers and suppliers. Remember, we're dealing with on our supply side, we're dealing a lot, not exclusively, but a lot with businesses that are having to do e-commerce for consumers anyways, right? Yeah. So Dell's learning, Dell's gotta learn how to sell over the internet. Their whole business model is to do that to consumers, right? Staples is doing the same thing. A lot of our best suppliers were being pushed by the, movement of the internet. In your case, there's no consumer push at all on these companies. They only sell to B2B, right?

Only sell to B2B, and which is— makes this a— it's been an amazing journey because there is not a playbook. Oh, absolutely. Here at all. And it's, it's really about— talked about earlier, it's, it's you fail fast and make the change, and you just kind of keep ratcheting your way towards And interestingly, Ariba's cross-industry, right?

It does what's called indirect procurement. It's the stuff that doesn't go into the finished product. But if you look at every other B2B marketplace, especially if they're true marketplaces, they're all vertical. Why? Because you got to have domain expertise, right? There's no, there's no multi-vertical B2B marketplace. There's no— the, the notion of chemicals and steel being together and auto parts and, um, lumber is, is, is insane because it's a different buyer and a different set of suppliers, right? Different product, different nomenclature, different quality issue. I mean, it's like mixing oil and water.

And I think there's also vertical pride, okay, which is, you know, this is our tool. Yeah, you know, yeah, you guys go get your own because I think they're like, okay, we're gonna go digital, but like, this is ours. And I think there's some of that.

Yeah. And even beyond pride, I mean, it's just the logistics are totally different for bulk chemicals and liquids than they are, you know, there's, there's, there's networks for the milk industry, right? Very specialized networks. Why? Because The logistics are entirely different, and so is the testing, and so is the payments, right?

Temperature, I assume, is—

yeah, you got to deal with refrigerated, and you're picking up from farms. And believe it or not, I didn't want to go down this rabbit hole, but we're going down it. So the amount of payment that's made to each farmer depends on the results of those tests, right? And how much protein and how much fat is in that milk.

So they'll grade the milk. Exactly.

So, and they got bonuses for certain quality aspects. So every— and, and you, you know better than I do, we've talked about in steel the nomenclature, and you've got quality issues, you get delivery issues, you got legit— I mean, every— it's, it's pride, and it's also just the unique characteristics of that industry. And so if you think about Ariba, Ariba, yes, they— we had different industries, but most of what was flowing through Ariba was the stuff that went across industry. IT, uh, travel, uh, temp labor, uh, um, office supplies, lab supplies.

That's huge. And hearing your story, because they were updating their own catalog, kind of took Ariba out of 'I need to know all of this' position, right? Which is a really important thing because getting the uploaded allowed them, just like we do with our catalogs if we have them in person, you know, I don't need— I know what I want. So Ariba doesn't need to say, hey, I've got this expertise here or there.

No, we didn't have any expertise. We didn't— I shouldn't say that.

We didn't know shit.

But we didn't know a lot about the products. Now, that was one of the downfalls of— if had we known a lot, we could have added more value. But you're right. What we did was we said, hey, you, Mr. Buyer, to a large extent, we said, one of the things you can do is put the onus on your supplier. Yeah. To keep the catalog and the prices up to date. And you should— yes, Mr. Buyer, a good best practice is you should be reviewing those periodically to make sure they're not cheating you. Yeah. But, but we didn't have to step in and become an expert on it.

Right. You're just creating a forum.

Now, in a true marketplace, you do want to, you do want to have that domain knowledge. You know this. If you're going to help a buyer compare different suppliers, the same product across different suppliers, you're going to have to add some value because those are the chances that those suppliers describe the same exact product in the same way is zero. You have to keep— even when there's, even when there's industry, you know this better than I, even when there's industry nomenclature, they're not going to use it properly, or if they use it, they may abbreviate, or they may take shortcuts, or there may be aspects— there's often attributes that are not included in the industry structure that become important, and nobody thought about that.

Well, in our first conversation, uh, years ago, we, we talked about that, and you— I mean, you were thrown on a phone call. I was— we were talking to a mutual— was now a mutual friend— said, hold on a second, brought you into the call. And he dumped into the call. And, you know, we're nice-ish. What are we doing here?

And we started talking about payments.

I think it started off there, but I don't think that's what ultimately really piqued your interest. We did a follow-up. You and I did. I gave you a demo and it was how we'd standardized all this nomenclature and create universal kind of center column of data that we had painstakingly gone down, you know, these couple thousand lines that everybody can understand and they can tag their part in whatever they want to it. So trying to bridge that, that's a huge gap.

Yeah, I remember seeing that and I remember you demoing that and just going, this guy's got it. He's, he's on to something here because I see it across. It's just, it's such a pedestrian problem that the same product is described differently by different suppliers, that when you, when you, or buyers, that when you say it to people, they go, duh. And then you think of— and but, but then when you try to create a marketplace or software to create commerce you realize that if you're not going to solve that problem, you're not going anywhere.

You're not— nobody's going to work.

Most people don't solve it. But again, the great, the great marketplaces that I can think of, like the OECs and the GHXs, they solve that problem. Yeah. Um, and it takes them years, uh, but they solve that problem. It's, it's—

one of the problems is really just a very basic problem, which is you talked about the idea of You take something simple, like expressing the dimension, 1 inch. Oh my— Just 1 inch, is that 1.000? What's the tolerance? What's the tolerance? Especially if you get into decimals, because you're dealing with computers, so you've got to say, does this person say 1-1/2 for 1.5? 1.5, you know, or they do something ridiculous like, you know, 1 and 8/16. Like, there are all of these different ways that these can all be expressed and you've got to control for every single possible combination. Yeah. Which is— I remember when, when I tackled that was on a— Sarah was out of town. I had like a 4-day period and I just sat there like just crushing nodos. It just got through every single thing that it could possibly be. Worst weekend of my life. Yeah, I mean, it has to be—

it has to be done. AI is making it easier. This is a great application for AI. But until recently, it was always— it was someone with unbelievable domain expertise, which you had. Yeah. And your team had. And also thinking through what's the right taxonomy, what are all the attributes that I'm going to need to describe this thing, which aren't always identifiable, readily identifiable in advance, right? No, sometimes you don't realize later on we're going to have to figure out which of these products have cadmium in them because now we realize cadmium is a problem., right? Yeah. Uh, or which come from this country, right? I've, I, there are a number of people who didn't, you know, I've seen them build businesses where they didn't put country of origin because they didn't really think it mattered necessarily. Right. Probably didn't. And it does start to matter when tariffs happen. It's, it's, right. Yes. Or there's supply chain disruption.

Or the, the, or the deal or the build only got funded because there's an agreement on which material would be used. Yeah. Right. Buy America Act or whatever it is.

Something like that.

Yeah. So that's, that's intensely important. And I think that the— it also used to be— there was a time when there was a quality difference between different things being made. And I think that's fairly leveled out at this point. Right. Is that all countries are— when you talk about making metals, all of them that you know, bring a product to market, it's all pretty good stuff and pretty well balanced out.

But I'm sure you still test— people, buyers still sample and test the product.

They do. That sort of can be application-driven, you know, which is if, you know, if I'm putting up stop signs, I'm not going to be as worried about that versus structural bridge or whatever it may be. Yeah. So, and you could argue a stop sign falling down could be catastrophic, but I think you get the point. But I keep pulling you off of Arriba and where I'm trying to get us to is that you've, you really helped and you were on scene for the development of digital software that was successful in bringing a network together and monetizing a network.

I'd like to think so. Yes. With a lot of help from a lot of other people. I was a small cog in the wheel. Yeah. Yeah.

Not a solo act. No, for sure not. So what did— so jumping forward to the monetization. So you had a network of buyers and sellers that knew each other prior, and what was the opportunity you saw to monetize? Well, the opport—

there were several opportunities. One was for, um, we just— one was more of a pricing exercise, which is our competitors didn't have a network, and so we were giving away the network essentially for free to buyers. Like, literally? Literally, yeah. Okay, almost literally.

Um, was it subscription, or back—

this is before there's SaaS, right? So you bought, believe it or not, behind-the-firewall software in the old days, people would buy a license to the software. You would buy a perpetual license, and then you would pay annual maintenance. And basically, we included unlimited access to the network in the annual maintenance.

I love the idea of maintenance.

Yeah, okay, um, that means, uh, it was usually like 20% of the costs. Okay. And maintenance meant you were going to get bug fixes and updates and things like that.

Could you opt to not buy maintenance?

You could, but then you would be eventually on an unsupported version of the product. So in practice, you, you didn't because you probably wanted the bug fixes. That's amazing.

It was, it was an extraordinary business to be in.

Now, every— eventually everything moved into a subscription, and you, you know, as we are now.

Would you like this to work in 6 months?

Yeah, exactly. So, so that was one aspect. And then we, then we thought about what value can we drive, like I said, to suppliers. And we established a fee for suppliers to pay to be on the network as well. So it became a product in and of itself as opposed to the analogy I used to use with, with my team was in the old days, you bought a— well, I guess you still do— you can buy a handset of a mobile phone, right? It's a handset, and then you can shop for which network you want. Okay. And we would, we would sell you the handset and then give you the network for free. And over time, I tried to convince people, well, you should buy the handset, and separately you should buy the minutes on the network. Right, right. So it was essentially that. And yeah, and that— it took a long time, as these things do, but over a period of about 10 years, it became an important revenue stream and differentiator for Ariba.

How many years? So how many years did that take?

It was probably I would say from the time we first conceived of it to the time it was starting to be material to Ariba was probably about 6, 7 years.

And in hindsight, do you think could have done it in 4 or does it just take that long?

No, it took that long. Yeah. Because you couldn't create value until there were lots of transactions flowing through it. Sure. And it took that long for, as we, as you pointed out, for buyers to adopt it. So buyers first have to adopt it and then suppliers have to adopt it, right? Because you can still buy the hand, you can still create the PO, and if you want to, you can print it out and fax it to someone. You don't have to send it field.

Okay. So you have sort of these—

you have ways around it, right?

Kind of.

Not to mention legacy ways of doing it. Not to mention that if you don't make your employees use it, they can just pick up the phone and buy whatever they want and put it on their personal credit card and put it on their expense report. Yeah. If you're not enforcing policy.

So you got options. Yeah.

So you got options to go around it.

So that ended up being a really big part of Arriva. It did. And so what year did you start there? I started in 2000.

I left in 2010. Okay. And it gets— Ariba gets bought by SAP. I'm trying to remember if it was 2012 or 2014. I'm going to say 2014 for $9 billion, something like that.

Okay. Yeah. That's not bad.

Roughly, yeah. I mean, remember $40 down to half a billion, back to $9. Yeah. So, client.

Which one of those was right?

Oh, that's hard to say.

Did you think it was worth more than $9 billion?

SAP, it was an incredible purchase for SAP.

It was. Yeah, incredible purchase. The ERP, SAP is strictly ERP kind of business flow and—

Yeah, SAP had been competing with us. They had their own e-procurement. Module, but they did not have a network. Um, and I think they realized the value of the network was one of the reasons they bought Ariba. Wow. We also had a better e-procurement product, probably.

Well, that was smart of them because it sounds like they were— this is still relevant today, which is you have large companies— we've talked about this in this conversation— that are trying to do something outside of their core competency. Yeah. And doing, just doing what you do really well is really hard.

Yeah, I think they watched the network with amusement and thought, what are these guys doing? It's cute. And then they realized after, um, what, 10, 12 years of watching it, that they— we started to get some customers who were using SAP for e-procurement but then using our network to connect to their suppliers. Okay. And we were making money from what they saw as their customers' suppliers, right? So, and I think they said, you know, the camel's getting its nose into the tent, we gotta stop this. I've never heard that before. You never heard that saying? Do camels do that? Yeah, I have no idea, but it's a great saying, isn't it? What do they do?

Are they telling it's time to leave?

Get— yeah, I think if the camel puts its nose in a tent and likes and thinks kind of warm in there, they're coming in to join you, and you probably didn't design the tent to accommodate a camel.

Because usually it's pretty cold where you find a camel.

Right. Good point. Maybe, yeah, I don't know, maybe they want to get out of the sun.

Maybe they heard you in there getting a drink and it's like—

It's a windstorm. There's all sorts of reasons you put up a tent. It's not always—

Put on your camel goggles for that sort of thing. Okay, so you left in the last— 2010. 2010. You had to stop after— where did you go after that?

Um, I had a non-compete. Okay. For a year. Um, so I just thought about what I wanted to do.

Um, a lot of time at the bar.

Yeah, definitely. For a year. Yeah, got it. Um, and, um, I, uh, I decided that, um, based on my experience in the food industry that Ariba wasn't touching a lot. Ariba was not designed to touch a lot of things like the food testing I had been doing. When I left Ariba, by the way, food testing was still not something that was purchased through Ariba, despite— You were right. Yeah. And in particular, I realized that there were lots of services that were performed at a job site that had very unique aspects. If you think about it, like, let's take the oil field services, right? You got to show up at a particular site. I— you got to perform a service which is not well defined by a catalog because you don't know when you show up how deep you're going to have to drill and what you're going to have to— what bits you're going to have to use and drilling mud and and I make it sound like I know something about oil field service.

Well, yeah, well, it's a bit of, uh, we'll know more soon. Yeah, exactly.

And the same thing is true, but much simpler example, uh, uh, air conditioning goes out at the Godiva chocolate store, right? Pretty important how fast you respond, right? Yeah. And when you get there, you don't know what's going to be wrong, right? So you can have a catalog all you want, but there's actually a price book. You can call it a lot of different things, but there's a negotiated rate. But every repair is going to be different and every service is going to be different. And for a whole variety of reasons, I didn't feel like Ariba was set up well to solve those types of problems. So I start— I decided on my own, I started thinking about maybe I'll start a company that just does all these services. That, um, don't run through Ariba. Um, and one of the areas that I thought about was facility services because I had had a lot of retailers as customers at Ariba. We had Home Depot, we had Walmart, we had CVS, we had all these big— and I knew that we were doing all sorts of stuff for them, but I knew that the plumbers and the janitors and the security guys and the power washers and the remodelers and all these services that were provided to every store all the time— snow removal, right, right— we're not running through Ariba. No, no. But it would— but it's an enormous industry. And so I thought, maybe I'll start something that does kind of what Ariba does but for all these services, right? So I started looking into it, and I called a few people, and they said, oh, That's really an interesting idea, Bob. Sounds like something called Service Channel. And I said, what's that? And they said, well, it does kind of what you're describing. And I said, no, yeah, but I want to do it for the big guys, like for Walmart and CVS. I want to do it for real. I want to do it for real. And they said, well, that's who all their customers are. Yeah. And I went, oh. And I actually came across it, reached out to the CEO, founder of it. And said, boy, what you're doing is super cool. I did something similar to REBA. I can see that some of the things you're doing we never thought of, but are also things that we did that you haven't thought of. And I think I can add a lot of value. So I consulted to them for a year, and I— and then I became president of the company for a year as well. Oh yeah. And so it was another one of these two sides. And we did have a marketplace there as well.

Was there a lot of the same playbook though?

A lot of the same playbook, yeah.

Was it easier the second time?

Oh, so much easier the second time. And the CEO founder had built a really good, really good starting to work with there.

Yeah, exactly. Okay, so you're out of there at what year?

You finished there? I probably finished there, let's see, I took a year, probably 2013, 2014. And at that point, I've been on the road for 30-plus years. I got millions of miles on several different airlines. And it's time not to do that anymore. And I've done a lot of performance appraisals. So you were traveling like crazy? Traveled like crazy. I tell people I did travel to customers because that I enjoyed, and I did hiring and firing. Hopefully mainly hiring. That, that's what I remember. I remember constantly thinking about people and their careers and how to keep them stressful, motivated, and, um, and keep their careers advancing. And, you know, I learned that if you have the best people, you win. I learned that at Ariba. The CEO of Ariba used to say that, and he was right. Um, but after 30 years of the travel and also thinking about everybody else's career, I was like, okay, I just want to think about myself for a little bit. Selfish, right? Yeah. Um, and I said, I'll just— I did, um, an interim gig for a while, and I just realized I, I didn't want to be responsible for, for, uh, people. I liked these businesses. Yeah. But that I could I could help people who were building them but not have to do it all myself again. Yeah, so that's what I did. I just started, um, I had done a little consulting during that year off, and then I jumped back into Service Channel, and then I said, I'll just jump back to consulting, and this time I'll stick with it. Mhm. Um, and I've stuck with it ever since. All B2B software, all inter-enterprise all platforms, marketplaces, networks, nothing else. I really try to stay very, very narrow within that niche.

And are you seeing that there's been a, or a big evolution, or it's just kind of the same fundamentals are still right there?

Well, it's both. I mean, the tools that are available now, like when we were gonna start monetizing the suppliers at Ariba. I had to— we had to build a billing system, right? That just didn't exist. And it wasn't that easy to accept credit cards. I mean, it was starting to get there, thank goodness.

Did you ultimately accept credit cards?

Yeah, we did. Um, and it wasn't easy to convince our CFO that we needed to do that, but so it was a very, you know, It's different when you're a business with 600 customers and all of a sudden you're going to go to a business with 12,000 customers overnight, right? That creates its own stresses. Um, so that took time. Now I get to Service Channel and it's only, what, 6, 7 years later and I can buy a billing system, right? Right. And it's much easier to do payments. And now there's marketplace software you can buy, right? Mm-hmm. Not sure I would recommend some of it, but there's certainly the payment. And you saw this when you were looking at payments and finance.

It's a good place to start. As far as what we did is by recommendation of others, which is it's not the best thing in the world, maybe not fit what you guys are trying to do ultimately. But don't try and take all this down.

Yeah, you can't. Yeah, you can't. And logistics, you can now buy— I mean, we, we— there was no make versus buy decision when we were doing it in 2005. It was, it was all make, right? Um, so that's changed. What the, the tooling has changed, the, the trust of the internet has improved, but what hasn't changed is and I can't remember the name of the really bright guy who, who coined this term. He said, when you start a marketplace, you're not a marketplace by definition, because you're not a marketplace unless you get lots of buyers and suppliers. And nobody starts with lots of buyers and suppliers, right? You got to build that. Now, you can steal it if you're Airbnb or somebody. You can steal it from a competitor and do some illegal things to try to do it. Unethical things. I'm not saying they did. I can't remember which one did that. They might have done that. Um, everybody stole stuff from Craigslist, right? I think. Yeah. So, but you can't do that in, in B2B. And so the, the problem of the chicken and the egg or the cold start problem, people call it different things, it never goes away. Just doesn't. Now there are more— you can read article upon article about the hacks to try to to, to try to make that problem go away. But there's, there's still no tried and true method. You can't add water and stir and all of a sudden all the buyers or suppliers there and they trust it and they want to use it and they find it valuable and they're not having to relearn things and, you know, etc.

That, that perhaps a different episode of discussion, but I feel like after all of our learnings, that is what we finally figured out. I think that's right.

And it's been fun to watch you too.

It's been, it's probably more fun to watch. You know, it's, but we got there and it was, I talked to the team about this. There's this interview with Pink Floyd, Dave Gilmour and Roger Waters. When they were in the studio making Dark Side of the Moon, they'd recorded everything and they were mixing it and they were like, this is it. And I remember when we were developing Gone in 60 Seconds, I remember we had an investor meeting one time and I told investors what we were up to and had been saying that we're doing this way. And I was like, guys, this, we were so influenced by B2C. We started off in the wrong direction. Yeah. You know, and, and that's okay, I think, so long as you recognize it and you haven't spent $1 billion to recognize it. But I remember when we were making it and we saw the first prototype come back from Dev and we were just like, is that—

Yeah, because you, you got to— I mean, You got to just— it's back, back to what you said about DocuSign. You gotta, you gotta think you're asking two different organizations and the people within them to do something different than they've never done and to do it together on the same platform. That's— it's like getting two bullets to hit each other in the air.

It ain't easy, right? That's a really good analogy. Because it is that difficult to do. And the agendas, it sounds wrong, but it's right in that these agendas are really different between a buyer and a seller. I know they got to choke through a transact. They got to get through. I was thinking of it as like a hula hoop. They both got to squeeze through the hula hoop together. Yeah. But their motivations and how they treat their time is really different. And it's just by, I think, almost, I'd say just luck that we got there. No, not luck.

It's not luck. It's really hard work. And I think you recognize just watching it from afar, what you honed in on was this notion of the speed, right? And because what's so frustrating in these transactions is the amount of time they take. And I think your single-minded focus on that, you know, it blows people away when they see how much faster it is.

It feels like a magic trick to a degree. You're just like, right, how did this occur?

And it's kind of like, whereas, you know, at the beginning it was more like, well, we're going to help you. Not exactly, but, you know, you're going to— we're going to automate kind of what you do today, right? You're gonna sort of put up a catalog and you're gonna send me a message and I'm not gonna show you the price and I'm gonna, and it was like, okay, I'm making it a little better, but it's still this stupid game we're playing. And then you sort of stepped back and reimagined it and said, these people are here to transact. How do we make that happen? Right? In a way that's fair and fast.

And I remember I heard, I heard this song by 10,000 Maniacs. Natalie Merchant days. That's like, hey, give them what they want. Yeah. And that was— I heard that and I was like, we need to be giving people what they want. So they want a price and they want it now. They want it off their desk. They want to make sure they can trust it. It's accurate and all those sorts of things. Yeah. Between DocuSign and Natalie Merchant, we came up with something together as a group and it was It was cool to see that, but I'm really only bringing that up because that was, that was years of wrong.

Yeah. To be right. Yeah. Well, it's just so much, I mean, I don't want to minimize it. eBay's value was that you're going to be able to transact with someone. There's no other way you would know they even existed. Right. So they could just get away with sending paper checks at the beginning because I was creating enough value just by joining the community of people who had PEZ dispensers together. Because otherwise they were going to have to travel to some—

they felt disenfranchised for years. Exactly right.

But you're, you're, you're coming in to make things better for two parties who may or may not know each other. May or may not. Yeah. And you have to add value in both instances, right? And that's a lot harder, right? You're not just doing pure discovery, right? And, you know, Uber and Lyft are, you know, they're, they're— for me, it's just, is there a driver available and how long will it take, right? And by the way, I go into both apps to check both before I decide which to take. Yeah. But Yeah, there's, there's a lot of magic there behind the scenes, but at the end of the day, is there a driver available and how much is it gonna cost?

Is there an app yet called like Luber that like monitors both Lyft and Uber?

There was, you know, I wrote a blog post once about that, about, um, I, somebody tried that and I, I, I'm trying to remember, I don't know if the driver side has that or not. 'Cause those apps are competing to get those drivers to stay on their platform and not go on the other. They have all sorts of incentives they get. But you're right, I always wanted one where I could just put it in on my phone and it would bring up, put in the destination and it would show me the two times and the two prices.

I mean, how heartbreaking for those companies 'cause they have these like, we've got the technology and we are, as a rider, you're just like, I don't give a shit. It's the same driver. Yeah, literally the same guy.

Yeah, I'm, I'm sure they would not want to give you access to their APIs to pull that, right?

No, I mean, they're not in a hurry to do that.

Yeah, exactly. I mean, they're just hoping we're just lazy enough, which most people are, not to enter. I happen to be so cheap that I will check both.

Do you check both? No, I don't. Oh, wow. I don't check both.

And the reason why is— Yes, tell me that.

It's the same reason I don't drive around town to find out how much the gas costs, because I realize I'm getting ripped off in all cases. You know, it's just like, fine.

I think I do it because I'm fascinated by the price volatility. And I'm fascinated by the knowledge that each market is, you know, a local market, which is something, you know, from metals, right? So it's just fascinating to me that you go to some markets and Uber looks like they dominate and they're far cheaper. And you go to others and Lyft is that way. And so for me, it's more part of my business. Yeah.

It's a point of interest for you. Yeah, it is. I'm usually, if I'm taking an Uber, I'm probably already half pissed off because I've been traveling or there's something going on. It's always, you know, it's the last mile, right? It's the hardest of all things. True. Isn't it? It's a last mile mentality. You get an Uber, you're like, this is fucking stupid.

By the way, you say that, there are lots of last mile marketplaces now for logistics, some for bulk, some for, you know, obviously for consumer there are, but there's a bunch of them.

Speaking of which— Specialized. You want to stop one of those conversations dead in its tracks with those guys is the hardest, I guess, subsector there is the dedicated flatbed truck. So, I've talked to any name that you can think of because that's such an owner-operated world. Interesting. Yeah. And so when you get into the steel dedicated flatbed truck over the road, like, I need that truck. I'm not— I don't need Dominion, YRC, or any of those name brands that are out there.

And you talk to any one of these marketplaces, a lot of the metals are dedicated flatbed trucks, right? Yeah.

Yeah. And so that's owner-operator, that's broker, broker freight boards, you know, and there's no that I know of, they've advertised it and you end up talking to them and you're like, well, what's the rate and da da da for dedicated flatbeds? And it's like, we're just going to get back to you on that. Wow. Because we don't— it's a hard takedown and I get it.

It's not organized. Even today, not with Truckstop or DAT or some of these job boards.

Well, in all fairness, The last conversation I had was probably about a year ago on that.

But still, that's amazing too.

And it was still, yeah, we don't really, and if they do, the rate is not going to be nearly as competitive. So the thing about that flatbed world is it is literally, you think you got a book, somebody calls and they're $50 cheaper. I mean, an hour before this thing's supposed to go and that other guy gets dropped. Wow. You know, or you're the one getting dropped. It is a very live, volatile market.

Well, that's, as you know, that's one of the reasons that that volatility and fragmentation makes marketplaces, you know, super successful. And that's why one of the areas that's been so successful is logistics of all types, right?

I mean, these are really the hallmarks of an industry that's prime for— Yeah. A marketplace.

Yeah. And local density. Right? I mean, all those factors, many of which are true in, in your business too, but when you combine them all, that, that's why they're— and they're different ones, as you know. For people have tried to do all modes of transport. Yeah, but like we said before, you gotta, you gotta knock one down. Pardon me. You got to do flatbed trucks and before you can do every kind of truck. And you can't do— it's hard to go from trucks to air cargo to to ocean, right?

And people try to do all of them, but that ain't easy. Well, especially the whole concept of flying steel. Flying steel, you know, is— and we did that. And when I was in distribution, someone would be in Europe. You kidding me? No, we'd fly it over there. Wow. You know, and it wasn't like a truckload or anything, but it'd be like a crate of fittings or or something like that. More specialty. Yeah. That in some cases were made in Europe. And yes, the beauty of the fragmentation, the opacity, if you're in distribution, you know that they're probably made over there, but the person you're talking to doesn't. So, the sales guy, he did their job and be like, well, so, Who else have you called? Let's find out how much you really don't know.

I never thought of air being used for steel products, but yeah, I think, uh, who's it?

Ernie, which is I think a flange manufacturer in Germany. I think it's flanges. We— I remember a couple times we had them and they didn't have anything on the ground in the U.S. They'd load up a plane. Wow. And bring it on over and it's just nothing you know, natural about putting a plane full of steel and getting it off the ground. Yeah, exactly. What I know about thermodynamics and lift and all that is I'm not your guy. So I, I don't want— I could literally talk to you for several more hours, but okay. So you couldn't— yeah, I think so. We're gonna give it a shot. So you end up in consulting. You have a blog that you're really active on. You're a student. Used to be really active, yeah. Yeah, well, maybe it's losing interest. No, so used to be more active, or maybe you've written about everything at this point.

Yeah, I doubt it. I've written about everything I can. You know, I can't write about stuff I work on, so then I got to write about stuff that's in the public domain. And some of the things I used to write about, other people do better than me now. So, you know, I've got to be pretty picky.

You're feeling like the ChatGPT pinch?

Yeah, I mean, like, I can do teardowns of S-1s when marketplaces are going public, and I still do some of those, but there are people who have whole teams of people who do that, and there's just so much content out there. I'm only going to write when I feel like I got a unique perspective to say.

When you're feeling moved to do it. Yeah, exactly. So you're an advisor to businesses? Yep. Uh, and to investors?

Uh, yeah, I'm on the board of some companies, and then I'm, uh, an advisor to a PE firm, um, and, uh, to a couple growth equity firms as well.

And is that something that you're still enjoying, or you're kind of like, you know, my marketplace digital sort of journey is sort of—

No, I enjoy it. I mean, I'm almost always, when I'm advising, it's on one of these marketplaces or networks or platforms. So I get to talk, bring the perspective of, you know, having been around it for 25 years. Which is both good and bad. You know, probably I'm sometimes Debbie Downer a little bit.

On the other hand, I went by Debbie now and again. That's fabulous.

You know, because I know the pitfalls and I got to be a little careful about that. But on the other hand, when I see somebody who's got a unique way to solve it, much as you have, then I like— it clicks like, oh, this is a unique approach. And, and could work. Um, so no, I, I still get, I still get excited about it and I still enjoy it. Um, I don't know how many more years I'll do it, but, but for now it's—

How many more seasons you got in there? Exactly, exactly. Well, you've seen a lot, you've seen a lot, and it's kind of the more things change, the more they stay the same. Like, I mean, how often are you surprised by outcomes when you, when you, we had a board meeting, you're hearing about a plan and You share it. I mean, we all are right or wrong now and again, whatever, but—

I guess, you know what surprises me is I've been kind of studying this fairly narrow area for 25 years. And I would say there's not a week that goes by where I don't learn about a new company that's doing something really interesting. Now it may not work, But, um, there are so many different marketplaces and platforms and industries and verticals where someone is attempting to, to solve a problem unique to that area. And I've never heard of it. And some of them are substantial, right? I mean, it's one thing to read about the startups. It's another thing to realize there's a $100 million software company in, I don't know, the legal world that, you know, is a marketplace that you never heard of. Yeah. And that's growing and is profitable and has really succeeded. And you just— when you think you've seen everything, I'm constantly reminded how little I know.

So, and, uh, so there are things that— I mean, I don't know, been surprised many times along the journey of getting to where we are. In one way I have, in the other way I haven't, meaning that I knew we could get there, but it wasn't clear how we get there, but I knew it would be transparency and it would be, you know, neutral, you know, like kind of these high-level—

You knew there were models out there because you and I talked about them where it was, well, that's really not a marketplace. That's a distributor with e-commerce. Right, we would see these other things and go, well, that's not what, what the market needs.

It's— yeah, they don't need just sort of a, a kind of reinvention. Yeah, of something that's kind of, you know, people aren't asking for that change. Yes, really. Exactly. Yeah, but I would— my assertion I'm about to make is based on inexperience and also experience. Which is I think a marketplace might be one of the hardest things in the world to get to spin. And as people, I mean, chicken egg, whatever you want to call it, how, you know, how much does the target market want it? Yeah. You know, and you really won't know the answer to that until you nail your product, by the way. Yeah. You know, because they could be not excited, not excited. Oh my God, this thing's fabulous. So there's— it's an iterative thing. But to someone, let's say they are at the beginning of a journey, which happens daily. Our— since we've had this conversation, you know, LLCs have been formed and people are getting ready to do things. So anyone that's approaching a B2B marketplace and really thinking about it, just give them maybe 3 things they should be thinking about in their first leg of the journey.

It's so funny that you say that because for many years I didn't— I really sort of avoid— I, I did platforms and networks but not marketplaces because they were so hard, I felt, in B2B. And there were so few true marketplace examples creating those new matches. And when people would come to me and say, you're a marketplace guru, I would say, not really, but And then they would say, well, I'm starting a marketplace. And I would say, why don't you try to do something else? This is just so darn hard. Yeah, right. Um, but now when I see them, I still want— so the first thing I really hone in on is I want to hear the problem you're solving for the buyer. I want to hear the problem you're solving for the supplier. Mm-hmm. First thing I want to hear, hear the person articulate what that is. Is it discovery? Is it transaction time? Is it price transparency? Is it the ability to compare? Is it a cheaper commission structure that the supplier and, you know, cheaper distribution method for them? Is it, you know, what, what is it? And, and does the entrepreneur recognize that it's— that they have to create the value prop for both sides and communicate it separately to them. So that's the, the first thing I try to figure out. The second thing is I ask is— and, and then within that is, does it sound like substant— show me— I guess the second thing would be show me how their life is going to be different using the marketplace than what they're doing today. I want to see the steps. How does this actually happen today on the buy side and on the sell side? Show me the as-is and the to-be. Sure. How much time is going to be saved? How much effort is it going to take? Is it a big enough change that someone's going to go, this is a meaningful difference?

Is it a need-to-have or nice-to-have for That's not an easy question to answer if you're on square one. No, very hard. And that's, that's a, I mean, after all these years, that's a question I think I finally got answered probably within the last year because you really wrestle with that question for a long time. But anyway, so you're really asking, that's a domain expertise question.

Yes. Yes. Very much a domain expertise question. And by the way, when I see people who don't have the domain expertise, I'm usually going to run.

Okay. Pretty quickly. And will you advise them to— I mean, it depends what is the reason you're together, if you're helping or if you're investing.

Yeah, I advise them to get somebody with domain. I don't see how you do this without domain expertise. Just makes no sense to me. That'd be kind of impossible. It's just another layer. You got to learn how to make the transaction happen. You got to learn how to attract both sides. And now I got to learn the domain on top. It's just, it's impossible, right? So that's sort of a— but luckily most occasionally I'll see, you know, a couple MBAs or, you know, bankers who say, well, we found this hole in the market and we think we're going to create it. And, um, and they don't have the domain. But most of the time it's coming from someone who's lived the pain within the industry, like you. Um, and then the third thing is, how are you going to solve the cold start problem? Right, right. How are you going to get buyers and suppliers? What's your— there are all these hacks. Which of the hacks are you thinking of, or do you have a, a partnership that's going to help you? Or do you have a, um, a set of suppliers who you think are going to support you, or a set of buyers who you think are going to support you? Or do you have an industry association? Or do you— what, what is the way, yeah, that you're going to attract both sides? You need a foothold. You do, you do. And you got us. And, and, oh, I'm so glad you said that. Yeah. What's this— I tell people You know, people talk about flywheel. They're also like, you know, uh, I've read that snowflakes start with a little kernel, okay, and then they grow from there. What's the kernel? Like, sometimes people can't articulate where they're going to start. Like, remember, you, we, you and I used to talk about, is it going to be structural steel? Is it going to be oil and gas? What types of products is it going to be? You can't do all steel at the beginning. No, right? So, and eBay was collectibles, right? eBay didn't have motors for a long time. Is that right? Yeah, it was collectibles at the beginning.

Like, what, what's an example?

Like the figurine? Yeah, Pez dispensers, Beanie Babies. You know, that, that the Pez dispenser was the famous example at the beginning, right? I had no idea. Who knew people collected those? Um, they did, uh, and they still do, and they, and, and they grow category by category. And so, and when you look at all of the great marketplaces, they're either— they have a g— they have a— they have that snow— that kernel that starts the, the snowflake. It might be a region, it might be a geography that they dominate, like for OpenTable or ACV Auctions. Yeah. Or it might be a type, a category, a type of steel in your case. Yeah, but you can't— back to that boil the ocean idea— you can't be a marketplace for everything to everyone. Just doesn't work that way. And so you have to fix something that doesn't work, doesn't scale.

Where's the snowflake going to start?

And often that's, that's probably the third question. Is I want to know, does the entrepreneur have a notion of which particular buyers and suppliers are in the most need and are most— are going to transact there? And they may be small, they may not be enough to build the business on, but they're enough to get started.

It's an entry point.

It's an entry point.

And then I guess the question is, what sort of, you know, chain reaction can can occur from there? Like, how much room is there in that vertical? When you're talking specific to B2B, you know, if you start with Sheet or, you know, some product, how many friends does it have? You know, how wide and tall does this thing go? Exactly. And how much does understanding that one mean you understand that one, right?

And I remember asking you, are, you know, Do you have a set of products that you're going to focus on? You're like, yeah, you're damn right.

We have a set of products we're going to focus on. It's just been very focused. Yeah. And luckily, and I guess that would be another part of that discussion if you're talking to someone who's starting out is— and all these things are really cliché, I guess, but they're asked for a reason, which is it works in metals because it's a massive industry. Right? Even if you didn't have that many products, I mean, anyone who's listening or watching, as you look around the room, you are surrounded by metal. Exactly. And so really choosing that vertical or that's that industry, probably would be an industry if it weren't somewhat ubiquitous, but, uh, whatever subsector you're going into, you know. But ultimately it sounds like marketplace, if there's not a real expertise there or availability to an expertise, maybe think about a different path forward.

Yeah, altogether. And there have to be, you know, you've got the classic stuff of size. You, you want to look— usually you want to look for fragmentation on both sides so there's a need to discover. You want to look for pain associated with the transaction. You, you may want to look for, um, a difference in a cost of capital between both sides. I know that's something that you've thought about. You may want to look at nomenclature issues, right, that, that make transactions hard. Logistics, quality, all sorts of things that, that you think you can solve on behalf of the buyers and suppliers.

I mean, I think nomenclature is quietly amongst the most important things, at least that we've taken down yet, is, is that's just a, that's like a sleeper problem. Oh yeah. You know, because when you're approaching marketplaces and you've got all these languages, you're like, oh, how are we gonna handle that?

Yeah, you take it for granted, but, um, it's so embedded in the concept. Of B2B e-commerce. And, you know, it's even within steel, I'm sure it's different for coil versus rod versus whatever. Yeah, right. The attributes are different and the issues are different. And it's like, that's just a simple example. Well, she—

coil and valves, like you're talking about 30 different attributes. Yeah. And there's shorthand when people say I need this or that. But behind the this or that is like a laundry list of things that need to match. Yeah. You know, it's, it's, uh, the valves is a whole, a whole nother beast. And I think that's one of those things that when you're talking about industrial valves, maybe that's not going to be suitable for the internet for a minute. I mean, there's, there's, there's a lot.

PVF, is that what they used to call it? Is it PVF?

Pipes, valves, and fittings. Yeah. And that's, that's my background is, you know, where I was is, is primarily PVF versus structural. We ended up in structural really because in 2020, as the election was coming, it just kind of occurred that we may not— the demand for PVF domestically if, if Biden were to take office would change the market and we'd want to not just be sitting there with PVF as the only offering. Right. And then that's— that was the real first impetus to say we need to be over in structural as well.

It's such a good example. You think, is steel a market? Yeah, steel's a market. But I don't know, you know, how much overlap is there between, between there's not a lot of overlap between the buyers and suppliers of PVF and structural.

Probably they're different markets. Yeah, they're just—

so if, and if you don't know that, if you're not a domain expertise expert, that people— it's so obvious, but the suppliers who don't supply what you buy are irrelevant. The fact that they're on the network has no value. In fact, it may have negative value because it makes congestion. It makes it harder to find what you're looking for. And the opposite is true too. If I'm on your network and all your buyers are buying something else, your, your network has no— your marketplace has no value for me. It's just such a simple concept, but it's, it's—

people have to be relevant to each other. There has to be a high level of, of, uh, kind of a complementary pairing. Yeah. And it's, it's, it is obvious But it's, it's not an overnight thing. Yeah.

And you were talking earlier about, you know, mistakes that some of these companies make when they get a lot of capital is they get all caught up and I've got a lot of capital, got to add buyers and suppliers. So they spend all this money and they create all these great metrics for all the buyers they added or all the suppliers that they added.

And it's disparate.

Exactly. And they're not relevant to each other. And so the underlying thing, which is a match or a transaction that would have otherwise occurred, that would not have otherwise occurred because of you, which is the ultimate measure of value of a marketplace, those suffer even though the other higher-level metrics, which you can get excited about, don't, you know, are great, look great on the surface.

So, uh, is Looking ahead, as far as you're doing, is there anything that you feel like you want to go do left in this space? Or you feel like, okay, you're enjoying the boards that you're on, your involvement, but is there something else? Do you want to go start playing guitar and doing gigs or anything like that?

No, I don't think I'd like to see more of the world. You know, when you— I got to travel a lot and the businesses I worked on were very international, were global. Mm-hmm. And, you know, you realize how small our perspective is if— unless you get out and travel. So I definitely would like to do that. I don't— I don't think You know, I try to— I'm at the point in my career where it's— I try to give back more, just, you know, try to be a mentor. Yeah, right. And help others avoid the mistakes I made. Yeah. Well, and maybe be a little more successful a little faster. I'd say that's about it professionally. I still enjoy learning, you know, so, uh, and I enjoy meeting entrepreneurs like you and, and helping, you know, build, you know, if I can help you build your business to be successful. That's probably, that's probably it. But no, not, not, no big hobbies, no big, uh, um, new, uh, I, I have friends who I really admire who are learning to play guitar, and they're like, I, I mean, I, I love languages, so I always regret that I don't— I only speak English and French, and I'd love to learn a few more, but I'm probably—

if you were gonna do it, which doesn't sound like you are, but if you were, what would be the next language?

Oh, Spanish for sure.

Spanish? Yeah. And then after that, uh, maybe Chinese.

I mean, there's a lot of billion people I'd be able to talk to that I can't.

All the friends you don't have, right?

My dad always tried to get me to take Chinese at college, and I just— it seems— took French. I wish I, you know, hard not to want to speak Spanish when you're in America and there's so many Spanish speakers. But they're there. I think they're all, they all, I guess these days now we can use Google Translate or something. So maybe, maybe it's not as important as it used to be, but there's something about speaking to other people in their native tongue. That's really, yeah.

I mean, it doesn't, you wouldn't do it. I think you would enjoy the pursuit of understanding that language as much or equal to the ability to communicate in it. Yeah, that's probably true. I think languages are interesting. Yeah. And it's always interesting in languages to see even languages that are very different. Every once in a while they overlap in some way. Yeah. Like some word or And not in recent times, but it's an interesting study. And then there's some that very different and never going to overlap.

But it's such a human thing. My wife is really good about getting on Duolingo when we're about to travel to a new country. She'll get on and try to learn a little Portuguese or wherever we're going and Swedish or whatever. And I admire that. It's fun.

Did you take language in high school, college?

You took French? Yeah, I took French from 3rd grade on through college. And are you fluent? I was. Perishable. At one point, I lost it. I went to France a couple times during college, and so that was sort of my peak. And then I lost it. And then the food testing business that I was in, we sold it to a French company. So I went and took Berlitz for a few months, which was what you did back then. I guess there was no Duolingo or whatever, Babbel, and got really good again for a very brief period of time. And now I've lost it. It comes back. I watch French. It does? Yeah. And when we go over there, I watch some French detective shows and try not to rely too much on the subtitles.

And, you know, I took German.

German was the other really popular one.

Took it all the way through college. Yeah. And I would say that—

you stick with it or no after that?

No. Horrible.

Well, I went to Germany, but probably great for your industry.

Right. Well, I would say that, well, I went to Germany probably junior year in college, and I could communicate it better than I was expecting. I hadn't been anywhere abroad prior to that. Wow. But the thing that I remember the most about taking German, which I enjoyed, the way they do this most places where they give you like a sheet of useful and Useful expressions, you know, so if you're like slang, they're not like normal. Well, it's just like, it's kind of like your, your emergency list of communication. Yeah, of, of like, so it's one, this was in school, they're like, here's the useful expressions. I just remember being on there like, who wants to play tennis? It's like, that's always useful. Or like, things that got in traffic. Yeah, who wants to go mountain climbing? Shit like that. You're like, how about, where's the hospital? Where's the bathroom? You know, like, I was gonna say, where's the bathroom? Like, that's useful. Like, who wants to play tennis? Yeah, is Björn Borg here? Or, you know, whoever it was, Boris Becker. Uh, but other than that, that's what I remember the most about taking German for 10 years, was the, was the list of useful expressions. I gotta find that somewhere.

'Cause it would probably be really funny.

But it was a list of things like, do you know where the car dealer is?

But can you imagine how few of them are probably still applicable? Probably a lot of them. Yeah. Oh, you think so? I think some of them wouldn't be like—

No, they would, they're not useful. Oh, they're not useful. Exactly. And that was the whole thing is like, you just gave me a list.

Where can I make a phone call?

Yeah, exactly. Or stuff that's become obsolete. That's what I mean. Yeah. Over time. Like where's the fax machine? Shit like that. So, well, I'm going to wrap up. Thank you so much for everything. It was an honor and a pleasure. It was a fun conversation.

I hope your listeners enjoy it. They won't. I can't imagine, but hopefully they will.

You know, maybe at some point their base of knowledge will become great enough that they'll understand much of what you said. They could start by reading your blog. Yes, there you go. You know, which, by the way, they can find Where, if they do want to bring it?

www.softwareplatform.net. Oh, it's a.net.

That's why I couldn't find it. I'll just go try and read some of those.

Yeah, I don't think.com wasn't available, I don't think. Yeah. All right. And I thought.net made more sense for a platform in that work. It should be.bob..bob.

All right. Thanks, Bob. All right. Thank you.