WSJ has a story that will warm the B2B fans (any still left): ChemConnect has survived and thrived to become “the biggest online exchange for chemical trading, with volume of $8.8 billion in 2002.”
One key to ChemConnect’s survival was speed. It was first to market, launching an Internet bulletin board in 1995. It was also the fastest and best fund-raiser among its dozens of competitors — bringing in $105 million by the time the stock-market bubble burst in 2000, compared with $50 million for its chief competitor, CheMatch.com. Mr. Beasley also realized that the only way to persuade traditional chemical companies to trade online was to allow the industry to profit from ChemConnect — so he sold about one-third of the company to more than 40 chemical companies.
ChemConnect still isn’t profitable, although it expects to break even this year. And while it is used by about 44% of the industry, many sellers wish there were more buyers online, according to a survey of 250 chemical buyers and sellers by AMR Research. “The key now is to basically be as patient as you can, but to continue to push the adoption curve,” [founder] Mr. John Beasley says.
With its hefty cash hoard, ChemConnect took the opportunity to buy competitors, including CheMatch.com and an industry-owned exchange. Mr. Beasley also recruited a seasoned chemical executive, John Robinson, to run the company as chief executive, while Mr. Beasley remained chairman.