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Posted by Richy George on 7 May, 2020This post was originally published on this site
During the waning days of the first dot-com boom, some of the biggest names in venture capital invested in marketplaces and directories whose sole function was to consolidate information and foster transparency in industries that had remained opaque for decades.
The thesis was that thousands of small businesses were making specialized products consumed by larger businesses in huge industries, but the reach of smaller players was limited by their dependence on a sales structure built on conferences and personal interactions.
Companies making pharmaceuticals, chemicals, construction materials and medical supplies represented trillions in sales, but those huge aggregate numbers hide how fragmented these supply chains are — and how difficult it is for buyers to see the breadth of sellers available.
Now, similar to the way business models popularized by Kozmo.com and Webvan in decades past have since been reincarnated as Postmates and DoorDash, the B2B directory and marketplace rises from the investment graveyard.
The first sign of life for the directory model came with the success of GoodRX back in 2011. The company proved that when information about pricing in a previously opaque industry becomes available, it can unleash a torrent of new demand.
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