My team is on the court!

Add comment November 21st, 2007 David Bush - Iasta

I found an interesting article that discusses how smaller companies thrive in a world dominated by giants. Of course, I found this somewhat intriguing as I was trying to do a little catch up on a transcontinental flight. The WSJ author points out how a relatively small brokerage is successfully fending off massive competition and growing despite pressures from rivals such as Aon, Goldman Sachs and Blackstone. One can see how I found parallels in the story lines.

Two very similar traits between Lockton and Iasta are quoted in the following:

“Mr. Lockton and his three nephews — who are all executives and board members — hold equal stakes in the closely held firm that add up to about 90% ownership, and the entire company is in family hands. Mr. Lockton became CEO when Jack Lockton, his brother, was diagnosed with cancer in 1998. Jack Lockton died in 2004.”

Iasta: 100% employee owned and operated. No outside interests are involved which is why our methodical growth has maintained for 8 years.

“Key to Lockton’s growth, Mr. Lockton says, is the fact that the family is willing to plow money back into the business. The company’s pretax profit margin, he says, is 10%.”

Iasta: The entire company is run organically and profitably, as it has since 2001. If margins exist during any month, it is virtually 100% reinvested.

This article did not have anything to do with supply management on the surface, but it does give great insight into the concept of FUD (fear, uncertainty, doubt) which is liberally strewn throughout the eSourcing marketplace by companies that have no other recourse to explain their value proposition.

I think it would have been fascinating to take a straw poll over the last few years to predict a last man standing survivor game. PurchasePro, Materialnet, C1, FreeMarkets, (Procuri ???), B2e, Perfect (take your pick of which version), SupplierMarket, Verticalnet, Baybuilder, Frictionless…the list goes on and all now in the rear view mirror. Most of them have completely evaporated and others exist in name only or as part of new ownership. Very few lived up to the promises and none outlasted the smaller company. I guess, more resources does not a company make and for that, I am THANKFUL!

Entry Filed under: General, e-Sourcing Marketplace