The road to funding, however, hasn t been easy for this first-time Internet entrepreneur, and as months passed, other industry players have started to move in on the Internet space. There are now so many online marketplaces fighting it out that the Gartner Group predicts that only 5 percent of online marketplaces will succeed. Horowitz, however, is churning ahead, convinced that he ll overcome these hurdles and build a sustainable business. Darwin described TheWireExchange s business plan to three industry observers, all of whom had at least some doubts about the viability of Horowitz s effort. In industrial appliances like wire and cable, you need a personal contact, says McNulty, unless you ve been buying from a company for 50 years.
Buyers trust other people to deliver what they want, and often go on a face and handshake.
TheWireExchange will have to figure out how to build up recognition and trust, he says, while competing with offline site visits, golf games and long lunches. Focus on one audience One way to make it more people-based, suggests McNulty, could be by focusing only on distributors. Horowitz knows their needs and how they work. He could provide them with timesaving Web tools and tricks of the trade, and be available for consultation offline. This, says McNulty, is the type of service a site would have to provide to make industry players budge.