How WeMarket attracted global superbrands | KPMG | NL

Startup success: How B2B trading platform WeMarket attracted global superbrands including Nike and Dom Perignon

How WeMarket attracted global superbrands

'Now I know: you can't wait until everyone thinks it's perfect'

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How B2B trading platform WeMarket attracted global superbrands including Nike and Dom Perignon

As a startup you have to be able to take the tough decisions, as the founders of the B2B trading platform WeMarket can tell you. Not once, but twice did they change direction drastically. And because of that, they managed to convince some global superbrands to work with them – in under a year.

It’s Christmas Eve 2015. Four months after the prototype WeMarket trading platform went live. The WeMarket management team meets and takes a major decision. For three months they’ve been building a significantly improved online trading platform, intended to repeat the success of its big sister WeTransfer – now widely used to share large files. Today, one month before the global launch, they decide to change direction. The online trading platform framework is scrapped. ‘We needed to make it simpler’, says CEO Patrick Steenkist, at the WeMarket headquarters in Amsterdam. No cramped attic space for this start-up, but a stylish warehouse beside the WeTransfer building. 

Idea: B2B trading platform
Bas Beerens, inventor of WeTransfer and owner of the design and production agency OY, came up with the idea for a trading platform early in 2014. At the time Beerens had been working for years for sport giants such as Nike, where he worked as a young man. So he knew that manufacturers like Nike are often left holding stock that buyers are looking for. What was missing was an online link between the supply and demand, and from that aha moment, WeMarket was born. ‘The best ideas aren’t ones that solve a standalone problem, but ones that meet a personal or professional need’, says Steenkist.

Don’t compromise

  • Involve people that can retain focus.
  • Don’t be afraid to buy in expertise when you’re having problems.
  • Don’t be afraid to change your strategy. 

 

It can be for the best.Beerens developed his idea within a small team: an online marketplace in the form of an exclusive business club which the buyers and sellers would pay to join. Having had the idea, it now needed to be developed: Beerens needed people to bring the idea to market. So in April 2014 he asked a group of people, including Steenkist, to help him realise his idea. ‘Bas is best compared to Elon Musk or Steve Jobs. He’s someone who thinks in terms of possibilities, a dreamer’, says Steenkist. ‘I’m here to keep focus, to develop action plans and to ask the question: is what we’re doing what we actually need?’ When the development team started building the trading platform, the ethos was still: we don’t want to make any concessions, so we’ll build everything ourselves. The platform had to be an ‘immense’ search engine, where buyers and sellers would meet. However, after the beta launch, Steenkist and his team had to pump the brakes. Not because the trading platform wasn’t taking off, but for technical reasons.

Shortly after the prototype went live, the development team realised that it was taking each new technical employee at WeMarket a significant amount of time to learn how to operate the platform; not very efficient for a dynamic online platform, to which new features would need to be added constantly. The solution? The management team decided to shop around. They selected an existing framework, and the WeMarket tech experts worked with an external team to tailor it to WeMarket’s needs. Three months later, WeMarket went live globally.

The building and testing period went pretty well, however something kept nagging at the creators. A marketplace as an exclusive business club that members would pay to join… was that the right direction? Three weeks before the launch of WeMarket, the management team made a decision. They would change the existing business model to a freemium model, free for everyone, with additional features available to buy, à la WeTransfer. Steenkist: ‘So it’s now within the reach of a businessman in India who just wants to put stock online once a year.’ According to Steenkist, this free point-of-entry fits WeMarket much better. ‘Changing direction wasn’t a hard decision, but it did come at a difficult time. We had to change much of the framework, while already dealing with the stress of the launch.’

Launch first, then improve

  • Don’t wait until everyone thinks it’s perfect.
  • Don’t decide everything all at once.
  • Working in a team with friends brings out the best in people.

 

In hindsight, Steenkist thinks the run-up to the trading platform launch took too long. ‘We should’ve done that differently. You can spend too long thinking about every eventuality. Now we know that you can’t keep developing until you have the perfect prototype, because that’ll never happen. We’ll always have to keep making changes to our platform, even after the launch. Some of us have backgrounds in graphics and are super-critical of how the platform looks. Now I know: you can’t wait until everyone thinks it’s perfect. It’s better to go live quickly and keep developing based on what actually happens. We measure everything, images, banners, texts…’

Another important lesson: you can’t decide everything as a team. ‘There’s nothing wrong with a little healthy dictatorship!’, according to Steenkist. ‘Initially we decided everything together, but with the launch approaching we needed a different decision-making model’. A third lesson from Steenkist: working in a group of friends brings out the best in people. ‘I don’t go to work, I go to meet up with my friends to create something great.’ But there is another side to this, says Steenkist. ‘When you’re critical of your friends, it can get personal pretty quickly, which doesn’t always bring out the best in everyone.’

The beta launch of WeMarket in the summer of 2015 was celebrated in style on an island owned by Bas Beerens, half an hour’s drive from Amsterdam. The people invited: everyone who had contributed to the development of WeMarket and any potential users. ‘It was a wednesday, not the most popular time for networking’, says Steenkist. ‘To be honest, we were surprised when everyone we’d invited turned up. It was the confirmation we’d been waiting for that companies really liked our idea.’ 

Patrick Steenkist discusses the network functionality of the WeMarket trading platform

Currently WeMarket has three pillars: Karma, Insights and Circles. WeMarket Karma measures the reliability of the users, based on user reviews, credit scores and their presence on the marketplace. WeMarket Insights provides tailored information on supply and demand. WeMarket Circles enables manufacturers and brands to invite their existing trade network into their own marketplace. Steenkist: ‘The best comparison is a friends group on Whatsapp.’

‘Look, Europe’s awake’, says Steenkist. He points to the KPI dashboard on the wall. Lights on a map of the world show where companies are currently using WeMarket to trade online.

WeMarket has been live for a couple of months now and products as diverse as consumer electronics, fashion and toys can be found on the marketplace. In total approximately forty sectors from approximately sixty countries are represented. In three to five years, the trading platform is expected to have at least a million users. Steenkist: ‘It’s developing pretty much as we expected. A couple of thousand companies have already found us; establishing a leading marketplace will take a couple of years.’

In fact, many of its sales meetings follow the same pattern, says WeMarket’s CEO. Initially, manufacturers tell them that everything is running smoothly using their existing networks. Until the sales managers explain how the platform works. ‘Than they say: that sounds really convenient. It’s interesting that according to Dutch department store V&D an online marketplace didn’t fit its strategy; it was bankrupt a year later.’ According to Steenkist, WeMarket does not have any online competitors, only traditional trade. ‘Alibaba isn’t a competitor, as it’s not catching on in western countries. Its founder, Jack Ma, recently said there is demand for a B2B marketplace, but Alibaba doesn’t intend to set one up. Amazon has a totally different model than ours, buying products in order to sell them itself. Anyway, we’re not afraid of some competition! The market’s enormous. Really, to succeed, you just need to do it better and simpler and make it more attractive.’

At first, the management team of five, including Steenkist, assumed that manufacturers, distributors, wholesalers and retailers would want to sell their surplus stock through WeMarket. But soon it became clear that they also want to sell the products they sell through their regular channels on the platform, in order to establish new trade relations in new areas. ‘That’s a fantastic development’, says Steenkist. And the technical decision regarding the new framework was proven correct. ‘Our technical staff can make interfaces with the sellers’ systems much more easily.’

There’s no time to waste

  • Offer paid features when they add something.
  • When partnering with an investor, select someone you connect with.
  • The scaling-up phase is important; it will take time.

 

Steenkist is already looking to the future. WeMarket will always be free, he says, although certain paid features such as WeMarket Circles, WeMarket Insights, system interfaces, push messages, etc. will be added. This will be done once there are sufficient users, because then the features will really reflect what the users want. Steenkist: ‘Features such as receiving a message when a user’s offering something that you’re looking for, information on the region where your product receives the most interest, a personal marketplace where you can link up with your ‘friends’, thus creating your own trade partners network. We have new ideas almost every day. As far as I’m concerned, one of the next steps is to launch a WeMarket app, enabling sellers to put products from their warehouses, or services, on the marketplace really quickly.’

WeMarket is self-funded, but exploratory discussions are being held with investors. The wish list: an investor which will bring in not just capital but also knowledge and contacts. Steenkist: ‘There has to be a connection. You don’t need to be great friends with an investor, we prefer to keep it professional, but you have to enjoy working together.’

The next major innovation? Build in a social platform. ‘We want to make it a community, in which all employees can trade and collaborate’, says Steenkist. ‘We want to stimulate trading, that’s our ultimate objective.’ The next investment round will come when the start-up expands to the United States. ‘But probably not for a year or two. We’re scaling-up the business now, and we need to stay focused. There’s no time to waste.’

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