Built a network of 56 community Web sites for industries ranging from solid-waste to human-resources management--then began upgrading them into online trading hubs.
Creating fee-generating services such as logistics, customer service, and financing, to attract participants. The end goal: Making VerticalNet profitable by mid-2001.
All the cool kids on the Internet used to dis Mark L. Walsh. Silicon Valley smart guys ridiculed Walsh's VerticalNet Inc. (VERT) as a collection of 56 boring online trade magazines. The rap: All its money came from ads, not e-commerce. Skeptics lined up to fund rivals, who concentrated on one industry or ignored magazine-like ''We've done it exactly the opposite way," Benchmark Capital partner David Beirne said after investing in used-equipment auction site TradeOut.com. When Walsh heard that, he minced no words. ''What the f--- does David Beirne know?'' he snapped. ICGE), the Wayne (Pa.) business-to-business e-commerce investment firm, Buckley put B2B on the map by pumping $1.4 billion into 61 startups in just four years. But since December, ICG's stock has collapsed from a high of 212 to a recent 39. Investors are concerned that B2B upstarts could get crushed by Old Economy giants looking to seize control of online commerce.
Now naysayers are eating dust. Walsh always planned more e-commerce once the trade mags built an audience to support trading hubs. And it's happening: More than half of VerticalNet's first-quarter revenue came from e-commerce. Softbank Corp. and British Telecom PLC (BTY) will help create European and Asian versions of VerticalNet. And Microsoft Corp. (MSFT) will pay for thousands of companies to set up VerticalNet ''stores'' powered by Microsoft software.
All of a sudden, Walsh's company is projected to grow sixfold this year, to $130 million in revenues, and to turn a profit by mid-2001. ''We'll be the first profitable [business-to-business Internet] company by two quarters, maybe six,'' Walsh says. Analysts say other B2B companies are aping VerticalNet's multi-industry strategy.
Walsh is B2B's poster boy--and the Net's Jay Leno. (Example: He joked that fellow e.biz 25 member Marc Rotenberg's casual outfit for the e.biz cover shoot was ''like Tom Jones after a long concert.'') Walsh's gift for gab comes in handy, since his main job is to rally partners and investors. He learned to communicate early: His mother was the voice of the child screeching ''More Parks Sausages, Mom!'' in radio ads.
Walsh's humor, however, has a calculated edge. It takes a little pressure off his fledgling company. VerticalNet is still far from locking up the infant B2B market, and he admits it. ''We're the tallest midget around these parts,'' he says, laughing. That may be one of many jokes on Walsh's road toward the last laugh.