Ariba Technologies, Inc., the leader in Operating Resource Management Systems (ORMS) for Global 2000 corporations, today announced that Intel Corporation has made an investment in Ariba. In addition, Ariba and Intel will initiate joint marketing activities to highlight the benefits . . .
Ariba Press Release, April 22, 1998
Being unique is great. Especially when everyone else is like you.
Business-to-business. B2B. That’s what they were beginning to call our space. That’s how they were describing what companies like Neoforma did...
Business-to-business. B2B. That’s what they were beginning to call our space. That’s how they were describing what companies like Neoforma did...
The number of Internet companies creating a huge buzz—and investor gains—was increasing dramatically. Most of those companies catered to consumers, not businesses. They were called business-to-consumer. B2C.
Driven by the desire to discover the next big thing, some investors were casting their eyes on Internet companies that served businesses rather than individuals. The argument they suddenly adopted: business between businesses was much larger, more repetitive and more predictable than businesses that dealt with fickle consumers.
Ariba, one Silicon Valley Internet software company that served businesses, was among the new darlings of the local investment community. They were creating quite the buzz. Following up on earlier investments by top venture capital firms, Ariba was receiving investments from large corporations. Strategic investments of this type were an early indicator of upcoming initial public offerings (IPOs).
The IPO is the Holy Grail for early investors. One early investment in a company that hosted a successful IPO could make up for a dozen bad investments.
A handful of other business-to-business Internet companies were getting attention too. The press was writing about some of them. Except for that one mention of us in an obscure (possibly defunct) lawsuit, the press didn’t have any way of knowing about Neoforma yet.
Smelling blood and seeking an exclusive, Alexander and JP, our long-lost potential angel investors, reappeared with breathtaking speed and requested a meeting. We didn’t expect much.
After Jeff and I provided a very brief update on our activities since we had last seen them a few months earlier, Alexander abruptly said, “Okay, here’s what we are going to do. We’ll get together between half a million and a million dollars to get this company going. Then we’ll immediately go after the tier-one venture firms to get a follow-up investment. Once they know that we have invested in you, they’ll want to invest too . . . at a much higher valuation.”
Then Alexander and JP jumped into a private, but overtly audible, dialog. They discussed the people they would call (dropping recognizable names) and when they would call them. Then they moved on to the people they’d call next. They orchestrated the next two funding rounds in a matter of minutes. Their energetic, well-rehearsed brainstorming was contagious. Ordinarily independent to a fault, Jeff and I leapt into their stream of consciousness and let ourselves be swept forward.
And that’s about all there was to it. A couple of weeks later, we had more than a million dollars in the bank. I would never meet most of the investors that participated in that funding round. And in fact, the investment round had been oversubscribed. We actually had to turn money down.
Wally and Denis were happy, for the most part. In two months we had increased the value of their investment by a factor of five.
But both Wally and Denis warned me, independently and sternly, “Those guys can take you far, but you must be aware, they’re sharks . . . out for a large, quick meal. No more. No less.”
So, almost overnight, Neoforma became a B2B Internet company serving one of the largest industries in the world, healthcare. At least, that’s how it was branded.
It was nice to have our laborious arguments converted into a tagline. Saved a lot of time. A square hole had been created to hold our square peg. Or maybe we had been rounded off a bit.
Driven by the desire to discover the next big thing, some investors were casting their eyes on Internet companies that served businesses rather than individuals. The argument they suddenly adopted: business between businesses was much larger, more repetitive and more predictable than businesses that dealt with fickle consumers.
Ariba, one Silicon Valley Internet software company that served businesses, was among the new darlings of the local investment community. They were creating quite the buzz. Following up on earlier investments by top venture capital firms, Ariba was receiving investments from large corporations. Strategic investments of this type were an early indicator of upcoming initial public offerings (IPOs).
The IPO is the Holy Grail for early investors. One early investment in a company that hosted a successful IPO could make up for a dozen bad investments.
A handful of other business-to-business Internet companies were getting attention too. The press was writing about some of them. Except for that one mention of us in an obscure (possibly defunct) lawsuit, the press didn’t have any way of knowing about Neoforma yet.
Smelling blood and seeking an exclusive, Alexander and JP, our long-lost potential angel investors, reappeared with breathtaking speed and requested a meeting. We didn’t expect much.
After Jeff and I provided a very brief update on our activities since we had last seen them a few months earlier, Alexander abruptly said, “Okay, here’s what we are going to do. We’ll get together between half a million and a million dollars to get this company going. Then we’ll immediately go after the tier-one venture firms to get a follow-up investment. Once they know that we have invested in you, they’ll want to invest too . . . at a much higher valuation.”
Then Alexander and JP jumped into a private, but overtly audible, dialog. They discussed the people they would call (dropping recognizable names) and when they would call them. Then they moved on to the people they’d call next. They orchestrated the next two funding rounds in a matter of minutes. Their energetic, well-rehearsed brainstorming was contagious. Ordinarily independent to a fault, Jeff and I leapt into their stream of consciousness and let ourselves be swept forward.
And that’s about all there was to it. A couple of weeks later, we had more than a million dollars in the bank. I would never meet most of the investors that participated in that funding round. And in fact, the investment round had been oversubscribed. We actually had to turn money down.
Wally and Denis were happy, for the most part. In two months we had increased the value of their investment by a factor of five.
But both Wally and Denis warned me, independently and sternly, “Those guys can take you far, but you must be aware, they’re sharks . . . out for a large, quick meal. No more. No less.”
So, almost overnight, Neoforma became a B2B Internet company serving one of the largest industries in the world, healthcare. At least, that’s how it was branded.
It was nice to have our laborious arguments converted into a tagline. Saved a lot of time. A square hole had been created to hold our square peg. Or maybe we had been rounded off a bit.
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