When Shep Hickey was on the buy side of the steel business, the biggest frustration he had was busyness.
“When I was a purchaser, my thought was it’s a real pain to buy something today I just bought yesterday and now it’s out of stock and I must pay five times as much. My first idea was like, let’s make this easier!”
He started Bryzos, a full-stack market network that addresses traditional supply chain and financial inefficiencies, to assuage the pain. He shared his perspective with PYMNTS’ Karen Webster in a Fireside Chat during the recent Freightwaves Supply Chain meets FinTech Virtual Conference.
The Business of Busyness
Hickey recounted a day in his life as a buyer a decade ago. If you were buying the same thing day in and day out because of inventory composition volatility, you had to go back out and do it again. It was just repetitive.
He compared the process to the purchasing of travel before platforms like Travelocity digitized the industry.
He observed that as a business owner, the process is an underutilization of talent, in effect a cost. Businesses hire smart people to make smart decisions, not to spend a lot of time and energy just collecting data, but rather use the data to exercise their expertise.
So, his initial thought in starting Bryzos was to skip the busyness and replace it with the efficiency of knowing what supply exists in real time.
That has become the value proposition the company uses to sell steel online for industrial uses.
“The incentive is that you’re being arguably more efficient with your time,” he said. “You’re getting better options and doing a better job controlling your costs. That would be an incentive to do it. That purchase literally goes to the bottom line of your business.”
Behind the Scenes
According to Hickey, what goes on behind the scenes is all about the flow of information and payment between those two parties.
“It wasn’t as simple as you throw a Craigslist [together], which is great, but for industrial products, it’s just not that straightforward,” he said.
Hickey noted that you must first decide what kind of marketplace you’re going to be — a facilitating marketplace where you have all the support needed to make sure the transaction is successful, or a straight brokerage marketplace in which the buyer and seller may not ever know each other.
According to Hickey, finding data for buyers to make decisions was the easy part. To develop software that addresses all the other issues, first you must decide whether to create a digital analog of the status quo, or something completely novel.
In the event, he started in the middle of the range — maintaining fundamentals from the offline purchasing world but using digitization to reengineer aspects of the process.
The first BNPL in Steel
Having begun with the simple goal of simplification, Hickey soon found that there were many other layers involved, financing first and foremost among them.
“We might have had the first BNPL, meaning that we solved this a long time ago, had it up and running to where a buyer could buy on terms and the seller had 100% confidence that they were going to get paid,” he said.
Every innovation disrupts something. In the case of Bryzos, according to Hickey, it was something no one misses: general distrust.
“Purchasing is maybe 25% based on price,” he said.
The rest depends on trust in other aspects of the transaction such as quality and timely delivery. Bryzos is an example of a marketplace that engenders the trust among vetted buyers and sellers to remove friction from commerce.
PARTNER WITH PYMNTS