The importance of Naming: Enterprise Gateway Marketplace
Does something exist if it doesn’t have a name? There is evidence that without a name, you will have a hard time identifying something as unique or separate from other entities. Take for example, the color blue. Across many ancient societies, the last color to appear in their language was blue. According to research done with the Himba tribe by psychologist, Jules Davidoff, if research participants didn’t have the word for the color blue, it was significantly harder for them to distinguish it from other colors. Fast forward to modern-day market-places and identifying what distinguishes them still applies. That’s why it is so important to name new ideas: to help recognize and understand differences and benefits to new programs, software, services, etc. Enterprise Gateway Marketplaces (EGMs) are a perfect example of this concept. What is it? What makes it different from other marketplaces?
According to James Currier of NfX, EGMs are, “a variant on the traditional 2-sided marketplace model. They are marketplaces tailored to help big enterprises (2,000+ employees) on the demand side coordinate with 1,000s of outside vendors on the supply side. EGM’s answer the question, how can large, bureaucratic corporations add marketplace efficiencies?” There are a variety of marketplaces and this trend is still just emerging so differentiating variants will be increasingly important.
Differences between EGMs and typical marketplaces
The main difference between EGMs and typical marketplaces relates to the size of transactions. Typical marketplaces connect buyers and sellers directly acting as a platform (think Amazon). But as the size of purchasing transactions grows, logistical obstacles make selling unrealistic for small business owners. The most obvious example of an obstacle related to terms and conditions is payment terms. Large corporations have heavy systems in place that ensure compliance across a wide range of entities including legal, HR, etc. This creates stability but increases time to payment. Obviously, many small business owners cannot afford to receive payment on a delayed timeline and therefore forgo access to these large sales. EGMs handle the slew of logistical and compliance issues on both sides while accruing data to streamline the process to benefit both buyers and sellers.
Benefits for Small Businesses
Obviously, the list of benefits is extensive, but the main benefit that EGMs provide to small businesses is access to large purchasers. Doing business with large and well-established corporations comes with a long list of demands via terms and conditions that, alone, small businesses are often not equipped to handle. With the help of EGMs, small businesses have access to purchasing power and enterprise pent-up demand for purpose-driven purchasing.
Benefit for Large Corporations
The same things that make large corporations desirable can often hold them back. Innovation and change-making are difficult to implement in a timely manner in a large bureaucracy. Access to smaller companies who are more nimble can provide large corporations access to new innovations that would otherwise be next to impossible for them to bring to market. For example, if a large consumer business wanted to move from plastic to more sustainable packaging of their products, it would be much faster to test the idea with a small, sustainability-focused supplier than to try to implement it within their own operations.
As the world becomes more aware and concerned with environmental, social, and governance issues, more and more consumers are demanding business in alignment with the values-driven business. Identifying, utilizing, and naming new structures that provide significant and unique value to businesses large and small will be increasingly important.
“It’s our prediction that large corporations will adopt the gig-economy and freelancer network-style operational approach adopted by SMBs over the last 8 years. EGMs are how large corporations will implement this shift.” — James Currier, at NfX
At 17 Ways, we’re building an enterprise gateway marketplace that centers values-driven companies. Through our marketplace, you can choose from a long list of certifications and classifications that apply to your work making it easier for interested purchasers to find you. In addition to certifications such as woman and minority-owned, regenerative organic, veteran-owned, and B-corp, our marketplace allows you to signify which of the UN’s 17 Sustainable Development Goals your company is aligned with.
To learn more or get started, head over to www.17ways.co and look around.
Interest in learning more?
- More about the importance of naming blue here.
- NfX’s full article on EGMs here.
- Have questions? Reach out on LinkedIn.
