June 1 , 2002
Internet Mavericks: Still Working Out of the Garage?
project coming up in six months, how do I get space on your production line so that I know I am going to get a timely delivery and better pricing six months from now?"
That is the kind of phone call we want to have surrounding the exchange.
How are you dealing with antitrust law?
Our exchange is open and based on the size of the anticipated founder group, which will probably be two to three times the size it is right now, and the number of energy companies that will come on board as members. We do not believe, and our council does not believe, that we will have any issues with antitrust surrounding safe-harbor rules.
How we treat suppliers is going to send an important message. What we don't intend to do is go out and do a competitive bid, pick a company, and only deal with Supplier A for widgets. Our intent is to have a marketplace where we have a number of widget suppliers. We want the competition and if we settle on one and don't sign up any other widget suppliers, that one is going to end up with an advantage. Even if they are low-bid this year, eventually if they are the only one that you can buy from on our exchange the price will come up and they no longer will be the low bid in the marketplace.
Our strategy for aggregating is where it merits consideration we will. We may do it among a small handful of buyers with no antitrust issues affecting us. We will have a preferred supplier out there or two if the market is big enough but we would want to have some alternative suppliers out there who this year did not win the bid but next year might.
When will you be online?
It is being built now and it will be available later in the fourth quarter.
What is the overall cost of the exchange?
That number we have not gone public with.
Will your exchange trade as a public company?
This business may go IPO [initial public offering]. That is always a possibility. We are focused on building a good business that provides a good return to the founders and provides good values to the users.
How will you make your money?
The money will be made through transaction fees and through fees for value-added services such as auctions and catalog content, and such things as collaborative design features and settlement. It is possible that we could have a financial package as part of this exchange, where we help people who are buying and selling to settle up their charges between them. The ultimate solution may be that Enporion pays the bill and a buyer gets invoiced once a month, instead of getting 5,000 invoices during the month for various suppliers.
What happens to Enporion if utilities are re-regulated?
I believe even if they were regulated that marketplaces would remain the way to do business. The marketplace can drive out six to nine percent of your costs