Way2Bid cuts staff, repositions for anticipated market upswing

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Many Internet-related and dot-com businesses have found it difficult to stay afloat in the rough economic seas the United States has been experiencing. Springfield-based Way2Bid Inc., 3343 E. Montclair, is no different.|ret||ret||tab|

In mid-February, the Internet-procurement company for governments and schools decreased its number of employees aboard from 35 to 23, according to Bill Perkin, chief executive officer of Way2Bid.|ret||ret||tab|

Perkin said the company's method of procurement which is designed to cut down on paperwork and save time and money isn't being utilized as quickly as the company had hoped.|ret||ret||tab|

"It's very different with clientele all in the public sector. The adoption rate has been slower than anticipated. There is a need for the product and customers recognize it and are moving toward it. But it's a slower adoption and implementation rate. The stock market and the Sept. 11th disaster didn't speed anything up," Perkin said. |ret||ret||tab|

He added that Way2Bid had hired a number of talented people to serve an ex-pected increase of clients, but "because of the speed the market is moving at, we had to do what we needed to position ourselves for when the market comes around. We had to make sure we had cash left to get us there.|ret||ret||tab|

"Two years ago we had competitors coming out of everywhere. A bunch went out of business because they tried to build too fast. We've been fortunate that we didn't use all of our cash at the be-ginning and have been able to wait for the market to develop," Perkin added.|ret||ret||tab|

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Company origins|ret||ret||tab|

The Way2Bid idea began in 1995 when Darren Henderson, Joe Herman and Erick Burgess decided to take ad-vantage of the Internet to streamline the massive amount of paperwork necessary for bidding and purchasing in the public sector. Way2Bid was incorporated in 1996 under its parent company Eclectic En-terprises, Inc.|ret||ret||tab|

The company's clients are "scattered coast-to-coast. Probably the majority are in the central part of the nation but we have some in Washington and some on the East Coast," Perkin said.|ret||ret||tab|

Also, Perkin noted, the company has been endorsed by the Association of Ed-ucation Service Agencies, with more than 500 members across the country that are buying co-ops for school systems, and by the American Association of School Administrators, which has 14,000 members.|ret||ret||tab|

"We have about 11 educational co-ops which are buying groups that now have an online purchasing site that's up and running and successful. We have implemented everything from the Missouri School Board Association to a Nebraska co-op. We have 10 up and running and another five to go," Perkin said. "We have a technology that is actually being used today. That's what separates us from our competitors."|ret||ret||tab|

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Employee adjustments|ret||ret||tab|

With the layoffs, Way2Bid should have enough funds on hand to keep the company running through mid-2003, Perkin said, adding, "We ex-pect revenues to be up this year. By mid-2003, we should be profitable. That's the plan. We're better po-sitioned right now to do that than we were."|ret||ret||tab|

He also pointed out that the privately held company has no debt position to worry about because it has the financial support of several investors. |ret||ret||tab|

The new 2002 board of directors in-cludes possible funding sources with venture capitalists Kevin Compton, partner in Kleiner, Perkins, Caufield and By-ers of Menlo Park, Calif.; Bob Gold, president and CEO of Ridgewood Cap-ital of Ridgewood, N.J.; and Tim Dan-iels, head of the K-12 segment, Sylvan Ventures, in Baltimore.|ret||ret||tab|

"Kevin Compton put in $15 million. The other two were venture investors in the competitor, Kawama out of Los An-geles, which we bought last year. They moved over to our board," Perkin said. "It's really nice for us to have three different venture firms sitting on our board. We have a lot of access when we need future cash."|ret||ret||tab|

In addition to Perkin, the company's other board members are Troy A. Comp-ton, management consultant; Theodore W. Tabor, retired Springfield Public Schools administrator; and Way2Bid co-founder Erick Burgess, who serves as the company's director of technology.|ret||ret||tab|

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The future|ret||ret||tab|

But Perkin said Way2Bid isn't exactly coasting along; company officials are taking action to place the company in an even better position.|ret||ret||tab|

"We are looking at acquiring another company that has contracts and revenues going with stock, not cash out. This competition has some good contracts in state business. The company that owns them is a public company and has invested about $40 million in that company," Perkin said.|ret||ret||tab|

"Pretty promising" is how Perkin de-scribed Way2Bid's future. "We've positioned ourselves to be around," Perkin said. |ret||ret||tab|

He also credits the survival of the company with being based in the Midwest with the ethics and values of the people. Perkin said, "Being more conservative has made us a survivor."[[In-content Ad]]