Niche Markets Might Be the Best Bet for B2B Entrepreneurs

Attention all would-be B2B moguls. The doors to business-to-business e-commerce are closing. So said Jeff Leane, co-founder of Chemdex Corp., a pioneer in the virtual marketplace.

As the big auto makers, health-care companies and paper producers form online marketplaces in their industries, fewer opportunities are left for such entrepreneurs as Leane in those businesses.

“The gorillas are waking up,” said Leane, speaking at an e-commerce forum at Caltech recently. “A lot of doors are already closed.”

Leane, whose publicly traded company runs an online market for the life sciences industry, said entrepreneurs should look for niche markets with few dominant players. Or, he said, entrepreneurial companies should strike deals with the gorillas, as his firm did with Tenet Healthcare to sell hospital supplies online.

“There are opportunities in specialty markets,” he said. “Go where the gorillas aren’t.”

Leane, a former technology consultant, co-founded Palo Alto-based Chemdex in 1997. It has a market value of $3.5 billion.