How to launch a platform as an incumbent company

Through a conversation with Sebastian Brenner, CEO of CheMondis, we explored how an incumbent company like Lanxess executed a platform strategy and launched the leading B2B platform in the chemical industry in Europe.


Intro

In our fourth episode of the “Platforms 4 Future” podcast, we had a conversation with Sebastian Brenner, CEO of CheMondis (www.chemondis.com), the leading B2B platform for the chemical industry.

This time, we explored what it takes to launch a platform as an incumbent and traditional company and what are the key requirements to become #1.


Launching a platform in the 3rd biggest market in the world

CheMondis is still a young platform, born in 2018 by the mother company Lanxess – one of the largest players in the chemical industry, but developed and run 100% independent. Since then the platform has grown and is now the leading marketplace in Europe. 

Sebastian explains: “The idea of Chemondis actually was born out of an initiative that was run at the company to identify digital levers for Lanxess for basically their entire operations. And what the guys identified was that it was lacking digital sales channels in this industry, and I think it was actually an interesting idea and I got fascinated immediately right from the start to build something number one of this kind.”

But usually it is not the point to have the idea of a platform and being fascinated by it, but actively launching it. So Sebastian continues, “If you don’t do it, someone else is going to do it for you.” ​Simple, but to the point when we talk to companies it’s very often that they don’t face the challenge of finding the right whitespace, niche or market to launch a platform. It is also not the force from outside, like e.g. Amazon, they say it’s just to get things started being in the driver’s seat.

Or as Sebastian explains: ​ “And I think it’s the smarter and better decision to be actively running, that change and proactively transform the entire industry.”

But this is just the beginning, to establish a marketplace in an industry that starts with the right conception of oneself. 

We are a software company

Incumbent companies know how to build excellent products, but building a marketplace is different. And CheMondis made it clear right at the beginning: ​“We are an independent software company. ​We provide a software for the chemical industry, but we are not a chemical company.​ And this is a different way of working and a different kind of DNA, different processes, different kind of profile of people that you require and need to hire.“, Sebastian continues.

You need the right people on board and most of them come from outside and not from inside the incumbent company. Sourcing and forming the right team is a key part of the success.

Focus, Focus, Focus

After you assembled a great team, it comes to the second most important aspect, Focus. Very often teams tend to dream and act big at the same time. Losing time trying to build the perfect solution or to work on multiple “features” at the same time. CheMondis also went through this learning process as Sebastian outlines: 

“And I think for us, the breakthrough was really to focus and narrow down the scope very much.”

It’s easier said than done and maybe the toughest management task, but it helps accelerating a lot, and helps to gain traction.

Trustful Relationships

As we always said, especially in B2B, trust and establishing trustful relationships are additional critical requirements.

“Trust is of utmost importance, and we decided very early that trust was at the center of what we do.​“​

Sebastian Brenner, CEO CheMondis

When you look at how business is usually done in B2B, it all becomes clear for you. Usually, if a company wants to build-up a relationship with another company, it is going through a supplier qualification process to check the products but also the trustworthiness of the supplier. After that it takes multiple deliveries and a lot of personal care to establish the relationship. 

So, if you as a marketplace show up, it’s the same logic: you have to earn your credits just like the supplier did. And if you can show that you know what it takes to pre-qualify the supply side, and to monitor the quality of delivery, then a first step is done. 

Leadership Advice – Speed and Entrepreneurship

At the end we closed our conversation and asked Sebastian to reveal us his key leadership advice for other platform leaders. And he made it clear that it is not technological expertise or domain knowledge, it is speed and entrepreneurship. Sebastian also said:

“Once you’ve decided to do it, you need to be fast and you need to give the team the necessary freedom and entrepreneur kind of space.”

And we only can underline this: Building a new platform requires focus and speed to leverage the first mover advantage and build momentum. If done with the right entrepreneurial approach you can become number one. 

Thank you Sebastian for the great insights. 

The complete episode can be listed at your favorite podcast provider.