Besides the technical issues associated with syncing up computer systems, B2B integration, if done properly, hinges on rethinking global supply chain practices and instituting massive change not far from the scale of upheaval associated with the 1980s reengineering fad. Getting companies to cast a critical eye at their existing processes and interaction with their supply chain—not to mention, to be willing to make modifications—is where most of the suffering will lie. "To get us to nirvana, the early adopters and mainstream adopters are doing the work that’s required over the next couple of years," Harwick says. "They’re bearing the pain but will reap the benefits of being early movers."

First Come, First Served

E-Steel is clearly positioning itself as one of those integration pioneers. Yet while Levin says the idea of linking the exchange to a steel company’s back-end systems was always part of the e-Steel big picture, it was not the focal point when the site was conceived in early 1998 or at the time of its inaugural transaction on Sept. 7, 1999. That’s when Worthington Steel Co. purchased several truckloads of prime hot-rolled coils from Cargill Ferrous International.

At the start, the thinking was to create a networked, global marketplace that would alleviate some of the inefficiencies in the steel industry, which was struggling with low margins and cumbersome, paper-based processes. It had been Levin’s goal for years, having started in steel at his stepfather’s company, Titan Industrial Corp., after graduating from Harvard Business School in 1974. Although no one expected him to stay in the business for any length of time, Levin saw promise in what many viewed as a stodgy, unprofitable industry. He became addicted to the global marketplace that sent him to exotic locales like Turkey and India, so much so that he eventually ended up buying Titan from his stepfather and logging over 25 years in the business. "Steel mills are the fundamental building blocks of our economy," he explains. "Steel is on a scale where everything is big. It’s everyone’s notion of what industrial power is all about."

Levin’s obsession first resulted, during the early 1990s, in something he called Steelnet, a global network where participants could communicate and transact business using satellite communications. While the idea for Steelnet stuck, the company never materialized since satellites were not robust enough at the time to deliver the real-time information required for Levin’s vision. When the Internet took off years later, Levin revisited the concept. This time, he put up about $1 million of his own money in initial seed capital and brought on financial and marketing gurus to help make refinements to what he was now calling e-Steel. They got funding in 1999 from the cream of the venture capital community, including Kleiner Perkins Caufield & Byers, Bessemer Venture Partners and Greylock, and the race to B2B e-commerce was on. "This was not greed-driven," Levin says. "In my mind, this was a culmination of a career in steel and a way to make a difference in the industry."