Building an American E-commerce Company that Now Sells into China: Peter Mann, CEO of Oransi (Part 3)

Sramana Mitra: What happened after Dell?

Peter Mann: When I was at Dell, I learned pretty quickly that the culture wasn’t what I was expecting. At the same time, the Internet bubble burst. Dell started going through round after round of layoffs. The morale was low. It was a difficult environment from a cultural perspective. I was confident that I wasn’t going to lose my job but at the same time, no one really knew what was going to happen.

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Building an American E-commerce Company that Now Sells into China: Peter Mann, CEO of Oransi (Part 2)

Peter Mann: Shortly after that, the Gulf War began and so we were sent over the Red Sea for about six months. That was a changing event for me. I got married a year out of college. We got married very young. I missed the last six months of the pregnancy and I missed the birth. I didn’t actually find out he was born until a day or two after because we didn’t have Internet.

Sramana Mitra: What year are we talking of when you got back from the Gulf War?

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Building an American E-commerce Company that Now Sells into China: Peter Mann, CEO of Oransi (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Peter Mann started Oransi as a B-to-C e-commerce company. Today, 40% of his $10M revenue comes from China. This is the kind of company America hopes to see more of – selling American products to international consumers.

Sramana Mitra: Peter, let’s start with your background. Where were you born and raised? What kind of background leads up to your entrepreneur story?

Peter Mann: I was born in Syracuse, New York. I lived in the same house till I was 18 and went off to college. My father was a mechanical engineer. He was a manager at General Electric. He comes from a time when people worked 40 years in a company and then get their retirement package. He was also a professor of Mechanical Engineering at Syracuse University. We were heavily involved with the university. I grew up around a university atmosphere during my childhood.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 7)

Ed Cross: When I was at Pricewaterhouse, I was heavily involved in the area of procurement project consultancy. Exchanges were much heralded and I was very supportive of them but the more I got into them, I observed that they didn’t take off. A lot of them lost ground, went bankrupt, or disappeared. There’s an easier route to buying stuff but I’m not convinced that for many organizations, they’re able to provide the most competitive prices, the appropriate quality, and service standards for the customer against what they could do for themselves.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 6)

Sramana Mitra: There are some very special exchange offerings in the automotive industry and several other spaces. There are very successful vertical exchanges operating right now doing billions of dollars in transactions.

Ed Cross: Probably from the European end, but I see very little activity. It may well be the case that they’re successful in the US, but I don’t necessarily see them amongst my customer base and in my network of procurement professionals. I don’t necessarily see much evidence of them operating anywhere else in the world other than in certain industry sectors.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 5)

Sramana Mitra: I have followed those phases. There is Starbucks doing contract life-cycle management. Then, we have had pretty sizable companies being built in the procurement management systems base like E-vines that now sits inside SAP and several other vertical-focused offerings on procurement exchanges. How do you see that trend evolving?

Ed Cross: I wouldn’t want to specifically comment negatively about a competitor in the marketplace. However, you have to look at the technology that Ariba and SAP supply and think in terms of whether it covers all the procurement set of activities. Frankly, it doesn’t. Ariba carved out a very fine niche for themselves in certain areas of the procurement life-cycle, but they are not doing all of it and neither are SAP. That’s why there’s a proliferation of organizations in the marketplace offering single-solutions for single areas of procurement activity.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 4)

Sramana Mitra: It’s stuff like office supplies that you are outsourcing. It’s more of a cost consideration. Whereas, a more strategic procurement issue would be dealing with parts and technology, and that’s where it becomes more complicated.

Ed Cross: Let me be more direct. To outsource indirect stationery, for example, can be a fairly simple decision, but not to outsource direct materials. If you are an automotive manufacturer, to outsource the procurement activities associated with buying automotive parts that go into vehicles is a bigger decision.

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Outsourcing: Ed Cross, Executive Director – Procurement & HRO at Xchanging (Part 3)

Sramana Mitra: What do you think is driving that trend? Why is procurement outsourcing growing?

Ed Cross: A couple of things. One is that businesses need to save money. Though the global economy is starting to come out of recession, there was a level of retrenching that went on when economic conditions were difficult for businesses. Procurement is a relatively straightforward area to save money. For the CFO or the CEO, procurement outsourcing is starting to enter the mainstream and being seen as a viable approach to saving money, particularly if it’s outcome-based. We tend to charge our customers from the savings that we achieve. It’s a fairly straightforward decision for the CFO to engage somebody like ourselves.

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