BuyHive: A Digital Platform for the Transformation of Global Sourcing

The case focuses on key decisions facing startup venture BuyHive, which is on the cusp of disintermediating the sourcing business with a new business model. Core issues include (1) identifying the pros and cons of raising capital from strategic investors who can open doors to large pools of small and medium scale enterprises (SMEs) that can be attracted to the platform versus financial investors who typically only bring in the capital, (2) how to monetize the data the company can access from platform users, and (3) how to address some of the issues central to platforms, such as platform disintermediation, network switching, bridging, and multi-homing. The founders must specifically consider ways they can increase scale and stickiness with respect to both platform users and sourcing specialists. The platform was an outcome of radically rethinking the way value was being delivered to buyers seeking to identify manufacturers who could supply to the specifications that the buyers had developed. Giant global sourcing companies and platforms such as Alibaba, Made-in-China, and Global Sources, among others, had typically focused on creating value for the suppliers (manufacturers and their representatives or intermediaries). BuyHive seeks to make buyers the core focus and create a buyer-centric platform. The company must identify the right type of investors, engineer the platform to create greater buyer value, improve stickiness of the platform, and adopt AI-based algorithms in bringing sourcing experts on board.