April 12, 2017
A burly, menacing-looking man channeling rage tears through a thick paper catalog. Another fellow—fierce with frustration—blowtorches a second massive catalog. These are the images on 3BG Supply Co.’s homepage that illustrate the startup’s mission: to (figuratively) burn, shred or otherwise obliterate massive paper catalogs by creating an easy-to-use, centralized, online database of industrial MRO (maintenance repair and operations) products. Recently buoyed by $600,000 in seed funding, the “technology-enabled distributor” is harnessing the rage caused by catalogs to build “a better way.”
3BG is an acronym for “Three Bald Guys,” a nod to the company’s visionaries: two co-founders and their first key hire. Despite the balding reference, 3BG’s tech-savvy founders created the company in 2010 before either had turned 30 years old.
3BG co-founder and President Shane Araujo’s business idea was born in a catalog room—indeed, square footage is dedicated to housing the piles of massive paper catalogs that must be sifted through to order common replacement parts for machinery: things like bearings, sprockets, electric motors and conveyor belt systems.
“It’s pretty difficult to purchase these things efficiently, due to the decentralization of product data,” says 3BG Chief Executive Officer Alex Smith. “There really is no industry standard for finding information on every product in this space in any particular category, or if you’re looking for any specific manufacturer within those product categories.”
The Fort Wayne-based startup has set out to create what it calls “the industry’s most comprehensive interchange” database for industrial MRO products. 3BG coined the term “interchange” based on the reality that many of these parts are interchangeable.
“You can have two bearings or sprockets that, based on specs, are exactly the same. They’re just made by different manufacturers,” says Smith. “Those are actually interchange products for each other; you could purchase one or the other and put them on as a replacement.”
Traditionally, that would involve thumbing through catalogs from each manufacturer, but 3BG has created an “Amazon-like, one-click” shopping tool for industrial MRO products.
“On Amazon, you can filter and see all of the options for a phone case that fits a Samsung Galaxy Note 7, in the color red,” says Smith. “We’re on a mission to create that same ease-of-use in the dirty, old, dusty space of industrial products.”
For example, a purchasing manager can search electric motors, filtering by a specific RPM, mounting style, voltage, price and manufacturer—among other factors. The startup collects and organizes the mind-blowing amount of data from “what we consider to be the most reliable source: the [manufacturers’] PDF and paper catalogs,” says Smith.
“We use data extraction software to do in hours or days what whole data extraction teams might take weeks or months to do,” says Smith. “Then, we use industry experts paired with developers to identify which specs are interchangeable or important.”
While 3BG calls itself a distribution company, it carries no inventory. And unlike Amazon, which charges distributors to sell their products on its website, 3BG buys and sells the products.
“The difference is, within our distribution model, we don’t physically touch the products; we’ve convinced over 300 suppliers to ship the products factory-direct,” says Smith. “Customers purchase from us…our suppliers ship the product from their warehouse to the customer…and we make money on the margin.”
In February, the company announced $600,000 in seed financing, including an investment from Elevate Ventures’ Indiana Angel Network Fund. With more than 1,200 customers and $1.2 million in annual revenue, the startup says a key focus will be growing and enhancing the online shopping experience at 3BGsupply.com.
“We’ve spent many years talking internally about the vision and incrementally building pieces of this business, but when you add a significant amount of cash through raising venture capital, you actually get to materialize that vision,” says Smith. “We’re excited about the momentum the capital has unlocked for this business.”
Meaning a bigger blowtorch may be in order as 3BG aims to annihilate even more paper catalogs.