Size does matter when it comes to setting up industry-specific electronic exchanges. Exchanges being formed by consortia of a few market leaders have made headlines in the last year as the likely winners in a race to put a healthy slice of the economy online.
But a class of exchanges founded by smaller startups is proving that, in the short term at least, bigger is not necessarily better. Smaller companies claim they are more entrepreneurial than older behemoths because they are not encumbered by layers of bureaucracy, existing business processes and mountains of legacy technology that need to be patched into newer Web-based trading systems. So far, exchanges announced by industry leaders have done little to counter that charge.
Companies such as CyberCrop.com , an online grain exchange, are already on their second generation of software while rivals like Rooster.com, an agricultural exchange formed by industry giants Cargill , Cenex Harvest States Cooperatives and DuPont, have yet to get their online trading floors in operation.
"The real innovators, the people that are innovating on a daily basis, are giving it a shot," said Scott Deeter, CEO of CyberCrop, of Fort Collins, Colo.
