Throwback To 5 biggest dot-com failures

With the successful IPO of LinkedIn, and all the social media frothiness that is sure to follow, here is a look back at the 5 biggest dot-com failures of the turn of the century:

1.  Webvan (1999-2001)
Business Idea: Online grocery delivery business.
Key Mistake: Grew too big, too fast, in the wrong industry. The initial idea was seriously flawed, but may not actually have been as bad as one might initially think. The company’s real mistake was using all the capital raised from its much hyped IPO to start building out a huge warehouse infrastructure (initially planned for 26 cities), long before it had a sizable customer base.

2.  Pets.com (1998-2000)
Business Idea: Online pet supply store.
Key Mistake: Pets.com more than any other company symbolized the silliness of the entire dot-com era. The idea was horrible to begin with (who buys pet food on the internet), with a seriously dysfunctional business model (they lost money on every single order they took), and then spent $11.8 million on advertising (against 1999 revenues of $619,000). But no matter how big the disaster ended up being, one thing is for sure, the sock puppet was pure genius!

3.  Flooz.com (1998-2001)
Business Idea: Internet currency company. (This was seriously shaky from the get-go!)
Key Mistake: Trying to create an internet currency... and perhaps having Whoopi Goldberg as your spokesperson.

4.  eToys.com (1997-2001)
Business Idea: Online toy store.
Key Mistake: This is one of the few dot-com era companies that went through the boom-bust cycle and found new life post-bankruptcy. The company actually had a pretty solid idea, though far from original, however it collapsed for pretty the same reasons as everybody else. Too much money spent on advertising, technology and a bunch of other hype-type activities, while too little revenue was getting generated on the other end.

5.  Boo.com (1998-2000)
Business Idea: Online fashion retail store.
Key Mistake: Another company that actually had a pretty solid idea, as a whole host of internet retailers have proven since then (see Bluefly.com). This British company was sabotaged more by inept managers who spent most of their time expanding globally and dealing with language barriers, pricing issues and various tax legalities, while at the same time agreeing to pay postage on all returned items.

US Hits Debt Ceiling - 3 Things That Could Happen

The US Government finally hit the debt ceiling everybody in Washington seemed to have been waiting for. Though this doesn’t spell disaster in the immediate future, it does spell opportunity for all those in Congress who can’t wait to get on their high horses and provide endless solution-less lectures on the nation’s credit card addiction. I suspect that after a little political posturing everybody will eventually get in line and raise the debt ceiling for one simple reason, we have no choice!

I was however still interested in what the various possible outcomes are, so I dug around a little and this is what I found:

1. The government selectively pays some of its bills. Congress basically has until August 2nd to raise the debt ceiling, or else it would force the Obama administration to choose between paying the nation’s creditors, or paying for the 2 wars we’re currently in, Social Security, Medicare and all other household bills.

2. Reduce spending drastically. Rebulicans want any debt ceiling increase directly linked to cuts in government spending of at least equal measure. The real kicker here is that they have ruled out any significant cuts in defense spending, or an increase in government revenue (i.e.) raising taxes.

3. U.S. defaults. Though unlikely, its entirely possible that everybody commits to a crazy game of chicken, and both the Obama administration and Congress fail to increase the debt ceiling, forcing a national default.

My only hope is that amidst all the hoopla going around, a serious look is taken at how to responsibly manage a government over the long haul that has very real obligations to its citizens, worldwide partners, and its future unborn generations.

Thoughts on World’s Most Valuable Brands

Today I read a list of the world’s most valuable brand’s published by a consulting company called Brand Finance (I guess there really are consultants for just about everything). Basically its a ranking of the 500 largest companies in the world sorted by an estimation of their brand’s value. The core of their methodology uses a modified discounted cash flow technique to arrive at an estimated figure of royalty revenue generated by every brand. A little guesswork is definitely employed, but the logic seems reasonable enough given they’re trying to measure the somewhat unmeasurable.

Well, after perusing through the list here some of the thoughts I had:

• Apple overtakes Google for first time in 4 years. My last blog post talked about the fascinating rivalry that’s developed between these two companies. I’m certainly not surprised that Apple is more valuable than Google. In fact, I’m left questioning why Google was ever ahead of Apple to begin with? Its difficult to imagine how in terms of revenue, public awareness, customer loyalty or any other reasonable branding measure I can think of, Google would ever rank ahead of Apple.

• Google more valuable than McDonald’s or Coca-Cola? Not sure I buy this one. I very well could be the last person on earth who still believes in the power of old school brand’s, but I really can’t see how Google is more valuable than either McDonald’s or Coca-Cola... Do you think people in Zambia have ever heard of Google? Cause I’m pretty sure people living under rocks have heard of Coca-Cola.

• China Mobile more valuable than Verizon? No way. I’m pretty sure I would not be alone in calling shenanigans for this call. I understand that China have way more people than the western world, and I understand that everybody seems to assume they will all one day magically buy everything under the sun. But even when looking through rose colored glasses, I am pretty sure that Verizon is a more valuable brand than China Mobile.

• Blackberry is more valuable than Disney... Nonsense!

• Top 10 brand’s look just about right. With the exception of Google in the 2nd spot, and China Mobile in the 9th spot, I would say they otherwise have the top 10 list right about where I would expect them to be.