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.
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.
No comments:
Post a Comment