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Boo No More
morn writes: "Boo.com, European 'flagship' e-commerce sportswear store (maker of the distinctive 'geek in sportswear' TV and cinema ads) and largest Internet retail funding ever in Europe has financially collapsed, causing 300 job losses, according to this story by BBC News. The boo.com site is still up, and there are hopes that the firm will be taken over by a more established company. Nevertheless, it begs the asking of this year's favourite question - is this the beginning of the ecommerce bubble bursting?"
The telecom monopoly BT justifies it by making massive profits for its shareholders (profits are in excess of £1m a minute or something ridiculous like that).
The other telecoms operators (UUNet, NTL, etc) decide that it would be real nice to make a similar profit, rather than providing cheap internet access, and so charge similarly.
Matt. Want XML + Apache + Stylesheets? Get AxKit.
when this started to hit.
I have a 144k DSL connection at home, and it was dog-slow even on that. It did have a tool to measure my data rate, and it claimed I had a 53k data rate, which was marginal to check out the "full" version. I went with the "full" version anyway because I was curious to see what it was like.
A clue as to the vast usability problems that were found on the site is that their "tour" was a condescending highlight-and-display of every single menu option on the site. It was slickly done, but too boring for me to sit through.
The actual shopping experience was sluggish, and despite using the high-bandwidth option, the product images were not large or distinctive enough to give me a good sense for what I would have been buying.
This whole thing reminds me of a friend of mine who created a very similar Javascript-laden "remove all control from the user" site. His site, like this one, was just about impossible to navigate. I felt a strong dislike for his approach, and I didn't feel any better about Boo, despite the massive budget.
I can surely shed a tear for the people who worked night and day trying to push this thing together, but as far as I can tell the site was, and still is, fatally flawed.
D
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But it's not like that. Boo was a badly mismanged site -- their launch was delayed by five months due to technical problems, and they spent way too much on marketing (surprise!).
People have forgotten than 90% of Internet companies are supposed to fail; only 1 in 10 business startups of any kind last more than a few years. It's just that a whole load of Internet companies started up at the same time in the big, big boom last year and now the weaker ones are beginning to fail, but there are a lot of them. Investors got this idea that a Dot-Com was a sure investment, guaranteed to make them rich, and that's not true. Business sense, a solid business model and good management matter as much as they ever did. Amazon.Com is run by a businessman, not a geek, and that's usually the case for sucessful technology companies (e.g., um, Microsoft? Bill's more businessman than geek).
Unfortunately, no one will listen and even really good e-commerce ventures are going to have a tough time getting VC in the next twelve months. Eventually, it'll level out and there will be no difference between getting VC for an online business and an offline one (in fact, since all business will be online in some way, there will be no difference at all).
One of the reasons cited in the article for Boo's collapse is `overly
complex websites', that most customers could not read. Some meat to
the `Viewable with any browser' campaign methinks...
Dr Spong is on the money: e-commerce is just mail order in fancy dress. This scored against Boo from the very beginning: they were attempting to sell a product that had never worked in mail order in Europe before. There are plenty of direct sales clothes retailers, but for specialised niches (extra-large, extra-small) or just cheap, but none selling heighth of fashion stuff.
Moreover, Boo attempted to launch as a fully fledged multinational, with 300 staff and offices all over the world. It over-engineered its front-end - whether this drove customers away is an issue i can't answer but it certainly took a chunk out of the $135m startup capital by launching over three months late.
It isn't the end of e-commerce: it's just yet another bad business idea, badly managed, by inexperienced managers, that spent too mcuh too quick. There's a surfeit of these on the Net now, - expect a spectacular crash every few months. But the idea of e-commerce is still sound, it's just the number of jokers getting VC for a used toilet paper B2B exchange that's the problem.
-- need more time?
No, why would it? Just because an online store goes out of business, why would that signify the collapse of all e-commerce? Everytime a furniture store has "going out of business" commercials on TV, does that signify the collapse of normal retail stores? Of course not.
E-commerce (dammit, I hate that word, as well as anything starting with e- or i- besides e-mail) definately has some kinks to work out before it works as well as physical stores, but there's no reason at all why it shouldn't. It's just like a normal store, only the cost of running it is a bit cheaper. No different than mail-order stores, really.
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There will be ups and downs, but the overall internet-retail market will have years of growth ahead of it. It will begin to mature, and that means some of the frontier nature will be gone, but it will certainly continue to be profitable and a growth industry.
I keep trying to explain to people that our economy right now is in "frontier" mode. For examples of what to expect, look to the international expansion of the US economy post-war (both world wars, really); the beginning of the industrial age; the western expansion of the US, etc.
No, I don't think this is the start of the economic bubble bursting. This is a sign of an even more disconcerting issue for us Europeans. For the last couple of years our governments have been telling us the big Internet boom that has swept the states is going to happen over here (just a little later). This unfortunately is not entirely true, one of the great things the internet has done is sweep aside international barriers, you don't need one large book/sport ware/whatever vendor in each region for the internet, you just need one globally. The Internet bomb has not just been delayed in Europe it is not going to happen (to the same degree anyway). The US dominates the internet and change will be slow, factors like the metering of internet calls in most of Europe have slowed the take up speed and pushed us out of the critical window where we could take part in the 'boom' (UnMetered tariffs are appearing now but it is to little to late).
Does anybody else have the impression that there was a slight contradiction in their target audience? What's next: A brick-and-mortar shop that tries to sell wearable computers to jocks?
Say no to software patents.
Boo collapsed because it was an ill-conceived mess. Sure, it had lovely design. Sue, it had all sorts of interface bells and whistles. But it was a godawful e-commerce site.
Its home page didn't show any product or say what it was. It popped up a window that also didn't show any product or say what it was. Instead, it asked what country you were in. This was idiotic, given that the largest pool of visitors were in the US, and doubly idiotic because the US was at the bottom of an alphabetized list of countries. Very egalitarian and politically astute, sure, but idiotic if your goal is to sell, especially given that on average you lose half of all visitors with each click. Why ask the country up front? Why not wait until late in the transaction? And if you have different warehouses for Europe and North America, then advertise two separate sites, stupid!
Once you drilled down to a product through its lovely but tedious Flash menus, you had to return to the store entrance to pick another brand or type of product. In other words, to pick a shirt and then get a pair of jeans, you'd have to click "continue shopping", which would take you to the front of the store again, because menus don't follow you through the drilldown.
And the Flash. Flash is nice. Flash is close enough to universal these days to be justifiable on a commerce site. But Boo's use of complex framesets, multiple windows and multiple Flash elements per screen makes computers with less than 128MB RAM cry.
Multiple windows. Eek! A Boo shopping session is pretty crowded with all the windows it opens on a 1280x1024 display. Windows overlap on 1024x768. At least a third of all web users are running in 800x600 or 640x480. And those on bigger monitors probably have other windows open for other apps anyway. Ouch.
Boo was theoretically right in some of its design decisions. The mix-and-match clothing previewer is a keeper, or will be someday, as are the ideas behind the fabric zoom and 360-degree views. But the way they did it, over the heads and over the hardware reality of potential customers, was pure idiocy. The only serious interface change they made over time was to get rid of the "clippy"-like virtual advisor (also in a separate window). Adn I sort of liked that element.
Is cost. Pure and simple.
To run a large scale web site here costs a fortune. I run a tiny site behind a 64k leased line link, and it costs a fortune for the facilities I have, in comparison to my American business colleagues (*). I can't even begin to think what it must cost to have 2 redundant T1's (actually I can, and the cost is anywhere between frightening to unbearable).
(*) I pay £3600 (+17.5% tax) a year for 64Kb. My manager pays something like $40 a month for 1.5Mb down and 512Kb upstream.
Matt. Want XML + Apache + Stylesheets? Get AxKit.
My wife is the reason boo.com failed. She's got high-limit credit cards, she likes to buy clothes, she's amenable to mail-order and Internet buying, and she's online (professionally and recreationally) for up to 10 hours per day. If she wasn't boo.com's perfect potential customer, who was?
But when I showed Debbie this Slashdot post, she said she'd never heard of boo.com and certainly hadn't ever bought anything from them.
Upon reflection, she thought she *might* have checked out the site briefly when it first launched, but found it unusable (because of all the Java). and didn't think their clothing selection was very exciting or that their prices were anything special, so she forgot about it.
Multiply Debbie by millions of other women online, and it should be obvious why the company failed.
- Robin
I work for a company that's designing e-commerce sites and we were in the middle of coming up with design concepts when boo.com launched with The Buzz... everyone knew about it from industry press, etc. They had a great PR department and were well-funded, which is what made them "high-profile", _not_ favorable reactions from an adoring public. The site was overly tech-y, complex, and probably crashed half the browsers that visited it. There is a Golden Rule of web design (or any design, for that matter): Above All, Do No Harm. In the design of e-commerce, this can be refined as Don't Ever Get In The Way Of People Who Want To Spend Their Money On Your Site.
Boo.com eventually redesigned, but by the time Boo Mk.2 launched, I no longer heard The Buzz. My suspicion is that, flush with his/her buzz-generating success after launch, the PR person in charge at the beginning jumped ship for greener pastures, while the techs and a dwindling design staff, morale shaken by user criticism, scrambled to use ever-diminishing capital to make the site usuable on the second go-round. Just a guess.
Is the fall of boo.com a harbinger of the collapse of e-commerce? No more than RedHat stock's return to non-stratospheric levels invalidates Linux as a viable platform. Although I do think it's a harbinger of the inevitable return to earth of many overfunded companies flush with bright-eyed twenty-one-year-olds who think that being on the cutting edge guarantees their success and liberates them from such mundanities as user testing and developing a weatherproof business plan. Their ilk are numerous and we'll all be better off (and a bit wiser) without them.
"Luck is the residue of design" --Branch Rickey
The economic rules are slightly different for dotcoms. Most of the cash they burn goes on advertising, the actual costs of doing business (altho' I haven't done any quant to confirm this) for boo.com would be much lower than, say, Nike Town. Once a dotcom gets funded, it could probably hang on for 6 months just by lying low.
If boo.com had worked out that marketing and advertising aren't the same thing, they'd probably have been a lot more successful. Consider a demographic who are constantly online with high powered equipment and plenty of bandwidth, have disposable income, and like to wear designer sportswear: the "new media" community, of course. Instead of the "viral" effect boo might of hoped for, the people who could have been their biggest market spent most of their time laughing at the site's ludicrous over-design - and everyone else couldn't get into the site at all!
just take a glance at the top 50 traffic sites or the top 20 in e-sales and see how many of these hip designs are on the list...
It's not funny till someone gets hurt.
But, initially at least, a large proportion of its potential market was unable to access Boo's site because the website design was too advanced for most computers.
I wonder what they meant by that? I went to the site before it got /.ed and it seemed fairly ordinary to me. Malmsten and Hedelin did a good job with the mechanics of the site from what I can tell, but it sure looks like their rent-an-exec management staff made some very poor choices such as betting the farm on the value of board member relationships as the vehicle for capital, rather than raising capital by not overselling the value of the site/product.
More race stuff in one place,
than any one place on the net.
I think it's a bit over the top to say that because one web site goes under, then the e-commerce bubble is about to burst.
That would be the same as saying that just because the shop around the corner is shutting, then retail is going to be abandoned, and we will all return to self sufficiency.
Also, if you look at Boo, and what they did, it's not much of a surprise that they went under. First of all they only targetted themselves at IE4 and NS4 or higher users, and for a long time the Mac was passed over completely.
Also, most people complained about the non-intuitive nature of the interface, and the aparrent difficulty in actually getting to the checkout (not to mention the speed, and MS office paper-clip inspired shop assistants).
So really, it's not that much of a surprise. As one news report put it, it shows that you should never put style over substance.
Find funky gifts
IIRC, the original boo.com site was overblown with too many images, JavaScript, probably Flash and lots of other junk. Nobody could use the site and within a few weeks they had to redo it as something simpler.
Now the company has gone bankrupt. Could this be related to customers being driven away by their early, over-flashy Website?
The tale of boo.com might be a useful weapon when trying to persuade your customers that JavaScript rollovers, MIDI files and Flash are not the last word in sophisticated Web design.
-- Ed Avis ed@membled.com
Unbelievably, Boo managed to piss £80m up the wall. Despite having this massive arsenal, they seroiusly f**ked up the technology side, with a site most people couldn't use, and it sucked for those that did.
It just goes to show the poor light that a lot of ecommerce entreprenures see technology in. They are quite happy to waste tens of millions on stupid marketing campaigns, but cannot be bothered to invest time and money to make sure their web sites work!
Whats the betting that their technology people told them that their 'high tech' web site ideas wouldn't work in practice, and where roundly ingnored by the management who wouldn't know one end of a computer from the another.
Still, this is the END of the bubble for companies like this. No one is getting that kind of money unless they seriously know what they are doing, including the technology aspect
I'd just like to point out that, though I did indeed pose that question, I didn't mean it as "Is this the end for ecommerce" or anything so dramatic - I meant "Are people finaly realising that a company has to make a profit to succeed?"
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...or am I missing something?
The reason this has such lasting ramifications is because very few of these sites make a profit. As a result they rely on venture capital to keep going. A major player such as boo (their brand recognition in Europe was excellent) collasping is bound to scare of investors.
This could hurt alot of startups. Somehow boo went through $135m in one year. For more details check out ft.com they have a very good article on it.
"Do you think we could wipe out world hunger forever if scientists figured out how to make AOL's Free CD's edible?"-