Slashdot Mirror
A Look Back At Ten Dot-Com Flops
climbing_monkey writes "CNET.com has posted what, in their opinion, are the top 10 dot-com flops." From the article: "The most astounding thing about the dot-com boom was the obscene amount of money that was spent. Zealous venture capitalists fell over themselves to invest millions in Internet start-ups; dot-coms blew millions on spectacular marketing campaigns; new college graduates became instant millionaires (albeit on paper) and rushed out to spend it; and companies with unproven business models executed massive IPOs with sky-high stock prices. Of course, we all know what eventually happened to this world. Few of these companies actually made enough money to recoup that cash, and when their investors fled to the hills, these start-ups died dramatic deaths. These are the celebrity victims of the new-economy bust."
As those who saw the 2000 Super Bowl (I believe that was the one) can attest, much of this money was indeed spent on marketing. At the time, this made sense: let's establish ourselves with high profile commercials, designed to reach a huge audience.
But that didn't work. If only these companies knew then what we know now: these internet services don't need to be marketed to the masses. They only need to be marketed to a select few. Take websites and software like MySpace (please!), CDBaby, Delicious Library, and even Google: these are just a handful of current web success stories that are profitable, and they've never used television advertising. The goal isn't to reach everyone; the goal is to reach early adopters who will use and actually benefit from your product. The masses will come along...eventually.
concrete5: a cms made for marketing, but strong enough for geeks.
"If only these companies knew then what we know now: these internet services don't need to be marketed to the masses."
You hit the nail on the head. The level of misunderstanding at the time was immense. I vividly remember one keynote address at the 1999 World Wide Web Conference in Toronto, given by Bob Metcalfe.
Bob had this nice tight little riff he'd made up, wherein he announced that in order to thrive on the web, a company had to eyeballize, memberize and then monetize their website. His message, as much as any other, epitomised the Oklahoma-land-rush feeling at the time, where people grabbed turf first and asked questions later.
Unfortunately, some of those questions were rather nuanced. Like, for example, 'do you not like ads at all, or do you just not want to be distracted while you're reading online?' Google found the answer to that. Go.com and others did not, to their chagrin.
MSN has only recently begun learning the folly of 'memberizing'. And people are still struggling with the problem of 'monetizing' their websites.
At the time I heard Metcalfe's talk I remember shaking my head in disbelief. Now, don't get me wrong, I respect him greatly for inventing ethernet. But further proof of the folly of the Dot Com boom was the blind faith that investors put in the business acumen of the alpha geek. Visionaries, generally speaking, are not too great at dealing with the messy details of day-to-day life, and as often as not need to be protected from it (that's one good use for tenure in Universities, by the way). Investors allowed these same dreamers into the driver's seat, and paid in spades for the decision.
Crumb's Corollary: Never bring a knife to a bun fight.
Why does money make people lose the ability to do arithmetic?
The EV1. WTF? Why the hell would you miss this. I got the chance to try one at high school, I forget which teacher arranged to have it shown off. The thing was underpowered to the extreme, didn't have long range and was apparantly plagued with failures.
I had a chance to try one of the first computers. Why the hell would any one want a computer? It was underpowered in the extreme, wobbling the rampack would lose all your data, and all the software you had to type in by hand out of 'listings' in magazines.
However that aside it was inefficent as hell. People like to pretend like it's non-poluting because there's no tail pipe. News flash: That power was generated somewhere and coal probably did the generation. Because of the multitudes of conversions of form the power underwent, the efficency was for shit. The straight mechanical transformation of an ICE was much better.
Newsflash: You've no idea what you are talking about. Already a fair percentage of energy is created by renewable energy and that percentage is growing all the time. You can even stick up some solar cells and charge the car yourself. The ICE is maximum 40% efficient, and performance degrades over time in cars, the pollution happens to occur mostly in densely populated human areas. In my town, Nice in France, the government is spending 320M euros on a tramway... which is effectively a bunch of electric busses. A lot of other european cities are going the same way. Whether electric or hydrogen powered, anything that makes the air we breath cleaner is good for everybody.
Phillip.
Property for sale in Nice, France
While we feel close to the 'huge' losses of the dotcom boom/bust, we must not loose sight of the fact that two US corporations (Enrom, $80+ billion, WorldCom $74+ billion in 2000/2001 alone, and Tyco) probably account for more direct losses than all the dotcom spending. It was these big corporate failures trashing the stock market, that led to widespread losses amounting to trillions of dollars (billions from State pensions alone), that then brought down our favourite dotcoms.
The dotcoms may have been pretty fireworks, but they were not the monetary black hole that snak the economy.