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Dot-com Boom's Biggest Duds, From Flooz to iSmell
Carl Bialik from WSJ writes "WSJ.com looks back on some of the boom's biggest busts, and catches up with once-optimistic inventors. A creator of the unfortunately named iSmell, a USB device meant to 'print' smells transmitted by websites or videogames, says, 'It was a heartbreaking experience, because we had put so much into it.' The digital currency known as Flooz crashed and burned when a ring of thieves defrauded the company out of $300,000 using stolen credit cards. Microsoft flushed iLoo down the crapper. CueCat, meanwhile, got a second life as a bar-code reader that doesn't pick up personal information. 'The cat got butchered, but it has spawned a cottage industry,' says the device's inventor."
How can they forget Boo.com? The way that management team burned money epitomized the dotcom era. It wasn't surprising at all that their site was an obnoxious, pretentious, bloated piece of junk. The good thing about the bust was that it shook out and humbled all these artsy "we know what's best for the user" types that ran Boo.com.
There was also a company started during the dotcom boom which delivered candy right to your front door (The name eludes me). Only problem was that consumers were using it to buy single bars of candy, and the shipping costed to much for the company to stay alive. A good idea though. Reminds me of when I could order groceries online, but that was cancelled due to the lack of popularity. I suppose America isn't ready to take the final step to pure laziness.
Slashdot, the only place where intellectuals can act like idiots... and still sound intellectual.
These guys are penny ante losers. I want to know the REALLY BIG losers.
I remember seeing some TV show back around 1992, some analysts from Bolt Beranek & Newman said they had a bet in their office about what company would be the first to lose $1 Billion in cash by investing it in the Internet. He called it by some stupid name like "a Gigalapse."
I've remembered that bet for quite a few years, and whenever I hear a big loss, I always see if it comes up to a billion. I've seen a few companies lose hundreds of millions, but nobody's come close to a billion that I know of. But surely it will happen someday, sooner than we think. For all we know, Microsoft or Google might have lost a billion in some bad internet investment and buried it somewhere in their P&L where nobody is looking.
I remember when PointCast hit our network - every dingdong was running it to look 'kewl', instead it just sat there sucking up our (then) expensive bandwidth day & night.
Later on we became a "PointCast Partner" which never seemed to amount ot much.
What I want is a combination of news.google.com headlines & After Dark's Headlines module, just to keep me on my toes of real-news vs. fake-news (aside from Fox News)
I don't read ACs: If a post isn't worth so much as a nom de plume to its author then I wont bother either.
Why bother with a tiny little article from WSJ when you have an entire website dedicated to dot-bomb companies? FuckedCompany.com was a big hit during the dot-bomb era, everyone I knew used the site to make bets on which company would get screwed next. They should be the ones authoring the story. They probably have all the great insider information on all the dot-bombs. If it weren't for NDAs, they could probably publish a top selling book with all that rumor-mill information they've got stored away.
I don't know. I find that the only thing I actually buy from B&M stores nowadays are perishables, things I must have immediately and things that really need to be examined (or tried on) in person. Amazon.com has cheaper prices on just about everything else. If it's not something I need *that day*, why would I want to haul my ass down to Best Buy or Walmart or Costco just for the privilege waiting in line and then paying MORE?
And hell, if you're too cheap for Amazon (and are willing to take a small risk), there's always eBay.
Letstalk.com makes B&M cell phone retailers a fucking JOKE--they literally offer dozens upon dozens of phones for hundreds less than the B&M stores--and that's before rebate. After rebate, you can get nearly anything free--RAZR, PEBL, Samsung SGH-t809, at least one of their Blackberry models... you can even get up to 5 of them free, if you're starting a family line (we recently did this and it kicks ass. Saved many hundreds of dollars, and for myself I picked up an N-Gage QD for -$50 after rebate. Don't insult it until you try it; Nokia fixed most of the design flaws with the QD revision. Basically, I'm being PAID $50 to use a very powerful, very underrated Symbian S60 smartphone. Kickass.) Just for grins we walked into a B&M retail store and asked the reps if they could give us a similar deal. They simply laughed in our faces and shook their heads.
My girlfriend and I (cue the 'liar' jokes) would've been fucking broke a long time ago if we couldn't buy our porn and sex toys online. The markup at B&M sex shops is nothing short of heart-stopping.
I'm not even going to get into fatwallet.com... let's just say that I wind up getting at least 2 or 3 INCREDIBLE deals per month. (Think over 50% off on stuff that is NEVER heavily discounted at B&M stores. Over 75% off is not uncommon. Over 90% off the typical B&M price isn't out of the question.)
The simple fact of the matter is shipping costs are nothing compared to the overhead of rent (or construction + property tax), utilities, cashiers and sales reps and customer service reps (who can't be outsourced, unlike online stores' reps), uniforms for the reps, general upkeep and maintenance, etc. We're beyond having to prove this--just walk into *any* B&M store and see how long it takes you to find something that you can't get cheaper off of Amazon or Buy.com or Outpost.com or eBay. With gas prices the way they are, I do indeed think that the internet will eventually spell the doom of the vast majority of B&M businesses. B&M currently has a lot of momentum, though, and I think it will be at least another decade or two before we see any real decline.
Making B&M obsolete isn't a joke; it's just not going to happen that quickly. Google's calendar has nothing to do with the internet retail scene. eBay is thriving, Amazon is well in the black, Buy.com is running commercials now, fatwallet.com's forums are overflowing with deal-hunters, and I seriously can't remember the last time I bought something at a B&M store that cost more than $20.
I really liked Webvan. But I suspect it was doomed - even without the complexities of building your own logistics infrastructure.
I probably was a prime candidate for Webvan. But I really didn't like the idea of letting someone else pick out my perishables (meat, produce, etc.). So I never even thought of hitting their site. Then, in a particularly busy month, the family car broke down. We were out a car while it was in repair and by the time I got home from work - it was very late. So my wife made a quick grocery order via Webvan. Nothing big. Just enough to pad out the groceries until we could make a real run. And the service was great. The produce was top-notch. And soon the majority of our groceries came via Webvan.
But despite this - I just don't see that many other people giving them the chance. And without that, you're certainly not going to pay off that expensive logistics infrastructure.
I originally had maybe half a dozen cuecats which were daisy-chained together and used to illuminate my desk at night. I never really went out of my way to get them, and I accumulated those few from magazines or friends who didn't know what to do with them. Several months after Digital:Convergance went out of business and stores stopped pushing the cuecats on consumers, I decided on a whim to ask a radio shack manger if he still had one or two. It turns out that there was an entire box of them in the back he was just itching to get rid of.
So, the obvious result of this was that I had a small christmas tree that year decorated with cuecats (it needed quite a bit of external power, and all the cords seemed to hide a lot of the tree anyway).
Oh, the college days...
I worked for Sprockets.com for a couple months as technical support while I learned web development elsewhere.
As best I could tell, Sprockets was completely fake. The goal was to build a new-media friendly collaboration tool. Emphasis was on appearance and real development work was outsourced to Israeli programmers who could barely keep up with...well they just sucked. I never saw a deliverable and never had any responsibilities.
We had four in-house developers, fresh college kids who mostly goofed around and laughed at their non-responsibilities. When I showed up to work at 11am, the infrastructure team bluntly offered me a free cellphone. They also threw stock at me like toilet paper.
I bailed on Sprockets to take a real development job at double salary, but about a year later I got a letter in the mail saying Sprockets was defunct and I could come to the office to take whatever I wanted. Fait accompli...venture capital=profit. I can't believe they got away with it, but my feeling is this was pre-planned from the start and they broke no actual laws. They knew what they were doing.
Call it VC raiding. Anybody who wasted venture capital should probably be jealous (and my future employer did exactly that.)
It should be noted that this minor "cottage industry" success appeared despite efforts to the contrary by Mr. Philyaw (or whatever name he calls himself now or the future). Referring to the device as "butchered" is telling.
As an aside, it's interesting that he now operates a "patent holding company" and changed his name. Even more so is his choice of name. The guy's a class act all the way.
http://en.wikipedia.org/wiki/Boo.com
"1990s. Boo.com's intention was to sell branded fashion wear over the Internet; however, after spending vast sums of its venture capital, it eventually had to liquidate and was placed into receivership on May 18, 2000. Fashionmall.com now owns boo.com."
Enough said?
Now that was one of my favorites. You had this little advertizement bar that appeared on the bottom of your screen, and got paid for however many hours it was up. Nevermind that you could run it at night while you slept. You also got additional cash for getting others to sign up under you. My roomate and I put together a little program we called 'TakeAdvantage' that was basically a small gui for breaking what pathetic blocks they put in place to prevent one person from signing themselves up 20 times. hundred dollar checks every month for nothing? Sweet. Whatshotnow was another great one. You got points for filling out surveys, and you could use those points on free junk at their website. Ghostmouse let you fill out surveys (everything is awesome!) for hours at a time while you slept or were at class. I'll never understand how they thought these business models could work. Ditto that with the 'new' Napster.
I saw the device at GDC (guess they missed that appearance, but then, I've never been to CES so I guess it's all a wash) but didn't attend the demo. It was pretty spiffy looking though. It had a palette of about fifteen chemicals (IIRC) and some kind of odor neutralizer it would blow between smells to clear them out.
I told 'em that my favorite smell of all was the rain on hot asphalt and it ended up on their webpage under their "Favorite Smell" poll. My fifteen seconds :P
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
It wasn't only an American phenomenon. I worked in a Dotcom in Germany back then where our biggest customer was a German company My Media. Innovative, eh? They burned through 200 million in two years (We built a health and lifestyle portal for them) by holding business meetings on chartered yachts in the Seychelles. When they went down, so did we.
They final month before the office was vacated saw the guys smoking weed in front of the webcam, my boss doing coke in the toilets and our isp bill at enormous rates as the guys spent the whole day downloading stuff from Napster and fighting with the sysadmin who was trying to save a bankrupt company from losing even more money.