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'90s Dot-Coms — Where Are They Now?
An anonymous reader writes "The Industry Standard has put together a list of 10 dot-com stars from the Internet bubble of the late 1990s, and tracked down what happened to the services and their founders. A lot of the services are still around, albeit under new ownership, including eToys, Garden.com, and DrKoop.com. Others have been completely reinvented — Boo.com, an online clothing retailer that burned through $125 million in funding in the late 1990s, is now an online travel community. Of the founders, many were able to cash out early and/or achieve later online success. Excite's Joe Kraus and Graham Spencer later started JotSpot, which was bought by Google, and Kraus now directs work on Google's OpenSocial initiative. Others did not fare as well, such as two of the co-founders of Garden.com, who declined to cash out at the height of the bubble, and are currently 'between business ventures.' The insiders' post-mortems of the failed dot-coms are interesting — several suggest the concepts were good but too early for their time, while others identify specific factors that led to the failures — ranging from a lack of advertising to 'intense' greed."
When I look at the list of dot coms there, I'm struck by the 'normality' of the offerings: pets, holidays, clothing etc.
These are all things that are sensible things to sell on the Internet - and if you compare them to some of the (relatively) completely off the wall offerings that we use on an everyday basis, they don't seem all that odd (or novel).
Maybe "too early for their time" is true, but too early in the sense that at that time the Internet had just emerged from a very geek world and everyone was just settling into the concept of using it for something else.
Books and second-hand crap (and of course porn) weren't really a problem for people. Maybe a dog was.
Genesis 1:32 And God typed
Even watching it go on live while I was in high school, it always struck me that a company that didn't actually sell anything was pretty much doomed to failure.
/you/ as their source for whatever stupid crap they were talking about, and then trying to sell ads to other companies...
.com boom? sun, cisco and whoever makes those aeron chairs -- 'cause they were actually selling stuff. ratemypetrock.com or whatever sort of ideas that people had failed because they were stupid.
Slopping some "information" up on a web page, hoping that enough people will "recognize" your "brand" and choose
who made out well from the
then again, I'm sure if I could have justified sporks as an "e-commerce solution," I could have been a billion heir for 15 minutes, too.
Back in 2000-2001, our Downside site ran an automatic predictor for dot-com failure. It was amazingly simple and painfully accurate. The system read through SEC filings, extracted the numbers for cash on hand and rate of losses, and projected when the cash would run out. We called that the "death date". That was a good predictor of when the company would go bust. This is a surprisingly good predictor for companies financed via an IPO. You can only IPO once (yes, secondary offerings are possible, but not when you're failing), so there's a finite amount of cash, and when it's gone, so is the company.
For Deathwatch purposes, "dead" was defined as "investors lost essentially all (90% or worse) of their investment". Some of the companies, like Dr. Koop, hung on for years, but their investors did not. (This, by the way, is a common phenomenon to venture capitalists. Many failing companies hang on as overfinanced small companies, downsized until they are able to make just enough money to cover current operating costs but not to recover their startup costs. VC's call these "zombies".) By our standards, essentially all the companies on the Industry Standard list died.
dealnews.com (originally just deal-mac.com) is still alive and kicking. We are still doing what we did in 1997. We still have the same owners. (I was employee #3, the owners were #1 and #2). We did not burn through crap loads of other people's money. We did not hire a huge rock band for our company parties. We did not do any of those things that the failures (and sure, some of the success) did. Good business decisions for the win.
One major problem the early .com's faced was that it was hard to undercut the local brick and mortar store with the additional cost of shipping on top of it. It didn't matter if you could sell dog food $5/bag cheaper if it cost $20 to ship it and waiting 3-5 working days to actually get it wasn't either convienient or cost-effective. Between that and the fact that the consumer buying habits didn't change quickly enough (as you had lots of people without the internet, or those like my dad who are terrified to use their credit card online); They weren't doing enough sales (in volume) to fully utilize their capital investments (warehouse, infrastructure) or lower their shipping costs.
I still think to this day (having developed sites for companies and their affiliate agents) is that insurance is bar-none, the perfect B2C product for the internet, because essentially, you're using a similar program your agent is to get a quote and the insurance company only has to send a single post-letter (or in a lot of cases now, generate a PDF) to send your insurance card, policy number and policy documents. They avoid the high cost of warehousing and shipping which has allowed them to be incredibly profitable (and even reduce their brick and mortar presence in a lot of cases) simply by making a public version of the software they already have (with some features removed).
In any case, it is significantly easier to sell a good (such as insurance or a digital file) or service that doesn't involve a physical product if you're the one shouldering the responsibility of getting it to the customer's doorstep (unless you've got a great way of passing the cost on and still remain competitive or all your competitors have the same situation like a furniture store.)
Forgive my spelling from time to time. I'm often posting during short breaks.
My favourite:
-- Ed Avis ed@membled.com
Even back in the 90's I was going these are not High-Tech companies. They are just freaking Mailorder companies. That they had for hundreds of years. Except for Mailing or Telphoneing and seeing the description your order you did it via the web. But all in all it was just an other mail order company. The problem was people though it was some new way of doing things. It really wasn't Using the web is just an improvement of the Mail Order system.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
I worked for a few dotbombs in the 90's in New York City. I know from personal experience, the companies blew thru the money because one of two reasons..
.. yea, I'm old school!
1. They were under pressure from the investors to spend it. Investors wanted us to go public ASAP and cash out. They wanted us to spend whatever it took to get from point A to point IPO. And that is where the long hours and stress comes in. As we all know, money doesn't translate to faster. So Cxx's are pressuring you to:
a. Hurry the "f**k" up!
b. Spend, Spend, Spend, whatever it takes.. I don't care buy more servers.. etc.
2. They were absolutely inexperienced and living in fantasy land! They would mistake $120 mil in VC as "We MADE IT!", and spent the money like they were already a long established successful company. Two monitors for everyone, plush chairs, pool tables, free meals everyday, lavish company parties for IT. (hehe that was fun why it lasted).
just mah $0.02
Awesome!
At first their office and server were together in a windowless closet in downtown Santa Cruz, California, just on the other side of the wall (and a short ethernet run) from Scruz.Net, the first commercial ISP in Santa Cruz.
They later expanded to about twenty-five employees and a nice office. I worked there for a time as a web programmer.
Chris and Thomas sold out to Verio. Chris' take was six million dollars. Thomas invested his share in two new dot-coms that failed, so that he wound up looking for sysadmin jobs again.
Chris did what most would say was the smart thing and retired. I didn't see him for a long time, until I came across him riding a mountain bike when I was hiking in the woods at UC Santa Cruz. I envied him for his apparently happy life.
One day, Chris was turned away from a psychiatric hospital because he was considered not sick enough to hospitalize. This is actually a very common problem - mental health is a popular victim of budget cuts, so there are never enough beds for all the potential patients.
The next day he blew his brains out.
It is thought that he was an undiagnosed manic-depressive.
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