The original dot-com busts were "actually fantastic ideas"


#1

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#2

There’s no doubt there were some good ideas floating around during the 1.0 days. The problem was largely that the technology and infrastructure wasn’t ready to support them. Also, many of the ideas were kinda half-baked; Kozmo had a decent germ of an idea, but they didn’t have warehouses of product so they weren’t able to get a retailer’s margin, and the delivery was 100% theirs, which meant that they had all the expense. So every time someone ordered Nyquil and chicken soup (that was one of their ads, if I remember correctly) they literally had some Kozmo messenger on a scooter going to the store and getting those things, then running around town dropping it off. Fine if someone was willing to pay a $10 premium for not leaving the house when they were sick, but it turns out there wasn’t a large market for that.

Before we say these were “fantastic ideas” we need to realize the flaws in the original models. Otherwise we’re doomed to repeat them. Just the other day for instance I saw a guy from Instacart in my local grocery store doing “personal shopping” for someone, and the guy clearly had no idea what he was doing. It was probably going to take him an hour to do this one job for one client, and my guess is that he wasn’t getting paid a decent wage at all. That’s another thing. The fact that many of the recent darlings of the Internet world have relied on “externalizing” the burdens of having a workforce means that they can really only exist in a bad economy, where labor is cheap, or they operate in a grey area of the law to take advantage of workers at the cost of creating real, sustainable business.


#3

#4

A lot of those companies had okay concepts but simply failed as businesses. I think the old narrative that they all succumbed to “internet = profit!” magical thinking was, in a sense, recursively naive.


#5

Yep.
I lived through all that in the Bay Area (well, I lived through more since I was born there in the middle 60’s). Also, I was an early subscriber to WebVan and loved it. I had a delivery every single Saturday morning - Peets coffee beans, apples, sliced sourdough, eggs, skim milk, cheese and turkey for sandwiches. It was the perfect re-stock of all my staples. :smile:


#6

I worked at drkoop.com, and my experience was that senior management was repelled by any idea that smacked of revenue. Several good ideas were rejected or neglected in favor of…ad revenue, I guess? Turns out it’s difficult to cover a $10 million/month burn rate with ad revenue.

Still not sure what to make of that company. Either the folks at the top were too-slowly implementing some inscrutable plan, or else they really did subscribe to magical internet=money thinking. I remember the CEO telling us that healthcare was a multi-multi-billion dollar a year industry, and if we could just grab a small piece of that, we’d be set. In retrospect, that seems like the most clearly articulated business plan they ever produced. They probably included it in their IPO filings.


#7

One RTFA later, I take issue with this article. BitCoin does not prove that flooz.com was a viable idea. BitCoin is a decentralized internet-based currency. Flooz.com was a for-profit company hoping to profitably insert itself between corporate customers and retailers. ’

Internet-based currency? Viable idea.
A dollar that costs you $1.05? Thanks, but no.


#8

That’s called a creditcard.


#9

Credit is a different concept. Flooz was sort of like a universal gift card.


#10

“So disruptive, man.”


#11

That’s my experience when shopping in an unknown place. Second, third, fourth visits get progressively better and then I get to a pro level, knowing what is where. Then the friend I am visiting moves - AGAIN - and I can start from anew.


#12

There was a brouhaha here about the mall-wide gift card, which was honoured by any vendor in the mall. They started to charge a fee. The spokesman for Mall Managing Company reminded us that the cards were accepted at any Mall Managing Company-managed mall across the country.

All you had to do was trade cash… which is accepted at any Mall Managing Company-managed mall across the country, as well as a few other non-participating dealers.


#13

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