'90s Dot-Coms — Where Are They Now? 206
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."
"Too early for their time..." (Score:5, Interesting)
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.
lack of product? (Score:4, Interesting)
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.
Downside's Deathwatch, a decade later (Score:5, Interesting)
Back in 2000-2001, our Downside site [downside.com] ran an automatic predictor for dot-com failure. [downside.com] 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.
We are still here! (Score:4, Interesting)
Cost of Physical Goods (Score:5, Interesting)
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.)
100 dumbest dotcom moments (Score:5, Interesting)
My favourite:
MAIL ORDER COMPANIES! (Score:5, Interesting)
Re:Stamps.com (Score:1, Interesting)
No kidding (Score:3, Interesting)
No kidding. Some friends and I tried to start a digital music distribution .com in 1995 - this was years before Napster and mp3.com, a decade or more before iTunes et al. We had an end-to-end system sorted out - one-click download and burn to CD (this was way before portable .mp3 players), $1 songs, etc, etc. It was just WAY too early. None of us ever imagined the RIAA would have its head so obscenely far up its ass. Thankfully, we didn't burn through millions of other people's venture dollars - though the stories of meetings with those idiots are quite funny.
Sometimes dot-coms were just bad ideas with money (Score:3, Interesting)
Needless to say, they had a hard time getting more money after the first initial "You're a dot-com? Let me throw money at you because you must be on to something great!" enthusiasm wore off. The idea was just stupid and I couldn't believe that 2 MBA graduates (non-techies you might note) honestly though that there was a need for such a thing. Eventually they went belly up. There was no big buyout before the bubble burst, they just failed.
Dot-Com fun (Score:3, Interesting)
Towards the end of 2000, I ended up working at SkyCache/Cidera [archive.org] a satellite provider of USENET feeds and streaming media distribution. Unfortunately, after raising $75 million, they also had challenges [archive.org], two layoffs with 50% staff cuts each time (one was originally scheduled for Sept. 11, 2001, but had to be postponed), and eventually went under [isp-planet.com].
So I left the Internet, and made the transition to broadcast television engineering (where it is all going IP anyway)...
Flooz.com?? (Score:1, Interesting)
Re:Fundamental flaw (Score:3, Interesting)
Not exactly right. The loans given by banks for mortgages were well within legal limits a lot of the time (excepting the not-unheard-of outright fraud in some cases when subprime borrowers had their salaries inflated), using the whole fractional lending tradition (which is how our entire banking system works, really). So, there was just as much "real money" as any other loan had backing it.
However, then those loans were packed together, redivided, and sold as "safe high return investments" called Collateral Debt Obligations (CDOs) which then were purchased by hedge funds and other investment houses, with the assurance by Moody's that the vehicles were safe. Adjustable loans start defaulting, banks start getting scared and stop lending (this is the credit "crunch" people talk about), the financial sector takes a dump, investors flee to other investments (thus why commodities like oil and gold have skyrocked lately), the Fed starts lowering interest rates and going nuts trying to keep the monetary system from locking up tight, etc.
The real problem wasn't a matter of creating artificial need (Realtors have been trying to do that for decades, "no one is making more land", "prices always go up", etc), but rather that post-9/11 real estate and building was the only thing really working well as an industry, and in order to get in on the fun, *some* lenders significantly relaxed their underwriting standards in order to get people into houses.
Re:Fundamental flaw (Score:4, Interesting)
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
My friend, a Web hosting pioneer, died of suicide (Score:5, Interesting)
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 [thomasleavitt.org] 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.