The Dot-Com Bust’s Worst Flops Were Actually Fantastic Ideas(wired.com)
wired.com
The Dot-Com Bust’s Worst Flops Were Actually Fantastic Ideas
http://www.wired.com/2014/12/da-bom/
21 comments
> You can turn any "flop" into a "fantastic idea" if you devise a sustainable business model for it.
Not all, but many of the failed dot-coms can be summed up as offering Service X at a price that people were willing to pay that happens to be less than the cost of delivering the service.
If I can relax the price > cost constraint there are any number of fantastic ideas that I can come up with. Private jets for the price of commercial. A driver for $1/hour. Etc.
Grocery delivery can be a perfectly fine business but, like most services that fundamentally offer convenience, it's also a premium service that people need to be willing to pay for--and the business plan needs to recognize that fact. And, as is often true, grocery delivery seems to make the most sense when it can piggy-back on a standard self-service grocery business.
Not all, but many of the failed dot-coms can be summed up as offering Service X at a price that people were willing to pay that happens to be less than the cost of delivering the service.
If I can relax the price > cost constraint there are any number of fantastic ideas that I can come up with. Private jets for the price of commercial. A driver for $1/hour. Etc.
Grocery delivery can be a perfectly fine business but, like most services that fundamentally offer convenience, it's also a premium service that people need to be willing to pay for--and the business plan needs to recognize that fact. And, as is often true, grocery delivery seems to make the most sense when it can piggy-back on a standard self-service grocery business.
I would generally agree - I tried a couple of experimental Instacart orders when they started delivering in my area. My immediate impression is that unless they handsomely pay the shoppers who go pick up your groceries (which seems unlikely), they are mostly extracting value by offloading costs onto the shoppers.
As for the offering itself, I wouldn't be surprised if they are generating the product catalog for the three stores in my area semi-manually, though possibly via scraping something. It's certainly a tiny subset of the products on the shelves. If the stores had an API for exposing their inventory (plus looking up pics for the items), it would make Instacart much more attractive.
This is clickbait, slightly more subtle than usual. Some of what they say is true, but an article in a real business magazine would attempt to quantify what's changed since the 90s and what the limits of the new paradigms are. Wired is a hype and lifestyle magazine, and they're just trying to outrage all of us with absurd comparisons between Flooz and Bitcoin.
One sign of a bubble: articles that proclaim, without caveats or quantifiable reasons, that caution and experience are for suckers.
One sign of a bubble: articles that proclaim, without caveats or quantifiable reasons, that caution and experience are for suckers.
Exactly. Yes, "delivering groceries to people able and willing to pay for them" is a great idea, The problem is Webvan didn't have it.
1) How many people were online?
2) How many people had credit card info online?
3) How many people trusted WebVan (vs. Amazon, which built trust over decades)
4) How many people had portable computers in their pocket at all times, with instant access to your service?
Saying "X is a good idea" doesn't make sense without the surrounding strategic context.
1) How many people were online?
2) How many people had credit card info online?
3) How many people trusted WebVan (vs. Amazon, which built trust over decades)
4) How many people had portable computers in their pocket at all times, with instant access to your service?
Saying "X is a good idea" doesn't make sense without the surrounding strategic context.
"Deliver groceries to people able and willing to pay for them" has been going on for a very long time.
Back before home internet access was a thing, companies like Schwan's ( http://en.wikipedia.org/wiki/Schwan_Food_Company ) were making home deliveries of frozen foods. Dairies have done deliveries for as long as I can remember.
Webvan didn't fail because grocery delivery is a bad idea.
Back before home internet access was a thing, companies like Schwan's ( http://en.wikipedia.org/wiki/Schwan_Food_Company ) were making home deliveries of frozen foods. Dairies have done deliveries for as long as I can remember.
Webvan didn't fail because grocery delivery is a bad idea.
Doesn't this sort of confirm that 'ideas are cheap, execution is everything'? The abstract idea of 'an online virtual currency' is garbage without the brilliant crypto implementation.
I admittedly have a very strong bias against people that think they have a brilliant idea and just need 'someone to build it'.
I admittedly have a very strong bias against people that think they have a brilliant idea and just need 'someone to build it'.
The article mentions Webvan, but didn't note that its early rival, Peapod, is still around. Peapod managed to survive by strategically retreating to the markets where it was working - a useful counterpoint to the ever-present "grow, grow, GROW!" mentality. Webvan overextended itself, and paid the price.
Is this true? Peapod was acquired by Royal Ahold in 2001 and thus cancelled its contracts with all other grocery stores that were not Royal Ahold-owned.
http://en.wikipedia.org/wiki/Peapod
http://en.wikipedia.org/wiki/Peapod
Peapod delivers here in Milwaukee. I haven't used it much but I just noticed that they now have a "pickup" option in some cities where you drive up and they load you your vehicle. I might actually use the service more if they offer that as my biggest problem is that I usually go shopping only when I'm totally out of something I really need. If I planned ahead better I would use it more.
In DC they might start doing a thing where they'll have lockers at Metro stations, so you can pick up your groceries on the way home. There was a Washington Post article from just a few days ago.
http://www.washingtonpost.com/local/trafficandcommuting/too-...
My Giant store has the Peapod curbside pickup although I've never used it or Peapod in general.
http://www.washingtonpost.com/local/trafficandcommuting/too-...
My Giant store has the Peapod curbside pickup although I've never used it or Peapod in general.
It's still around in the Chicago area as well, though I've never used it.
Peapod is hiring heavily in Chicago after opening a new downtown space.
I've only used Peapod during a period when I was on crutches and couldn't easily do a full grocery shopping. My impression though is that they're a relatively low profile service that works in partnership with grocery chains. They charge for delivery.
They were OK for my needs when I was using them. Invariably they didn't have everything in stock and didn't have the breadth of selection you have in the store. (And, of course, you can't examine the produce, etc. before buying.) For my needs at the time, they were worth it but under normal circumstances it's easier and cheaper just to swing by the store a few miles down the road.
They were OK for my needs when I was using them. Invariably they didn't have everything in stock and didn't have the breadth of selection you have in the store. (And, of course, you can't examine the produce, etc. before buying.) For my needs at the time, they were worth it but under normal circumstances it's easier and cheaper just to swing by the store a few miles down the road.
People are often wrong when they speculate what caused the dot-com bubble bust of the 90's. For some it was a matter of being too ahead of their time, but for many, it was a case of irresponsible management and use of funds. The whole lean startup concept was basically nonexistent.
I might have been relatively young back then, but seemed to me startups in the 90's went a little too overboard on advertising. Expensive Superbowl advertisements, TV ads, radio and outlandish publicity stunts. Not to mention, the ridiculous parties CEO's would throw. Look around, you can find countless stories of 90's startups throwing lavish and expensive over the top parties courtesy of VC money and high valuations.
A few of the commerce based ideas were ahead of their time. Sadly, the Internet was still this unknown and unsafe looking entity to many consumers in the 90s and early 00's. Not every startup failed though, some did make it through to the other side, but quite a few failed.
I am concerned we are starting to see a repeat of the dot-com boom taking place again. As history has shown, it tends to repeat itself.
I might have been relatively young back then, but seemed to me startups in the 90's went a little too overboard on advertising. Expensive Superbowl advertisements, TV ads, radio and outlandish publicity stunts. Not to mention, the ridiculous parties CEO's would throw. Look around, you can find countless stories of 90's startups throwing lavish and expensive over the top parties courtesy of VC money and high valuations.
A few of the commerce based ideas were ahead of their time. Sadly, the Internet was still this unknown and unsafe looking entity to many consumers in the 90s and early 00's. Not every startup failed though, some did make it through to the other side, but quite a few failed.
I am concerned we are starting to see a repeat of the dot-com boom taking place again. As history has shown, it tends to repeat itself.
I worked at an ISP in the late 90's which was bought up, together with several other small ISPs. Before the acquisition it was a bunch of techies working their asses off. After, dozens of non-technical staff came on board who all got huge paychecks and a BMW, bossed the techies around in clueless Outlook 98 fullquote e-mails but contributed zero to the bottom line.
The money, in our case, came from a large north-european telco with deep pockets. They turned a blind eye to the burn rate for almost 2 years before pulling the plug.
I've heard of a German tech company hiring a philosopher, you know, just for fun. On a superficial level, this might seem comparable to Google hiring Ken Thompson, Guido van Rossum and tytso. In reality however these folks not only boost Google's reputation among developers, they innovate and make a technical contribution to the company. That precisely is the difference between 90's dotcoms' thrift-spending habits and how companies work today. The article misses that completely.
The money, in our case, came from a large north-european telco with deep pockets. They turned a blind eye to the burn rate for almost 2 years before pulling the plug.
I've heard of a German tech company hiring a philosopher, you know, just for fun. On a superficial level, this might seem comparable to Google hiring Ken Thompson, Guido van Rossum and tytso. In reality however these folks not only boost Google's reputation among developers, they innovate and make a technical contribution to the company. That precisely is the difference between 90's dotcoms' thrift-spending habits and how companies work today. The article misses that completely.
> I've heard of a German tech company hiring a philosopher, you know, just for fun.
Oh, there are American companies that do that too: http://www.newyorker.com/magazine/2014/11/17/crystal-ball-3
Oh, there are American companies that do that too: http://www.newyorker.com/magazine/2014/11/17/crystal-ball-3
> ... seemed to me startups in the 90's went a little too overboard on advertising. Expensive Superbowl advertisements, TV ads, radio and outlandish publicity stunts.
They did because they could. I'm sure you remember the ungodly amounts of money that were being thrown at everyone with a two-bit idea back then.
They did because they could. I'm sure you remember the ungodly amounts of money that were being thrown at everyone with a two-bit idea back then.
>> but seemed to me startups in the 90's went a little too overboard on advertising. Expensive Superbowl advertisements, TV ads, radio and outlandish publicity stunts. Not to mention, the ridiculous parties CEO's would throw.
This.
Saw this first hand with several companies. I was with a telecom CLEC and we were in a building jammed with startups in the late 90's.
I would agree with all your points and also add most of the companies I saw guys who had been toiling in middle management their whole careers, suddenly got a shot at running their own show. They got drunk on the money and power and ran most of the companies into the ground by burning through their money and making asinine decisions.
The CLEC I was working for was a perfect example.
When I was brought on as a sales person, this was the pitch in the interview:
"We want our sales people to be the highest paid sales people in the industry. We're going to offer more salary and more commission then any other CLEC in town," This was a CLEC who had 15 employees, and were trying to hire three sales people.
Their commission structure would be outrageous for a fortune 500 company, but this was a CLEC startup in a middle tier market. Your quota every month was 60 lines. You got a bonus for hitting your goal, then each tier above that was additional commission.
Here's their tiered structure:
60 lines - $5,000
70 lines - $3,000
80 lines - $4,000
100 lines - $5,000
Let's say I land a nice commercial building with several tenets and the first month I land three companies all three of their contracts equal 70 lines. It would mean I get my $5K for hitting my quota and another $3K bonus for hitting the 70 line tier.
I thought this was awesome. Then after two months I suddenly realized something. I asked around to see what the margins were on the lines we were reselling.
On each line the company was making a pretty nice margin, around $20/per line. Now, you compare that with the commissions they were paying us. You do a little math and realize it's going to take them over 6 months just to break even on the commission they were paying versus what revenue they had coming in from our sales. More lines? More commission and longer wait times to realize a profit. Even though I was still in college, it was obvious to me this was not a smart business decision.
EDIT: CLEC stands for Competitive Local Exchange Carrier
This.
Saw this first hand with several companies. I was with a telecom CLEC and we were in a building jammed with startups in the late 90's.
I would agree with all your points and also add most of the companies I saw guys who had been toiling in middle management their whole careers, suddenly got a shot at running their own show. They got drunk on the money and power and ran most of the companies into the ground by burning through their money and making asinine decisions.
The CLEC I was working for was a perfect example.
When I was brought on as a sales person, this was the pitch in the interview:
"We want our sales people to be the highest paid sales people in the industry. We're going to offer more salary and more commission then any other CLEC in town," This was a CLEC who had 15 employees, and were trying to hire three sales people.
Their commission structure would be outrageous for a fortune 500 company, but this was a CLEC startup in a middle tier market. Your quota every month was 60 lines. You got a bonus for hitting your goal, then each tier above that was additional commission.
Here's their tiered structure:
60 lines - $5,000
70 lines - $3,000
80 lines - $4,000
100 lines - $5,000
Let's say I land a nice commercial building with several tenets and the first month I land three companies all three of their contracts equal 70 lines. It would mean I get my $5K for hitting my quota and another $3K bonus for hitting the 70 line tier.
I thought this was awesome. Then after two months I suddenly realized something. I asked around to see what the margins were on the lines we were reselling.
On each line the company was making a pretty nice margin, around $20/per line. Now, you compare that with the commissions they were paying us. You do a little math and realize it's going to take them over 6 months just to break even on the commission they were paying versus what revenue they had coming in from our sales. More lines? More commission and longer wait times to realize a profit. Even though I was still in college, it was obvious to me this was not a smart business decision.
EDIT: CLEC stands for Competitive Local Exchange Carrier
Ideas are nothing. Timing and execution is everything. Just because something might work in today's world (when it didn't before), doesn't make it a good idea.
Marc Andreesen: "1/A thing I believe that few believe: Almost all Silicon Valley startup ideas from qualified founders = great ideas. But some are too early."
The whole tweetstorm is a good read.
https://twitter.com/pmarca/status/502476823402270720
Marc Andreesen: "1/A thing I believe that few believe: Almost all Silicon Valley startup ideas from qualified founders = great ideas. But some are too early."
The whole tweetstorm is a good read.
https://twitter.com/pmarca/status/502476823402270720
I vaguely remember something called Boo.com that tried to sell t-shirts.
From what I recall, they warmed their offices by burning money in gold fireplaces and insisted on traveling by elephant. Of course these days that kind of behaviour is considered showy and inefficient and so the investor's cash is now spent on social media campaigns instead, which is a much more direct method of achieving the same result.
problem with this post is this "THE WORLD IS READY TO CASH IN ON THE WORST IDEAS OF THE ’90S."
I disagree with that. I was working on tablets in the late 90s, online chat software too. Neither went anywhere. So "worst ideas" or too early or poorly executed? ..probably mostly the latter two.
I disagree with that. I was working on tablets in the late 90s, online chat software too. Neither went anywhere. So "worst ideas" or too early or poorly executed? ..probably mostly the latter two.
Indeed, there are quite a few similar examples. Remember CUSeeMe, an early VoIP app? Now all but forgotten outside the HN crowd, and yet Skype managed quite well several years later.
One could argue the Newton falls into that category, coming simply too early for pervasive (sometimes) high speed cellular data, where Palm/Handspring and RIM fared so well - even if transiently - later on.
One could argue the Newton falls into that category, coming simply too early for pervasive (sometimes) high speed cellular data, where Palm/Handspring and RIM fared so well - even if transiently - later on.
You can outrun your customer base pretty quickly. Regardless of how good your ideas and execution are, you are limited by how fast the status quo can change.
The lesson here is that it's not about the idea it's about execution.
there are plenty of good ideas, the hard part is the execution on those ideas.
its akin to music. there are a lot of good musicians but it is much harder to put together a great band.
its akin to music. there are a lot of good musicians but it is much harder to put together a great band.
Ideas are cheap. Implementation is key.
I think this reinforces the notion that ideas are fairly cheap; it's execution that matters.
Looks like timing was the issue with the companies listed, Many times ideas are sound, execution is solid but the audience just isn't ready for the actual product in the current landscape.
Well, for a lot of them, execution was crap too.
Shipping 50lb bags of dog food at pets.com for free is still a bad idea.
"Shipping for free" is a slippery concept, since it just means that the cost of shipping has been moved out of a line item called "shipping" into another one. But there are certainly people making money today shipping big bags of dog food for not much money. Amazon alone is full of them, to say nothing of these new retailers starting up. (I'm curious what they expect to offer me over Amazon, but that's a question for another article, I suppose.) It doesn't seem to me it was a "bad idea" so much as "one whose time had not come yet". Pets.com couldn't afford to set up Amazon-scale infrastructure for mere pet food, but now, Amazon-scale infrastructure exists. Even if these new businesses go under, the idea is frankly already proved to some extent, since people are already doing it, and I wouldn't expect them to stop.
Amazon also is clearly no making profit doing what they are doing either. They can afford it due to the vast scale but for how long?
Seems to work for me, not from pets.com specifically though. We have all our pet food on automatic ship.
Both matter. Execution doesn't progress without the capacity to think well. Learning to think well doesn't progress without littering and clearing the mind of thousands of ideas. It's a careful balance of maintaining a signal in the noise.
I agree to some extent. I think that given an equal idea across two executions, the better execution wins. And that's the take away.
Given an equal execution across two different ideas, wouldn't the better idea win?
A less-valuable (worse) idea may be easier to execute successfully than a more valuable (better) idea.
Or not.
But, going with that: Conversely, a better execution may be more difficult to implement successfully.
My original point was that the G-GP's statement was self-evident to the point of meaninglessness. You could flip the bits the other way and say something equally as meaning-ful(less).
Both idea and execution have some level of importance, but holding one constant while improving the other does nothing to discriminate between the relative value of either.
But, going with that: Conversely, a better execution may be more difficult to implement successfully.
My original point was that the G-GP's statement was self-evident to the point of meaninglessness. You could flip the bits the other way and say something equally as meaning-ful(less).
Both idea and execution have some level of importance, but holding one constant while improving the other does nothing to discriminate between the relative value of either.
The completion of executing the less valuable (as perceived) idea may lead to the ease in execution of the more valuable (as perceived) idea.
It's more humorous to consider maths and programs as ideas. And when I say humorous, I mean that very seriously.
It's more humorous to consider maths and programs as ideas. And when I say humorous, I mean that very seriously.
Too many variables.
It's also the timing of ideas. Many of these ideas flopped because execution just wasn't feasible at the time. Today, it's much cheaper to execute on ideas (people are moderately more expensive, technology infrastructure is several orders of magnitude less) so ideas that didn't pass muster previously now might.
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Interesting that they don't mention Peapod - it isn't Amazon, nor a SV darling like Instacart, but they survived the dot-com and are still going strong. Fantastic idea indeed.
Ah, Peapod. My last memory of Peapod is getting my final grocery delivery for free because it got lost in the shuffle of them backing out of the Dallas/Fort Worth market.
I've seen this suggested in another context: maybe the "bubble" was never actually irrational. The Internet was new, and no-one knew exactly how high it was all going to go; maybe all these ideas really were million-dollar ideas, and will be now.
Of course, an alternate reading is that the Valley now is just the bubble all over again.
Of course, an alternate reading is that the Valley now is just the bubble all over again.
Bubbles are about prices, not ideas. Prices affect things in at least two ways:
1) The idea may be something people are willing to pay for, but when given an inordinate amount of money with which to execute it, people go overboard on spending and create a business that is unsustainable if the money unexpectedly goes away (even if the idea itself would have been sustainable if they had started off with less but more predictable resourcing).
2) The idea may be a thing that people want, but costs more to execute than customers are willing to pay (and thus can only be financed in an irrational bubble).
In both cases the ideas are for things people want. You can't judge a business by the idea alone.
1) The idea may be something people are willing to pay for, but when given an inordinate amount of money with which to execute it, people go overboard on spending and create a business that is unsustainable if the money unexpectedly goes away (even if the idea itself would have been sustainable if they had started off with less but more predictable resourcing).
2) The idea may be a thing that people want, but costs more to execute than customers are willing to pay (and thus can only be financed in an irrational bubble).
In both cases the ideas are for things people want. You can't judge a business by the idea alone.
Tech itself wasnt a bubble. Bubble is caused by investors. If investors that have little knowledge of technology, will pour ridiculous money to young and/or not established companies - this is the bubble.
Bubble actually helped to some extent promote tech and created jobs. Many companies after bubble survived providing jobs and offering safe harbour for employees, startups and investors.
Bubble actually helped to some extent promote tech and created jobs. Many companies after bubble survived providing jobs and offering safe harbour for employees, startups and investors.
They say Afghanistan is where empires go to die. Well perhaps same day delivery of food is where bubbles go when they're ready to pop.
more seriously though, time is as much a part of good ideas as any other component. Google glass is probably a good idea, but also ahead of its time. Even if every other part of the execution is perfect, people need to be ready to accept it.
more seriously though, time is as much a part of good ideas as any other component. Google glass is probably a good idea, but also ahead of its time. Even if every other part of the execution is perfect, people need to be ready to accept it.
Or perhaps its just a case of executing it right. I certainly hope so since the startup I work for[1] does same day delivery of food (and has been doing so for years now), and so far we're doing it without bubble-esque levels of investment.
[1] https://www.hubbub.co.uk/
[1] https://www.hubbub.co.uk/
The iPhone wasn't a good idea until Apple figured out the right time and the right pitch. This isn't exactly a new phenomenon -- bad ideas are sometimes only bad because of the environment that is limiting their potential (but sometimes a bad idea is just a bad idea, because some environmental factors are unlikely to change).
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I think, like most things, it's a question of execution. Frankly, a lot of the infrastructure and societal mindset just wasn't there in 1999. I was playing online games every day since 1998, but it wasn't until 2003 that I was making even one or two purchases online each year, and not until 2007 or so that they felt commonplace to me.
Then again, that doesn't mean it wasn't a bubble- the irrationality is in how viable the businesses themselves are, not the ideas, as many more ideas have a kernel of value than what we think, but it's a question of execution, timing, and luck. We might still be heading into another bubble now. Or maybe we've just gotten very, very good at closing the convenience gap.
Then again, that doesn't mean it wasn't a bubble- the irrationality is in how viable the businesses themselves are, not the ideas, as many more ideas have a kernel of value than what we think, but it's a question of execution, timing, and luck. We might still be heading into another bubble now. Or maybe we've just gotten very, very good at closing the convenience gap.
The irrationality was the equity / stock prices, not the idea.
Is there any reason to believe the modern day incarnations are more sustainable then their dot-com counterparts? It certainly feels that way but the article is very light on evidence.
There are at least some reasons.
The dot-com era was full of companies getting heavy funding with zero sales, zero product, zero track record and absolutely no real market evaluation.
Companies would literally spend days of meetings trying to figure out what colors to paint their huge offices and have massive catered lunches.
I worked at one company that had ZERO revenue and had secured $20 million in funding, and immediately hired 200 people. When the money ran out, they got another cash infusion of $40 million from a pending buy out, and when we were being told this by the CEO, I joked to a coworker that we would need to spend twice as fast this time to run out at the same speed...the very next thing that came out of the CEO's mouth was "so we're going to be doubling our staff right away". I found out later that we had TWO actual programmers in our company (I was one) and 10 "managers" for every actual "employee".
It was ludicrous. I think there are issues with today's 'VC' fueled market, but it's nothing like back in '99.
The dot-com era was full of companies getting heavy funding with zero sales, zero product, zero track record and absolutely no real market evaluation.
Companies would literally spend days of meetings trying to figure out what colors to paint their huge offices and have massive catered lunches.
I worked at one company that had ZERO revenue and had secured $20 million in funding, and immediately hired 200 people. When the money ran out, they got another cash infusion of $40 million from a pending buy out, and when we were being told this by the CEO, I joked to a coworker that we would need to spend twice as fast this time to run out at the same speed...the very next thing that came out of the CEO's mouth was "so we're going to be doubling our staff right away". I found out later that we had TWO actual programmers in our company (I was one) and 10 "managers" for every actual "employee".
It was ludicrous. I think there are issues with today's 'VC' fueled market, but it's nothing like back in '99.
Nothing beats Atari, who in their heyday had 500(!) marketing drones. Who spent their days at lavish conventions in Hawaii etc. and went through a billion dollars before they got bought out (and all fired).
In terms of sustainability, things like same-day delivery are being attempted by companies with much greater capacity to absorb losses. Google and Amazon can explore potential market opportunities without devoting their entire operation to that venture. If it works out - great, but if-not, they haven't gone out of business, and can re-focus on their core business model.
Online food delivery has worked for years and I believe is profitable, at least in the UK.
No one is currently making any money in online food delivery in the UK (unless you count Just Eat, who had the fantastic idea of doing away with any sort of logistics on their part). There's definitely potential for the market to be huge as people become more comfortable with the idea of having someone else pick their bananas for them though.
Unless I'm mistaken, Ocado is still not profitable even if it's been at it for 13 years.
Apparently, Ocado did indeed finally turn a profit this year:
http://www.theguardian.com/business/marketforceslive/2014/ju...
A pity to see even they're running so lean on the profit margins - I've found them to offer the best organised process for actually getting the groceries inside, where all the crates are staged first, then the bags unhooked and hefted inside, taking very little time at all, versus the loose bags or even completely loose items of the other supermarket delivery operations.
http://www.theguardian.com/business/marketforceslive/2014/ju...
A pity to see even they're running so lean on the profit margins - I've found them to offer the best organised process for actually getting the groceries inside, where all the crates are staged first, then the bags unhooked and hefted inside, taking very little time at all, versus the loose bags or even completely loose items of the other supermarket delivery operations.
There's an online shoe/fashion retailer in Germany (Zalando, because faux Italian is the new dot-com) that's apparently following Amazon's "every sale is a loss but we're making up for it in volume" model. They're ridiculously successful (in terms of sales and market share) and often held up as an example for successful tech companies.
I'm not entirely sure what their long term plan is, but I'm hoping this is just an attempt to establish a monopoly that can then be exploited to turn the operation into a profit.
I'm not entirely sure what their long term plan is, but I'm hoping this is just an attempt to establish a monopoly that can then be exploited to turn the operation into a profit.
Most people use food delivery services run inhouse by the major supermarkets, which also means that it's hard to tell whether or not they're profitable. Tesco claims that theirs is (though not masively so) but it's not clear how accurate their figures are, and the competing supermarkets refuse to provide that information.
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Just because Google and Amazon are (newly) competing in a space doesn't mean that space will ever be profitable.
I think it's likely that the space will be profitable for Amazon and Google. They work at the sorts of scales where you can make a decent business even with a lifetime value of pennies for each customer. Doing a startup that doesn't have that sort of scaling advantages is a very different proposition - anyone thinking that this is the same idea as Kozmo hasn't really thought about it very hard.
Indeed -- in fact it may meant that it can't ever be profitable, and thus is only practical for large companies who make their revenue elsewhere to use as a loss leader.
These wouldn't have been high profile failures without something appealing about them. Nobody remembers the really terrible ideas that never got past the drawing-board.
Selection bias. It's really no different from how people always seem to think all music in ${decade that they were teenagers} was so much better. Because all we remember are the handful of songs we liked plus the memorable stuff that survived in "best of" compilations.
Actually there is a different reason music during your teenage years is the most meaningful to you. It's because it was the music you listened to while having your strongest emotional experiences. It consoled you after that first breakup, was playing during that first kiss, etc.
http://www.slate.com/articles/health_and_science/science/201...
http://www.slate.com/articles/health_and_science/science/201...
The two aren't mutually exclusive, though. This merely explains why you remember certain individual songs and think they are better than you might think if they didn't have any special meaning to you. The fact that those that you remember are likely the better ones (rather than an unbiased sampling) is what makes you think all music was better (or that there was more better music, at least).
By the malinvestment theory of a bubble, by definition bad ideas were getting past the drawing board, otherwise it wouldn't have been a bubble. Not everyone agrees with strict malinvestment theory.
This isn't a contradiction; there will be ideas that have something appealing about them, and are actually bad ideas in practice.
Or they could be early or executed poorly. YMMV.
In other word "Worst Flop" is not going to be the terrible stupid bad ideas - the exact opposite of "fantastic idea", more like "biggest gap between expectation and reality".
Or they could be early or executed poorly. YMMV.
In other word "Worst Flop" is not going to be the terrible stupid bad ideas - the exact opposite of "fantastic idea", more like "biggest gap between expectation and reality".
"though Flooz was a flop, bitcoin has now shown that digital currency can play huge role in the modern world"
Sure - if one considers "never-ending hype-machine" and "engine for producing scam mining-hardware companies" to be a "huge role"...
Sure - if one considers "never-ending hype-machine" and "engine for producing scam mining-hardware companies" to be a "huge role"...
Well, the #1 problem for me was the name -- too close to "fleece". But also they were injecting themselves between the buyer and the merchant, adding friction and uncertainty (Why should I use them when the merchant already accepts Visa?)
That simply isn't true. BitPay, just one bitcoin payment processor, is processing for over a million dollars worth of merchandise per day [1]. That's real people buying real stuff.
I suppose you could argue that several million dollars a day doesn't amount to a "huge role," but let's not pretend that it's just hype and mining.
[1] http://www.coindesk.com/bitpay-now-processing-1-million-bitc...
I suppose you could argue that several million dollars a day doesn't amount to a "huge role," but let's not pretend that it's just hype and mining.
[1] http://www.coindesk.com/bitpay-now-processing-1-million-bitc...
Interesting way to look at it ... kinda like how one could conflate the invention of SMTP & the problem of spam email?
If one judges new things through the lens of mainstream media and not by actually seeking to understand the new thing then of course it'll seem like a "never-ending hype-machine". Seems to me you might actually be gaining an understanding of how the media works and confusing that with an understanding with the topic they're talking about.
If one judges new things through the lens of mainstream media and not by actually seeking to understand the new thing then of course it'll seem like a "never-ending hype-machine". Seems to me you might actually be gaining an understanding of how the media works and confusing that with an understanding with the topic they're talking about.
Fantastic Ideas != Economically Viable Ideas
Pay close attention to the underlying costs of the implementation of your idea and look for new technologies which you can use to enter a market with a higher quality product/service at a reasonable price.
Pay close attention to the underlying costs of the implementation of your idea and look for new technologies which you can use to enter a market with a higher quality product/service at a reasonable price.
There's actually a very important lesson here--one that has been confirmed for me personally by speaking with some more experienced people in the industry.
Success in a startup is not just about a good idea, great people and great execution. It's also very much about timing. You can find lots of stories about smart people trying to create amazing businesses five or ten years before the world is ready for them.
Success in a startup is not just about a good idea, great people and great execution. It's also very much about timing. You can find lots of stories about smart people trying to create amazing businesses five or ten years before the world is ready for them.
You can further break down "the world is ready":
1) are customers ready for it? Will they see it as a weird idea that they'd never spend money on, or as a quality of life improvement? Ten years ago I'd have thought buying kitchen towels on the internet was a crazy idea when I can drive 3 blocks to the store to get them; now I think it's crazy to take a trip to the store for one thing when I can get a better selection and better prices on amazon prime.
2) is the technology / infrastructure you need to implement it in place? Apps related to local travel became much more viable when people started carrying portable computers (with telephone functionality) everywhere they went. Niche resale became much more viable when you could plug in to a pre-existing marketplace (ebay, amazon) with an existing customer base, payment processing, etc. so you don't have to spend big bucks developing those things yourself.
1) are customers ready for it? Will they see it as a weird idea that they'd never spend money on, or as a quality of life improvement? Ten years ago I'd have thought buying kitchen towels on the internet was a crazy idea when I can drive 3 blocks to the store to get them; now I think it's crazy to take a trip to the store for one thing when I can get a better selection and better prices on amazon prime.
2) is the technology / infrastructure you need to implement it in place? Apps related to local travel became much more viable when people started carrying portable computers (with telephone functionality) everywhere they went. Niche resale became much more viable when you could plug in to a pre-existing marketplace (ebay, amazon) with an existing customer base, payment processing, etc. so you don't have to spend big bucks developing those things yourself.
I'd add a somewhat related #3: Do the underlying economics as they exist today support a business based on that idea? [1] There are lots of things I'd jump at spending some money on but not nearly enough money to cover the cost of providing me with the service.
[1] Obviously, companies often do have some runway before turning a profit but normally there needs to be a viable path to get there at some point.
[1] Obviously, companies often do have some runway before turning a profit but normally there needs to be a viable path to get there at some point.
Instacart is not "exactly like" Webvan. The only thing the two companies have in common is groceries. What distinguishes them is everything else. Webvan:
* Shipped their own groceries from their own gigantic centralized warehouses
* Did a land-grab rollout to a large number of cities
* Had a gold-plated customer experience enabled by enormous spending on employees and infrastructure. I still store all my electronics in a large stack of those big plastic crates Webvan gave me for free
* Built a massive central kitchen so they could deliver prepared meals to their customers
Instacart:
* Sends randos to Whole Foods and Safeway to get groceries using those people's own vehicles
* Rolls out slowly (I still can't get service in Oak Park, despite being half a block from Chicago, and Chicago only happened months and months after they launched SFBA)
* Has no discernable infrastructure expenses. I think they might reimburse some of their drivers for $20 dollies.
You can turn any "flop" into a "fantastic idea" if you devise a sustainable business model for it. If you can buy for a nickel and sell for a dime, you're golden. Webvan bought for a dollar and sold for a penny. Groceries had nothing to do with it.