Remembering Online Business Failures
The Wall Street Journal Online had a great article the other day called "The Best of the Worst" remembering some spectacular failures from back during the dot-come bubble. I remember several of the sites mentioned, and it reminded me that bad ideas for online businesses have been around for a long time, and often involved some very smart people and very large sums of money.
CyberRebate was clearly a bad idea. Their whole business plan consisted of selling stuff at ridiculously high prices, then giving people their money back if they jumped through all the hoops required to get the rebate. The company planned to make money thanks to the poor suckers who didn't jump through all the hoops correctly. Hard to believe it didn't work out for them.
I was briefly a member of Flooz, which was meant to become the online currency we all had to have. Except of course it turns out we didn't. Beenz was a similar service around at this time, which also didn't make it. A big part of their failure (apart from not really having a product that anybody actually needed) involved freeloaders and cheaters. To anybody involved in PTR reward programs, I'm sure these problems sound familiar.
Another dot bomb not mentioned in the WSJO article was FreeProductSamples.com -- one of those sites that offers freebies from various companies. Nothing particularly wrong with that, but at the time they launched they'd identified 21 competitors doing exactly the same thing. This didn't stop them from predicting they'd be earning $100 million in revenue within 5 years. Yeah, right!
There are heaps of other examples, and the amazing thing is, some of these 'businesses' were handed millions, and in some cases tens of millions of dollars, and ended up with absolutely nothing to show for it. And it's still happening, although on a much smaller scale. We still see sites (in PTR, affiliate marketing, etc.) that are getting all sorts of hype, but that don't really have much substance when you take a good look at them. Of course that doesn't mean there's no money to be made, but there's no value being created.
CyberRebate was clearly a bad idea. Their whole business plan consisted of selling stuff at ridiculously high prices, then giving people their money back if they jumped through all the hoops required to get the rebate. The company planned to make money thanks to the poor suckers who didn't jump through all the hoops correctly. Hard to believe it didn't work out for them.
I was briefly a member of Flooz, which was meant to become the online currency we all had to have. Except of course it turns out we didn't. Beenz was a similar service around at this time, which also didn't make it. A big part of their failure (apart from not really having a product that anybody actually needed) involved freeloaders and cheaters. To anybody involved in PTR reward programs, I'm sure these problems sound familiar.
Another dot bomb not mentioned in the WSJO article was FreeProductSamples.com -- one of those sites that offers freebies from various companies. Nothing particularly wrong with that, but at the time they launched they'd identified 21 competitors doing exactly the same thing. This didn't stop them from predicting they'd be earning $100 million in revenue within 5 years. Yeah, right!
There are heaps of other examples, and the amazing thing is, some of these 'businesses' were handed millions, and in some cases tens of millions of dollars, and ended up with absolutely nothing to show for it. And it's still happening, although on a much smaller scale. We still see sites (in PTR, affiliate marketing, etc.) that are getting all sorts of hype, but that don't really have much substance when you take a good look at them. Of course that doesn't mean there's no money to be made, but there's no value being created.
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