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March 25, 2013 07:00 am GMT
You’ve all heard stories about the infamous dot-com bubble burst of the early aughts. It wasn’t pretty, a lot of people lost a lot of money – and their livelihoods to boot. There will always be talk of whether we are close, or ever could get close, to a similar situation again. I spent some time with an early employee of everything-you-can-think-of-on-demand-delivery-service Kozmo.com, Micah Baldwin of Graphicly, which was a poster child for early dot-com excess. The company raised $250 million before it shut its doors in 2001, since it had only become popular with college students and young professionals, they said. In 1999, its revenues were only $3.5 million, leaving the company with a net loss of $26.3 million. Ouch. This service was a lot like hot companies of todayPostmates and TaskRabbit. The difference was that Kozmo didn’t have the social Internet, mobile devices or apps to spread the word about its free delivery service. Mind you, being a free delivery service makes zero sense, so no wonder why it flamed out. Baldwin and I discussed an early commercial campaign that the company was super proud of, spending millions upon millions of dollars to produce and air. It starred an older version of the Million Dollar Man, Lee Majors. It got me to thinking, and this is exactly why Kozmo fizzled: It was a cute commercial, but since it cost so much money to hire the agency to come up with the concept, cast it and air it, it was already an incredibly wasteful idea before it was complete. However, what was Kozmo to do? There was no Facebook, no Twitter and there certainly wasn’t YouTube for something like this to go (ick) “viral.” There were no Facebook pages to like, no accounts to follow and no apps to download. Kozmo had a few choices to get its name out there to the world, and all of them were expensive. This is why so many companies crashed and burned: There were no ways to do things cheaply. Failing and going back to the drawing board was impossible. To hit yet another demographic, Kozmo paid to have a different commercial created, but this one never hit the airwaves: Again, cute and not awful. However, both of the commercials are something that companies are creating quickly and cheaply these days, passing them around to networks of millions of people thanks to
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/DfnpcmUMANA/
The Social Web Will Help Protect Us From Another Dot-Com Fizzle
You’ve all heard stories about the infamous dot-com bubble burst of the early aughts. It wasn’t pretty, a lot of people lost a lot of money – and their livelihoods to boot. There will always be talk of whether we are close, or ever could get close, to a similar situation again. I spent some time with an early employee of everything-you-can-think-of-on-demand-delivery-service Kozmo.com, Micah Baldwin of Graphicly, which was a poster child for early dot-com excess. The company raised $250 million before it shut its doors in 2001, since it had only become popular with college students and young professionals, they said. In 1999, its revenues were only $3.5 million, leaving the company with a net loss of $26.3 million. Ouch. This service was a lot like hot companies of todayPostmates and TaskRabbit. The difference was that Kozmo didn’t have the social Internet, mobile devices or apps to spread the word about its free delivery service. Mind you, being a free delivery service makes zero sense, so no wonder why it flamed out. Baldwin and I discussed an early commercial campaign that the company was super proud of, spending millions upon millions of dollars to produce and air. It starred an older version of the Million Dollar Man, Lee Majors. It got me to thinking, and this is exactly why Kozmo fizzled: It was a cute commercial, but since it cost so much money to hire the agency to come up with the concept, cast it and air it, it was already an incredibly wasteful idea before it was complete. However, what was Kozmo to do? There was no Facebook, no Twitter and there certainly wasn’t YouTube for something like this to go (ick) “viral.” There were no Facebook pages to like, no accounts to follow and no apps to download. Kozmo had a few choices to get its name out there to the world, and all of them were expensive. This is why so many companies crashed and burned: There were no ways to do things cheaply. Failing and going back to the drawing board was impossible. To hit yet another demographic, Kozmo paid to have a different commercial created, but this one never hit the airwaves: Again, cute and not awful. However, both of the commercials are something that companies are creating quickly and cheaply these days, passing them around to networks of millions of people thanks toOriginal Link: http://feedproxy.google.com/~r/Techcrunch/~3/DfnpcmUMANA/
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