David Towers over at GoodWebPractices.com has a great top ten of the 10 most epic web venture failures. Great article:
These outstanding web failures did not require a $700 billion government bail out but they did manage to burn a hole in someone's pocket!Full article
1. Myspace
The idea: Social networking site aimed at 13 year olds.
Spent: Rupert Murdoch paid $327 million for MySpace in July 2005 (more info).
Highlights: More than 100 million users. Users can add friends, customise their profiles, add comments to profile pages and embed music. Myspace was Voted #1 worst website by PCWorld.
What went wrong? Myspace let users personalise their pages making the majority of profiles look horrific and illegible.
2. HavenWorks.com
The idea: News portal
Spent: $120 per year for past 9 years (Hosting cost!)
Highlights: Homepage is over 800k! Over 3600 diggs for HavenWorks being the worst designed website on the net. Received over 70,000 visitors in March (according to Compete).
What went wrong? What didn't? How this site has been online over 9 years defeats imagination. HavenWorks looks more like a pack of sweets than a news website.
3. Pets.com
The idea: Sell pet accessories and supplies direct to consumers.
Spent: $82.5 million in 2 years.
Highlights: Most trafficked online pet store at the time. Created a famous sock puppet which appeared on TV ads (watch a medley of Pets.com TV ads here). Ran a Super Bowl ad which cost $1.2 million.
What went wrong? Unsustainable business model. Who wants to wait 2 days for your cat litter to arrive when your cat has already pooped all over the kitchen floor.
4. Webvan
The idea: Online grocer, sold and delivered groceries within the US.
Spent: $1billion in 18 months.
Highlights: Went from a $1.2bn company with 4,500 employees to bust in less than two years. Share price went from $30 to 6 cents in a few months.
What went wrong? They built an infrastructure that cost over a billion dollars before they had made serious profit. The directors didn't understand the importance of cash flow!
5. Kozmo.com
The idea: Free one-hour delivery of any items above $10 (like DVD rentals or Starbucks coffee) within their service area.
Spent: Over $280 million in 3 years.
Highlights: Amazon invested $60m in Kozmo. Expanded to 7 US cities. Over 1100 employees. Advertised on TV. Documentary film made which portrays the fate of the company (e-Dreams, 2001).
What went wrong? How did they expect to cover the huge start up costs delivering DVD rentals and a pack of gum for free?
6. Flooz.com
The idea: Create an online currency. Can you lend me a Flooz?
Spent: $50 million in 3 years.
Highlights: Promoted by comic actress Whoopi Goldberg. Flooz lasted two and a half years. Russian mafia used Flooz for money laundering!
What went wrong? Who wants to use pay for products using an online currency when they could just use a credit card! What were they thinking?
7. eToys.com
The idea: Sell toys online.
Spent: $166 million in 4 years.
Highlights: Stock went from a high of $84 per share in October 1999 to a low of just 9 cents per share in February 2001.
What went wrong? Classic boom-to-bust, spending outweighed the company's income.
8. Kibu.com
The idea: Online community for teenage girls: "fashion, music, and boys"
Spent: $22 million in less than a year.
Highlights: Backed by a number of big Silicon Valley names including Jim Clark. Ran out of money and closed the site 46 days after the launch party!
What went wrong? A spectacular failure. Boom to bust to under a year. Some say Kibu.com was a victim of the fall in the financial markets as a result of the dot com bust.
9. Boo.com
The idea: Sell expensive branded fashion apparel.
Spent: $135 million in 6 months.
Highlights: When Boo.com went bust, they owed over $21million to creditors. Boo.com's software and technology purchased at $70 million, were sold off for $250k.
What went wrong? They built a site using JavaScript and Flash in the days of 56k modems so users had to wait ages to load the site, they also employed 400 people when they only needed 30.
10. Microsoft live search
The idea: Create a search service that people will actually use.
Spent: Several billion dollars!
Highlights: Multiple attempts to buy out Yahoo. Launched two programs to entice users to use Live: Cashback and SearchPerks. Cashback was launched in May 2008 and didn't have a significant effect on traffic numbers. SearchPerks was launched on the 1st October and probably won't do much either.
What went wrong? Live's search results are so poor, users can't even be bribed to use it! Live search has less than 10% of the search market.
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