Ever heard about Kozmo.com or Flooz.com? Probably not, but that is because they emerged and disappeared from the Internet scene within a small time frame. Sure, there are many success stories out there like Facebook. What about failure stories though? We should talk about them more often!
That is exactly what an article that I came across yesterday was doing. It was titled “How 9 Tech Companies Lost 2 Billion Dollars.”
Here is what happened with Kozmo.com:
“A great idea poorly executed. Kozmo.com was founded by investment bankers Joseph Park and Yong Kang. The company’s purpose was simple: to deliver a wide variety of small goods within an hour for no delivery charge. Wanted popcorn, soda, and a movie on your doorstep in under an hour? No problem! Unfortunately for Kozmo, the gimmick that made it famous, “Free Delivery”, was also its undoing. The company claimed that the money saved by not needing rental space for store fronts would easily offset the costs of delivery. This however was not the case as the company would shut its doors after only three years of service. Kozmo raised roughly $250 million in funding including $60 million directly from Amazon.com, but one wonders what their logic was when they promised $150 million of that money to Starbucks for advertising.”
The other companies covered are Webvan, Pets.com, Flooz.com, eToys.com, Go.com, GovWorks.com, Boo.com and MVP.com. You can read the full article here.