The Dot Com Bubble is littered with the long dead corpses of companies and entrepreneurial ideas that thought they could become practically overnight billion-dollar success stories. Unfortunately for most of these companies, they entered the market as too much the visionary and too little the pragmatic that is often needed to succeed in business.
After all, many investors carried by the endless of stream of media hype for these dot com companies found themselves not even checking the profit and losses and other cash flow metrics that are routine with any other investment these people would normally make.
Because of this, many of these dot com bubbles were totally overvalued and operating with business models that were simply not sustainable. Here on Dead on the Web, we like to relive this kind of nostalgia and really dive deep into what exactly happened to these instant giants of industry that quietly died off almost as quickly as they rose to prominence.
WebVan.com the Biggest and Most Famous (In My Opinion) Flop of an Entire Dot Com Era
Web Van is a great example of visionaries who came too early to the marketplace. They were a company back in the late 90s that people could hop online and order groceries from. Then these large vans would go around the city and deliver the groceries direct to you.
This idea is not bad at all. In fact, you can see it working now successfully with several different companies including a small branch of Amazon that will deliver groceries to you so you do not have to go shopping.
The problem is… as with many of these dot com companies, Web Can grew too fast too soon with too little capital and too little infrastructure in a marketplace that just was not ready for their kind of product.
The company was a titanic conqueror in comparison to other companies, raising over $1.2 billion dollars during its Initial Public Offering back in 1999, few would ever had expected that this company would not be able to keep up with demand or had too razor thin profit margins to stay active in the marketplace.
In the year 2001, Web Van was no more. They could not afford to keep doing business with their model and they shut their doors. Their stock, once a pristine and enviable stock, fell to just 6 cents a share. The web company that had become the idol for many web entrepreneurs was now defunct, laying off around 2,000 people as their warehouses closed across the country.
As I said, the idea for Web Van is coming back in popularity and this company likely failed mainly because of the hype and too-early market adoption. The website is still up and going by the way, by one of the companies that is actually bringing this business model back to popularity – Amazon.
Amazon has opened this service to a few different cities now, and unlike Web Van, they are being very conservative as to how and where they open this service to make sure it remains as profitable as possible.