25 Internet Startups That Bombed Miserably

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25 Internet Startups That Bombed Miserably

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6. Pets.com

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Pets.com’s talking sock puppet mascot was intriguing enough to be featured in parades and Super Bowl commercials, but it didn’t give anyone incentive to buy their pet food on the Internet. Part of the problem was waiting for your order to be shipped. As C/Net aptly observes, “after they ordered kitty litter, a customer had to wait a few days to actually get it. And let’s face it, when you need kitty litter, you need kitty litter.” Pets.com dug themselves into an even deeper hole by offering huge shipping discounts to entice people to order. This negated the value of the few orders people did place, as even those were not ultimately profitable. In spite of these obvious red flags, Pets.com managed to raise $82.5 million in a February, 2000 IPO. Not surprisingly, though, the company collapsed a mere nine months later.

7. Boo

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Boo.com showed the world that Internet startup failures could, indeed, go international. The United Kingdom-based online fashion retailer also testified to another startup-killing habit: using JavaScript doo-dads and quirky Flash-based navigation in order to dazzle and impress instead of fulfilling genuine consumer needs. These tactics make for slow-loading sites today, but they were downright fatal during the dial-up days of 1998-2000. Boo also underestimated the hassles of being a “global company”, such as dealing with the many different languages and tax structures of the various countries it attempted to do business in. The result was all too predictable. After a couple years of lackluster sales and unmet projections, Boo liquidated its assets in May, 2000 after blowing $160 million in venture funds.

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8 . Kozmo

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Billed by as “the shining example of a good idea gone bad”, Kozmo actually shocked many people by failing. The idea was to let city dwellers order late-night impulse items like movies and snacks that would be delivered free in an hour. It was a big hit with its target market, but before long, Kozmo became a victim of its own success. The very thing that made it appealing – free, fast delivery – made the business model unsustainable. It was simply not possible to deliver items that cheap for free and still turn a profit. By the time Kozmo began charging for delivery it was already too late, and the $280 million in funding was lost when the company closed its doors in March, 2001.

9. Kibu

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Kibu is one of the few Internet flame-outs that had the good sense to close up before burning through all the money it raised. They were mainly a victim of poor timing. By the time of their closing in October, 2000, investors had were beginning to get burned by the dot com crash and grew increasingly suspicious of dot com companies. Consequently, the big-name Silicon Valley investors who were backing Kibu promptly jumped ship on the company just as they were beginning to attract users from its target market. Many in the industry consider the Kibu abandonment a precursor to the end of the venture capital backed gravy train for Internet startups during this time.

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10. Go.com

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Not even the mighty Walt Disney Company could insulate itself from the shock of the dot com bust. Their briefly-successful Go.com portal (also known as the “Go Network”) was intended to be an all-service destination a la Yahoo, Lycos, and Alta-Vista. It seemed like a halfway decent idea at first, and Go even managed to partner with big-name content providers like ESPN and ABCNews. Unfortunately, being run by Disney placed restrictions (such as bans on mature content) on Go that none of the other portals had to contend with. As a result, the website was never able to recoup or justify the millions of dollars spent on promoting it. Go.com was shut down in Janurary, 2000 and Disney took a $790 million bath on the whole project.

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Leave a response
  • July 27, 2008 at 9:42 pm

    This is a great list! It is a blueprint of what not to do in growing your online business! Should be a class at Wharton!

  • July 27, 2008 at 11:50 pm

    Note to the author: an opening parenthesis, (, eventually requires a closing parenthesis, ).

  • July 28, 2008 at 12:50 am

    FWIW I wasn’t a founder on Kiko. I was their first employee (#3).

  • July 28, 2008 at 3:23 am

    I remember Beenz, it was almost a good idea… for a 5 yearold!

  • July 28, 2008 at 6:23 am

    This would probably take too much time, but what would really be great if you could find/compile a list of the founders of these companies, and what they’re doing now. We all know that most entrepreneurs fail the first time out of the gate, but many go on to do great things. How does “epic” vs. “quiet” failure affect future success?

  • July 28, 2008 at 6:38 am

    Startup.com is an entertaining documentary. It’s actually on satellite again tomorrow morning. I’ve got my DVR set.


    The main problem with Pets.com was the shipping costs for selling heavy, and relatively inexpensive, bags of dog food and cat litter. An online retailer needs a much lower ratio of shipping costs to product value to be profitable.

  • July 28, 2008 at 7:14 am

    No Value America? The subject of Dot.bomb, Value America was a spectacular blow-up. The kicker is that Amazon now does what they set out to do: sell anything and everything.

  • eric
    July 28, 2008 at 7:16 am

    as I understand it, friendster is quite popular in China…

  • Iso
    July 28, 2008 at 7:23 am

    There was a documentary about kozmo.com too: e-dreams


  • July 28, 2008 at 7:25 am

    Would you take the risk to work for a startup now? I don’t think I would…

  • JIm Jones
    July 28, 2008 at 7:56 am

    Wow dude, I forgot about most of those sites. Good article!


  • Zuma Marie
    July 28, 2008 at 8:12 am

    another famous flop from 97-98 : iFusion.com

  • Wendy D
    July 28, 2008 at 8:20 am

    I was a fan of both WebVan and Kozmo. Both delivered excellent product and great service. They were especially helpful because I was living in downtown Atlanta, which has very few stores open at night and no local grocery store, or didn’t at that time. It was fantastic! But I guess both were too good to be true.

  • July 28, 2008 at 8:27 am

    Interesting post, but over 15 of those stories all occurred between 1998 and 2001. Of course there were a lot of flops during that time, I’d like to hear more start-up failures after 2001…follow up post?

  • July 28, 2008 at 8:50 am

    What did Kibu (#9) do or sell? The article mentions that they began “to attract users from its target market” but never says who that is???

  • July 28, 2008 at 9:15 am

    It’s probably misleading to say Go.com “acquired” content from ESPN and ABC, since those are both Disney-owned properties.

  • Adam
    July 28, 2008 at 9:27 am

    What did Kibu do? And you should probably note that while Go.com partnered with ABC and ESPN, both of those companies are Disney brands as well.

  • LocoTx
    July 28, 2008 at 9:34 am

    Great list! Now we need a list of dot.com companies that made it and what they felt was why they were successful.

    I think know what to do is just as important on knowing what not to do.

  • July 28, 2008 at 10:07 am

    Startup.com was a great film. Too bad Govworks didn’t succeed. The idea is now in use all over the place.

  • rezzer
    July 28, 2008 at 10:18 am

    No loser list should be without the miserable failure of …. smallbusiness.com

  • Anargeek77
    July 28, 2008 at 10:31 am

    I think Friendster is still STRONG in numbers. Have you guys visited the site recently? To be honest its more user friendly than FACEBOOK or MYSPACE.

    You shouldn’t include friendster.com as one of the bombed sites. I still use it, they have APIs, WEB 2.0 and they are OPENSOCIAL.

    Being a SELLOUT doesn’t mean you bombed!!!

  • July 28, 2008 at 10:38 am

    Just proves you can have a great idea, great intentions, etc … but you still need the right minds to push it forward. Great article.

  • July 28, 2008 at 11:12 am

    Some people are just way into the future and it’s not their time to shine. We’re seeing another wave this time around too, even though only smaller players.

  • July 28, 2008 at 11:39 am

    Funny selection!

  • July 28, 2008 at 12:51 pm

    A friend of mine use to work for friendster.
    What a pile of poo that company was.
    I can’t believe they didn’t sell when they could.

    I don’t know why kazaa was on this list..
    they didn’t fail because they were bad they failed
    because they were destroyed by the music industry.
    People liked kazaa, they didn’t like the free spyware tho.

    Also this list is real short.. there were no just 25 company’s who failed during the dot.com time frame there were 100’s that you may have or not have heard of.
    excite, inktomi, ariba, netscape the list go’s on and on.
    Befor you say that netscape is not out of business, I’ll
    clarify. After netscapes business started going down the tubes, the company was split up and sold off to sun and aol.
    100% of all of the employees quit withing the next 10 months if they were not let go when there managers quit.
    All that remains of “netscape” is it’s name.

  • Ron
    July 28, 2008 at 12:57 pm

    Wow, I remember when eToys was rocking on the stock market. Too bad they never survived the bubble burst… here’s a story of how they could of potentially changed their strategy and business tactics to surive (look at the excerpts)… http://www.readtheanswer.com/index.php?RTA=web2

  • July 28, 2008 at 1:28 pm

    don’t forget PODSHOW

  • Kevin
    July 28, 2008 at 2:34 pm

    Great read…enjoyed it. It seems as though PlanetRX is still up and running though. I even decided to call them directly and place an order and was able to do so.

  • July 28, 2008 at 2:50 pm

    This is a great collection. I have started my internet business few months and this article is a great input to my business decision.

    Great Job. Keep it up.


  • Laura
    July 28, 2008 at 3:09 pm

    eve.com – I had quite a few friends involved with them. They gave a great severence package, though!

  • July 28, 2008 at 3:16 pm

    Kick ass list and a great example indeed. I forgot about eToys. Loved their jingle. I can’t believe Beenz raised 80MM dollars. WOW.

  • Thad
    July 28, 2008 at 3:49 pm


    I knew I had wasted my money when the strategy was “kiosks in gardening centers” promptly followed with a 10 minute description of why it was a brilliant idea. Only minimal change in consumer mindset and spending patterns will make a ton of money.

  • July 28, 2008 at 5:38 pm

    Great list, I was a pretty prominent user on a number of those sites (particularly Altavista).

  • thermocline
    July 28, 2008 at 9:01 pm


    $70 million burned in 12 months, and they took a family-owned furniture business with it.

    Context Magazine: http://tinyurl.com/5g7gff
    SF Chronicle: http://tinyurl.com/5akd6k

  • July 28, 2008 at 11:53 pm

    You would think the time is ripe for a WebVan service, with the gas prices so high right now.

    Safeway has been trying to deliver your groceries for a couple of years.

    Has anyone ever had their groceries delivered?

    Take care,

  • fred
    July 29, 2008 at 2:06 pm

    I was bitten for almost $5g working for SoulMD.com. They went under and refused to pay for some work I did. Talking to the CEO on the phone, his answer was- quote- “Hey, you got screwed! Get over it!” My lawyer sent him a letter and it was returned unopened, and the little shit had carefully colored a box over the entire address with a ball point pen.

    Monte, we have unfinished business if I ever see you on the street.

  • ridge
    July 29, 2008 at 4:33 pm

    what? no garden.com ? sheez!

  • Antinous
    July 29, 2008 at 11:11 pm

    Sadly, my stock broker, the person who was giving me investment advice, sank all his money into eToys when it was at its peak price. I derive a little satisfaction from imagining that he’s living in a smaller refrigerator box than me.

  • July 30, 2008 at 1:13 am

    SAD!!! they must have put in so much of hard work… :(

  • Jenn
    July 30, 2008 at 2:35 am

    What about “powwow”? the downloaded program to “chat”…man that was awesome back then! *LOL*

  • July 31, 2008 at 12:03 pm

    There’s a lot of things to be learned from failure. Thanks for the reminder of some of the more fantastic failures out there.

  • August 1, 2008 at 9:19 am

    This is great list and i think it shame such great ideas might fail , more research should have been done though i guess

  • December 14, 2008 at 12:17 pm

    This is a very good site, it will help me to know what not to do in starting my own business. Thanks for the info.

  • December 19, 2008 at 9:58 am

    very informative…thanks for the post.

  • December 28, 2008 at 5:16 pm


    I guess they did bomb… because I haven’t heard of any of them!

  • January 9, 2009 at 10:32 pm

    i still use and love friendster!

  • Paul
    January 28, 2009 at 8:29 am

    I worked for an online publisher during the 15 minutes that Beenz was alive.

    Beenz were desperate for us to jump on board. I remember one of their reps trying to convince me that eventually, currencies would be replaced by ‘Beenz’. I laughed so hard I almost wet myself.

    As laughable as their distorted ‘vision’ was, they somehow managed to convince some moron in our marketing dept that it was viable. We rolled it out across several million pages, only to roll back 4 weeks later when Beenz announced they’d pulled the pin.

    Beenz was yet another hair-brain idea sold by enthusiastic 20 somethings to greedy investors and marketing managers so wet behind the ears and desperate to make a buck, they couldn’t spot a stupid idea if it smacked them in the face!

    But having said that, if someone told me back in 2000, a site like Facebook would be worth billions, I’d have told them to get off the crack-pipe.

    Maybe they are the visionaries – maybe they know the odds are slim, but, if it works, then the sky is the limit. I guess it’s easy to take a chance when you’re using someone else’s money.

  • Ryan
    February 5, 2009 at 3:01 pm

    So, with all of these out of the way, where might someone get advice on starting yet another one? Maybe one with a useful purpose, cash flow, wide market, ect., ect.. I have an idea that I want to get off the ground, but don’t know where to go to get good advice before the “beenz” are spilled.

  • June 11, 2009 at 8:47 pm

    I wish there were 100 failures on this list. That was a great read.

  • Saad
    June 24, 2009 at 2:10 pm

    great read

  • November 16, 2009 at 8:44 pm

    I’d have added DEN to this, for sure…

  • November 16, 2009 at 10:32 pm

    Same comment with Todd. I don’t recall seeing what Kibu was about in the article. Also, IMHO, some of the companies don’t deserve to be in the “failed miserably” list. Other than that, it was a good read. 😉

  • November 17, 2009 at 4:21 am

    Interesting Read, jogging my memory to many, thinking “failed miserably” is in the amount of revenue lost. Ordering kitty litter, waiting for 2-3 days stinks to high heavens.

    OMG, Owners of company must not have ever owned a stinking Cat.

  • Christian
    November 17, 2009 at 4:25 pm

    The old ones like boo and webvan are wellknown but what about some more recent epic startup fails? It’s a dilemma that we won’t hear about any big fails unless the big next bubble explodes. Until that happens, the small fails won’t seem big and relevant enough to talk about.

    As Nassim Taleb puts it right in his book “The Black Swan”, people tend to look on the big and colorful successes (twitter, Facebook) but are ignorant when it comes to all the small failures that happen silently and alone.

  • July 29, 2010 at 4:38 am

    Unfortunately, it sank and my stock broker, and the person who was giving me advice in the area of investment, all his money in the e-toys when prices were at their peak. I derived little satisfaction from the thought that living in a smaller square me the fridge.

  • November 13, 2010 at 5:50 am

    I heard of Flooz and Beenz. I guess they were really popular and could have used the brand name to sell something that would sell.

  • January 4, 2011 at 11:58 pm

    friendster is still ok. Great read thnx.

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