Boo.com (1998-2000)
Boo.com an online fashion store, famously went bust following the dot-com boom during the late 1990s. Boo.com had already encountered with problems and mismanagement from the start. After several highly publicised delays, Boo.com launched in the Autumn of 1999 selling branded fashion apparel over the Internet. The company spent $135 million of Venture capitalists' money in just 18 months, and it was placed into receivership on 18 May 2000 and liquidated.
Fashionmall.com, which has been operating since 1994, bought the remains of Boo.com which included brand, Web address and advertising materials but this deal did not include any physical assets, software or distribution channels. In 2005 CNET called Boo.com the sixth greatest dot-com flop.
The question is what has caused Boo.com to fail????
1. Timing
The fundamental problem was that the company was following an extremely aggressive growth plan, launching simultaneously in multiple European countries. This plan was founded on the assumption of the ready availability of venture capital money to see the company through the first few years of trading until sales caught up with operating expenses.
Such capital ceased to be available for all practical purposes in the second quarter of 2000 following dramatic falls in the NASDAQ presaging the "dot crash" following the Dot-com bubble. Boo would probably have failed for this reason even if the user experience had been excellent and the launch on schedule.
2. Problems with the user experience
The boo.com website was said to be poorly designed for its target audience, going against many usability conventions. The site relied heavily on JavaScript and Flash technology to display pseudo-3D views of wares as well as Miss Boo, a sales-assistant-style avatar.
Miss Boo
The first publicly released version of the site was fairly hefty—the home page alone was several hundred kilobytes which meant that the vast majority of users had to wait minutes for the site to load, by then broadband technologies were still not widely available at that time. The site's front page did contain the warning, "this site is designed for 56K modems and above". So users which have a slower modem speed won’t have a chance to access at that time when dial-up internet usage was the norm.
3. Burn rate
Boo.com's sales did not match expectations, due partly to the very high number of products returned by customers. Poor management and a lack of communication between departments resulted in costs spiraling unchecked—the effectiveness of an eye-catching and expensive ad campaign was limited because the website wasn't ready in time, resulting in curious visitors being greeted with a holding page.
Boo spent wads of cash to market itself as a global company but then had to deal with different languages, pricing, and tax structures in all the countries it served. The company also mysteriously decided to pay postage on returns, but even more importantly, sales never reached expectations. Boo.com eventually burned through $160 million before liquidation in May 2000.
For more info on other dotcom flops checkout this website
http://www.cnet.com/1990-11136_1-6278387-1.html
The first publicly released version of the site was fairly hefty—the home page alone was several hundred kilobytes which meant that the vast majority of users had to wait minutes for the site to load, by then broadband technologies were still not widely available at that time. The site's front page did contain the warning, "this site is designed for 56K modems and above". So users which have a slower modem speed won’t have a chance to access at that time when dial-up internet usage was the norm.
3. Burn rate
Boo.com's sales did not match expectations, due partly to the very high number of products returned by customers. Poor management and a lack of communication between departments resulted in costs spiraling unchecked—the effectiveness of an eye-catching and expensive ad campaign was limited because the website wasn't ready in time, resulting in curious visitors being greeted with a holding page.
Boo spent wads of cash to market itself as a global company but then had to deal with different languages, pricing, and tax structures in all the countries it served. The company also mysteriously decided to pay postage on returns, but even more importantly, sales never reached expectations. Boo.com eventually burned through $160 million before liquidation in May 2000.
For more info on other dotcom flops checkout this website
http://www.cnet.com/1990-11136_1-6278387-1.html
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