Ten Years Ago This Week: A Requiem for Petopia
In honor of this week's 10th anniversary of the dotcom stock market peak, NetworkWorld's Paul McNamara rounds up some entertaining contemporary coverage of a market bust that seemed impressive at the time but now stands in relation to the real estate bust as the Great War stands to World War II:
A few of the names live on as poster children for failure, of course: Pets.com, Kozmo.com, MVP.com and Go.com…
[T]here were remarkable and enduring successes during this period—Amazon, eBay, Craigslist, Yahoo, Google—even if it would be insulting to call them dot-coms and their real fortunes had so many chasing empty dreams.
Highlights include this CNet obituary for one celebrity-enabled digital cash site:
Flooz.com was a perfect example of a "what the heck were they thinking?" business. Pushed by Jumping Jack Flash star and perennial Hollywood Squares center square Whoopi Goldberg, Flooz was meant to be online currency that would serve as an alternative to credit cards. After buying a certain amount of Flooz, you could then use it at a number of retail partners. While the concept is similar to a merchant's gift card, at least gift cards are tangible items that are backed by the merchant and not a third party. It boggles the mind why anyone would rather use an "online currency" than an actual credit card, but that didn't stop Flooz from raising a staggering $35 million from investors and signing up retail giants such as Tower Records, Barnes & Noble, and Restoration Hardware.
Funny that. Tower Records is now out of business. Revolution Restoration Hardware was picked up for a song in 2008. And is anybody placing bets on the existence of a Barnes & Noble in 2015? Yet a scant decade ago they were all "retail giants." Et in Arcadia did Ozymandias a stately pleasure dome decree!
I'm old enough to get heartsick when I realize my memories of King Philip's War no longer have currency with today's youth, so reading McNamara's piece I was relieved to find it all seemed so long ago. Yet I still feel a need to defend my cohort of superannuated punks (like aged hippies, but even less pleasant to be around). To wit:
A few lucky tweaks in the business plan and we would all be talking about Flooz and the revolutionary approach to e-commerce that made it a perennial leader over Paypal. In a comment, reader Mike FM gives a pretty good theoretical defense of the Flooz model, and raises a metaphysical question about digital currency that will, I'm sure, be answered on the Last Day. You know the real reason Flooz failed? Because most human endeavors fail, and Flooz happened to be part of that majority. (If there are any Flooz vets out there, please give me a FuckedCompany-style correction in the comments.)
And that's assuming a static business model. The cavalcade of all-stars cited above includes one company (Yahoo!) that has drilled through more new models than Tiger Woods at the Everglades Club, and another (Amazon) that has spent much of its life trying to escape from its original business plan of selling books. Both have enriched us with their innovations: Amazon's Kindle is as likely a candidate as any to supplant the paper book for good and all. And I know there's something Yahoo!'s still good at, but I'm becoming forgetful in my seasons. Yet both companies endured because they did what the losers get mocked for trying to do: They made an early drive to control a big chunk of what some geezers still call "web real estate."
In fact, I'm going to say Pets.com and other dreamers were actually smarter than the snarking lurkers who make fun of them with hindsight. Even the dumbest dotcommer knew by 2001 that controlling real estate is a liability once the real estate becomes worth nothing. It took the rest of America until 2006 to learn that lesson. (Some took even longer than that.)
So light a candle for Petopia. And revisit those days of hype and glory with Heather Havrilesky, James Poniewozik and illustrations from the immortal Terry Colon.