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Is everybody forgetting the dot-com crash in early 2000s? Plenty of companies bet big on the web and lost everything. Nobody knew what they were doing, or how t

Is everybody forgetting the dot-com crash in early 2000s? Plenty of companies bet big on the web and lost everything. Nobody knew what they were doing, or how to make money, online. A lot of ideas that sound good and commonplace today were tried and failed dramatically at that time.

jrnichols 8y ago
Exactly. I remember the spectacular failures of pets.com and webvan.com (they blew through.. what, $600,000,000 in less than a year?) and now we have chewy.com and a bunch of other grocery delivery services. what's old is new again, they say.
- wahern 8y ago
  Webvan was simply premature. Pets.com is the better example. It was a failure because the market and economics for speciality stores isn't any better with electronic storefronts than with brick & mortar--most people want one-stop shopping most of the time, online or offline. But Sears never tried to go down that route.
ghaff 8y ago
I think even a lot of people who were adults at the time have trouble appreciating just how different things were just 20 years ago. There were no smart phones. Online shopping was very new; I think my first Amazon order was only in 1997 or so. A lot of people were still skeptical about a credit card for mail order catalogs for that matter. Email was still far from universal. Etc.
mixmastamyk 8y ago
Sears was selling things that people actually buy however. Clothes, tools, toys, stereo, computers, etc.
wahern 8y ago
Maybe I'm misremembering, but the big idea that lost in the crash in retrospect seemed to be that the Internet could make highly specialized, niche commerce profitable and scalable. It didn't. Amazon succeeded by expanding its offerings, not by sticking to books and CDs. All the big success stories either had large retail selections (eBay) or offered specialized technical services (PayPal, Google) that enabled or leveraged the Internet as a green field for traditional commercial activity. These paths to success were right up Sears alley. Yes, they tried and failed with Prodigy. But surely the entrepreneurs on HN understand that failure is often a matter of timing, not of value or market potential. Sears' leadership could have stepped back and asked whether their attempts with electronic retail were a matter of timing or just a hopeless flop. It appears they did neither and simply executed the 1980s-1990s playbook: "focus" on your core business and return everything else to shareholders, who theoretically are better able to allocate funds to experimental ventures. The problem with that economic theory is that it ignores or discounts the value of good will and the intrinsic value of the firm, both of which Sears exemplified, and it neglects the duty owed to the firm as an ongoing concern. Rather than play to win they decided to not play at all. In 1993 such defeatism was hardly justified given their otherwise strong (if declining) market position.

jrnichols 8y ago

Exactly. I remember the spectacular failures of pets.com and webvan.com (they blew through.. what, $600,000,000 in less than a year?) and now we have chewy.com and a bunch of other grocery delivery services. what's old is new again, they say.

wahern 8y ago
Webvan was simply premature. Pets.com is the better example. It was a failure because the market and economics for speciality stores isn't any better with electronic storefronts than with brick & mortar--most people want one-stop shopping most of the time, online or offline. But Sears never tried to go down that route.

ghaff 8y ago

I think even a lot of people who were adults at the time have trouble appreciating just how different things were just 20 years ago. There were no smart phones. Online shopping was very new; I think my first Amazon order was only in 1997 or so. A lot of people were still skeptical about a credit card for mail order catalogs for that matter. Email was still far from universal. Etc.

mixmastamyk 8y ago

Sears was selling things that people actually buy however. Clothes, tools, toys, stereo, computers, etc.

wahern 8y ago

Maybe I'm misremembering, but the big idea that lost in the crash in retrospect seemed to be that the Internet could make highly specialized, niche commerce profitable and scalable. It didn't. Amazon succeeded by expanding its offerings, not by sticking to books and CDs. All the big success stories either had large retail selections (eBay) or offered specialized technical services (PayPal, Google) that enabled or leveraged the Internet as a green field for traditional commercial activity. These paths to success were right up Sears alley. Yes, they tried and failed with Prodigy. But surely the entrepreneurs on HN understand that failure is often a matter of timing, not of value or market potential. Sears' leadership could have stepped back and asked whether their attempts with electronic retail were a matter of timing or just a hopeless flop. It appears they did neither and simply executed the 1980s-1990s playbook: "focus" on your core business and return everything else to shareholders, who theoretically are better able to allocate funds to experimental ventures. The problem with that economic theory is that it ignores or discounts the value of good will and the intrinsic value of the firm, both of which Sears exemplified, and it neglects the duty owed to the firm as an ongoing concern. Rather than play to win they decided to not play at all. In 1993 such defeatism was hardly justified given their otherwise strong (if declining) market position.