4 ms·

All-time greatest failed Internet startup

51 points by mg1313 15y ago

lisper 15y ago
My favorite part (with reference to eToys): "They ditched a perfectly working MySQL application and migrated to Oracle which caused them to hire Oracle consultants $2000 per day and spend millions on Oracle big-iron." Reminds me of when the ads manager at Google decided we needed to ditch MySQL and get a "real database" for the ads system. "Real database" in that case meant Sybase, but it was still a barely mitigated disaster. Sometimes it seems as if the "real" databases are just a colossal scam.
- hga 15y ago
  Back then it might have been an OK decision, you did get some very nice things with Oracle including scaling and MySQL was a lot less mature, only about half a decade old. It certainly doesn't sound like choosing Oracle per se was instrumental in eToys' failure. On the other hand I've never heard a good thing about Sybase.
  - Devilboy 15y ago
    Sybase is a fantastic piece of engineering. Nice code syntax, rock solid in production. There you go, now you've heard a good thing about the father of MS SQL Server.
- dpapathanasiou 15y ago
  Hard to say if the switch to Oracle (and the resulting expenses) was the reason for their demise, but I was surprised by this: "In 2000 they were doing around $24 million per quarter with a gross margin of 21%." Wow. How could you get off to a start like that and blow it all?
  - bpeebles 15y ago
    Well, it never was listed that Oracle was the reason, just that it was one of, and indicative of why it failed. If the MySQL solution was working, which the answerer on Quora implied, and there was no immediate sign of its failure, I think transitioning to Oracle at the cost of millions of dollars is a pretty big mistake.
- rudiger 15y ago
  paul would argue otherise
- jrockway 15y ago
  Sybase has to be the worst of the "real databases", although SQL Server, DB2 and Oracle are bad too. The first time I tried to use Sybase, I wrote something like "CREATE TABLE foo (id INTEGER PRIMARY KEY, bar INTEGER NOT NULL)". Turns out Sybase doesn't have a type called "INTEGER". What the fuck. Admittedly, all databases have their quirks. I use SQLite for a multi-process app suite, and get "database is locked" rather frequently. At least my app now knows how to retry transactions. Most of the apps using "real databases" fall over as soon as a transaction fails. "Internal server error, please retry later." Uh, no... transactions are supposed to fail. Even reads. But I digress.
Eliezer 15y ago
Oh ye of little history. Do none remember Xanadu still? Inspired by Eric Drexler's call for hypertext as a way of making society more intelligent, they tried to invent the Web, a decade too early and with standards much too high (cached local copies which would still receive micropayments, two-way backlinks), and never solved the incredibly difficult programming problems they were tackling before Mosaic and HTML came along.
- neonscribe 15y ago
  Ted Nelson, not Eric Drexler. And not "inspired by" but founded by him. (K. Eric Drexler is nanotechnology, not hypertext.) Not really an Internet startup, certainly one of the longest but not the biggest tech business failures.
  - Eliezer 15y ago
    Ted Nelson was the founder, yes. He was inspired by Drexler, who like certain later transhumanists did human rationality on the side. Do none still remember "Engines of Creation"? It had a whole chapter on hypertext.
    - Turing_Machine 15y ago
      Nelson started what became the Xanadu project in 1960, when Drexler was only five years old.
      - Eliezer 15y ago
        Correction noted. I'm pretty sure though that at least some of the people on the Xanadu team were Drexler-sent.
- anigbrowl 15y ago
  Ted Nelson's Hypercard on steroids? Oh yes. As a bright-eyed technologist of 20 at one of the big 4 accounting firms, I remember being told to 'shut up about hyperspace' In fairness, I had very little idea what I was talking about; Appletalk didn't look like a solid platform and in 1991 few people had a clear concept of the internet to begin with. I hope I don't find myself looking back in another decade or two and and sighing over the semantic web being too far ahead of its time.
sradnidge 15y ago
I guess technically they don't qualify, but surely Microsoft's web properties have to be right up there. Billions later, they have yet to turn a profit.
jonursenbach 15y ago
Surprised there's no mentions of Cuil.
- anigbrowl 15y ago
  Even their failure was a letdown.
Cherian_Abraham 15y ago
Anyone remember BroadVision? (shudder!) For a time there, I worked for UNext, an online University who decided that it was not enough that their site was powered by Broadvision (using highpriced broadvision consultants), but that their Intranet needed to run on broadvision as well. Oh swell!! On top of that, they decided to contract those consultants straight out of Broadvision Inc itself, at over $300 an hour. The CEO drove one of the $100k Mercedes Jeep type SUVs, imported ofcourse. Not soon after, I left Chicago to go back to the Valley. And they ran out of money soon after.
arethuza 15y ago
boo.com was pretty impressive - $188 million in six months and all lovingly documented by their co-founder in CEO in a fairly unapologetic book: http://www.amazon.com/Boo-Hoo-Dot-com-Concept-Catastrophe/dp/0099418371 http://www.amazon.com/Boo-Hoo-Dot-com-Concept-Catastrophe/dp...
daniel1980fl2 15y ago
They ditched a perfectly working MySQL application and migrated to Oracle which caused them to hire Oracle consultants $2000 per day and spend millions on Oracle big-iron. They were hiring out of control. They decided to build a new building to house their new offices because the Ocean Park Blvd offices in Santa Monica weren't pretty enough. They opened up a London office in Piccadilly Circus, the most expensive rental area in London. They replicated their entire USA dev team in the UK for no apparent reason. They started work on a German operation. They launched a warehouse in Belgium (my baby) to service Europe. All execs flew first class between Europe and USA. Engineers were flown around the world as needed. I was even told to expense my groceries while in Santa Monica for 3 months. Trivial, but the little things add up. --- none of above would have happened, had they hired professional managers, not a bunch of children willing to spend every single dime on anything other than business itself. apply that list to any business, including apple, google, microsoft, oracle, groupon, you name it, the result would be the same disaster as with etoys.
- arethuza 15y ago
  In some .com disasters it was actually the "professional managers" who caused a lot of the problems as they were the ones who tried to replicate the infrastructure, pay and perks of the large companies they had worked for before.
  - daniel1980fl2 15y ago
    how can "professional manager" burn so much money without any profits, knowing that spending this money will not affect the business (positively) -- is really building your own offices because you seen five premises and dont like the view from windows will sell more toys online??
    - veritgo 15y ago
      Professional Manager does not necessarily mean Competent Manager.
    - jerf 15y ago
js2 15y ago
Ah, how do I miss f'dcompany.com. :) I'm still impressed by the VA Linux IPO: http://en.wikipedia.org/wiki/Geeknet http://en.wikipedia.org/wiki/Geeknet
ScottBurson 15y ago
Metricom burned through $600M of Paul Allen's money building out an early wireless network that hardly anyone used, then folded. I don't know if this is quite in the "Internet startup" category since it wasn't a Web site, but it certainly was Internet infrastructure.
pessimizer 15y ago
Definitely drkoop.com. Its market cap at one point was around 1.3 billion. http://www.nytimes.com/2002/07/16/business/technology-briefing-e-commerce-drkoopcom-is-sold-for-186000.html http://www.nytimes.com/2002/07/16/business/technology-briefi...
steveb 15y ago
How about Iridium? Over $5 billion invested, sold for $25 million. http://www.wired.com/techbiz/media/news/2000/03/35043 http://www.wired.com/techbiz/media/news/2000/03/35043 Right now it is hard to compete with bing.com, losing 2.5 billion per year.
Hominem 15y ago
Great to see Kozmo mentioned a few times, I still to this day have quite a few Kozmo shirts they used to send out for free. I'd like to add WinStar, they had people going pretty much door to door in Manhattan selling services, I got a pretty decent free lunch off them. I'd also nominate GovWorks, not huge in terms of money burned or technical blunders, but I credit the movie startup.com for really exposing some sheer ineptitude. Edit: How could I forget Globix, the colo that had a coffee shop and a gym.

51 points by mg1313 15y ago

My favorite part (with reference to eToys): "They ditched a perfectly working MySQL application and migrated to Oracle which caused them to hire Oracle consultants $2000 per day and spend millions on Oracle big-iron." Reminds me of when the ads manager at Google decided we needed to ditch MySQL and get a "real database" for the ads system. "Real database" in that case meant Sybase, but it was still a barely mitigated disaster. Sometimes it seems as if the "real" databases are just a colossal scam.

hga 15y ago
Back then it might have been an OK decision, you did get some very nice things with Oracle including scaling and MySQL was a lot less mature, only about half a decade old. It certainly doesn't sound like choosing Oracle per se was instrumental in eToys' failure. On the other hand I've never heard a good thing about Sybase.
- Devilboy 15y ago
  Sybase is a fantastic piece of engineering. Nice code syntax, rock solid in production. There you go, now you've heard a good thing about the father of MS SQL Server.
dpapathanasiou 15y ago
Hard to say if the switch to Oracle (and the resulting expenses) was the reason for their demise, but I was surprised by this: "In 2000 they were doing around $24 million per quarter with a gross margin of 21%." Wow. How could you get off to a start like that and blow it all?
- bpeebles 15y ago
  Well, it never was listed that Oracle was the reason, just that it was one of, and indicative of why it failed. If the MySQL solution was working, which the answerer on Quora implied, and there was no immediate sign of its failure, I think transitioning to Oracle at the cost of millions of dollars is a pretty big mistake.
rudiger 15y ago
paul would argue otherise
jrockway 15y ago
Sybase has to be the worst of the "real databases", although SQL Server, DB2 and Oracle are bad too. The first time I tried to use Sybase, I wrote something like "CREATE TABLE foo (id INTEGER PRIMARY KEY, bar INTEGER NOT NULL)". Turns out Sybase doesn't have a type called "INTEGER". What the fuck. Admittedly, all databases have their quirks. I use SQLite for a multi-process app suite, and get "database is locked" rather frequently. At least my app now knows how to retry transactions. Most of the apps using "real databases" fall over as soon as a transaction fails. "Internal server error, please retry later." Uh, no... transactions are supposed to fail. Even reads. But I digress.

Eliezer 15y ago

Oh ye of little history. Do none remember Xanadu still? Inspired by Eric Drexler's call for hypertext as a way of making society more intelligent, they tried to invent the Web, a decade too early and with standards much too high (cached local copies which would still receive micropayments, two-way backlinks), and never solved the incredibly difficult programming problems they were tackling before Mosaic and HTML came along.

neonscribe 15y ago
Ted Nelson, not Eric Drexler. And not "inspired by" but founded by him. (K. Eric Drexler is nanotechnology, not hypertext.) Not really an Internet startup, certainly one of the longest but not the biggest tech business failures.
- Eliezer 15y ago
  Ted Nelson was the founder, yes. He was inspired by Drexler, who like certain later transhumanists did human rationality on the side. Do none still remember "Engines of Creation"? It had a whole chapter on hypertext.
  - Turing_Machine 15y ago
    Nelson started what became the Xanadu project in 1960, when Drexler was only five years old.
    - Eliezer 15y ago
      Correction noted. I'm pretty sure though that at least some of the people on the Xanadu team were Drexler-sent.
anigbrowl 15y ago
Ted Nelson's Hypercard on steroids? Oh yes. As a bright-eyed technologist of 20 at one of the big 4 accounting firms, I remember being told to 'shut up about hyperspace' In fairness, I had very little idea what I was talking about; Appletalk didn't look like a solid platform and in 1991 few people had a clear concept of the internet to begin with. I hope I don't find myself looking back in another decade or two and and sighing over the semantic web being too far ahead of its time.

sradnidge 15y ago

I guess technically they don't qualify, but surely Microsoft's web properties have to be right up there. Billions later, they have yet to turn a profit.

jonursenbach 15y ago

Surprised there's no mentions of Cuil.

anigbrowl 15y ago
Even their failure was a letdown.

Cherian_Abraham 15y ago

Anyone remember BroadVision? (shudder!) For a time there, I worked for UNext, an online University who decided that it was not enough that their site was powered by Broadvision (using highpriced broadvision consultants), but that their Intranet needed to run on broadvision as well. Oh swell!! On top of that, they decided to contract those consultants straight out of Broadvision Inc itself, at over $300 an hour. The CEO drove one of the $100k Mercedes Jeep type SUVs, imported ofcourse. Not soon after, I left Chicago to go back to the Valley. And they ran out of money soon after.

arethuza 15y ago

boo.com was pretty impressive - $188 million in six months and all lovingly documented by their co-founder in CEO in a fairly unapologetic book: http://www.amazon.com/Boo-Hoo-Dot-com-Concept-Catastrophe/dp/0099418371 http://www.amazon.com/Boo-Hoo-Dot-com-Concept-Catastrophe/dp...

daniel1980fl2 15y ago

They ditched a perfectly working MySQL application and migrated to Oracle which caused them to hire Oracle consultants $2000 per day and spend millions on Oracle big-iron. They were hiring out of control. They decided to build a new building to house their new offices because the Ocean Park Blvd offices in Santa Monica weren't pretty enough. They opened up a London office in Piccadilly Circus, the most expensive rental area in London. They replicated their entire USA dev team in the UK for no apparent reason. They started work on a German operation. They launched a warehouse in Belgium (my baby) to service Europe. All execs flew first class between Europe and USA. Engineers were flown around the world as needed. I was even told to expense my groceries while in Santa Monica for 3 months. Trivial, but the little things add up. --- none of above would have happened, had they hired professional managers, not a bunch of children willing to spend every single dime on anything other than business itself. apply that list to any business, including apple, google, microsoft, oracle, groupon, you name it, the result would be the same disaster as with etoys.

arethuza 15y ago
In some .com disasters it was actually the "professional managers" who caused a lot of the problems as they were the ones who tried to replicate the infrastructure, pay and perks of the large companies they had worked for before.
- daniel1980fl2 15y ago
  how can "professional manager" burn so much money without any profits, knowing that spending this money will not affect the business (positively) -- is really building your own offices because you seen five premises and dont like the view from windows will sell more toys online??
  - veritgo 15y ago
    Professional Manager does not necessarily mean Competent Manager.
  - jerf 15y ago

js2 15y ago

Ah, how do I miss f'dcompany.com. :) I'm still impressed by the VA Linux IPO: http://en.wikipedia.org/wiki/Geeknet http://en.wikipedia.org/wiki/Geeknet

ScottBurson 15y ago

Metricom burned through $600M of Paul Allen's money building out an early wireless network that hardly anyone used, then folded. I don't know if this is quite in the "Internet startup" category since it wasn't a Web site, but it certainly was Internet infrastructure.

pessimizer 15y ago

Definitely drkoop.com. Its market cap at one point was around 1.3 billion. http://www.nytimes.com/2002/07/16/business/technology-briefing-e-commerce-drkoopcom-is-sold-for-186000.html http://www.nytimes.com/2002/07/16/business/technology-briefi...

steveb 15y ago

How about Iridium? Over $5 billion invested, sold for $25 million. http://www.wired.com/techbiz/media/news/2000/03/35043 http://www.wired.com/techbiz/media/news/2000/03/35043 Right now it is hard to compete with bing.com, losing 2.5 billion per year.

Hominem 15y ago

Great to see Kozmo mentioned a few times, I still to this day have quite a few Kozmo shirts they used to send out for free. I'd like to add WinStar, they had people going pretty much door to door in Manhattan selling services, I got a pretty decent free lunch off them. I'd also nominate GovWorks, not huge in terms of money burned or technical blunders, but I credit the movie startup.com for really exposing some sheer ineptitude. Edit: How could I forget Globix, the colo that had a coffee shop and a gym.