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Fourteen Greatest Dot Com Bombs

fourteen biggest startup flops

Start-Up Flops: Fourteen Greatest Dot Com Bombs

Here’s how some of the biggest new ventures crashed and burned millions in the process.

Amp’d Mobile: $360 Million Burned

Created to provide youth with entertainment through their cell phone provider. Amp’d Mobile advertised heavily from the beginning. Amp’d sponsored parties and festivals, as well as Snoop Dogg’s football league. The company gained customers, but encountered problems with bill payment, with nearly half of their customers defaulting on bill payment. Time in business: <2 years

Webvan: $800 Million Burned

Despite lofty goals to automate and revolutionize grocery shopping, as well as hundreds of millions of invested dollars, Webvan could not find the customers it needed to stay in business. Though it pleased the customers it had, the company burned through money quickly. Purchases included $1 billion for warehouses and over 100 Aeron chairs. Time in business: 1.5 years

Procket: $272 Million Burned

The Silicon-Valley-based company built network processors and core routers, which it claimed used less power and could handle higher volumes of traffic than industry leaders. However, the company could not stay afloat post-dot-com-bubble, and was acquired by Cisco for $89 million, a disappointment considering its previous valuation of $1.55 billion. Time in business: 5 years

Caspian Networks: $300 Million Burned

Founded by an Internet pioneer, Caspian Networks made unique routers to compete with the likes of Cisco. Despite five funding rounds, Caspian experienced many layoffs and various CEOs. The company closed in 2006 due to the unstable management as well as an indecisive market position. Time in business: 8 years $150 Million Burned

The San-Francisco-based company sold pet food and other supplies as part of an emerging Internet retail trend. Despite having over half a million customers and an expensive Super Bowl ad, could not find a profitable business model or any more interested investors by the time its doors closed. Time in business: 2 years $250 Million Burned

Promising to bring movies, books, video games and even food to your door with free delivery within one hour, Kozmo had operations in 11 major cities. However the company was only profitable in four of those cities, partly due to a flawed business model based on providing costly home delivery for free. This was true even for small orders which could not turn a profit. Time in business: 3 years $185 Million Burned

This start-up offered a cat-shaped barcode reader connected to your computer. This allowed customers to scan a barcode appearing in print or on a product, which would launch a related Web page. In a costly marketing move, CueCats were bulk mailed to every subscriber of Wired magazine, but reviews of the product were very critical. The company’s servers also experienced a security breach, exposing 140,000 user’s' private information. Time in business: 3 years $100 Million Burned

This dot com retailing upstart had an $8 billion valuation in its heyday, and competed directly with Toys ‘R’ Us. The company experienced setbacks when it botched Christmas deliveries and eventually fell victim to the collapsing bubble. KB Toys purchased a majority of eToy assets, but later sold them. was acquired by Toys ‘R’ Us in February, 2009. Time in business: 4 years

AllAdvantage: $200 Million Burned

As an Internet-based advertising company, AllAdvantage paid its users a portion of the advertising revenue garnered by their surfing, calling itself an “infomediary.” AllAdvantage became known for its slogan “Get Paid to Surf the Web.” The company was another victim of the bursting dot-com bubble. Though by the time the company closed, the over $160 million it had paid its members didn’t help cash flow either. Time in business: 2 years

Xoma: $700 Million Burned

This relatively small biotech company had few successes. Typically, only one in five drugs that are tested on humans gets to market. For smaller companies like Xoma that only develop one or two drugs at a time, failures can restart the seven to eight year cycle of drug development. Xoma has had a few successes, and has laid off employees to save cash. Xoma hasn’t failed yet, and is still gambling on new drugs that could make the company profitable—if the drugs succeed. Time in business: 28 years

Digiscents: $20 Million Burned

Despite a strategic alliance with Procter & Gamble, Digiscents’ ambitions of using smell in games and movies would not be realized. The company made a device you would plug into your computer to receive iSmell-digitized scents. The requirement of this peripheral was pegged as a reason for the company’s failure. One critic said of Digiscents, “It’s a case of ‘just because you can do something on the Web doesn’t mean you should’.” Time in business: 2 years $65 Million Burned

Another online retailer, this time specializing in the sale of sporting goods. Even though was backed by sports celebrities like Michael Jordan and Wayne Gretzky and had an $85 million, four-year advertising agreement with CBS, the company could not succeed. Not even a year after signing the deal, failed to pay $10 million it owed CBS. The company failed shortly thereafter due to the declining online retail sector. Time in business: 1 year $790 Million Burned

Launched by Disney as a Web portal, also featured one of the Internet’s first Web-based chat room networks. later integrated a search engine, but struggled with dropping visitor numbers. In January 2001, and its search engine closed and the tracking stock was retired. Time in business: 3 years $22 Million Burned

In any early attempt to take advantage of online networking for teenagers, offered content and chat rooms for girls 13-18. However, the company fell victim to cold markets for Internet companies and closed up shop, returning its remaining capital to investors. Time in business: 46 days.

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