Futuristic Startups that Failed after the Dotcom Bubble Burst
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Kozmo.com
Futuristic Startups that Failed after the Burst of the Dotcom Bubble
It was a venture capital-driven online company, founded by investment bankers Joseph Park, Yong Kang, and Robert McNamara in 1998. It promised to deliver small goods free of charge within an hour, by bicycle, car, truck, or public transportation--a model criticized for being extremely expensive for the company and the refusal to take delivery fees pitting the company into losses. The company felt that since it did not require rented spaces to store its goods, it would be able to break even and exceed the cost of delivery. The company had expanded too rapidly and was in markers where they won't even be able to break even, since they had low demand. They raised a lot of money, about $280 million in venture capital from investors including Flatiron Partners, Starbucks, Amazon.com, and Softbank of Japan, that pulling back to high-density cities wouldn't have produces a sufficient return. The company didn't charge a delivery fee, and its money and public relations started plaguing the company. It failed soon after the collapse of the dot-com bubble, and laid off thousands of employees, finally pulling its shutters in 2001. The employees got to know about the company shutting down after arriving at work, and the company, including the employees' uniforms was liquidated by a seasoned entertainment wholesaler from Florida.