Ryan
11. MVP.com
MVP.com was a website devoted to selling sporting goods on the strength of endorsements from legends like Michael Jordan and Wayne Gretzky. The company’s prospects seemed bright at the onset, backed by $65 million in venture funding and an equity sharing partnership with CBS Sports that promised MVP free advertising during games. The $85 million deal was ill-fated, however, as MVP reneged on its promise to pay CBS the promised $10 million per year. Soon after, CBS squashed the agreement and MVP.com was benched for good. The lesson to entrepreneurs everywhere: celebrity endorsements mean nothing without a product or service people really, truly want. Today, Sports Business Journal refers to MVP as “a sobering lesson from the dot com bust, showing the need for business fundamentals no matter the names behind the venture.”
12. GlobalTek Solutions
Fronted by baby-faced, 18 year old Shazad Mohamed, GlobalTek Solutions was hailed by the popular press as the next big thing in the web design market. The young entrepreneur was featured in TV interviews and business magazines around the nation, and his company seemed destined for big success. Unfortunately, the story hasn’t panned out so well. GlobalTek’s website has remained in the same frozen state for almost five years, still claiming to offer solutions that “make the paperless practice a reality” in health care. Despite the mass amounts of hype and press coverage, it appears that GlobalTek never really came into its own as an Internet business.
13. Monitor110
Monitor110 began with a decent enough idea: pull together the newest, most relevant information online to help institutional investors stay ahead of the curve. Unfortunately, the company now serves as a cautionary tale of what not to do instead of a positive example, having burned through the $20 million it raised over three rounds of funding. One of the founders offered his reasons for why the company failed in a published postmortem. They are eerily consistent with many of the reasons for why the other companies on this list wound up failures.
- The lack of a single, “the buck stops here” leader until too late in the game
- No separation between the technology organization and the product organization
- Too much PR, too early
- Too much money
- Not close enough to the customer
- Slow to adapt to market reality
- Disagreement on strategy both within the Company and with the Board
14. Thought, Inc.
Thought was written up in a Forbes piece entitled “When Startups Become Blowups.” Apparently, they were a maker of customized server software that sounded a lot better in theory than it proved to be in practice. Unfortunately, their tale is symptomatic of many Internet startups that aren’t founded around a viable business strategy. The article goes on to tell the story of Hugh Carrol, a man who left a steady job in the Valley for a sales on comission job at Thought. Sadly, the software was difficult to sell and the company’s cash flow problems caused them to skip Carrol’s paychecks. When she investigated, she was told that she would get a lump sum “when revenues started coming in.” Predictably, that revenue never did come in – and neither did Carrol’s pay.
“It was a very disillusioning experience that left me cynical”, is all Carrol had to say about the Thought, Inc. fiasco.
15. Channel A
The same Forbes piece recounts the tale of Channel A, a website dedicated to Asian-American issues and entertainment. The new venture was appealing enough to lure 27 year old Pamela Yoon away from a secure job and get down in the trenches working for them, instead. “Why not take a chance?”, she offered as her reason. She soon had an all-too-painful answer. Despite Asian investors sinking millions into the Channel A site (and its many favorable mentions in the San Francisco newspapers), their target market in Asia ceased to care about what the site had to offer them. Consequently, the plug was pulled in Channel A in 1997, not even a year after Yoon came aboard.
“It sucked afterword”, Yoon said, adding that she was also unemployed for two and a half months after Channel A closed its doors.
