Why pets.com failed

In , there were no plug-and-play solutions for scalable eCommerce, warehouse management , or customer service. As a result, the company had to hire a team of over 40 engineers. Cloud computing was also many years away, so the company had to create a server farm and hire yet more staff to ensure the website did not go down. The lack of technology drove operating costs higher still. Many start-up companies of the era provided catered meals or fully stocked kitchens to their employees.

Games, gym memberships, group outings, and parties were also routinely offered as incentives. With excessive spending continuing in the face of an unprofitable business model , there was only one end for Pets.

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Sure, but Pets. They made a lot of big assumptions: that pet owners would want to buy online and knew how to remember, this was ; that selling pet products alone was compelling enough as opposed to say an online supermarket which could sell pet supplies and other groceries ; that people wanted to have such pet supplies delivered and were happy to wait a few days, rather than just driving down to the shops and getting it now. But market research and validation of ideas seemed to be unimportant back in the heady early days of the information superhighway.

Within a year of launch it had been acquired by venture capital firm Hummer Winblad who amazingly still list Pets. They even got Amazon. With cash in the bank and fire in their bellies, Pets. Awareness skyrocketed. Everyone was talking about Pets. The site was hit with traffic as people began to place orders. A month later Pets. There must have been a lot of back patting and happy Friday afternoon drinks. Their massive marketing campaign had certainly generated a lot of Awareness and some Interest.

Some of those involved in the failure struggled with the negative mark left in the public sphere. Wainwright, for one, laid low for a while. But not anymore. McLemore, who runs the International Arcade Museum and is a major vintage arcade game collector , appears to have fairly warm memories of his time running the site, then spinning it off—the WebMagic website states that they had no regrets about the initial investors.

And as for Jeff Bezos? Recently, I read a story about an entrepreneur who did something very similar to what Greg McLemore did in —a guy who bought the right domain at the right time. Warren Royal. Royal has been around quite a long time, and spent time running BBSes before he got into the internet business.

When the dot-com bubble burst, he left it for a while, and moved into another industry that knows a thing or two about bubbles: The mortgage industry. When the bubble burst there, Royal went back to the internet, looked around for interesting domains, and waited. He just knew they were interesting. He soon had success playing off the election year, and that success grew after he realized that there was an amazing business model to be had in custom-made bobbleheads—and he figured out that there were factories that could actually pull it off.

Like Pets. Royal lived through two bubbles, so he knew the pitfalls. He slowly turned his great domain into a better business. I wonder if, had Pets. But once venture capital money got involved, the goal seemed to be to become a major company as quickly as possible—a path that offers no room for failure. But Pets. Ernie Smith is the editor of Tedium, and an active internet snarker. The s had the insanity of Dot-com. The Internet was at a boom, dozens of startups opened every week.

Another pet supply company, PetSmart felt threatened by the pet store website opened by pets. PetStore also had a unique position in the market, they sell the products to pamper your furry, finned, or feathered pet friend. They also provide additional service by providing expert advice on pet care. They claimed to provide the lowest price and rapid delivery of pet products. They were an American retail chain in the United States and Canada. They were chains that had it all from food, accessories, furniture to the services of grooming, training, and daycare.

They also sold and adopted various species of animals. Their failed business model and mismanagement made them victims of the Dot-com bubble lead to the brief fame of the company.

Eventually, the Pets. There were many loopholes in the company. In simple words, the whole model was an anti-business model. The loss was not only of the revenue, about people became jobless after the site shut down. They created a domain on the assumption that pet owners would love to buy the supplies online. They did not carry out the basic market research to the market needs.