The staff and investors of the UK's first dotcom collapse Boo.com will have good reason to be crying into their frappucinos this morning as the money runs out on an Internet company barely six months old.
The dotcom that promised to have us rushing to the Net for all our designer sportswear needs (I for one have never had any designer sportswear needs, but hell, I shop in Walthamstow market so don't let that put you off). Boo threw the perfect mix of technology, lifestyle and high profile into its pot that it seemed impossible it would not reach the end of the Internet rainbow.
First it had a comic strip-sounding, wacky name -- essential for any Internet company. Next the deadly male/female co-founders combination (both nearly thirty, he slightly geeky with glasses, she blonde, beautiful, ex-model). Then it had "the big idea", the one thing that would put set Boo.com apart from the rest -- revolving clothes to put people at ease about shopping for wearables online.
And at the end of the day it was the technology that allowed pictures of trainers to rotate that proved to be Boo's Achilles heel. It was complicated, it delayed the launch, it didn't work on anything but the most sophisticated PCs. Some said it sucked. It is quite ironic that the dotcommers who paid scant attention to details like technology should find its first casualty in one that did.
As Boo opens its doors to the liquidators this morning it seems the light has finally been turned on in the dotcom bedroom. Investors are waking up to the fact that startups need a little more than a bottomless wallet. When I was little, my mum used to say that money didn't grow on trees but it seemed as if the dotcom millionaires were defying their mums as venture capitalists fell over themselves to empty their piggybanks for the startups. Everyone was singing Delboy's mantra. "This time next year we will be millionaires".
I remember watching a Panorama programme on the phenomenon of the dotcommers a few months ago and thinking there would be tears before bedtime. They seemed to think they were invincible -- they were cocky, they were being swept along on a perceived tidal wave of money and forgetting that money has to walk hand in hand with profit in order to keep capitalism smiling. Some young upstarts believed they could actually get funding for a start-up by telling investors that they would be out of the door as soon as the float was complete. This lack of commitment was symptomatic of a generation moving on Internet time. Wanting it all and wanting it now.
It was inevitable it wouldn't last forever and Boo.com can comfort itself at least with the fact that it will go down in history as the UK's first online failure. And it will not be the last. According to a report from PricewaterhouseCoopers, one in four listed startups will run out of cash within six months. They are spending money and not making any. I'm no economist but I can see that sum just isn't going to add up.
Investors, initially ready to rock and roll with the young Net heads, are creeping out the door now the launch party champagne has gone flat. To many people the rot set in when Lastminute.com made and lost more money in a day than George Soros. Its flashy launch -- when no paper from the FT to the East Accrington Echo was without a smiling picture of Martha Lane-Fox -- looked set to create the biggest float ever in the history of the world but turned out to be a whimper rather than a bang. Then tech stock took a dive as the market said "come on now, this is getting silly".
So instead of heading to Silicon valley for top level meetings, the dotcommers are heading down to the job centre. Imagine the conversations as the young hopefuls come to terms with the fact that the party is well and truly over.
"I used to be a dot commer. We had this great company which sold sports clothes. It was amazing, you could make them turn around and everything," says one. "That's nothing I had a company that sold things, even if you wanted to buy it at the last minute," says another.
Of course this does not mean that the much-talked about Internet bubble is about to burst. There has been too much money ploughed into it for that to happen and the market is not about to let go of one of its most precious assets. What will happen I think, is that the second wave of dotcoms will come with to market with a much more conservative attitude, with a serious long term commitment to e-commerce, with solid business plans. The old school of business is going to pick up the pieces left by the dotcommers and make the jigsaw of Internet investment finally make sense.
So the banks, the insurance houses and the traditional high street retailers that we ridiculed just a few months ago for failing to jump aboard the e-commerce bandwagon will be the real success stories of the Net. The investors that hoped to make a fast buck on the new generation will return to the fold and put their dollars back in the old school. The men in suits have run the show for too long and money always returns to money. The Internet, sadly, will just have to put its tie back on.
Note: This article is in no way intended to affect the share price of ZDNet which will continue to ride on the crest of the Internet wave. This time next year mate, I'll be a millionaire......
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