You may remember Webvan, probably the most spectacular flame-out in during the tech boom in the late 90s. If you don’t, Nicole Perlroth describes their blowup for Forbes:
Of Web 1.0’s most memorable implosions, Webvan still takes the cake. The online grocer raised $375 million in an IPO, descended upon eight major U.S. cities, peddled a 26-city expansion plan and somehow warranted a $1.2 billion market cap—all with the burn rate of a ticking time bomb. Eighteen surreal months later, the company closed down shop, laid off 2,000 and had nothing to show for itself except 30,000 Webvan-branded cup holders at San Francisco’s Giant’s ballpark.
The key takeaway—for venture capitalists, grocery chains and well, everyone else—was that carting small-ticket, low-margin items to people’s front doors from billion dollar warehouses did not a sound business model make.
Bad idea, right?
Well, maybe not.