Boo.com
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| Boo.com | |
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| Type of Company | Dutch NV (Disestablished in 2000) |
|---|---|
| Founded | 1998 |
| Headquarters | London |
| Key people | Ernst Malmsten Kajsa Leander Patrik Hedelin |
| Industry | Retail |
| Products | Clothing, cosmetics |
Boo.com was a United Kingdom Internet company founded by Ernst Malmsten, Kajsa Leander and Patrik Hedelin that famously went bust following the dot-com boom of the late 1990s. Boo.com's intention was to sell branded fashion wear over the Internet; however, after spending vast sums of its venture capital, it eventually had to liquidate and was placed into receivership on May 18, 2000. Fashionmall.com now owns boo.com.
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[edit] Reasons for failure
[edit] Website design
The boo.com website was widely criticised as poorly designed for its target audience, going against many usability conventions. The site relied heavily on JavaScript and Flash technology to generate pseudo-3D views of wares as well as Miss Boo, a sales-assistant-style avatar. The first publicly released version of the site was fairly hefty—the home page alone was several hundred kilobytes which meant that the vast majority of users had to wait minutes for the site to load (as broadband technologies were still not widely available at this time). The designers had forgotten that getting people to use the website and purchase items outweighed the "sexiness" of the design. The warning on their front page—"this site is designed for 56K modems and above"—apparently did not appease their would-be customers.
The complicated design required the site to be displayed in a fixed size window, which limited the space available to display product information to the customer. Navigation techniques changed as the customer moved around the site, which appealed to those who were visiting to see the website but frustrated those who simply wanted to buy clothes. As a result, although the boo.com brand received a lot of press coverage, potential customers were quickly turned off when they visited.
There was an unreleased site that not many know about. [citation needed] This site was ready early 1999, and had been created by Boo.com's original technology partners. The design was sleek, and simple—the balance between bandwidth and customers was carefully calculated. It did have Miss Boo, and the pseudo-3D flash, but neither were that heavy in terms of bandwidth. However, Boo.com's executives slowly transitioned away from the technology partners to their own growing team of contractors and staff. There was a decision early on by the new team that they wanted to put their own stamp on the project, so the executives decided that they could redesign. Months later the new site launched as the first publicly released site.
Boo.com also failed because it did not understand the potential customers or the basics of retail. The first version of the site did not work with Apple Mac computers, while a large number of the targeted user base, the "urban cool" group, were in fact Mac users. [citation needed] Its interface was also complex with a hierarchical system that required the user to answer four or five different questions before revealing that there were no products in stock in a particular sub-section. The same basic questions then had to be answered again until results were found.
[edit] Burn rate
Boo.com's Swedish founders famously spent their way through nearly $120 million [1] during its numerous startup delays and brief existence. While some companies like Amazon.com were spending a lot, but basing it on future savings and growth returns, Boo.com's sales didn't match expectations, due partly to the very high number of products returned by the customer (a service that was offered for free, but charged for by their logistics supplier Deutsche Post). Poor management and a lack of communication between departments resulted in costs spiralling unchecked—the effectiveness of an eye-catching (and expensive) ad campaign was limited because the website wasn't ready in time, resulting in curious visitors being greeted with a holding page — and the results were inevitable.
Staff and contractors were recruited in large numbers, with a lack of direction and executive decision about how many and what was required. This resulted in a crippling pay-roll cost. One contractor alone was reputed to be earning over £100 an hour—and Boo.com had asked them to put off holidays by offering 5-Star hotels and first class flights. It seemed everyone wanted a piece of Boo.com, even the employees—all at the expense of the business itself.
[edit] Aftermath
The biggest loser among boo.com's investors was Omnia, a fund backed by members of Lebanon's wealthy Hariri family, which put nearly $40 million into the company.
Creditors, most of whom are advertising agencies, are owed around $25 million. Over 400 staff and contractors were made redundant in London and around the world, and many had not been paid for several months.
In a widely circulated article, Tristan Louis blamed the management of the company for its failure.
Fashionmall, which has been operating in the US since 1995, reportedly paid just £250,000 for the Boo name and the Miss Boo character. Boo's main assets, its software, went to United Kingdom company Bright Station run by UK Internet Serial Entrepreneur Dan Wagner.
In 2005 CNET called Boo.com the sixth greatest dot-com flop. [2]
Interestingly another online fashion company called Net-A-Porter purchased rather large amounts of their computer hardware for use for their business, including several servers and cisco switches, some of this equipment is still powering the Net-A-Porter site.
[edit] "Boo Is Back"
Currently, Boo's website is displaying a cryptic message stating that "the boo is back", advertising their "new site coming soon". The design of the page bears some similarites to the site's design in 2000, although the domain name is of course owned by a different company. The web title of the page is "Boo.com".
[edit] See also
- Bright Station
- Dan Wagner
[edit] External links
- "Boo Hoo: A Dot Com Story" is a book written/edited by Ernst Malmsten, Erik Portanger and Charles Drazin.
- An angry creditor of Boo.com's founder Malmsten
- Jakob Nielsen's mini-review of Boo.com - A design/usability perspective
- Boo.com Goes Bust - An insider's perspective
- Boo.com, getting relaunched in 2006
- archived version of boo.com
- Case study on Boo.com for marketing and business students
- Boo.com A book written by Gunnar Lindstedt in 2001.
