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Examples of e-commerce failures

We can learn from examples of failure. They’re not written up that commonly since naturally 

those involved don’t want to share their failures.

Boo.com is an interesting case of the potential and pitfalls of an e‑commerce start‑up and 

criteria for success, or one could say of ‘how not to do it’. The boo.com site was launched 

in November 1999 following two significant delays in launching and in January 2000 it was 

reported that 100 of its 400 employees had been made redundant due to disappointing initial 

revenues of about £60,000 in the Christmas period. Boo faced a high ‘

burn rate

’ because 

of the imbalance between promotion and site development costs and revenues. As a con‑

sequence, it appeared to change its strategy by offering discounts of up to 40 per cent on 

fashions from the previous season. Closure followed in  mid‑  2000 and the boo.com brand 

was purchased by an American entrepreneur who still continues to use the brand. (Boo.com 

features as a case study in Chapter 5.) Investors provided a reported £74 million in capital. 

This enthusiasm is partly based on the experience of two of the founders in creating bokus.

com, a relatively successful online bookseller.

Burn rate

The speed at which  dot‑ 

 coms spent investors’ 

money.

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Chapter 2  Marketplace analysis for e‑commerce

Case Study 2.1

i‑to‑i – a global marketplace for a start‑up company

This case is about a specialist travel and education com‑

pany, focussing on its online TEFL (Teaching English as 

a Foreign Language) courses. The case illustrates the 

importance of marketplace analysis.