I watched E-Dreams last night. It’s the story of Kozmo.com, the company started by two 28-year old investment bankers in the late 90s. Their idea was to sell books, movies and snacks online with delivery via bike messenger in under an hour.
They raised $250 million in three rounds of funding, expanded to six cities at their peak, and ceased operations in early 2001 after an aborted IPO.
The part that struck me most is how “Lord of the Flies” it was. The filmmakers did a fine job of adding fuel to this perception as they focused on the young CEO & his partner instead of the “adult” executives they show early on in the film. Late night beer bash aside, I couldn’t help but feel the chaos of the CEO’s inexperienced, albeit passionate, leadership. At one point in the film he comments that he has around 2,500 un-read emails. 2,500?! How could a company possibly stay in business with that many questions going unanswered?
There was so much investor money floating around it didn’t matter if they lit their cigars with hundred dollar bills; they just needed to show up for work. Once the investment dollars stopped they were out of business in a few months. The co-founders are now in school getting their MBAs.
While the whole experiment wound up a failure, I can’t help but wonder if in 2005, growing organically with a small amount of funding, a Kozmo.com could become profitable.