Retrenchment

Add Your Comments

Hardly the kind of story I want to write Christmas Eve, but news, both public and private, kind of force it.

Why should you care about the company that made BarbiePCs going bankrupt? Because these guys were taking orders and money until the last minute.

To quote from the ZdNet article

“I ordered a Barbie PC for my daughter on Dec. 5, 2000. On Dec. 6, I was told that I would definitely receive my order before Christmas, despite the fact that there were about 1,100 orders that had not yet been shipped,” one customer wrote. “Did they not know that they would be filing for bankruptcy when I placed my order, 40 hours before they went to court?””

Not exactly sure how bankruptcy affects credit cards sales, but at the least, those folks with a charge and no computer are in for a hassle.

Why should this bother you?

You think this is the only dot.com going belly-up? I’m being told pulling the plug on these puppies is now a real growth industry.

Do you know why? If they’re not making any money, they aren’t getting any more. Welcome to the manic-depressive capitalist world.

A year ago, I could have started www.rottingdogturds.com, and if I used the right buzzwords, got serious investment money. Now I could have www.ICanMakeGoldOutOfLead.com and not get a dime of financing. People who got burned playing with fire won’t even touch your forehead if you say you feel warm. That’s going to drag a lot of good companies down right with the absurd ones.

Unless you’re Amazon (and they’ve had their wings clipped, too), you can no longer burn money in the hopes of increased market share in the hopes of making a profit . . . someday. You run out of money, you don’t get anymore. You don’t get anymore, you must start making money, and if your finances are so out-of-whack that you can’t possibly cut costs enough, you’re dogmeat.

People who thought they were going to make a lottery win look like chump change aren’t going to let go of that dream/delusion too easily, and if screwing you like those BarbiePC customers buys them a little extra time, you don’t think they’ll take you down with them?

If you don’t think it can happen to you, do you buy things at buy.com? They’re still trying to buy marketshare. The CEO doesn’t get it, to quote from here:

“The capital markets are not recognizing the vision that they were recognizing six months ago, even as we’ve continued to enhance our customers’ shopping experience,” Hawkins said. “I’m still struggling to build brand, but the capital markets are preventing me from spending the marketing dollars that I would have spent six months ago.”

They know you got a vision, alright, problem is they think it’s a mirage. They don’t want you chasing visions; they want you making money.

A quote from an article dated Friday:

Buy.com, second only to Amazon in online sales, is also thought to be struggling. A spokesman said the e-tailer was in a “self-imposed quiet period” and would not comment on its holiday season performance.

Quiet time???? Isn’t that for five year olds who misbehave? On second thought, might not be a bad idea when your leader is having visions and being fitted for a financial straightjacket.

Is this the sign of a company doing well?

John Sculley didn’t think so. He resigned from the board of buy.com about a month and a half ago. He used to run Apple; he should know a dog when he sees one.

Not saying the order you made yesterday is in imminent peril, but this is a company that bears watching. If they go down, and leaves mucho customers with nada goods, imagine the ripple effects.

The demise of the dot.coms was bad enough; add credit-card hacking a la Egghead and you have a double whammy. If the thieves inside a company don’t get you, the ones outside will.

God help consumer ecommerce, especially for the newer, weaker companies, if the regular media gets their teeth into this one.

There are real problems here. It does you no good if you have the most secure SSL transmission across the Internet in the world if Igor the Idiot Savant can just grab numbers once they get to the server.

Just the real problems alone will take effort, time and money to fix security problems and reassure people that you’re safe. And a lot of these companies don’t have the latter two requisites.

Imagine you’re a new dot.com in the next couple months. Unless many, you have bean-counters who actually know the purpose of a business is to collect more beans than you shell out. You’re not making money yet, but your belief that you will be soon doesn’t get you an instant diagnosis of delusional disorder.

You need some extra money, but you can’t get any from anybody because of all the companies before you that did have delusional disorders. Your online sales are drying up because the television told people that throwing their credit cards into the street is safer than buying online.

Things are getting rough out there.

Email Ed


Leave a Reply

Your email address will not be published. Required fields are marked *