Malmsten, Ernst, Erik Portanger, and Charles Drazin. Boo Hoo. London: Arrow Books, 2001. ISBN 0-09-941837-1.
In the last few years of the twentieth century, a collective madness seized the investment community, who stumbled over one another to throw money at companies with no sales, profits, assets, or credible plans, simply because they appended “.com” to their name and identified themselves in some way with the Internet. Here's an insider's story of one of the highest fliers,, which was one of the first to fall when sanity began to return in early 2000. Ernst Malmsten, co-founder and CEO of boo, and his co-authors trace its trajectory from birth to bankruptcy. On page 24, Malmsten describes what was to make boo different: “This was still a pretty new idea. Most of the early American internet companies had sprung from the minds of technologists. All they cared about was functionality and cost.” Well, what happens when you start a technology-based business and don't care about functionality and cost? About what you'd expect: boo managed to burn through about US$135 million of other peoples' money in 18 months, generating total sales of less than US$2 million. A list of subjects about which the founders were clueless includes technology, management, corporate finance, accounting, their target customers, suppliers, and competition. “Market research? That was something Colgate did before it launched a new toothpaste. The internet was something you had to feel in your fingertips.” (page 47). Armed with exquisitely sensitive fingertips and empty heads, they hired the usual “experts” to help them out: J.P. Morgan, Skadden Arps, Leagas Delaney, Hill & Knowlton, Heidrick & Struggles, and the Boston Consulting Group, demonstrating once again that the only way to screw up quicker and more expensively than ignorance alone is to enlist professional help. But they did have style: every ritzy restaurant, exclusive disco, Concorde day-trip to New York, and lavish party for the staff is chronicled in detail, leaving one to wonder if there was a single adult in the company thinking about how quickly the investors' money was going down the drain. They spent more than US$22 million on advertising and PR before their Web site was working which, when it finally did open to the public, took dial-up users four minutes to download the Flash-based home page and didn't accept orders at all from Macintosh users. But these are mere matters of “functionality and cost” which obsess nerdy technologists and green eyeshade entrepreneurs like myself.

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