Technology revolutions always have a boom-bust-rebirth-boom pattern. The key to this is surviving the down draft when it hits. Mary Meeker, whose career has taken a similar path, laid this out in a very powerful way. She aggregated the market caps of Google+Yahoo!+eBay+Yahoo!Japan+Amazon over time.
Pre-2000 IPO = $2B
3/2000 Peak = $178B
10/2002 bottom = $32B
11/2005 value = $262B (approaching 10x the trough and 150x pre-IPO!)
One of the most overlooked rebirths from this era is Peapod. Remember the $1B smoking hole in the VC road called Webvan? How about Kozmo or the array of other dead home delivery companies? Many started with low burn approaches but quickly ramped their burns in the hope of grabbing market share. My friends, Tom and Andrew Parkinson, founded Peapod in 1989, guided the company through the crash and now have, arguably, the most successful online home delivery grocery firm as part of Ahold. The May 1st Red Herring article "Life After Webvan" is a great article detailing this great story. I highly recommend it to all aspiring entrepreneurs. As I have written over and over again, controlling your burn equates to controlling your destiny.
The peapod story is a great one. I remember them delivering groceries to my dorm freshman year in the height of the boom. During the bust I had forgotten about peapod but, as soon as I moved into the North End in Boston, I remembered them quickly. For those who don’t know, the North End doesn’t have any large grocery stores nearby and I wasn’t one to go drive around and find one. The answer to my woes stared me right in the fact on the T one day – peapod. Oh yeah, I thought, I remember those guys. I started using them again and, not that I am a trendsetter or anything, everyone around me in the North End began to ask about them and, before I knew it, the neighborhood saw a peapod truck run through it at least once a day.
Congrats to the peapod guys for sticking it out and providing a great service at a low cost. 🙂
The peapod story is a great one. I remember them delivering groceries to my dorm freshman year in the height of the boom. During the bust I had forgotten about peapod but, as soon as I moved into the North End in Boston, I remembered them quickly. For those who don’t know, the North End doesn’t have any large grocery stores nearby and I wasn’t one to go drive around and find one. The answer to my woes stared me right in the fact on the T one day – peapod. Oh yeah, I thought, I remember those guys. I started using them again and, not that I am a trendsetter or anything, everyone around me in the North End began to ask about them and, before I knew it, the neighborhood saw a peapod truck run through it at least once a day.
Congrats to the peapod guys for sticking it out and providing a great service at a low cost. 🙂
As the Japanese proverb goes, fall down seven, get up eight. This could be the motto for entrepreneurs. It never ceases to amaze me how often something bottoms out, right on the edge of extinction, only to perserver and ramp into success. It just goes to show how important resilience is in this business!
As the Japanese proverb goes, fall down seven, get up eight. This could be the motto for entrepreneurs. It never ceases to amaze me how often something bottoms out, right on the edge of extinction, only to perserver and ramp into success. It just goes to show how important resilience is in this business!