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10 Online Business Ideas That Never Took Off


6
Kozmo
A Kozmo.com messenger prepares deliveries a New York City distribution center in February 2000. Chris Hondros/Getty Images
A Kozmo.com messenger prepares deliveries a New York City distribution center in February 2000. Chris Hondros/Getty Images

Along with many of the dearly departed companies on this list, Kozmo was all the rage back in 1998. It was almost too good to be true: a service that would deliver almost anything, anywhere (well, within the boundaries of nine certain cities), for free, within an hour, with no minimum order. It was a slacker's dream.

A slacker's dream, yes, but a business nightmare. One of Kozmo's stated goals was to eventually compete with UPS and FedEx, but it soon became clear that wasn't going to happen. The sweet delivery deal earned Kozmo plenty of customers, but the free delivery and cheap prices made it impossible to turn a profit. Even though the company received a reported $280 million in venture capital and had lucrative partnerships with Amazon and Starbucks, things unraveled pretty quickly: Kozmo lost $26 million in 1999, canceled a planned IPO in 2000 and shut its doors in 2001 [source: CNN]. Rapid delivery services kind of faded away after that, other than in a few urban markets — it was an understandably daunting business model. Same-day delivery has since made a comeback, but the charge is being led by behemoth companies like Amazon. And although the fees may be low, we're certainly not getting our deliveries for free anymore.


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