Online Currency (Flooz, Beenz)
Building a business model around solving a nonexistent problem was a common blunder of many early Internet startups. Online currency companies are but one example of this phenomenon — they were based on the assumption that people wanted an alternative to using their credit cards for online purchases. Turns out that wasn't the best assumption. Although consumers weren't quite as comfortable with online shopping as they are now, most people were just fine with the status quo. Merchants weren't all that interested in online currency, either.
There were a couple of well-known flops in the category. They both centered on the concept of earning rewards in the form of online currency for being loyal customers of participating merchants. Flooz had plenty of big investors and a flashy ad campaign featuring Whoopi Goldberg but closed up shop in a hurry in 2001 after only two years in business, leaving customers stranded with worthless "flooz." At about the same time, Beenz was squandering millions in venture capital and calling it a day after only three years.
Bitcoin has been the most promising and long-lasting online currency business thus far, but it hasn't been able to gain widespread acceptance. Perhaps this goes to show that creating a market where there's no interest might not be the best business idea.