Pay by Touch
You might not have heard of Pay by Touch, a company that marketed "biometric authentication technology" that allowed consumers to access their private accounts with the swipe of a finger. Unlike many of the high-profile companies on this list, it seems to have flown under the public radar. It arrived on the scene in 2002, just after the big wave of online failures — there was probably a bit of startup fatigue by that point, so the public and the media were no longer excited about every next "big thing." And chances are you never had the opportunity to use Pay by Touch. Not many people did.
Pay by Touch's concept was a viable one that may, in time, see a resurgence. But the company itself was done in by the sheer amount of drama that surrounded its CEO, who squandered an incredible amount of money and was accused of domestic abuse, drug possession and misappropriation of company funds, among other things. Pay by Touch lasted six years — about twice as long as some of the other companies on this list — but its collapse was no less spectacular. According to lawsuits (of which there were many), the company burned through $8 million a month at one point, eventually wasting $340 million in venture capital [source: Williams]. It also pulled another classic move in 2008 — closing so abruptly that many of its customers were left in the lurch.
Author's Note: 10 Online Business Ideas That Never Took Off
I worked for a failed online business in the first heyday of Internet startups. I was 24, my bosses were 29, we were in New York, and it was awesome. There was certainly no shortage of lax management policies and questionable decisions, though. I was an English major with zero financial experience who was put in charge of the accounting department. (It was a department of one, but still — not the best idea.) One of my daily duties was to walk down the street to the bank (in a fairly shady neighborhood) to deposit hundreds of thousands of dollars in checks. Sometimes I would take the stack of checks home for the weekend if the bank was closed. But the bubble burst, and it was all gone eventually. Ah, youth.
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Starting a bank requires a good business plan, raising capital and going through a complex regulatory process.