Boo Hoo

Sep 25th, 2002 by Tony in * commentary, * one-offs

I was starting to wonder how we had ever believed we were only weeks away from launch. It was a mass delusion. We either hadn’t seen, or had simply closed our eyes to, all the warning signs. Instead of focussing singlemindedly on just getting the website up and running, I had tried to implement an immensely complex and ambitious vision in its entirety. Our online magazine, the rollout of overseas offices, the development of new product lines to sell on our site – these were all things that could have waited until the site was in operation. But I had wanted to build utopia instantly. It had taken eleven Apollo missions to land on the moon; I had wanted to do it all in one.

— Ernst Malmsten, boo hoo

This is a scary book. Malmsten retells the story of how boo spent $135m over 18 months, to achieve total sales of less than $1.5m, and never really seems to understand just how badly they went wrong. He actually seems to believe they achieved something important, or at least interesting. At the point of Boo’s collapse, we’d built BlackStar to a turnover of $1m per month, with a total operating spend (excluding marketing) of less than $2m in the two years we’d been trading. Our product development costs (i.e the website, and all our fulfilment and customer service systems etc) had been less than $200k, whereas Boo had spent $250k solely on the feasibility study for theirs! By the time they were on the verge of collapse, even after significant cuts, Boo still needed $2m per week to survive. BlackStar, with 100 employees, and still growing fast, needed less than $100k per week.

Although Malmsten attempts to take responsibility for many of the shortcomings, it’s mostly in an “it was someone else’s fault, but I should really have sorted it out” way. Other than the quote above, he never really seems to realise that it wasn’t the execution that was flawed – it was the entire approach.

Malmsten even has the gall to finish the book with the final press release on Boo’s bankruptcy which finished: We believe very strongly that in there is a formula for a successful business and fervently hope that those who are now responsible for dealing with the company will be able to recognize this.

Hopefully the readers of the book will be able to see what Malmsten can’t.

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