Dot-Com Survivors

Discussion
Oct 07, 2003
George Anderson

By George Anderson

While the spectacular failure of high profile e-tail operations such as eToys and Webvan has been widely documented and discussed, a number of less publicized dot-com stores not only survived the bust, they prospered where others faltered.

An article by Bob Tedeschi of the New York Times reports that Wall Street and venture capitalists are beginning to take note of dot-come survivors such as Red Envelope and ProFlowers.com who have raised millions in recent initial public offerings (IPO).

“This has enormous impact for all of us who survived, and have the hope that one day we’ll be able to follow in their footsteps,” said Toni Sikes, the chief executive of Guild.com, an online and catalog retailer of fine art and gifts.

Now that the IPO market has been successfully tested, what will Red Envelope, ProFlowers.com and others that follow do with their sudden influx of cash?

“It’ll vary from company to company,” said Ms. Sikes, “but you can bet that as opposed to a couple years ago, 90 percent of the money won’t go into marketing spending.”

Moderator’s Comment: What lessons can be learned from e-tail survivors of the dot-com bust?

A business is as strong as its cash flow. Spend with great care. [George
Anderson – Moderator
]

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