It seems like forever since those heady, spirited days of the dot.com boom. There was no 9/11, no War in Iraq, no "Axis of Evil". Instead there was champagne was flowing freely, the NASDAQ, FTSE and DOW soaring to new heights, and millionaires (at least on paper) were being created overnight. Wanting to relive that spirited time and on recommendation of my friends Matthias and Abi, I recently finished reading "boo hoo", the story of boo.com, one of Europe's most high profile Internet stories of spectacular boom and heartwrenching bust.
boo.com was set up in London by 3 Swedes -- Ernst Malmsten, Kasja Leander and Patrik Hedelin in 1998. Malmsten and Leander, the real visionaries behind the business, had previous experience and success with Internet businesses in Swedem. This was very impressive for 1998, before many people had even tried the Internet, let alone figure out the commercial potential it could harness.
boo was to be the world's first online shop for fashion and sportswear. In a world with the hindsight of the successes of Net-a-Porter, eLuxury, ASOS and Yoox, this seems like an obvious idea. But, Leander and Malmsten faced substantial pessimism and doubt about boo's potential from many of the people they contacted. Through sheer determination, optimism and hard work, they slowly won people over to their idea.
Even if you are not interested in Internet businesses or business planning, this book is chock-full with lessons about setting up new businesses. It would be an insightful read for any entrepreneur. Since I was living in London at the time of boo.com's meteoric rise (and then dramatic fall) and knowing the ultimate conclusion of the business, I found myself rooting for Malmsten and Leander the whole way through, and wondering what I would have done in their shoes. What decisions would I have made differently? What decisions did they execute brilliantly? A few of the lessons that resonated most with me:
- Focus - be clear about what your company is about and what it is trying to achieve so as to understand what the core competencies of the business need to be. In the case of boo, not focusing meant they spent time an energy launching a new magazine and opening an international network of offices to support a business website that hadn't yet been launched. This burned cash and detracted from the essential tasks at hand.
- Choose investors and strategic partners who believe in you and your idea - they will end up being the ones to support you when things don't go as planned, not just because their money is at stake. That said, as an entrepreneur, to use a quip from the book, you might always want to think of your investors as "the enemy." The worst kind of investors for a start-up are the ones looking for a quick buck, who'll walk away without warning, when the going gets tough.
- It's never too early to build a company culture - boo got as far as it did due to the commitment, excitement and buy in from its employees. This is an incredibly valuable resource and your employees can become great sources of guidance, energy and realism.
- Beware the publicity machine - The media is very powerful, and while boo built an amazing profile in such a short period, having extremely high expectations from the marketplace can add additional pressure while the foundation of the business is being set up. And, if you aren't able to deliver what you promised, when you promised it, the media will be just as happy to tear you down afterwards
- Choose your partners carefully - Partnership is very tough. Having partners who don't add value or whose objectives are different from yours will eventually lead to breakdown of the partnership. Being completely aligned and having tough conversations early on about roles, vision, strategy and exit strategy are crucial. Even then, it is inevitable that partnership issues will arise -- these should be discussed openly and honestly so they can be resolved
I recommend this book highly. It is extremely readable, accessible and interesting, even to those who have no business training. It addresses all the nuts and bolts of building a business and as such, offers lessons to everybody in any business.
By the way, in case you're wondering what happened to the company's assets, brand and domain name, I went to the boo.com website and it says "A new boo.com is on the way" and then provides an opportunity to dress a guy in "slick" or "street" clothes. Also, rumour has it that Natalie Massenet of Net-a-Porter scooped up some of the expensive servers and hardware that was purchased to support boo's complex website and all the traffic it was to receive.