The laziness factor
Kozmo may be history, but CNET News.com's Mike Yamamoto says it's only a matter of time before some bright bulb figures out a way to make money by appealing to our sedentary ways.
No more midnight Haagen-Dazs fixes, last-minute movies or NyQuil deliveries for sickbed-bound days.
The tragedy of the demise of Kozmo.com is that, unlike a lot of other dot-coms, its service was actually useful.
Long before the Web came along, I had what I considered two great ideas for a business. One was for late-night dessert deliveries and the other for a phone service that kept a database of famous people who had died, to settle bar bets and the like, called 976-DEAD. (OK, so I had only one good business idea.)
When Kozmo started offering snacks along with their original business of delivering movies in one hour or less, I kicked myself for not having done it first. After all, if outfits like Mylackey.com were making a go of it, certainly a dessert delivery service could draw a following.
Call it convenience or plain old laziness, but I firmly believe there's a viable market for many Kozmo-like companies that have succumbed to the dot-com meltdown. So why do services that sound so good end up being such bad businesses?
Part of the problem, of course, is the abandonment among investors who began avoiding dot-coms like the plague last year. But many of the failures have to do with a lack of understanding about the slothful nature of people like myself.
Webvan, for instance, fundamentally misunderstood the laziness factor. Although the idea of having someone schlep groceries to my doorstep every week sounds great, I usually don't know my shopping needs days in advance, as Webvan requires for its schedule; instead, I go when I run out of a household staple, like potato chips.
As it became clear that Webvan was headed for niche territory rather than the mass market, its direct competition moved from supermarkets to the likes of 7-Eleven. In retrospect, that seems to have been inevitable, as convenience was the commodity that separated Webvan from its brick-and-mortar counterparts.
Kozmo had that concept down cold. Its last home-delivered catalog said it all, in the five categories featured on the cover: entertainment (movies), meals (pizza), market (toilet paper), drugstore (diapers), gifts (stuffed animals)--all items that you might want on a spur of the moment but aren't worth a trip to a crowded market, especially after you've put on your PJs.
This last point, in particular, is the primary reason that all these e-tail services should have thrived, at least in theory. For example, online toy stores should have succeeded simply because anyone who has braved a trip to Toys "R" Us during the holidays should be willing to do anything to avoid repeating that frightening experience.
Saving time obviously isn't important only to those permanently affixed to their La-Z-Boys; even journalists have learned after years of research that their main competition is the time people spend doing other things--not the rival newspaper or TV station across town.
Yet for all their convenience, companies like eToys and other ostensibly life-simplifying services have fallen victim to other problems of their own making. In Kozmo's case, a key miscalculation was one of basic geography. What made sense in densely populated areas where people have relatively high incomes, such as Manhattan and San Francisco, didn't necessarily translate to urban sprawls like Houston and San Diego.
That's what I call the Amazon syndrome. Rather than sticking to the areas or products that made the most sense, some online companies seemed to assume that their initial formula would automatically work elsewhere. Amazon lost investor and industry confidence in expanding its products beyond books in an apparent bid to become the Wal-Mart of the Web; Kozmo's misdirected expansion was in its physical territories rather than its products, but the results proved even more damaging.
Eventually, somebody is going to figure out how to make money while appealing to my sedentary ways. And you can bet that I'll be willing to pay a substantial premium, because these services have an advantage over the brick-and-mortar world that I value even more than convenience: the ability to order things without talking to people.
But that's a subject for another column altogether.