1998
Do you remember...
Kozmo.com
Kozmo.com was a New York City-based online startup that promised free, one-hour delivery of anything on their site. The items available for purchase were initially DVDs and Starbucks coffee, but they later grew to carry sandwiches, magazines and Playstation 2 gaming systems, among other small items. Kozmo’s business model was to have bicycle messengers in several large U.S. markets deliver the goods for free and also refuse tip. Kozmo said that they saved money in their target markets by not needing to rent space for retail stores because that would exceed the costs of delivery. Kozmo was perfect for getting a sandwich delivered for free on a stormy day at the office, or getting a DVD and candybar delivered so you didn’t have leave your apartment.
Kozmo was founded by investment bankers Joseph Park and Yong Kang in March 1998 in New York City, and was funded by Flatiron Partners, Oak Investment Partners, Chase Capital Partners and Amazon.com. Kozmo raised around $250 million in funding all together. Kozmo operated in Seattle, Portland, Boston, New York, Washington, D.C., Atlanta, Chicago, Houston, San Francisco, San Diego and Los Angeles. Kozmo failed soon after the collapse of the dot-com bubble, laying off 1,100 employees, and shutting it’s doors… or it’s site… in April 2001.
In 1999, Kozmo.com reportedly had revenue of $3.5 million, with a net loss of $26.3 million, according to documents filed with the Securities and Exchange Commission.
Kozmo.com was the single greatest dot com service that ever happened, and proved why we need big ideas and lots of excess venture-capital funding.
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