Conceptualizing Failed B2C Dotcoms as Innovation Failures

Abstract

During the 1998-2003 dot-com bust, many Internet-based business-to-consumer (B2C) companies failed to fulfill their initial and alluring promises. Concepts derived from the investigation of product and services innovation failures can provide a valuable strategic market framework to understand why so many dot-com B2C ventures crashed so fast. Early B2C ventures represented an entirely new class of technology-driven services. These B2C dot-coms sought to inform, promote, sell, and deliver consumer items in radically unfamiliar ways. In doing so, many B2C firms did not follow time-tested business precepts. In particular, the failed B2C firms did not realize they were marketing innovative services. Our framework uses the continuum of need-solution context in conjunction with the notion that seller/buyer perceptions about the scope of innovations are not necessarily concordant. Matched or “concordant” perceptions lead to success, and mismatched or “discordant” perceptions often breed failures. Using short cases and historical data, this chapter illustrates the explanatory power of the framework.