Furniture.com

» see furniture.com as it lived, on the wayback machine

~ the obit ~

furniture.com never reached turkey at any meaningful scale, it was a US-coded dot-com shipping sofas inside the lower forty-eight. in 2000 i was sixteen in ankara on a ttnet dial-up account that did not even render the company's image-heavy product pages cleanly. the idea of buying a couch through a website and waiting six weeks for a freight truck was not a category turkish e-commerce was running, the local stores in kızılay would deliver from across town and you would see what you were buying first.

the company was based in framingham massachusetts and had been founded in late '98 as a vertical play for the home-furnishings category. cmgi was the lead venture backer, the same boston-area conglomerate that had bets in alta vista and lycos plus a dozen other sub-vertical dot-com retailers. furniture.com built a product catalog with two thousand skus and signed distribution deals with a handful of manufacturers. the consumer site launched in '99 with the standard playbook of celebrity-tier advertising and below-cost shipping promotions.

the company filed an s-1 with the sec in january '00. the filing showed forty-six and a half million dollars in losses against twenty-two million in nine-month revenue, the burn rate was running at a multiple of revenue every quarter. by june the company withdrew the ipo, citing market conditions. the same week it announced a twenty-seven-million-dollar venture round from existing backers, the round was supposed to be a bridge to either profitability or a re-filed ipo in '01.

~ the rap sheet ~

~ the cracks ~

the bridge round burned in five months. look, the company had structural problems below the cash crunch. cmgi's own spokeswoman told computerworld that furniture.com had "poor back-office and product distribution systems," the kind of comment that does not get made about a portfolio company while the founder is still in the room. the manufacturer distribution model required the company to predict demand for thousand-dollar items it never owned, the freight logistics for last-mile sofa delivery were running fifteen to twenty percent of order value (roughly).

the gross-margin math did not close. every order that shipped was a loss on the contribution line, the only path to a positive number was a hypothetical scale curve that needed another two years of broadband adoption and another two rounds of capital. the capital was not coming.

~ the day it died ~

the cease-orders announcement went out on november 6 '00, a monday. seventy-six of the company's eighty-eight employees were laid off the same morning, the website stopped accepting orders by mid-afternoon. anyway, the company never filed for chapter 11 protection, the assets were sold off through a quiet wind-down process and the remaining inventory commitments were unwound through the manufacturer partners.

look, the framingham herald carried the layoff story alongside a piece about the local mall's holiday hiring. the wider press read furniture.com as the next-domino piece after [[living-com]] in austin three months earlier. the two companies had been the canonical pair of online-furniture retailers, both backed by serious money, both unable to make the unit economics work in time for the funding window to reopen.

~ what got buried with it ~

the furniture-online category had to wait about a decade for the version that worked. wayfair and west elm and overstock built the same business in the mid-2010s with the broadband and last-mile infrastructure the original cohort had needed, the lessons from furniture.com showed up as case studies in business school binders before they showed up as competitive analysis at wayfair. the framingham office was sublet inside the next quarter. cmgi itself did not survive the bust, the parent ran out of runway in '02 and was liquidated as a holding shell.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »