Next to the company that tried to wire Web users to bar-code scanners, money-burning dot-coms like Webvan don't look quite so bad.


Those grim, told-you-so pundits conducting postmortems of the Internet stock bubble have been quick to lash dot-com entrepreneurs for their foolhardy naiveté. “You idiots,” goes the standard line of rear-view mirror commentary. “You were great at giving away stuff to the public, but you never had a business model!”

This week’s news of Webvan’s demise provides hefty fodder for this conventional wisdom. Here’s a company that clearly provided a service that met a need — lots of busy Americans would love not to waste time at the grocery store — but never had a clue how to make money. Tsk, tsk, scold the pundits: what were they thinking?

Well, OK. It’s pretty obvious that any business launched without a clear vision of how to sustain profits isn’t destined for longevity. If, in the heady days of 1999, a motley cadre of venture capitalists, Internet visionaries and technology investors lost sight of that truth, it was, relatively, only a brief moment of folly.

The Internet industry and all of its “new economy” hype has now taken enough pulverizing criticism that it’s worth re-examining the animus against it. After all, what were many of the highest-profile dot-coms that soared and then crashed really up to? They gave away previously expensive goods and services (e-mail, Internet access, even computer hardware) for free. They devised innovative new services (home or office delivery of convenience-store goods and groceries, online payment schemes, free discussion and consumer rating sites) that lost money but made people happy.

Of course some of the companies floating in the dot-com dead-pool were just stupid. But in many cases, what did these companies do that was so deserving of scorn? They put the interests of their customers first. This may ultimately have been foolish, since in the end they couldn’t keep a business alive that way; but it’s nothing to sneer at.

Consider the alternative. Consider the sad saga of the CueCat.

The CueCat, you may recall, was a bar-code scanner that a company out of Dallas called Digital Convergence was sending out free to millions of users. You were supposed to plug it into your computer and then point it at bar codes appearing in magazine ads; the bar codes would send your browser to a specific page within the advertiser’s Web site.

Apparently the advertisers of the world faced such an insurmountable problem in guiding customers to their Web sites that it would be worth everyone’s while to deploy this Rube Goldberg contraption. Or so the thinking went among the captains of industry. Joe Web Surfer just yawned and laughed.

Digital Convergence, in other words, is the opposite of a dot-com: Rather than coming up with a scheme to please the public while forgetting about how to satisfy big-pocket investors with profits, these folks whipped up a project that made boardroom occupants drool with excitement — but forgot about pleasing their own customers.

As anyone who actually uses the Web could have predicted, the CueCat turned out to be a massive flop, and — except for a few hackers who figured out how to bend the device to their own ends — lots of CueCats are now fattening landfills everywhere.

What’s interesting about the CueCat fiasco is not that it happened but that large and ostensibly savvy companies chose to invest in the loony scheme. A recent Wall Street Journal article reported some details: Digital Convergence got $37.5 million from Belo Corp. (the media company that owns the Dallas Morning News), $30 million from Radio Shack, $28 million from Young & Rubicam and even $10 million from Coca-Cola. What were the titans of business acumen who lead these blue-chip companies thinking?

According to the Journal article, it was the boardroom sales skills of Digital Convergence CEO and promoter J. Jovan Philyaw that wowed executives and opened their wallets. I’ve never experienced Mr. Philyaw’s pitch myself, but it doesn’t take much imagination to picture the scene.

Philyaw doubtless told his listeners that the problem with their Web sites wasn’t that they were poorly conceived or designed or that there was little reason for most people to want to visit them — it was that users couldn’t find what they wanted because the Web was just so darn confusing. He didn’t say, “You should redesign your Web site to make it easier for people to find what they want”; he said, let’s spend a fortune putting bar-code scanners in readers’ hands and then require them to register because then we can tell you who they are and where they live.

In other words, Philyaw was able to raise such substantial sums of money because he told his CEO listeners what they wanted to hear. That doesn’t make him particularly special in the annals of business, which are filled with follies that appealed to the executive mindset but flopped when they were rejected by the public. But in this post-dot-com-downturn era, it does serve as a healthy reminder that a business model is not the only thing you need to build a company. It helps to have customers, too.

Salon co-founder Scott Rosenberg is director of He is the author of "Say Everything" and Dreaming in Code and blogs at

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 14
  • Close
  • Fullscreen
  • Thumbnails

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Pilot"

    One of our first exposures to uncomfortable “Girls” sex comes early, in the pilot episode, when Hannah and Adam “get feisty” (a phrase Hannah hates) on the couch. The pair is about to go at it doggy-style when Adam nearly inserts his penis in “the wrong hole,” and after Hannah corrects him, she awkwardly explains her lack of desire to have anal sex in too many words. “Hey, let’s play the quiet game,” Adam says, thrusting. And so the romance begins.

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Elijah, "It's About Time"

    In an act of “betrayal” that messes up each of their relationships with Hannah, Marnie and Elijah open Season 2 with some more couch sex, which is almost unbearable to watch. Elijah, who is trying to explore the “hetero side” of his bisexuality, can’t maintain his erection, and the entire affair ends in very uncomfortable silence.

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Charlie, "Vagina Panic"

    Poor Charlie. While he and Marnie have their fair share of uncomfortable sex over the course of their relationship, one of the saddest moments (aside from Marnie breaking up with him during intercourse) is when Marnie encourages him to penetrate her from behind so she doesn’t have to look at him. “This feels so good,” Charlie says. “We have to go slow.” Poor sucker.

    13 of "Girls'" most cringeworthy sex scenes

    Shoshanna and camp friend Matt, "Hannah's Diary"

    We’d be remiss not to mention Shoshanna’s effort to lose her virginity to an old camp friend, who tells her how “weird” it is that he “loves to eat pussy” moments before she admits she’s never “done it” before. At least it paves the way for the uncomfortable sex we later get to watch her have with Ray?

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Hard Being Easy"

    On the heels of trying (unsuccessfully) to determine the status of her early relationship with Adam, Hannah walks by her future boyfriend’s bedroom to find him masturbating alone, in one of the strangest scenes of the first season. As Adam jerks off and refuses to let Hannah participate beyond telling him how much she likes watching, we see some serious (and odd) character development ... which ends with Hannah taking a hundred-dollar bill from Adam’s wallet, for cab fare and pizza (as well as her services).

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Booth Jonathan, "Bad Friend"

    Oh, Booth Jonathan -- the little man who “knows how to do things.” After he turns Marnie on enough to make her masturbate in the bathroom at the gallery where she works, Booth finally seals the deal in a mortifying and nearly painful to watch sex scene that tells us pretty much everything we need to know about how much Marnie is willing to fake it.

    13 of "Girls'" most cringeworthy sex scenes

    Tad and Loreen, "The Return"

    The only sex scene in the series not to feature one of the main characters, Hannah’s parents’ showertime anniversary celebration is easily one of the most cringe-worthy moments of the show’s first season. Even Hannah’s mother, Loreen, observes how embarrassing the situation is, which ends with her husband, Tad, slipping out of the shower and falling naked and unconscious on the bathroom floor.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and the pharmacist, "The Return"

    Tad and Loreen aren’t the only ones to get some during Hannah’s first season trip home to Michigan. The show’s protagonist finds herself in bed with a former high school classmate, who doesn’t exactly enjoy it when Hannah puts one of her fingers near his anus. “I’m tight like a baby, right?” Hannah asks at one point. Time to press pause.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Role-Play"

    While it’s not quite a full-on, all-out sex scene, Hannah and Adam’s attempt at role play in Season 3 is certainly an intimate encounter to behold (or not). Hannah dons a blond wig and gets a little too into her role, giving a melodramatic performance that ends with a passerby punching Adam in the face. So there’s that.

    13 of "Girls'" most cringeworthy sex scenes

    Shoshanna and Ray, "Together"

    As Shoshanna and Ray near the end of their relationship, we can see their sexual chemistry getting worse and worse. It’s no more evident than when Ray is penetrating a clothed and visibly horrified Shoshanna from behind, who ends the encounter by asking if her partner will just “get out of me.”

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Frank, "Video Games"

    Hannah, Jessa’s 19-year-old stepbrother, a graveyard and too much chatting. Need we say more about how uncomfortable this sex is to watch?

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Desi, "Iowa"

    Who gets her butt motorboated? Is this a real thing? Aside from the questionable logistics and reality of Marnie and Desi’s analingus scene, there’s also the awkward moment when Marnie confuses her partner’s declaration of love for licking her butthole with love for her. Oh, Marnie.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Vagina Panic"

    There is too much in this scene to dissect: fantasies of an 11-year-old girl with a Cabbage Patch lunchbox, excessive references to that little girl as a “slut” and Adam ripping off a condom to ejaculate on Hannah’s chest. No wonder it ends with Hannah saying she almost came.

  • Recent Slide Shows



Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>