Webvan was founded in the heyday of the dot-com boom in the late 1990s by Louis Borders, who also co-founded the Borders bookstore in 1971. Webvan's original investors included Goldman Sachs and Yahoo!, who encouraged it to rapidly build its own infrastructure (the first-mover advantage strategy popularized by Amazon.com) to deliver groceries in a number of cities.Some journalists and analysts blamed this serious error of judgment on the fact that none of Webvan's senior executives (or major investors) had any management experience in the supermarket industry, including its CEO George Shaheen who had resigned as head of Andersen Consulting (now Accenture), a management consulting firm, to join the venture.
Webvan tried to embrace a total customer satisfaction model involving a 30 minute window delivery without considering that many working customers would like their groceries delivered at home at night.
While Webvan was popular, the money spent on infrastructure far exceeded sales growth, and the company eventually ran out of money. For example: Webvan placed a $1 billion (USD) order with engineering company Bechtel to build its warehouses, bought a fleet of delivery trucks, purchased 30 Sun Microsystems Enterprise 4500 servers, dozens of Compaq ProLiant computers and several Cisco Systems model 7513 and 7507 routers, as well as more than 80 21-inch ViewSonic color monitors and at least 115 Herman Miller Aeron chairs (at over $800 each).
Why did they fail?
What are the patterns and warning signs? How can we detect the warning signs
in organizations before it is too late?
Four Explanations
behaviors that lead to failure:
1. Executive Mindset Failures - Breakdowns in how
executives perceive reality for their companies
2. Delusions of a Dream Company - How people
within an organization face up to their reality
3. Lost Signals - How information and control
systems in the organization are mismanaged
4. Patterns of Unsuccessful Executive Habits - How
organizational leaders adopt unsuccessful behaviors
As part of its shutdown process, all non-perishable food was donated to local food banks. Webvan's legacy consists of thousands of colored plastic shipping bins for groceries that are still sitting in customers' basements and closets, and a lucrative severance package for ex-CEO Shaheen
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1 comment:
it really attract my attention to read further.it reminds me succeed doesn't long lasting.
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