Kozmo.com

Kozmo had a business model built around the delivery of small purchased goods within an hour by bicycle, car, truck, or public transportation for no delivery fee. The model was criticized by some business analysts, who said that one-hour point-to-point delivery of small objects is extremely expensive and were skeptical that Kozmo could make a profit as long as it refused to charge delivery fees.{{cite magazine

|title=Kozmo.com Pedaling To The Precipice?

|magazine=Forbes

|first=Davide

|last=Dukcevich

|date=June 22, 2000

|url=https://www.forbes.com/2000/06/22/mu3.html

|accessdate=2010-04-16

}} The company countered in part that, in their target markets, savings due to not needing to rent space for retail stores would exceed delivery costs.

Kozmo.com's headquarters was in New York City. According to documents filed with the Securities and Exchange Commission, in 1999 the company had revenue of $3.5 million, with a resulting net loss of $26.3 million.{{cite web

| title =Kozmo Com Inc SEC filing · S-1 · On 3/20/00

| publisher =SECInfo.com

| date =March 20, 2000

| url =http://www.secinfo.com/dRqWm.5c8t.htm

| accessdate =2008-01-07 }} The company had raised probably about $250 million, including $28 million from a group of investors in 1999 which included Flatiron, Oak and Chase[http://findarticles.com/p/articles/mi_m0EIN/is_1999_Oct_13/ai_56252091/pg_1 "Kozmo.com Receives $28 Million from Flatiron, Oak Investment, Chase Capital and Others"]. Business Wire, Press Release. October 13, 1999. Retrieved 2010-03-11. and $60 million from Amazon.com in 2000.{{cite web

|title = Press Release: Amazon.com Announces Investment...

|last = Greenspan

|first = Sharon

|publisher = Amazon.com

|date = March 20, 2000

|url = http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle_Print&ID=81108&highlight=%20press%20release

|accessdate = 2007-07-17

|archive-url = https://web.archive.org/web/20171103154104/http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle_Print&ID=81108&highlight=%20press%20release

|archive-date = November 3, 2017

|url-status = dead

}} It had entered a five-year co-marketing agreement with Starbucks in February 2000, in which it agreed to pay Starbucks $150 million (${{Format price|{{Inflation|index=US-GDP|value=150000000|start_year=2000}}}} in {{Inflation/year|US-GDP}}) to promote its services inside the company's coffee shops.{{cite web

|url=http://news.cnet.com/2100-1017-236857.html

|title=Kozmo.com sees more sales in Starbucks deal

|first= Joe

|last=Wilcox

|publisher=News.com

|date=February 14, 2000

|accessdate=April 16, 2010

}} This included up to 500 Starbucks locations to host drop-boxes in-store for video returns.{{cite web|url=http://www.bizjournals.com/seattle/stories/2000/02/14/daily1.html|title=Kozmo.com will pay Starbucks $150M|last=|first=|date=February 14, 2000|website=|accessdate=April 29, 2015}} Kozmo.com ended its deal in March 2001 after paying out $15 million (~${{Format price|{{Inflation|index=US-GDP|value=15000000|start_year=2001}}}} in {{Inflation/year|US-GDP}}). In July 2000, at the height of its business, the company operated in Atlanta, Chicago, Houston, San Francisco, Seattle, Portland, Boston, New York, Washington, D.C., San Diego, and Los Angeles.{{cite web

|first=John C.

|last=Wu

|title=Anatomy of a Dot-Com

|publisher=Supply Chain Management Review

|date=November 1, 2001

|url=http://www.scmr.com/article/CA184173.html

|archiveurl=https://web.archive.org/web/20040821125230/http://www.manufacturing.net/scm/index.asp?layout=articleWebzine&articleid=CA184173

|archivedate=August 21, 2004

|accessdate=2007-07-17

|url-status=dead

}} Kozmo filed an IPO with Credit Suisse First Boston, but never went public.Sandoval, Greg (February 29, 2000). [http://news.cnet.com/2100-1017-237445.html "Kozmo may deliver itself to the public"]. News.com. Retrieved 2010-04-16.

The company was the subject of an April 2000 report by MSNBC.com reporters Brock N. Meeks and Elliot Zaret claiming that Kozmo was redlining sections of the cities it served that were populated primarily by African Americans. Kozmo denied that race played any part in its decision on what zip codes to deliver to, saying it chose market areas based primarily on Internet penetration rates.{{cite web

|url=http://www.msnbc.com/news/373212.asp

|archiveurl=https://web.archive.org/web/20001217050000/http://www.msnbc.com/news/373212.asp?cp1=1

|archivedate=December 17, 2000

|title=Kozmo's digital dividing lines

|author=Zaret, Eliot

|author2=Meeks, Brock

|publisher=MSNBC.com

|date=April 11, 2000

|accessdate=2010-03-11

|url-status=dead

}} The Equal Rights Center (ERC), the Washington, DC–based civil rights group referenced in the article, pursued the company about the allegations. Later in the year, the ERC announced a joint initiative with Kozmo and stated that "Kozmo's initial service area was not motivated by racial discrimination," and Kozmo committed $125,000 toward increased Internet availability for underserved communities.{{cite web

|url = http://www.thefreelibrary.com/Kozmo.com+and+Equal+Rights+Center+Announce+Initiative+to+Bridge+the...-a067584214

|title = Kozmo.com and Equal Rights Center Announce Initiative to Bridge the Digital Divide

|publisher = Business Wire

|date = December 5, 2000

|accessdate = 2010-03-11

|archive-date = 2012-10-18

|archive-url = https://web.archive.org/web/20121018052823/http://www.thefreelibrary.com/Kozmo.com+and+Equal+Rights+Center+Announce+Initiative+to+Bridge+the...-a067584214

|url-status = dead

}}

While popular with college students and young professionals,{{cite news

| last = Casselman

| first= Ben

| title =Kozmo.com Website Goes Out of Business

| newspaper =Columbia Spectator

| date =April 17, 2001

| url =http://eyedev.columbiaspectator.com/2001/04/17/kozmocom-website-goes-out-business

| archiveurl = https://web.archive.org/web/20110708175851/http://eyedev.columbiaspectator.com/2001/04/17/kozmocom-website-goes-out-business

| archivedate = 2011-07-08

| url-status = dead

| accessdate = 2007-07-17 }} the company failed soon after the burst of the dot-com bubble, laying off its staff of 1,100 employees and shutting down in April 2001.Sandoval, Greg (April 11, 2001). [http://news.cnet.com/2100-1017-255710.html "Kozmo to shut down, lay off 1,100"]. News.com. Retrieved 2010-04-16.{{cite web|url=http://www.hive4media.com/news/html/industry_article.cfm?article_id=1068|archiveurl=https://web.archive.org/web/20010420072207/http://www.hive4media.com/news/html/industry_article.cfm?article_id=1068|title=Kozmo.com Ceases Operations, Fires Entire 1,100-Person Staf|website=hive4media.com|archivedate=April 20, 2001|date=April 12, 2001|accessdate=September 23, 2019|url-status=live}} Employees at many of the company's 18 locations found out about the shutdown only after arriving to work their scheduled shifts and finding the doors locked. Those locations, as well as their Memphis distribution center, were soon liquidated by a veteran entertainment wholesaler from Florida.{{citation needed|date=November 2012}}

The documentary film e-Dreams, released in June 2001, depicts the growth and fate of the company.

In April 2005, former CTO Chris Siragusa launched MaxDelivery, a Kozmo-like service in downtown Manhattan specializing in the delivery of food, wine, DVDs and essentials, and is still in business as of November, 2018.Cantrell, Amanda (September 14, 2005) [https://money.cnn.com/2005/09/14/technology/kozmo_redux/index.htm "Rebirth of Kozmo.com, kind of"]. CNN, [http://CNNMoney.com CNNMoney.com]. Retrieved 2010-04-16.{{cite magazine |archiveurl=https://web.archive.org/web/20121105102343/http://www.wired.com/techbiz/media/news/2005/07/68160 |last=Metz |first=Rachel |date=July 13, 2005 |url=https://www.wired.com/techbiz/media/news/2005/07/68160 |title=Diapers Revive Dead Dot-Com |magazine=Wired |archivedate=2012-11-05 |accessdate=2016-12-16 |url-status=bot: unknown }}

Joseph Park, former co-founder and CEO, went on to co-found Askville in 2006, which is now part of Amazon.com. Park left Amazon.com in June 2009 to become president of BibleGateway.com, which is owned by Zondervan, a Christian publisher that is a unit of HarperCollins (which is owned by News Corp.).{{cite web

| title =Kozmo.com founder Park leaves Amazon for Bible Gateway

| first =Eric | last =Engleman

| publisher =TechFlash

| date= September 29, 2009

| url =http://www.techflash.com/seattle/2009/09/former_kozmocom_ceo_park_leaves_amazon_askville_for_biblegateway.html

| accessdate =2010-04-28 }}

Yong Kang, former co-founder, returned to Wall Street, and as of June 2008 listed his occupation as investment banking at Lehman Brothers (now Barclays Capital).{{cite web|title=Where are they now: Kozmo.com |first=Mark |last=Henricks |publisher=The Industry Standard |date=May 29, 2008 |url=http://www.thestandard.com/news/2008/05/29/where-are-they-now-kozmo-com |archiveurl=https://web.archive.org/web/20080601045303/http://www.thestandard.com/news/2008/05/29/where-are-they-now-kozmo-com |archivedate=June 1, 2008 |url-status=dead }}

Some grocery-store delivery chains offering online ordering with same-day delivery survived the dot-com bust, and in the 2010s various competing same-day delivery services started in larger U.S. cities.

• Dot-com company
• FreshDirect
• Webvan online grocer
• Urbanfetch
• Askville

{{reflist|2}}

• [https://web.archive.org/web/*/http://www.kozmo.com/ Archived versions of kozmo.com] at the Internet Archive (Original Kozmo.com site predates June 1, 2001).

{{Dot-com Bubble}}

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Category:Retail companies established in 1998

Category:Internet properties established in 1998

Category:Retail companies disestablished in 2001

Category:Internet properties disestablished in 2001

Category:Defunct retail companies of the United States

Category:Online retailers of the United States

Category:Companies based in New York City

Category:Defunct online companies of the United States

Category:Dot-com bubble