Boondoggle operated as a web site where consumers could buy
interesting alternatives to gifts of CD vouchers and High Street
shop certificates. Instead, gift vouchers were sold for a range of
activity days, adventures and luxury services being offered by
third parties. The activities ranged from tank driving to dog
grooming.
On the company's web site, a statement headed "Boondoggle Bites
the Dust", says:
"We think we were on to something good here:
an excellent concept of making it easy to buy an exceptional gift
or arrange a great day away, a great financial model with no
inventory, margins of 30% plus and extraordinary cash flow,
partnerships signed with over 80 activity suppliers and 100
affiliates, a state-of-the-art open source website, and good early
results from our ten weeks of trading. But we found this wasn't
enough."
In an article in Scotsman.com, Boondoggle's founder, Doug
Wilson, explained yesterday that one mistake his team made was to
raise only £200,000 for the initial phase of the site, partly to
avoid over-diluting their equity before proving their business
model.
Wilson wrote, "it was a good idea, until Boo.com, Clickmango,
and the general decline in the technology sector came to pass." He
added that marketing projections let them down, despite the
validation of the figures by two sets of apparent experts. When
trying to close a funding deal, the projections made their actual
performance look poor, causing a drop in confidence and
consequently funding.
