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WHERE ARE THEY NOW
Why Dot-Com Disaster Kozmo Never Became Instacart
An investigation two decades later
Where Are They Now is a column that revisits once-popular companies and brands that have seemingly disappeared.
The shorthand for the bubbliest startup of the dot-com bubble has long been Kozmo, the turn-of-the-century startup that intended to solve the ultimate logistical problem: What if someone would just bring me that thing I want, now? Imagine Amazon Prime at the speed of pizza delivery but for free. At the time, many people asked “How is that a feasible business model?” — including the founders of Kozmo, though not soon enough to save their IPO in 2000.
And yet today, the world looks a lot like Kozmo envisioned it, especially during the pandemic. A network of companies — some old, some startups — have collectively pulled off something close to Kozmo’s original vision. And this time, the services seem to be more than sticking. DoorDash’s stock reached more than $189 a share on its first day of trading, a $72 billion valuation, and it’s now at over $200 a share some two months later. Instacart is bulking up its corporate team as the market waits for an IPO. Pandemic conditions caused Amazon to hire over 400,000 new employees in the first 10 months of 2020. Sales at Target’s in-house delivery service, Shipt, grew 300% over the holidays while Uber recently acquired liquor delivery service Drizly for $1.1 billion. So what stopped Kozmo from becoming Instacart?
Kozmo’s founder, a 25-year-old Goldman Sachs investment banker named Joseph Park, started the company in 1997 after realizing he would have to wait three to five days to read a John Grisham novel if he purchased it on Amazon. He named the company after his favorite drink and favorite Seinfeld character (cosmopolitan, Cosmo Kramer) and plowed a fifth of his $100,000-a-year salary into it. His freshman college roommate, Yong Kang, signed up to be the company’s co-founder, and the pair raised $232 million by the time Kozmo filed for its ill-fated IPO almost three years later.
The challenge for Kozmo, which operated in 11 cities at its peak, was balancing its cartoonish elevator pitch (“Order anything from our website, and we’ll deliver it to you for free within an hour”)…
