Documented cause
Boo.com was founded in 1998 in London and Stockholm by Swedish entrepreneurs Ernst Malmsten and Kajsa Leander to sell designer fashion globally through a technologically advanced website featuring 3D product views, rotating images, and virtual mannequins. The company raised approximately £120M ($135M) from investors including LVMH's Bernard Arnault, the Benetton family, JP Morgan, and Goldman Sachs. The founders spent extravagantly on a global office footprint, helicopter transportation, and a customer service operation across multiple continents. The fundamental product problem was invisible to the founders: the website required broadband internet speeds that most consumers in 1999-2000 did not have. Customers on dial-up connections found the site unbearably slow or unable to load at all. The company burned through its entire £120M in just 18 months — at approximately £80M per month at peak — and filed for administration in May 2000. The brand was sold for just $372,000 to Fashionmall.com. At the time of collapse, Boo.com had only around 200,000 registered users despite spending over £100M.
Alternative account: Boo.com launched in 1998 with a technology-forward vision for fashion e-commerce: a 3D model that could "wear" clothes for you to inspect from every angle, a virtual assistant named Miss Boo, and a slick Flash-based interface that would have been impressive in 2005. The problem: the interface required a high-bandwidth connection that barely 1% of internet users had in 1999. The site loaded slowly on dial-up, the technology was overwrought, and the product was luxury designer fashion with no delivery advantage over a physical store. The company raised £120M from LVMH backer Bernard Arnault and others, burned through it in 18 months on technology development and lavish offices, and went into administration in May 2000.