"Just a big old dope..."

Rohit Khare Rohit@KnowNow.com
Fri, 5 Oct 2001 17:59:53 -0700


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On the front page of the Los Angeles Times, no less... :-)

>Scout Electromedia Inc., maker of a wireless hand-held device, shut 
>down so fast that Rohit Khare never got a chance to use his.
>
>The device, called a Modo, was designed to display restaurant and 
>entertainment listings transmitted over the air. The service wasn't 
>available where Khare lived in Seattle, but he figured he could use 
>the gadget on his frequent trips to San Francisco and New York City. 
>So he plunked down $99 for a Modo. Two weeks later, Scout 
>Electromedia was no more.
>
>"I was just a big old dope," said Khare, chief technology officer 
>for a network equipment company now based in Mountain View, Calif.

------------------------------------------------------------------------
http://www.latimes.com/news/printedition/la-000079101oct03.story
COLUMN ONE

On Junk Heap of the Net

Nothing but dust-collecting junk--that's what much of the must-have 
tech devices have become since the deflation of the dot-com bubble.
By KAREN KAPLAN
TIMES STAFF WRITER
October 3 2001

For Jeanne Miller, the Internet revolution was crystallized in a 
wondrous device called SportBrain--a $99 clip-on unit that measured 
her physical activity throughout the day and relayed the information 
to a personalized Web site.

"Everywhere I turned, people were touting SportBrain," said Miller, a 
Seattle marketing executive. "Oprah had it, of all people!"

She saw the gadget as high technology's ultimate gift to fitness and 
was immediately addicted--for all of four months. In July, the 
company went out of business, rendering Miller's and 40,000 other 
SportBrains useless. "It's not like $100 is the end of the world, but 
if I had known in advance that it would only work for four months, I 
wouldn't have paid that," she said. "There's more than one way of 
investing your money in high tech and losing it. You can invest in 
the stock, or you can buy their product."

Along with mountains of worthless stock certificates and heaps of 
pink slips, the 18-month-long high-tech meltdown has left behind a 
growing pile of dot-com junk. Included in the debris are expensive 
wireless modems that worked only with a now-defunct service, 
hand-held gadgets that could display entertainment listings only from 
another vanished company, and untold dollars worth of Internet 
currencies that no longer have the power to buy anything.

The accumulation has unleashed a wave of consumer frustration rivaled 
only by the ire of the now- jobless thousands who actually worked for 
those companies.

"I cannot tell you how sick I was," said Linda Pratt, an Ohio real 
estate investor who ran up a $6,100 bill with CyberRebate.com. The 
company had promised to eventually rebate as much as 100% of the 
price of anything bought through its Web site. But Pratt didn't get 
her rebates. The company went belly-up in May.

"I felt I would throw up," she said. "I was shaking. I didn't even 
tell my husband for four days. It was the stupidest thing I've ever 
done in my life."

Edgar Dworsky, founder of an online consumer resource guide called 
Consumer World, noted that "historically, it has been only the 
venture capitalists and stockholders who lose money" in 
high-technology companies. "Now, more and more individual consumers 
are suffering financial losses when a dot-com goes bust."

The flakiness of some online ventures seems obvious now. But the 
early buzz about the Internet was so hot that any business that was 
online appeared to have boundless possibilities.

Few predicted that the dot-com frenzy would end so abruptly.

When prices for tech stocks began their precipitous decline 18 months 
ago, it took some companies only a few months to burn through 
whatever cash they had left. Many closed shop with little or no 
warning, leaving consumers fuming about how the tech revolution was 
turning out.

Scout Electromedia Inc., maker of a wireless hand-held device, shut 
down so fast that Rohit Khare never got a chance to use his.

The device, called a Modo, was designed to display restaurant and 
entertainment listings transmitted over the air. The service wasn't 
available where Khare lived in Seattle, but he figured he could use 
the gadget on his frequent trips to San Francisco and New York City. 
So he plunked down $99 for a Modo. Two weeks later, Scout 
Electromedia was no more.

"I was just a big old dope," said Khare, chief technology officer for 
a network equipment company now based in Mountain View, Calif.

And Pratt is still smarting from her experience with CyberRebate. "I 
am the most thrifty, money-conscious person you have ever met in your 
life," she said.

The idea behind the company seemed odd at first. Its prices were 
wildly inflated--$33 for a plain toothbrush, $77 for a set of toy 
racing cars, $60 for a bunch of Lincoln Logs that usually sold for 
$10.

But CyberRebate had a gimmick that was tough to resist. The company 
offered rebates for as much as 100% of the purchase prices, banking 
on the fact that a small percentage of shoppers would never bother to 
collect all the paperwork necessary for a reimbursement.

In March, the company was the seventh most popular e-commerce site on 
the Internet, drawing 5.6 million visitors, according to Jupiter 
Media Metrix.

Pratt didn't put her trust in CyberRebate right away. For five 
months, she quizzed friends and family members who bought items on 
the site, checking to make sure the rebate checks arrived as 
promised. She read everything she could about the company and 
discovered that the New York attorney general investigated 
CyberRebate and allowed it to stay in business.

Finally, she got tired of sitting on the sidelines. In less than a 
week, she ran up a $6,100 bill on a mini-refrigerator, a wooden salad 
bowl, several stuffed animals and assorted other merchandise.
Shortly before her refund checks were due to arrive in late May, the 
company went out of business. It left several million dollars worth 
of rebates unpaid, according to a group of stiffed consumers called 
the CyberRebate Recovery Alliance.

"I got sucked into this because it was free," Pratt said. "I had no 
idea that my money was at risk."

Unique Devices Swiftly Find Obsolescence

Adam Greenfield had doubts from the start about Scout Electromedia's 
business plan when he saw ads for the sleek Modo. He wondered how the 
company could survive without charging a service fee to pay for a 
lifetime of continuously updated listings and reviews. But the 
self-described gadget junky decided to buy it anyway.

"I wasn't sure how the business model was going to work," said 
Greenfield, who parted with his cash enthusiastically as soon as the 
service went live in the Bay Area. "But I knew if I got a year out of 
the thing, I'd be really happy."

As it turned out, Greenfield didn't get but a month's use out of it. 
Two weeks after buying his Modo, the company went under.

In New Brighton, Pa., Kim Tkacik spent countless hours--as many as 
three hours a day--collecting an online currency called Flooz by 
surfing Web sites such as CBS SportsLine. During nearly two years, 
she earned more than $400 worth of Flooz, some of which she used to 
buy books and videos for her kids and a new computer monitor for 
herself. Tkacik was such a fan of the stuff that she devoted several 
hours a day to maintaining the FloozNooz Web site to help others earn 
Flooz.

So when she got word that the company was shutting down, she hit the ceiling.

"There was no warning," said Tkacik, who had $188 worth of Flooz 
stranded in her account. "I was a mess. I called them right away. All 
I got was voicemail. I was so mad. I worked my butt off trying to 
find ways to try to get Flooz to people."

In previous eras, when technology was more evolutionary than 
revolutionary, new devices typically were built to run on existing 
infrastructure and could survive if the manufacturer went out of 
business. Even a discontinued Edsel could be kept running by a decent 
auto mechanic.

But with the Internet, almost everything was created from scratch. 
That produced many unique devices that couldn't work with other 
systems.

Loss of Service Bigger Than Loss of Money

Metricom Inc. of San Jose was the first company to offer high-speed 
wireless Internet connections with a service called Ricochet. It was 
a groundbreaking service that attracted 51,000 customers and rave 
reviews.

But when the company shut down its Ricochet service in August, all of 
its customers' specialized modems were rendered obsolete because they 
couldn't be used with any other Internet service.

Dennis Davis became such a fan of Ricochet that in addition to paying 
$99 for the modem, he bought a laptop computer to take advantage of 
Ricochet's mobility. The Anaheim man was so impressed he invested 
$10,000 in Metricom stock.

When the company filed for bankruptcy protection just 11 months 
later, Davis, an assistant city manager for Cerritos, was nonchalant 
about the money he had watched go down the drain.

Davis shrugged off the loss for the modem and even the $10,000 in 
stock, which had been worth as much as $100,000. "What really bothers 
me more is losing that [Ricochet] system," he said.

For all the disappointment, it might well be Internet consumers who 
have the last laugh.
Internet author and consultant Rick Broadhead of Toronto believes all 
of these useless artifacts will be worth something someday.

In the last three months, he has spent $1,200 on a Furniture.com 
baseball cap, a car magnet left over from the home delivery firm 
Kozmo.com and an aluminum loading dock sign that once belonged to the 
shuttered online toy seller EToys.com, among other items.

He has bid as much as $170 in EBay auctions for the nominally 
worthless stock certificates of defunct companies such as Pets.com, 
Webvan and Theglobe.com. He is still on the lookout for certificates 
from Mortgage.com and MotherNature.com.

"I believe one day there will be a dot-com museum somewhere that will 
be full of these items, and people will marvel at them the same way 
they go through a museum of any other nature and marvel at artifacts 
from the second World War," Broadhead said.

Many consumers, however, aren't so eager to consign their beloved 
gizmos to the dustbin of history.

Miller has held on to her SportBrain device despite her feelings of 
betrayal. Like a jilted lover yearning for a reconciliation, she 
still is hoping against hope that someone might buy the bankrupt 
company and reinstate the service.

In the meantime, she has discovered that her SportBrain, which used 
to be clipped to her belt every waking minute, works just fine 
without the Internet.

"It's a great paper clip," she said.
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<html><head><style type="text/css"><!--
blockquote, dl, ul, ol, li { padding-top: 0 ; padding-bottom: 0 }
 --></style><title>&quot;Just a big old
dope...&quot;</title></head><body>
<div><font face="Times New Roman" size="+1" color="#000000">On the
front page of the Los Angeles Times, no less... :-)</font></div>
<div><font face="Times New Roman" size="+1"
color="#000000"><br></font></div>
<blockquote type="cite" cite><font face="Times New Roman" size="+1"
color="#000000">Scout Electromedia Inc., maker of a wireless hand-held
device, shut down so fast that Rohit Khare never got a chance to use
his.</font><br>
</blockquote>
<blockquote type="cite" cite><font face="Times New Roman" size="+1"
color="#000000">The device, called a Modo, was designed to display
restaurant and entertainment listings transmitted over the air. The
service wasn't available where Khare lived in Seattle, but he figured
he could use the gadget on his frequent trips to San Francisco and New
York City. So he plunked down $99 for a Modo. Two weeks later, Scout
Electromedia was no more.</font><br>
</blockquote>
<blockquote type="cite" cite><font face="Times New Roman" size="+1"
color="#000000">&quot;I was just a big old dope,&quot; said Khare,
chief technology officer for a network equipment company now based in
Mountain View, Calif.</font></blockquote>
<div><font face="Times New Roman" size="+1"
color="#000000"><br></font></div>
<div><font face="Times New Roman" size="+1"
color="#000000"
>--------------------------------------------------------------------<span
></span>----</font></div>
<div><font face="Times New Roman" size="+1"
color="#9D11B3"><u
>http://www.latimes.com/news/printedition/la-000079101oct03.story</u></font
><font face="Times New Roman" size="+1" color="#000000"><br>
<b>COLUMN ONE</b><br>
<br>
</font><font face="Times New Roman" size="+3" color="#000000"><b>On
Junk Heap of the Net</b></font><font face="Times New Roman" size="+1"
color="#000000"><br>
<br>
</font><font face="Times New Roman" size="+3"
color="#000000"><b>Nothing but dust-collecting junk--that's what much
of the must-have tech devices have become since the deflation of the
dot-com bubble.</b></font><font face="Times New Roman" size="+1"
color="#000000"><br>
By KAREN KAPLAN</font></div>
<div><font face="Times New Roman" size="+1" color="#000000">TIMES
STAFF WRITER</font></div>
<div><font face="Times New Roman" size="+1" color="#000000">October 3
2001</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">For Jeanne
Miller, the Internet revolution was crystallized in a wondrous device
called SportBrain--a $99 clip-on unit that measured her physical
activity throughout the day and relayed the information to a
personalized Web site.</font><br>
</div>
<div><font face="Times New Roman" size="+1"
color="#000000">&quot;Everywhere I turned, people were touting
SportBrain,&quot; said Miller, a Seattle marketing executive.
&quot;Oprah had it, of all people!&quot;</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">She saw
the gadget as high technology's ultimate gift to fitness and was
immediately addicted--for all of four months. In July, the company
went out of business, rendering Miller's and 40,000 other SportBrains
useless. &quot;It's not like $100 is the end of the world, but if I
had known in advance that it would only work for four months, I
wouldn't have paid that,&quot; she said. &quot;There's more than one
way of investing your money in high tech and losing it. You can invest
in the stock, or you can buy their product.&quot;</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Along with
mountains of worthless stock certificates and heaps of pink slips, the
18-month-long high-tech meltdown has left behind a growing pile of
dot-com junk. Included in the debris are expensive wireless modems
that worked only with a now-defunct service, hand-held gadgets that
could display entertainment listings only from another vanished
company, and untold dollars worth of Internet currencies that no
longer have the power to buy anything.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">The
accumulation has unleashed a wave of consumer frustration rivaled only
by the ire of the now- jobless thousands who actually worked for those
companies.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">&quot;I
cannot tell you how sick I was,&quot; said Linda Pratt, an Ohio real
estate investor who ran up a $6,100 bill with CyberRebate.com. The
company had promised to eventually rebate as much as 100% of the price
of anything bought through its Web site. But Pratt didn't get her
rebates. The company went belly-up in May.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">&quot;I
felt I would throw up,&quot; she said. &quot;I was shaking. I didn't
even tell my husband for four days. It was the stupidest thing I've
ever done in my life.&quot;</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Edgar
Dworsky, founder of an online consumer resource guide called Consumer
World, noted that &quot;historically, it has been only the venture
capitalists and stockholders who lose money&quot; in high-technology
companies. &quot;Now, more and more individual consumers are suffering
financial losses when a dot-com goes bust.&quot;</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">The
flakiness of some online ventures seems obvious now. But the early
buzz about the Internet was so hot that any business that was online
appeared to have boundless possibilities.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Few
predicted that the dot-com frenzy would end so abruptly.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">When
prices for tech stocks began their precipitous decline 18 months ago,
it took some companies only a few months to burn through whatever cash
they had left. Many closed shop with little or no warning, leaving
consumers fuming about how the tech revolution was turning
out.</font></div>
<div><font face="Times New Roman" size="+1"
color="#000000"><br></font></div>
<div><font face="Times New Roman" size="+1" color="#000000">Scout
Electromedia Inc., maker of a wireless hand-held device, shut down so
fast that Rohit Khare never got a chance to use his.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">The
device, called a Modo, was designed to display restaurant and
entertainment listings transmitted over the air. The service wasn't
available where Khare lived in Seattle, but he figured he could use
the gadget on his frequent trips to San Francisco and New York City.
So he plunked down $99 for a Modo. Two weeks later, Scout Electromedia
was no more.</font></div>
<div><br></div>
<div><font face="Times New Roman" size="+1" color="#000000">&quot;I
was just a big old dope,&quot; said Khare, chief technology officer
for a network equipment company now based in Mountain View,
Calif.</font></div>
<div><font face="Times New Roman" size="+1"
color="#000000"><br></font></div>
<div><font face="Times New Roman" size="+1" color="#000000">And Pratt
is still smarting from her experience with CyberRebate. &quot;I am the
most thrifty, money-conscious person you have ever met in your life,&quot;
she said.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">The idea
behind the company seemed odd at first. Its prices were wildly
inflated--$33 for a plain toothbrush, $77 for a set of toy racing
cars, $60 for a bunch of Lincoln Logs that usually sold for
$10.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">But
CyberRebate had a gimmick that was tough to resist. The company
offered rebates for as much as 100% of the purchase prices, banking on
the fact that a small percentage of shoppers would never bother to
collect all the paperwork necessary for a reimbursement.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">In March,
the company was the seventh most popular e-commerce site on the
Internet, drawing 5.6 million visitors, according to Jupiter Media
Metrix.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Pratt
didn't put her trust in CyberRebate right away. For five months, she
quizzed friends and family members who bought items on the site,
checking to make sure the rebate checks arrived as promised. She read
everything she could about the company and discovered that the New
York attorney general investigated CyberRebate and allowed it to stay
in business.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Finally,
she got tired of sitting on the sidelines. In less than a week, she
ran up a $6,100 bill on a mini-refrigerator, a wooden salad bowl,
several stuffed animals and assorted other merchandise.</font></div>
<div><font face="Times New Roman" size="+1" color="#000000">Shortly
before her refund checks were due to arrive in late May, the company
went out of business. It left several million dollars worth of rebates
unpaid, according to a group of stiffed consumers called the
CyberRebate Recovery Alliance.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">&quot;I
got sucked into this because it was free,&quot; Pratt said. &quot;I
had no idea that my money was at risk.&quot;</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Unique
Devices Swiftly Find Obsolescence</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Adam
Greenfield had doubts from the start about Scout Electromedia's
business plan when he saw ads for the sleek Modo. He wondered how the
company could survive without charging a service fee to pay for a
lifetime of continuously updated listings and reviews. But the
self-described gadget junky decided to buy it anyway.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">&quot;I
wasn't sure how the business model was going to work,&quot; said
Greenfield, who parted with his cash enthusiastically as soon as the
service went live in the Bay Area. &quot;But I knew if I got a year
out of the thing, I'd be really happy.&quot;</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">As it
turned out, Greenfield didn't get but a month's use out of it. Two
weeks after buying his Modo, the company went under.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">In New
Brighton, Pa., Kim Tkacik spent countless hours--as many as three
hours a day--collecting an online currency called Flooz by surfing Web
sites such as CBS SportsLine. During nearly two years, she earned more
than $400 worth of Flooz, some of which she used to buy books and
videos for her kids and a new computer monitor for herself. Tkacik was
such a fan of the stuff that she devoted several hours a day to
maintaining the FloozNooz Web site to help others earn
Flooz.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">So when
she got word that the company was shutting down, she hit the
ceiling.</font><br>
</div>
<div><font face="Times New Roman" size="+1"
color="#000000">&quot;There was no warning,&quot; said Tkacik, who had
$188 worth of Flooz stranded in her account. &quot;I was a mess. I
called them right away. All I got was voicemail. I was so mad. I
worked my butt off trying to find ways to try to get Flooz to
people.&quot;</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">In
previous eras, when technology was more evolutionary than
revolutionary, new devices typically were built to run on existing
infrastructure and could survive if the manufacturer went out of
business. Even a discontinued Edsel could be kept running by a decent
auto mechanic.</font></div>
<div><font face="Times New Roman" size="+1"
color="#000000"><br></font></div>
<div><font face="Times New Roman" size="+1" color="#000000">But with
the Internet, almost everything was created from scratch. That
produced many unique devices that couldn't work with other
systems.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Loss of
Service Bigger Than Loss of Money</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Metricom
Inc. of San Jose was the first company to offer high-speed wireless
Internet connections with a service called Ricochet. It was a
groundbreaking service that attracted 51,000 customers and rave
reviews.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">But when
the company shut down its Ricochet service in August, all of its
customers' specialized modems were rendered obsolete because they
couldn't be used with any other Internet service.</font></div>
<div><br></div>
<div><font face="Times New Roman" size="+1" color="#000000">Dennis
Davis became such a fan of Ricochet that in addition to paying $99 for
the modem, he bought a laptop computer to take advantage of Ricochet's
mobility. The Anaheim man was so impressed he invested $10,000 in
Metricom stock.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">When the
company filed for bankruptcy protection just 11 months later, Davis,
an assistant city manager for Cerritos, was nonchalant about the money
he had watched go down the drain.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Davis
shrugged off the loss for the modem and even the $10,000 in stock,
which had been worth as much as $100,000. &quot;What really bothers me
more is losing that [Ricochet] system,&quot; he said.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">For all
the disappointment, it might well be Internet consumers who have the
last laugh.<br>
Internet author and consultant Rick Broadhead of Toronto believes all
of these useless artifacts will be worth something someday.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">In the
last three months, he has spent $1,200 on a Furniture.com baseball
cap, a car magnet left over from the home delivery firm Kozmo.com and
an aluminum loading dock sign that once belonged to the shuttered
online toy seller EToys.com, among other items.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">He has bid
as much as $170 in EBay auctions for the nominally worthless stock
certificates of defunct companies such as Pets.com, Webvan and
Theglobe.com. He is still on the lookout for certificates from
Mortgage.com and MotherNature.com.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">&quot;I
believe one day there will be a dot-com museum somewhere that will be
full of these items, and people will marvel at them the same way they
go through a museum of any other nature and marvel at artifacts from
the second World War,&quot; Broadhead said.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Many
consumers, however, aren't so eager to consign their beloved gizmos to
the dustbin of history.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">Miller has
held on to her SportBrain device despite her feelings of betrayal.
Like a jilted lover yearning for a reconciliation, she still is hoping
against hope that someone might buy the bankrupt company and reinstate
the service.</font><br>
</div>
<div><font face="Times New Roman" size="+1" color="#000000">In the
meantime, she has discovered that her SportBrain, which used to be
clipped to her belt every waking minute, works just fine without the
Internet.</font></div>
<div><font face="Times New Roman" size="+1"
color="#000000"><br></font></div>
<div><font face="Times New Roman" size="+1" color="#000000">&quot;It's
a great paper clip,&quot; she said.</font></div>
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