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There.com Reinvents Itself, Cons Investors Out Of Another $14 Million

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There.com was
"an online getaway where you can hang out with your friends and meet new ones--all in a lush 3D environment that's yours to explore!"
The real nature of There was to charge people real money to go online and buy virtual items. An example would be that you would deposit $10 dollars of real money and then in the world you could buy a virtual snowmobile for your online persona (avatar) to use.

It was a real stupid business plan IMHO. People aren't that hard up for socialization that they're going to spend real money for something just to play around with. Sure there are people who buy "virtual goods" for online Role-Playing Games like Everquest and Ultima Online, but they are purchasing items for their game to advance further. There was basically a chat room with no goals, objectives, quests or "big baddies" to defeat.

From this article at Wired:

After going through more than $30 million, laying off half its staff and being consigned by many to the annals of failed startups, once-high-flying metaverse developer There unexpectedly announced Tuesday that it has raised $14 million in new venture funding.

The Menlo Park, California, company also announced that it has changed its corporate name to Forterra Systems, that it has shuffled its top management and that it will be focusing largely on building simulated virtual worlds for government, industry and education clients. The company has already developed a multimillion-dollar simulated world for the U.S. Army.

Sounds like some of those dot-commer scam artists are at it again.

Now, I actually lived through the dot-com era in Santa Clara, California, which is in the heart of Silicon Valley. I can tell you that there were some pretty shady companies founded during that time. They'd come up with some quirky business idea involving the internet that wasn't developed, tested or even had a business plan (or one that even remotely made sense) and have investors hopping on the bandwagon the next day.

If we examine There we find the same phenomena:

  • No developed technology [check]
  • Tested technology and means of generating revenue [check]
  • Business Plan that doesn't make sense [check] My buddy Tom over at Anti-hero played around with There when it came out and said it was buggy and boring and that the payment system didn't work too well. He also said "why the hell would I waste real money to play with some stupid virtual jetpack". Tom knows his stuff, he's one of those guys who upgrades his machine just to play the latest game and I can assure you he's seen better action vehicles and 3d environments than There's crappy technology.

    The real amazing part of the Wired article is the comment below by their COO Steve Victorino.

    The company's decision to recast itself largely as a platform developer is a reiteration of a stance it took in May when it said it would no longer be updating its complex, graphically rich consumer service known as There and that the service might be shut down within 90 days. Many saw that announcement as the strongest sign that There was finished as a consumer play and that its only hope of staying alive was to pursue more Army-like work.

    But on Tuesday [article is dated Aug 26th - ed] , the company surprised many by telling its members that not only was the consumer service not shutting down, it was in fact getting a fresh infusion of resources.

    "You will see a new version scheduled to be released within the next few days, as well as several new enhancements and service changes that will enable the service to continue to operate and prosper," said Steve Victorino, Forterra's chief operating officer. "These new features and functionality are due in part to the addition of engineering, art and creative resources to the service, and are indicative of our continued commitment to our strong community. Without doubt, the service is indeed a strategic asset which we intend to operate and grow."

    We typically see these types of tactics with companies that go out with a bang. They form a company, bring in a huge amount of investment, their plan for revenue fails miserably. Then they change their name and focus of the company and try and raise more money. The audacity of him taking investors money and then dumping it into a failed revenue source however is just incredibly ignorant. If I was an investor I would be furious. Thirty Million spent for what they've accomplished already!

    The real problem with There is that it is based on a blazingly fast changing industry of the latest and greatest 3d environment. For There to even stay in business with a product that has no real drive or purpose for users, except other than to consume things and exist, There will continue to have to keep dumping money into upgrading their look or face antiquation.

    Techdirt has a nice set of articles on There.com:
    Jan 8, 2003 - There first launchs, Oct 27, 2003 - There Launched AGAIN, Aug 24, 2004 - The latest news

    Other Blogging
    Terra Nova

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    Posted by Digger on September 2, 2004 12:41 PM (Permalink)

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    hahahahahahaaha. look at there now. so many people use and pay real money for it. its a great virtual engine and a great environment. u dont know what ur talking about.

    Posted by: nolan on December 9, 2007 05:42 PM

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