Boo Hoo

Ernst Malmsten

I've always wondered who it is that reads those tedious biographies of famous tycoons or those how-to business books. But Boo Hoo is a business book with a difference. It's the story of the most notorious dotcom failure of them all: boo.com.

Ernst Malmsten and Kajsa Leander, two Swedes in their late twenties, started fashion retailer boo.com in 1999 and burnt their way through $130 million of investors' money before the business collapsed in May 2000. You might remember it. Briefly, when it launched, it was the brightest and hippest start-up of them all. For a time in 1999 it was valued at $390 million and its backers expected a $1,350 million turnover by 2003/2004. A few months later it was sold to the knackers yard by the liquidators for about £200,000. All that is left of the brand today is a basic portal site.

Boo Hoo is Malmsten's account of his company's spectacular rise and fall. It's easy, with the benefit of hindsight, to scoff at him and his vision and, most of all, the banks who were suckered into pouring money into boo. Most people who remember boo.com will remember what a god-awful slow and buggy site it was and put its failure down to that. But there were other fundamental problems. What's clever about the book is Malmsten manages to bring to his story some of the excitement and enthusiasm his ideas were generating before it all went wrong. And some of the most entertaining paragraphs in the book are the encounters Malmsten has in the early days with the few (and there were very few) investors who aren't impressed with his pitch. One far-sighted investor, after grilling him (one of the few who bothered) on his projections, visitor count and cash burn rate, said "I'm sorry but I'm not interested. You'll be bust by Christmas." But most of the banks Malmsten and Leander pitched to in 1999 couldn't wait to get on board.

As you read, you can't help but be irritated by the author and his co-founders, of course. There are the 400 jobs which were lost through mismanagement and financial incompetence. There are the investors, whose money was emptied down the drain (though it's hard to feel too much sympathy for them, to be sure). There are the stories of non-stop ridiculous spending on international travel, unwarranted expansion, over-spend on salaries, perks, premises and marketing (though little enough money, time and effort seems to have been channelled into the technological base). There's the staggering hubris which characterised the venture from start to finish (snobbishly, boo.com insisted on locating its call centre in central London, surely one of the most expensive business addresses in the world, because they didn't want their phones to be manned by provincials who knew nothing about fashion - that's all of us outside London, I guess). But there is no mention (not even a whiff!) of the cocaine misuse which other reviews of Boo Hoo, wondering even now to explain how you spend $130 million in six months, have hinted at.

Nevertheless, it's hard not to find Ernst a likeable enough chap. There are times, especially near the end when his disastrous dotcom is fighting for its life, where you wish, for his own sake, he had stuck to organising poetry festivals. Something he was clearly good at and which made him happy. Perhaps his literary roots explain why Boo Hoo is such a damn good read.