SUCCESS FROM FAILURE

Few niches crashed more spectacularly during Web 1.0 than the pet sector. In 2000, over just nine months, Pets.com managed to raise a jaw-dropping $82.5 million in an IPO, air a $1.2 million Super Bowl ad starring its sock puppet mascot, land funding from Amazon.com build a network of cavernous warehouses ... and go out of business without making a penny in profit. When Pets.com rolled over and died in November 2000, it presaged scores of dot-com disasters to follow and slammed the door on online pet businesses, seemingly for good. So when San Francisco Web designer Ted Rheingold co-founded Dogster.com in January 2004 as a kind of canine version of Friendster, the news drew smirks from the few who bothered to notice. How could Dogster, a pet site cobbled together on weekends and launched on a shoestring budget, expect to succeed where lavishly funded pet sites had flamed out? The consensus on Dogster was unanimous: It would fail. And indeed, it has failed. Over and over. But, alas, each knock has been a boost.

Dogster has discovered ways to turn its mistakes into better features. With pretty much no promotion, Dogster (and sister site Catster.com) has evolved into a premier pet lover's social network. Membership exceeds 275,000; the site features 340,000 photos and profiles of dogs and cats, and a blue-chip advertising list that includes Disney, Holiday Inn, and Target. Dogster, come to find out, has a good profit sheet. In many ways, the site is a prime example of how a Web deployment fails, but fails well by quick feature launch, seeing what works, and fixing things fast. According to Rheingold, "When we roll out a new feature, we know we're probably not going to get it right the first time." Dogster and similar companies have discovered that continually reviewing user data-most importantly, the discouraging events-provides important direction for enhancements. Says Rheingold, "Instead of working on a feature for months trying to get it perfect, we'll work on something for two weeks and then spend two or three days listening to users and fine-tuning it."

QUESTIONS:

1. Do you agree with Dogster's view, or should companies aim for "zero-defect" operations? Why or why not? What implications does this business model have for systems analysts?

2. Startup companies like Dogster are not the only companies that are implementing the "fail fast" strategy. Large companies like Google have used it and are still using it-in Google's case, with the implementation of the Google Toolbar. Cite another company that has used this strategy. Has it been successful?