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| | 02/02/2001
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| | Scoop
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| | Goliath Falls closing down, lays off most of the last 25 in the last two weeks
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| | Date: Fri, 2 Feb 2001 19:02:51 -0500
From: Name withheld upon request.
To: <ron@themayreport.com>
Subject: Goliath Falls
Ron,
Please do not use my name.
I just wanted to update you on the new happenings at Goliath Falls. You reported on them on 12/12/2000 that they had let go 60% of the staff going from just over 70 employees to 25.
On Thursday they told their employees that they were closing their doors and laid off almost all of their remaining employees. Retaining only the essential people needed to close shop.
In the six weeks since their initial layoffs Goliath Falls tried many things to remain afloat. They made payment arrangements with those they owed money to, brought the hosting of their site "in-house", returned all leased furniture etc., and moved into a smaller space so they could sublet their larger costly space. All the while the were looking for an infusion of cash. During this time they told their employees that things were looking good and there was a large sum of investor money that was on its way! Well the money never materialized.
Many have speculated why such a great idea failed in just over a year. Goliath Falls was a B2B e-comeerce company that gave independent retailers the buying power of the larger chain stores, thus allowing the little mom and pop stores to compete with the like of Walgreens and other "giants".
Goliath Falls started just about a year ago as the brainchild of Steve Greenberg. His family owns privately held Promotions Unlimited Corp (PUC) in Racine, Wisc. With an initial and substantial investment from his family, Goliath Falls became a reality. These family ties not only gave Steve the money he needed but gave him a "built-in" pool of customers. PUC highly promoted this venture to all their Ben Franklin stores as well as their other customers. Steve had 2,000 customers to start with before he even had a site. With thousands of other PUC customers to enroll later.
Goliath Falls had numerous investors including Compaq which gave them $10MM in cash and hardware. They hired Diamond Technology Partners to create their site, used InterWorld as their web platform, hired DDB to promote them, and hosted their site at Digex. They spared no expense to do things First Class. Their site went live on July 4th ("Independents" Day).
In the end Goliath Falls did themselves in. They wowed people with their flashy, expensive ads and site. Grew their staff very quickly. Paying some employees large signing bonuses. They even catered in meals for their staff two times a week. As part of their Compaq deal they gave customers a computer if the promised to spend $25K a year. Meanwhile they had trouble getting their products to customers in one piece, if at all. They were slow to bill customers, and even slower at collecting from them. They had lots of money going out and very little coming in.
So unless Steve Greenberg finds a miracle source of cash, Goliath Falls will be no longer. |
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