Posted Articles

What helped Blue Mountain Cards survive the dot com bubble

Have you heard of Blue Mountain Cards? Back in the 90's there was a huge rush of companies trying to provide online ecard services. I'm not sure exactly how they built a business model on the idea of giving away a free ecard, but they did. Business models based on advertising revenue were quite frequent back then. This is a difference with today's focus on real revenue. However, there are some painful similarities in web 2.0 to this idea of building big applications that will make money only from advertising.

Ecards are a difficult business space for me to understand. The business model is essentially one where you are killing another business model, the paper greeting cards space. It seems like the classic case of doing something through technology that was previously manual. But you should look deeper. An ecard is not the same thing as a paper card. You buy a paper card at a store and physically write on it. Electronic cards are bought online and never touch paper. In this way, it's a real product transition. So we are actually seeing technology change the wants and desires of the buyer here. This is not unique, just look at tvs, video games or any other electronic based market.

So what exactly did blue mountain cards do that was so special? First, Blue Mountain Cards had a big lead going into the game. They had a good plan. It seems like the executives at Blue Mountain Cards new they were onto something big, but that it wouldn't last. So the company was sold while things were still really really hot in the dot com sector. What a move that was.. I'll bet many people wish they had that type of timing.

How is that in 2008 Blue Mountain Cards is still a going concern? You could argue that the management team at Blue Mountain Cards were the luckiest people on earth to have gotten such a valuation at such a time when that was seen as appropriate. I often wonder if management teams like that are really lucky or create luck due to their experience. The greeting card business is huge. Regardless of their underlying financials, this business made a name for itself in a multi billion dollar business space. I am betting that this is why they are still around today. They built a brand and have a name worth something. The part this is far from any text book case study is how they exited at the height of the crazy valuations. I guess that's where a little luck goes a long way.