Blue mountain cards survives
02/09/09
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. It seemed like everyone thought somehow giving away ecards was going to be a business model. Business models based on advertising revenue were quite frequent back then. This has no changed with people wanting to know where the real revenue is coming from. However, with web 2.0, you could argue that it's started all over again.
Ecards are a difficult business space for me to understand. This is the space that is eating the lunch from the old paper greeting card space that's been around forever and a day. It seems like the classic case of doing something through technology that was previously manual. But I don't think it's that simple. eCards are not exactly the same product as paper greeting cards. Paper cards come from a store and require you to mail them. 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. You see this also in pcs, telephones, tvs and other electronic products.
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. The top management at Blue Mountain Cards seemed to know that the ride would not last forever. So the company was sold while things were still really really hot in the dot com sector. An amazingly well-timed move. I'll bet many people wish they had that type of timing.
So now it's 2008 and what is a business model like Blue Mountain Cards still doing around? 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. However, these were experience people who were also making a serious move in a serious industry. This is not a small business. Regardless of their underlying financials, this business made a name for itself in a multi billion dollar business space. I think this accounts for why they are here 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.
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