Kozmo.com

Kozmo.com was an on-demand delivery service launched in 1998 that promised free one-hour delivery of virtually anything to urban customers, from single candy bars to DVDs to magazines, with no minimum order requirements. The company burned through $280 million in venture funding while delivering items that cost more to transport than customers paid for them.

Why Kozmo.com Matters

Kozmo.com's failure illustrates the fundamental economics problem of on-demand delivery that persists today – the cost of last-mile logistics often exceeds customer willingness to pay for convenience. The company's collapse demonstrates how unsustainable unit economics cannot be overcome by scale alone, providing crucial lessons for modern gig economy businesses and delivery-focused startups.