Clark Schpiell Productions
CSP Newsletter

privacy policy
home archive links about contact store
a Eulogy for eToys

by david
Mar 11, 2001

Though many don't remember that far back, in the 1998 holiday season had been in existence, in some form, for about a year and a half, and was the internet's third-busiest retail site, according to BusinessWire. In May of 1999, eToys became a public company, and on IPO day its stock raced from an opening $20 to $85 a share, before closing around $75. Christmas '99 found eToys in heady country again, attracting so much traffic and so many sales that its website was inundated, its outsourced warehousing overwhelmed, and its inventory decimated. In the spring of 2000, amid the resounding silence caused by the conspicuous lack of Y2K-created Armageddon, eToys was hailed as an internet masterpiece and praised for its service and support, despite much publicized inventory hiccups. Over the summer and fall of 2000, eToys built its own warehouses, re-architected its site, stockpiled its inventory, unleashed a flood of uncannily market-savvy and heartwarming television ads, moved into its new three-story headquarters in Santa Monica, and dug in for the biggest holiday season the internet had ever seen.

In mid December, Toby Lenk, founder of eToys, called an all company meeting on the back lawn of the eToys building, on the same morning another web company, Razorfish, was moving into it's newly rented space on the third floor. Over the din of the moving trucks, Toby told his employees that he'd overestimated the holiday season of 2000. He wasn't certain if it was a product of the tech sector stock slide early in the year, nervousness over a rocky, only recently decided and still somewhat disputed presidential election, or fears of impeding economic recession. But, whatever the cause, he and the eToys board had made a grave mistake: they'd banked on a $240 million holiday, and wound up with a $120 million fiasco. Toby told his employees to go home and enjoy their holiday, for when they got back in the spring, some hard decisions would have to be made, including layoffs and the probable sale or unlikely closure of the company.

On January 4th, 2001, a few days after the holiday vacation ended, eToys laid off some 70% of its staff, and closed its UK offices. In mid-february, all remaining employees were given notice. On February 27th, plans to file bankruptcy were announced and, just last week, took down its award winning site, stopped taking orders, and ceased operations entirely.

I came into eToys in early November of 2000, after the first round of lay-offs at left me without a job on the last day of my honeymoon (a story for another time). It was a pretty crazy time -- the holiday season was rapidly approaching, and final preparations were being completed, and all around us dot-coms were dropping like flies. Shortly after I came on, Customer Care, Warehousing, and a few others hit the trenches for the season, and the rest of us turned to planning for 2001. I'd come on as a technical project manager in BabyCenter (a subsidiary of eToys recently sold for $10 million to Johnson and Johnson), meant to help facilitate the move of the BC Store onto eToys' newer, more flexible, more robust architecture. I had projects scheduled six and nine months out, and at first I worked on them without any real worry over what the holiday would bring. As November wore on, we began to back off of long-term projects, and to focus on more immediate goals as the post-Thanksgiving rush turned out surprisingly light. Toby's backyard meeting came before I'd really had time to even get my feet wet -- I'd barely learned the architecture, and I'd had really close working contact with no more than 20 people. But I'd been there long enough to learn some things about eToys that made me pause. I've had some great jobs in the internet industry, worked with exceptionally skilled and talented people in jobs I really enjoyed (thanks, Ian), but I've never been surrounded by such a large group of uniformly talented, dedicated people as I was at eToys. As a Project Manager, I worked with producers, html coders, designers, tech writers, QA guys, applications designers, buyers and marketing folks, and not a single one of them was anything less than astonishingly competent, and most were truly excellent at their jobs. And everyone seemed to believe that we were doing something really good or, at the very least, really cool.

When Toby called his backyard meeting, and when I found that I was facing my second dot-com layoff in as many months, I worried over my ability to find another job, especially one so good as my jobs at Stamps and eToys. But it never occurred to me that eToys itself would not rebound. Surely there were too many good, dedicated, talented people there, many of whom had been with the company for three years or more. Surely the rich, robust architecture, the streamlined processes, the instantly recognisible brand would be worth a bundle to a brick and mortar like Wal-Mart or Target. Okay, so maybe it was too soon in the life of the internet for pure ecommerce to survive, at least in the toy arena, but surely, I thought, eToys would continue, if only as an online face for a traditional retail giant.

As the January and then February wore on and my severance ran out , I took a position at yet another dot-com, and eToys slipped farther. Rescue seemed more and more a remote possibility, and I found myself feeling genuinely sad. Not because I'd invested a lot of myself in the company -- a lot of the people I worked with, Matthew and Kimberly and Scott and Chris and so many others, were feeling that, I'm certain, but I'd been there barely two months when I was laid off. I was sad because eToys was a good company. The management didn't bumble around and gorge itself and drive the company into dire straits ( The ideas behind the company weren't silly or poorly-thought-out ( The employees were not lazy or stupid or uncaring. The products were not bad, the delivery not fatally flawed. In fact, eToys was, as far as businesses go, the polar opposite of all of these things which normally cause a company to fail. eToys simply gambled on the growth of public acceptance of a new market and lost -- it hit a rough patch at a time when the public's attitude toward the still juvenile internet industry was particularly unforgiving of any misstep. A year ago, eToys probably could have recovered -- someone might well have stepped in and saved the company for its name alone. Unfortunately, that time has passed -- the era of internet riches and html dreams is over, at least for now.

So, goodbye to The site is now closed, save a little goodbye message and a small out-of-business FAQ. The lights will soon be turned off in the still-shiny new building with Legos on the walls, huge wooden dinosaurs in the lobby and giant Play-Doh cans for phone booths. It's hard for us to be sentimental about a business, especially when so many of us work for crappy companies in jobs we despise for bosses we hate. But trust me when I tell you that eToys was a good place to work, and it deserved to survive, as much as any internet company, and probably more.

I'm sorry it is gone.

email this page to a friend

buy we and gwb notes from the first four years today

home :: archive :: links :: about :: contact :: store


Creative Commons License
This work is licensed under a Creative Commons License.

all original content ©Clark Schpiell Productions, ©David Nett, ©Christopher Nett, ©Christopher Martinsen, ©Jeremy Groce, ©Jason Groce, ©Chad Schnaible, ©Rick Robinson, ©Eli Chartkoff, ©Thorin Alexander, ©Craig Bridger, ©Michelle Magoffin, or ©Jeanette Scherrer.
all non-original content ©original authors.