The man who built Borders bookstores wanted to end the weekly trip to the supermarket. Louis Borders started Webvan in 1996 with a plan to sell groceries online and deliver them from giant automated warehouses. By the fall of 1999 the company served the San Francisco Bay Area and had plans for many more cities. Investors loved the idea. When Webvan filed to go public, it had a famous founder, a big vision, and almost no revenue.

Warehouses Before Customers

Webvan's bet was scale. A normal grocer adds stores one at a time. Webvan built huge, highly automated distribution centers first, each one meant to replace dozens of supermarkets. Customers picked a delivery window online, and a Webvan van brought the bags to the kitchen. The model only worked if each warehouse ran near full. That needed a lot of customers, fast, in city after city. Webvan raised hundreds of millions of dollars from top venture firms to build them.

From $8 Billion to Zero

Webvan priced its IPO at $15 a share in November 1999. The stock opened at $26 on Nasdaq and closed the first day at $24.875, up 66 percent. That gave the company a market value of about $8 billion. In 2000 it bought rival HomeGrocer. Orders never caught up with the cost of the warehouses, and the dot-com crash closed the door to new money. Webvan shut down and filed for bankruptcy in July 2001.

Cover: Untitled (S.K. Fisk store with delivery wagon), Unknown. Art Institute of Chicago, public domain. Chosen for a delivery wagon outside a general store (home delivery).