Did you happen to receive a peculiar little gadget in your mailbox recently?
I did. It seems my subscription to Wired magazine came with an unexpected bonus – a free “cat.” Though, as Jared pointed out, this supposed “cat” looks more like a fox. See for yourself:
This miniature feline, or fox-like creature, is designed to scan barcodes, specifically those appearing in magazines like, you guessed it, Wired. The idea is that by scanning these barcodes, your web browser would magically transport you to, say, the Altoids website, as the example suggests.
Seriously.
The sheer number of questionable decisions baked into this concept is frankly staggering. It’s hard to fully grasp just how fundamentally flawed this business idea is.
This “cat,” officially known as CueCat (stylized as :CueCat, yes, the colon is part of the name), is brought to you by DigitalConvergence.:Com (no colon before the .com in your browser, just for stylistic flair). Believe it or not, this colon-loving company, DigitalConvergence.:Com, boasts a staff of 200 employees, according to their website. Even with a conservative estimate of salaries, we’re talking about a burn rate of roughly a million dollars every month, just to cover payroll. Now, considering audited figures indicate Wired’s paid circulation is around half a million, sending out these plastic cats is easily another million dollars in postage alone, assuming they aimed for full subscriber coverage. Factor in the manufacturing costs of the software CD, the connecting cable, and the :Cat itself, and you have a company hemorrhaging money at an Iridium level.
One has to wonder, what kind of investors are willing to throw money into a bonfire like this? Don’t they see how utterly pointless this whole thing is?
Apparently not. But let’s break down why this venture is destined for the tech graveyard, and why it’s a prime example of how catastrophically money can be misspent.
1. A Solution in Search of a Problem (and Money Down the Drain)
I’ve wracked my brain trying to understand the purpose of this desk-dwelling “cat.” What problem is it solving? I’ve managed to identify two potential “problems,” both laughably weak:
- Typing URLs is supposedly too difficult. Seriously? Navigating to the Altoids website is hardly a Herculean task. We’re talking about typing a mere seven characters.
- Magazines supposedly struggle to prove to advertisers that readers actually engage with their ads and visit the advertised URLs.
Point number two seems to be the driving force, the supposed pot of money at the end of the rainbow that will justify the existence of these plastic cats. Advertisers are expected to foot the bill for these free gadgets distributed to users. However, this premise is fundamentally flawed. People don’t need these cats, and they certainly won’t use them. The sheer cost of direct-mailing these cats, even just to Wired subscribers, runs into millions. And if typical direct mail response rates are any indication, 99% of these cats are headed straight to the trash. Even if a generous 1% of Wired subscribers actually install the thing, that’s an installed base of only around 5,000 cats. If Wired thinks advertisers will be impressed by metrics showing a paltry 13 scans leading to a website visit, they’re in for a rude awakening regarding their return on investment – or rather, lack thereof, showcasing a poor allocation of money.
If you’re peddling a product that doesn’t solve a real problem, it had better be incredibly entertaining. Is the :Cat entertaining? Let me share a gem from the included instructions:
“TO CHANGE YOUR COMPUTER’S BIOS SETTINGS…”
That’s where my interest flatlined. Fiddling with BIOS settings is not my idea of a good time. Installing this device offers no conceivable benefit to the average consumer. No rational person would willingly use this. It’s a classic case of throwing money at a problem that doesn’t exist, much like trying to train a cat to fetch financial reports.
2. The Chicken and Egg Cat-astrophe (and a Waste of Investor Money)
Advertisers won’t bother embedding CueCat barcodes in their ads unless a significant user base has these scanners installed. It’s cumbersome, and frankly, looks ridiculous.
Conversely, no one will install a CueCat unless they encounter these barcodes everywhere they look.
Conclusion: this whole endeavor is doomed to succumb to the classic Chicken and Egg Syndrome. This business model might have had a sliver of potential if CueCats were ubiquitous, and it would be a fantastic business if every ad, everywhere, incorporated these barcodes. But reality bites: they don’t, and they won’t. Hence, it’s not a great business. It’s a financial black hole where investor money vanishes faster than a cat chasing a laser pointer.
To circumvent this chicken-and-egg deadlock, DigitalConvergence.:Com is burning through a fortune giving away these devices. Even if they blanket Wired’s entire subscriber base, that’s still only half a million people out of a global internet population of 300 million. Hardly impressive market penetration. And their system inexplicably allows scanning UPC symbols, so you could, in theory, scan an actual Campbell’s Tomato Soup can to reach their website. These are feeble, half-baked attempts to address the fundamental chicken-and-egg problem, and they are costing a lot of money.
3. Déjà Vu Dumb Idea (and More Money Lost)
Just a couple of months prior, Wired magazine championed a different technology for automatic URL navigation from ads. This involved holding a page up to your digital camera, snapping a picture, and running some convoluted software to direct your browser to the Altoids homepage. So, instead of typing seven letters, you had to locate your digital camera, power it on, wait for it to boot, photograph the page, power it down, wait for memory flushing, extract the flash card, remove the network card from the PCMCIA slot, insert the compact flash into its holder, plug it into the PCMCIA slot, locate the image, launch the pre-installed software… the absurdity is mind-boggling. A half-hour ordeal just to reach the Altoids website, where you can’t even purchase Altoids! Curious indeed. This earlier venture, much like a cat chasing its tail, was pointless and went nowhere, fast, costing money and achieving nothing.
Unsurprisingly, that previous idea vanished so quickly that it’s nowhere to be seen in this month’s Wired. A fleeting, primordial tech soup experiment. I can barely recall its name. (My readers helpfully remind me it was called Digimarc MediaBridge.)
The core takeaway: if you find yourself employed by a company squandering millions attempting to persuade people to adopt something utterly useless and plagued by chicken-and-egg dilemmas, perhaps reconsider those stock options. They might be as elusive as trying to get a cat to understand the value of money.
[June 16, 2001: Digital Convergence lays off most employees.]
