3milliondownthedrain Great example of how Multinationals fail and waste money on web apps (updated)

I just got a call from Flametree director Pascal Spelier, he left an extensive comment below. I updated this post based on his comment.

Large corporations often think they can build their own cool web app, their own social network, their own LinkedIN, Facebook, or Hyves. And why not…. “We have millions of customers already, we have loads of money we can invest in this project, we have very skilled and expensive consultants. What can go wrong… LinkedIN eat your heart out!”

Well here is a story to prove the large corporations wrong (once again). The Dutch bank ABNAMRO (yes the one that merged with Fortis, then almost went bankrupt and was bought back by the Dutch governement for only 17 billion euros) thought they could build a Dutch copycat of LinkedIN. We have Hyves here, who rule the social networking space when it comes to your personal life, but some people might argue that we do not have a Dutch clone of a business network (others would say, so what, we have LinkedIN and Facebook…)

3 million A lot of money down the drain

ABNAMRO invested 3 million (Update: Flametree director Pascal Spelier says it is a lot less. My source mentioned the 3 million figure) a lot of euros in Flametree, which is probably the most pathetic corporate startup you have ever seen. It is a pity the service is in Dutch only. Last month I check on the number of users they had, (they removed the number of users from their frontpage) and it were a mere 3578 3221. I kid you not: 3221 people signed up for this service and they are around for quite some time (Flametree launched on March 29th of 2008). That is 900 euros per user! And we’re not even talking about active users here.

3 million euros that is about 3.8 million US! What were they thinking??? Do me a favor and just quit the service, shut it down and go and focus on saving your bank.

Update: Director Flemetre says: “Our main problem is activity within the network. Within a few weeks we will launch a completely renewed Flametree, which will tackle this issue, amongst other improvements.” OK, so they are launching a new version of Flametree, I’m curious if that will change their situation, but I don’t believe it will change anything. As Robert Gaal mentions in the comments: “I applaud that you tried to do something ambitious. However, I think you started of completely on the wrong foot.”

disclosure: I can’t get a mortgage at ABNAMRO, that might have influenced my opinion while writing this post :)