Compare and Contrast Webvan and Amazon
products, its delivery method, and its inability to take advantage of network externalities all put the company at a disadvantage to Amazon. In addition, Webvan was geographically restricted and could not offer services to the entire country. Hence, the company was forced to build out an expensive distribution infrastructure in every location it desired to do business. The final hurdle was the fact that Webvan was disadvantaged from day one, due to its late start and its inability to attract more venture capital before the equity and VC markets crashed beginning in mid-2000. This provided Webvan only one year to establish itself, whereas Amazon had nearly five times as long to establish and prove its business model.