The CueCat — A Free Cat-Shaped Scanner for a Problem No One Had

The CueCat was a small, cat-shaped barcode scanner, given away free starting in 2000 by a Dallas company called Digital Convergence, and within roughly a year it had become one of the most thoroughly mocked gadgets in the short history of consumer technology. The premise: instead of typing a web address, a reader would drag the cat across a special barcode — a “cue” — printed in a magazine, catalog, or newspaper, and their browser would open the corresponding page. It solved the strenuous problem of typing a URL by replacing it with the simpler act of locating a wired plastic cat, plugging it into your computer, installing its software, and dragging it across a code. The company burned through roughly $185 million before folding in 2001.

The CueCat arrived at the absolute peak of dot-com confidence, when the prevailing theory held that anything connecting the physical world to the web was inevitably valuable, and that the business model could be figured out later. Digital Convergence raised enormous sums from blue-chip backers — Belo Corporation, RadioShack, Young & Rubicam, and Coca-Cola among them — and struck distribution deals that mailed the scanners out by the hundreds of thousands. Forbes sent the first 830,000 to its subscribers; Wired sent over 500,000; RadioShack stocked them on shelves. Millions of cats went out into the world, free, to do a job almost nobody wanted done.

Two things finished it. The first was that the value proposition never made sense — the company, critics noted, never managed to explain why scanning a barcode was easier than typing the link it pointed to. The second was privacy. Each CueCat carried a unique serial number, and the software phoned home; the device tracked what users scanned and tied it to their registration, and in September 2000 the situation curdled into a genuine breach when a misconfigured server exposed the names, email addresses, age ranges, genders, and zip codes of roughly 140,000 registered users. A free gadget that surveilled you while solving nothing was a hard sell even when the price was zero.

By May 2001 Digital Convergence had fired most of its 225-person workforce, and by that September Belo had written off its entire $37.5 million investment. The CueCat has since become a fixture on lists of the worst products ever made — ranked twentieth among PC World’s worst tech products in 2006, and included in Time’s “50 Worst Inventions” in 2010 — a permanent monument to the dot-com conviction that a clever bridge between print and web was worth building whether or not anyone needed to cross it.

Anki (Cozmo & Vector) — The Charming Robots a Funding Call Killed

Anki was the consumer-robotics startup that made the genre’s most charming products and then collapsed almost overnight when a single financing deal fell through. Founded in 2010 by three Carnegie Mellon robotics PhDs — Boris Sofman, Mark Palatucci, and Hanns Tappeiner — the company launched its first product, the AI-driven racing game Anki Drive, in 2013, and went on to build Cozmo (2016) and Vector (2018), two small desktop robots widely praised for genuine personality. On April 29, 2019, Anki told its roughly 200 employees that the company was shutting down within days. It was bankrupt.

The waste was the painful part. Anki was not a vaporware outfit or a crowdfunding ghost. It had raised in the region of $185 million from serious investors including Andreessen Horowitz, Index Ventures, and JP Morgan; it had reportedly sold around 1.5 million robots, including hundreds of thousands of Cozmo units; and its products were good — Cozmo and Vector were among the few home robots that critics and owners actually loved rather than tolerated. The robots used expressive movement, a tiny animated face, and real computer-vision and on-board AI to do something most “social robots” only claimed to do: feel alive on a desk.

What killed Anki was the brutal economics underneath the charm. Building a hardware-and-software company that designs custom robots, runs the cloud services behind them, and funds the next product is enormously capital-intensive, and Anki was burning through its money faster than the robots could replenish it. The company was negotiating a major new round when, in the CEO’s words, a significant deal at a late stage fell through with a strategic investor. Without that bridge, a business that lived on outside funding had no runway left.

The end was abrupt and the human cost was real: about 200 staff were laid off with minimal notice and little severance, a sober reminder that behind every “startup shuts down” headline are families that lost a paycheck without warning. The robots themselves were not entirely abandoned. In December 2019, the edtech firm Digital Dream Labs acquired Anki’s assets and later revived Vector, keeping its cloud services running and giving the little robot — and the people who had bonded with it — an unexpected second life. Anki’s products earned their affection; the company simply ran out of the cash that affection alone could never supply.