Before Bitcoin: The Rise and Fall of Flooz E-Currency

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iStock

In the late 1990s, Silicon Valley entrepreneur Spencer Waxman was in Morocco on holiday when he heard an Arabic slang term for money—flooz—that stuck with him. In the dot-com boom taking place back in the United States, URLs with obscure etymology were popular. When Waxman and partner Robert Levitan decided to co-found a novel way of disrupting the online commerce industry, calling it Flooz.com was almost a foregone conclusion.

What Levitan and Waxman envisioned was a virtual gift certificate that would drive business to participating online retailers, give consumers some sense of security over their private information, and make shopping for stubbornly gift-resistant recipients easy. Rather than merely offering cyber currency, this was a service with purpose.

Unfortunately, it was also one that was doomed to fail.

A screen capture of Flooz.com
Flooz.com

Non-cash currency has been with us since the Chinese used cowry shells to sort out debt for goods and services more than 3000 years ago. In the 1960s, credit cards became an alluring alternative to saving and carrying paper bills. When online retailing exploded in the 1990s, it was only natural that startups would begin to explore virtual payment methods.

At the time, digital transactions were perceived by many consumers to be a near-guarantee of identity theft. Handing a card to a vendor in a closed-loop retail environment was one thing, but the thought of hackers seizing their information once it was entered into the borderless environment of the internet kept many away from online shopping.

As it turns out, that paranoia would turn out to be justified in our current climate of constant data breaches. It was also good for businesses hoping to turn their apprehension over credit card security into a monetized solution. Flooz.com debuted in 1999, just one year after another currency-based URL, Beanz.com, had garnered press. Beanz were a kind of earned points system, with approved transactions gifting customers with redeemable gift vouchers. Flooz took a different approach: Customers would sign up to Flooz.com and purchase gift certificates for specific retailers, which they could then use themselves or pass along to a gift recipient via email.

For businesses, it was a way of driving traffic to sites; for consumers, it was a way to keep credit card transactions limited to one vendor; for Flooz.com, being the intermediary meant taking a 15 to 20 percent cut of completed transactions on the selected retail sites, which ranged from Godiva Chocolates to Barnes & Noble and Tower Records.

To help Flooz.com cut through online marketing noise, Levitan enlisted actress Whoopi Goldberg to be their spokesperson. In exchange for company shares and Flooz.com money, Goldberg led an $8 million ad campaign for radio, television, and print that extolled the benefits of using Flooz.com.

Whether it was Goldberg’s pitch or the concept itself, Flooz.com met with a receptive audience. The company debuted in the fall of 1999, and had opened 125,000 accounts by January 2000. That year, roughly $25 million in Flooz.com money was purchased and used. (In a nod to the impenetrable vocabulary of the internet at the time, the media loved to point out that Beanz could be used to purchase Flooz.)

Bolstered by the attention and early success, Flooz.com was eventually able to raise $35 million in venture capital. Consumers could meet their gifting obligations by emailing a code to their gift recipient without having to waste time shopping. For a time, it appeared Flooz.com would become a leading method of payment for online transactions.

Actress and Flooz.com spokesperson Whoopi Goldberg is photographed during a public appearance
Paul Hawthorne/Getty Images

But it didn’t take long for the seams in the Flooz.com model to show. While gifting vouchers to family and friends was convenient for the gifter, the giftee was stuck with a very limited number of vendors that took Flooz.com as payment. If Amazon, for example, had a deal on a DVD or book that Barnes & Noble didn’t, Flooz users were out of luck. Shopping for a bargain wasn’t possible.

The second and most crippling detail was one Flooz.com was forced to make in order to strike deals with vendors. The company guaranteed its transactions, meaning that it would make good on orders even if Flooz dollars had been purchased via fraudulent means. By the summer of 2001, that commitment became a tipping point. Agents from the FBI informed Levitan that they suspected a ring of Russian hackers had purchased $300,000 worth of Flooz in order to launder funds from stolen credit cards.

This created a paralyzing cash flow problem: As their credit card processor withheld funds until Flooz.com could secure the transaction, people were still busy redeeming Flooz dollars they had already spent. Retailers then looked for Flooz.com to reimburse them. Suddenly, customers trying to pay with Flooz were greeted with error messages that the site was down.

Those issues, coupled with the fact that corporate clients had already started to move away from gifting employees with Flooz dollars, forced Flooz.com to file for Chapter 7 bankruptcy in August 2001. Court papers cited almost $14 million in liability. (Beanz.com was also a casualty of the dot-com bust, when participating retailers processing the points steadily went out of business.)

Levitan rebounded, founding the Pando file sharing network and selling it to Microsoft in 2011 for $11 million. Meanwhile, Flooz.com remains a barely-remembered footnote in e-currency, though it would be hard to chart the rise of digital funds like Bitcoin without it. Like with so many other good ideas, timing is everything.

Upper Crust: The Story of Pizza Hut's Forgotten Priazzo Pizza

Pizza Hut tried to up their game in 1985 with a high-rise "Italian pie."
Pizza Hut tried to up their game in 1985 with a high-rise "Italian pie."
Presley Ann, Getty Images for Pizza Hut

When Pizza Hut rolled out its newest menu item in the summer of 1985 under the nonexistent Italian word Priazzo, the chain was quick to correct anyone who declared it a new variety of pizza.

The Priazzo was unlike any pizza Americans had ever come across. With two layers of dough, pepperoni, mushroom, onions, spinach, ham, bacon, tomatoes, and one full pound of cheese, Pizza Hut called it a pie; others called it a strange alchemy of pizza, quiche, and lasagna. PepsiCo, which owned the franchise, hoped it would boost revenue by 10 percent.

It did. For a while. But there were problems inherent in a pizza chain that claimed to be serving something other than pizza.

The Priazzo, which spent two years in development, followed the successful 1983 rollout of Pizza Hut's Personal Pan Pizza. That menu item, which was intended to appeal to customers who wanted just a single portion on their lunch break, was a tremendous hit, increasing the company's lunchtime business by 70 percent. With the Priazzo, however, the restaurant went in the opposite direction—super-sizing a dinner option and limiting its availability to after 4 p.m. on weekdays and all day on weekends.

Though the name was nonsensical—it was the invention of Charles Brymer, a marketing consultant who had also named the Pontiac Fiero—Pizza Hut used names of Italian cities for the three variations. There was the Roma, which had a mix of meat (pepperoni, Italian sausage, and pork) along with mozzarella and the very non-Italian cheddar cheese, plus onions and mushrooms; the Milano had all the meat of the Roma plus beef and bacon, mozzarella and cheddar on top, but no mushrooms or onions; and the gut-busting Florentine, which featured spinach, ham, and five different kinds of cheese, including ricotta, mozzarella, parmesan, romano, and cheddar. (A fourth pie, the vegetarian Napoli, was added later.)

All the pies were stuffed with ingredients and then had a layer of dough with tomato sauce and cheese baked on top. A small Priazzo sold for about $8.05, a medium was $10.95, and a large ran around $13.75. For that you got the full Priazzo experience and nothing extra, as customers were not allowed to change or substitute toppings—or, more accurately, stuffing—as the surplus of ingredients was the entire point of the Priazzo. Diners could, however, ask that ingredients be subtracted.

“Most Italian homes have a version of their own,” Arthur Gunther, Pizza Hut's president at the time, told the Chicago Tribune of the idea behind the Priazzo in 1985. “We looked for those that we felt would have application in the United States.” In Italy, such double-crusted pies are known as pizza rusticha, though putting sauce and cheese over the top crust was unique to the Priazzo.

On the strength of a $15 million marketing campaign and a commercial shot in Italy, and accompanied by music from famed Italian opera composer Giacomo Puccini, the Priazzo made a splashy debut in June 1985, right around the same time that Pizza Hut and other chains were moving into home delivery. While it was not exactly a deep dish pizza, it promised something of similar gastronomic substance, and Pizza Hut hoped that would entice people who didn’t have access to table-tipping pizzas outside of Chicago.

The Priazzo gained some early devotees who enjoyed the dish's generous and layered presentation. One notable exception was Evelyne Slomon, a cooking instructor and author of 1984's The Pizza Book: Everything There Is To Know About the World's Greatest Pie. She refused an offer to endorse the pizza and noted that actual Italians would rarely put so much meat in their pies. Others observed that pizza is one of the words commonly used for pie in Italian, making Pizza Hut’s insistence that their “Italian pie” was not a pizza rather grating for linguists.

Still, they fulfilled their objective. In early 1986, PepsiCo reported a 12 percent increase in Pizza Hut revenue, aided in part by the Priazzo. But its success would not last. In the fast-casual atmosphere of a pizza chain, consumers wanted their typical fare. After the initial curiosity wore off, not many customers were returning to the Priazzo for pizza nights. Anecdotally, there were also reports of employees finding the thick pies too cumbersome and time-consuming to deal with.

Whatever the case, the Priazzo was disappearing by 1991 and was last mentioned in print by Pizza Hut in 1993. The baton of pizza excess was later picked up by their stuffed crust pizza, which was introduced in 1995 and has remained a perennial favorite. That might be due in some part to the fact that Pizza Hut was content to call it what it was: a pizza.

The Big Squeeze: How Mr. Whipple Made Advertising History

Charmin toilet paper icon Mr. Whipple in 1999.
Charmin toilet paper icon Mr. Whipple in 1999.
Bob Riha, Jr., Getty Images

In the 1970s, a handful of famous faces dominated popular culture. There was scandalized former president Richard Nixon; the Reverend Billy Graham; daredevil Evel Knievel; and boxer Muhammad Ali, among others.

Dick Wilson had a face, not a name, that might have come close to being equally recognizable. The English actor was known to millions of Americans as Mr. Whipple, the nervous grocer who spent 21 years and more than 500 commercials pleading with fictional customers to please "don't squeeze the Charmin."

Born in Preston, England, on July 30, 1916, Wilson grew up in Ontario, where he worked as a radio announcer as a teenager, and attended the Ontario College of Art and Design majoring in sculpture. (He would also later serve in the Canadian Air Force during World War II.) Wilson, who was the son of two performers—his father was a vaudeville attraction and his mother a singer—designed scenery for a dance school after graduating and got compensated in the form of dance lessons. Those skills led to Wilson becoming a comedic acrobatic performer on the vaudeville circuit, which led to acting.

The MVP of TP

When Wilson got the call to audition for a toilet paper commercial in 1964, he had already built up a long career in stage, film, and television, including one-off appearances on everything from Bewitched to McHale’s Navy. The call for the commercial came from Wilson's agent, about whom the actor joked he had put on a missing persons list due to the lack of communication.

Toilet paper mascots were, of course, nothing new. As far back as the 1920s, brands like Scott and Charmin had used a variety of figures on packaging that had positive connotations—things like babies, angels, and puppies. Scott had Mr. Thirsty Fibre, a gentleman in a top hat who seemed downright ornery. Charmin, introduced by the Hoberg Paper Company in 1928, used a woman’s silhouette and later a baby to endorse their buttock wipe. (An employee described the pattern on the roll as "charming," leading to its name.)

These mascots were necessary in a time when being explicit about the quality of toilet paper was virtually forbidden. Until 1890, magazines wouldn’t even accept ads for toilet tissue. That year, The Atlantic agreed to print a photo of a package but didn’t allow any advertising copy to accompany it. And prior to 1975, television commercials weren’t allowed use of the phrase toilet paper. It was “bathroom tissue.”

This was the world Wilson found himself in when he beat out 33 would-be Whipples to become the face of the ad campaign. The character was named after George Whipple, a public relations director for ad agency Benton & Bowles, on the premise that no one else could sue Charmin parent company Procter & Gamble, which bought Charmin in 1957, for using their name.

The Big Squeeze

In the world depicted in the ads, Mr. Whipple was a grocer who appeared to have a great deal of anxiety over customers—typically giddy housewives—who couldn’t resist squeezing the Charmin products.

The premise was devised by Benton & Bowles copywriter John Chervokas, who said he was inspired by shoppers who squeezed fruit to evaluate its firmness before buying. Chervokas also wrote Mr. Whipple’s signature plea, “Please don’t squeeze the Charmin.”

But squeeze it they did, across 504 ads total from 1964 to 1985. The punchline was that even Mr. Whipple himself could not resist Charmin’s softness, and often gave in to the temptation to squeeze when no one was looking.

The spots were formulaic by necessity. “What are you going to say about toilet paper?” Wilson once asked. “I think we handle it the best way we can.”

A legend is born

In an industry where human mascots can have a high turnover rate—we’re looking at you, Dell Dude—two decades is a notable achievement. Wilson himself considered it a cushy job, once noting that it took just 16 days out of the year. Charmin also provided him with a monthly shipment of toilet paper.

In return, Wilson swore loyalty to Procter & Gamble, refusing to appear in any other commercials or endorse any other products. He also faithfully followed a morals clause in order to protect the character; "I can't be seen coming out of a porn parlor,” Wilson told the Chicago Tribune in 1985.

Wilson appeared sporadically after his retirement in 1985, returning for a series of ad spots in 1999 to celebrate a new, more absorbent version of Charmin. That led to a Lifetime Achievement Award, given to him by the company in 2000, though the ceremony was delayed after a Screen Actors Guild strike complicated things. (Wilson showed up at a rally with the line, “Please don’t squeeze the actors.”)

That same year, the Charmin bear was introduced. Wilson died at age 91 in 2007. While he probably never imagined he would become nationally known for endorsing toilet paper, he maintained a sense of humor about it. When queried about his career squeezing rolls, he enjoyed pointing out where he shot his very first commercial: in Flushing, New York.

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