I worked for a consulting firm during the late 90's up to the summer of 2001 (when it failed along with the rest of the world). During this wild era of anything goes public we had our share of interesting "customers".
Both stories show that sometimes the WTF is not in the software, but in the brains of those who run the company.
You Want The Domain Called WHAT?
This company came to us wanting to cash in on the excitement of eBay and the other auction sites that were springing up. They had a large successful company in some manufacturing field (don't remember what) and they wanted to build a side business setting up a site for manufacturing businesses to exchange used equipment and machinery. Not a bad idea so far.
That was the last one they had.
The first sign of impending doom was that the people involved in working on the design were all VPs and the CEO. Plus they would only fly down to Texas and meet with us when the CEO was in the country (he apparently enjoyed visiting overseas customers). After a first meeting with them to get an idea of what they were thinking, the next phase would be to build some prototype designs and generate some kind of requirements list. However their first thought was to negotiate the contract from hell.
Oh and one other thing they told us. They had a name and had purchased the domain already. Once they told us the name, our response was "WHAT?"
Read it again.
We pointed out the really bad name, but they said something like "business people don't make those kind of associations" and refused to consider anything else.
Our CEO told me (saddled with the project) to start working despite the lack of contract since the only agreed on detail so far had been that the initial phase of the project would take 3 months. So armed with a hour's worth of details I started imagining how such a business and site would work. Meanwhile the group would occasionally show up (when the CEO was in the country) to argue more contract details. I was not allowed to say anything of the work I was doing as no price had been agreed to. All I had was the initial hour to go on.
Months past. Dotcom auction sites were conceived, got venture money, went public, and spent themselves into oblivion. Eventually a contract was agreed to but all the time had already been spent. We presented the work to them (with the CEO in the country) but they hated everything so we would have to now start over. With the contract now up they wanted to negotiate a new one but by now they were busy with their own business, the CEO stayed overseas, and the whole thing never happened.
As a postscript, the domain name suddenly became available in January, 2007. I guess they finally gave up.
Lose A Penny, Make A Profit
Value America was one of the earliest e-retailers and a poster child for the new age of the internet. Starting in 1997 they aggressively sold technology, office and consumer products. In a press release you can still read Fred Smith of Fedex said "I believe that Value America has one of the best business models I've ever seen".
They came to us looking for a vendor to develop a new online store. During meetings with them our representatives were told the now classic line "we sell products for 99 cents that we paid a dollar for, and we'll make it up in volume later". IBM was the other competitor in this race to create a new face for this high-flying company.
We eventually lost to IBM, which at the time seemed a great blow as it would have been a large customer.
The next thing we heard in 2000 was that Value America's value was dropping like a rock (it had been a high flying IPO) and soon wound up in bankruptcy. The only good news was that IBM probably didn't get paid, so our loss turned out to be better in the long run.
One of the founders even wrote a book. dot.bomb My Days and Nights at an Internet Goliath which explains it all pretty well.