WebVan isn't the right analogy - a real estate bubble is a better one.
In the .com bubble, no one was really sure how things would shake out, so there were lots of companies who wouldn't have succeeded no matter how big they got (the "losing money on every sale but making it up in volume" business plan). When the .com bubble crashed, real estate was seen as a much stronger investment because no matter how low it went, it was real "stuff" that had a sort of intrinsic value - it may go down, but it wouldn't go to 0. A similar thing happened in Tokyo real estate circa early 90s. A Tokyo apartment still has a lot of value - you'd probably think it very expensive - but it's still 80% cheaper than it was at its peak.
The problem with lots of companies now isn't that they won't ever be profitable, or that they don't have realistic business plans, it's just that their valuation is way more than their earning stream will ever support. They are valued at "we'll eventually take over the market" prices, even though they'll only ever reach niche market status.
This is a great explanation. Remember that the value in a stock is that you're owning X% of a business just like if you owned 100% of a coffee shop.
If you buy a coffee shop for 10% @ $100,000 that makes $10k/year you just bought a company for a P/E of 10. The value of a stock in that company is in the growth of that 10k over time that is either paid as a dividend or retained and valued in to the price of the stock. If you don't make money, or make much less than what you could be expected to grow, their value will fall.
In the .com bubble, no one was really sure how things would shake out, so there were lots of companies who wouldn't have succeeded no matter how big they got (the "losing money on every sale but making it up in volume" business plan). When the .com bubble crashed, real estate was seen as a much stronger investment because no matter how low it went, it was real "stuff" that had a sort of intrinsic value - it may go down, but it wouldn't go to 0. A similar thing happened in Tokyo real estate circa early 90s. A Tokyo apartment still has a lot of value - you'd probably think it very expensive - but it's still 80% cheaper than it was at its peak.
The problem with lots of companies now isn't that they won't ever be profitable, or that they don't have realistic business plans, it's just that their valuation is way more than their earning stream will ever support. They are valued at "we'll eventually take over the market" prices, even though they'll only ever reach niche market status.