Biodiversity prospecting, and ethnobotanical search methods that draw on the medicinal knowledge of traditional societies, are mechanisms of drug discovery with the potential to reward the conservers of biological resources. Shaman Pharmaceuticals aspired to be a model of ethnobotanical bioprospecting, discovering new medicines while sharing benefits with indigenous people. Shaman's failure to market any new pharmaceutical products and its ultimate bankruptcy were heralded as marking the failure, and future abandonment, of ethnobotanical bioprospecting. This analysis of Shaman's history suggests that risks inherent in drug development, company risk associated with Shaman's drug development strategy, and technological change in the industry all contributed to its failure. The authors examine the opportunities and constraints encountered in bioprospecting and ethnobotanical searches and argue that natural products will remain important to drug development. Technological change, however, means that new models and new institutional structures are required for drug development based on natural products.