Ntuda Dotcom Assignment

1) The internet started as a computer network connecting millions of computers globally and has now become an essential competitive tool for businesses of all kinds. 2) Internet startups are newly formed companies based on innovative ideas, often started by enthusiastic founders. Some examples include Voyantis and ZKX. 3) Many early internet startups during the dot-com era failed due to issues like adopting the wrong business model, poor recruitment practices, immature markets not ready for digital services, and overvaluation amid abundant venture capital funding.

Uploaded by

Ntuda Daniel

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as DOCX, PDF, TXT or read online on Scribd

0% found this document useful (0 votes)

79 views5 pages

Ntuda Dotcom Assignment

Uploaded by

Ntuda Daniel

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as DOCX, PDF, TXT or read online on Scribd

You are on page 1/ 5

KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

SCHOOL OF BUSINESS

SUPPLY CHAIN AND INFORMATION SYSTEMS

ISD 470 E-BUSINESS

NTUDA BEREH DANIEL

INDEX: 4370918
THE INTERNET is the largest computer network in the world, connecting millions of
computers. It comprises the physical computer network, thus computer, monitor, modems cables,
phone lines, and many more. Globalization of businesses, including almost all functional areas,
(human resource management, logistics, accounting, marketing) has made it easy if not
impossible to conduct businesses at lower cost and in more efficient ways.

For this reason, the internet has now become more of a competitive tool in this era used by most
organizations today to beat competitors in terms of revenue and profit levels, greater customer
attraction and retention (customer loyalty), and other valuable edges.

INTERNET STARTUPS are internet businesses that are in the process of starting up.
(lexico.com)The term originated in the late 90s denoting new organizations that were ready to go
online at that time. The word startup may have become popular relatively now but startup
businesses have been around since 1970. When the internet took off globally in the 90s, startups
gained another level of power in the world of business. The success of starting a profitable
business today is dependent on modern communication methods, which also allow you to profit
by developing an intangible product. Nowadays, Internet startups offer the opportunity to start an
online business by implementing a popular idea. An internet startup is a newly formed company
that has not yet been registered as a legal entity and is based on cutting-edge technology and
innovative ideas. Regardless of the existence of the IT sector, an internet startup can be
connected to any field of activity. Its primary advantage is that it provides consumers with
entirely new products and services. A social network or an online service with specialized
services are very bright examples of internet startups (language learning and other disciplines,
freelance exchange). Internet startups are traditionally developed by a group of super enthusiasts,
who can’t imagine their lives without innovations.
Some examples of internet startups include Voyantis, ZKX, ArArchivesMagic Eden, parallels,
etc (crunchbase.com)
REASONS WHY SOME INTERNET STARTUPS FAIL
The ultimate aim of this piece is to analyze the case of the dot-com dreams failure of most
companies.

First and foremost, Wrong Business Model, Everyone makes mistakes and trying to follow a
business model that eventually fails is a mistake that all of us can make. The most common issue
when launching an Internet startup is the incorrect selection of a business model. Strangely,
many investors and entrepreneurs put large sums of money into a project without even
considering the business model. As a result, there may be instances where the project is running
smoothly and has an audience, but there is no funding to support it. This is from the case study as
a result of “NO IDEA. A lot of organizations do not simply understand the need for the right
internet technology to make their businesses move faster and hence simply led to the collapse of
their dotcom dream. An example was Avnash’s group of companies situated in the northern part
of Ghana, Tamale.

POOR RECRUITMENT POLICY

Insufficient research is conducted by most organizations in recruiting the right personnel to

manage the Information Technology (IT) and Information Systems (IS) aspects of their
organization. A lot of these internet Startups’ failures were failure result of poor recruitment
methods adopted by their Human Resource managers. Further analysis also showed that internal
recruitment from the firms without soliciting external experts’ knowledge resulted greatly also in
the failure of most internet Startups. For example, Voyantis, previously Arkivean Internet
Startup in 8 collapsed as a result of recruiting directly their IT staff internally. Due to inadequate
training and e-education companies, the com dream came to an end.

IMMATURED MARKET

Most organizations (internet startups) dotcom dreams failed as a result t interest in penetrating
through malware not ready to adopt and embrace the dotcom businesses.
Mobile phone penetration has largely contributed to the growth of the internet over the years.
Ghana has the highest mobile penetration in West Africa and already outperforms many of its
regional peers. By the end of 2019, mobile adoption stood at 55 percent, percent had percent
regional average which is 44.8 percent. This means a percentage of people were still not serving
through digital services and hence preferred shops offline. Internet startups that were operating in
these markets. A case to this market is Uber Ghana trying to penetrate to the northern sector of
Ghana, that is Tamale and its neighboring communities the early 2000s the mobile phone
penetration, in the north was a slow pain and hence deprived a lot of the northerners from
patronizing digital services include that of Uber.

HIGH SETUP MAINTENANCE ASSOCIATED WITH THE DOTCOM

One of the major reasons why a lot of internet startups fail is the cost involved in setting up and
running the websites without breaching social concerns such as privacy, security, and others are
critical to the majority of customers in the digital age, hence companies that were ready to adopt
the dotcom needed huge sums of capital investment to run their websites. For this reason,
companies that were not making enough pro profit burned

OVERVALUATION OF DOTCOM COMPANIES

Most tech and internet companies that held IPOs during the dotcom era were highly overvalued
due to increasing demand and a lack of solid valuation models. High multipliers were used on
tech company valuations, resulting in unrealistic values that were too optimistic.

Analysts did not focus on the fundamental analysis of these businesses, and revenue generation
capability was overlooked, as the focus was on website traffic metrics without value addition.
Research carried out revealed an overvaluation of more than 40% of dotcom companies by
studying their P/E ratios.

THE ABUNDANCE OF VENTURE CAPITAL

Money pouring into tech and internet company start-ups by venture capitalists and other
investors was one of the major causes of the dot-com bubble. In addition, cheap funds obtainable
through very low-interest rates made capital easily accessible. It coupled with fewer barriers to
acquiring funding for internet companies led to massive investment in the sector, which
expanded the bubble even further.

REFERENCES

Zhang, G.Q., Zhang, G.Q., Yang, Q.F., Cheng, S.Q. and Zhou, T., 2008. Evolution of the
Internet and its cores. New Journal of Physics, 10(12), p.123027.

Chase, J., 2013. The evolution of the internet of things. Texas Instruments, 1(1388), pp.1-7.

Dhamdhere, A. and Dovrolis, C., 2008, October. Ten years in the evolution of the Internet
ecosystem. In Proceedings of the 8th ACM SIGCOMM conference on Internet measurement (pp.
183-196).

Dhamdhere, A. and Dovrolis, C., 2011. Twelve years in the evolution of the internet ecosystem.
IEEE/ACM Transactions on Networking, 19(5), pp.1420-1433.
Wang, J., Lim, M.K., Wang, C. and Tseng, M.L., 2021. The evolution of the Internet of Things
(IoT) over the past 20 years. Computers & Industrial Engineering, 155, p.107174.

Naughton, J., 2016. The evolution of the Internet: from military experiment to General Purpose
Technology. Journal of Cyber Policy, 1(1), pp.5-28.

Kahn, R., Leiner, B.M., Cerf, V.G., Clark, D.D., Kleinrock, L., Lynch, D.C., Postel, J., Roberts,
L.E. and Wolff, S., 1997. The evolution of the Internet as a global information system. The
international information & library review, 29(2), pp.129-151.