Saleem Dotcom

The document discusses reasons for internet startup failures. It states that selecting the wrong business model and conducting insufficient market research were common mistakes. Many startups also failed due to immature markets not ready for digital services, high setup and maintenance costs, and poor recruitment of personnel lacking technology expertise. Examples provided include collapsed Ghanaian startups Voyantis and Uber's struggles penetrating northern Ghana in the early 2000s due to lower mobile adoption rates.

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Saleem Dotcom

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Ntuda Daniel

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KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY

SCHOOL OF BUSINESS

SUPPLY CHAIN AND INFORMATION SYSTEMS

ISD 470 E-BUSINESS

MOHAMMMED SALEEM SADIQ

INDEX: 4369018
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) have been made easy if not possible to
conduct businesses at lower cost and 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 the 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 with 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 in a group of super enthusiasts, who can’t imagine
their lives without innovations.
Some examples of internet startups include Voyantis, ZKX, Arkives, Magic Eden, parallelz etc
(crunchbase.com)
REASONS WHY SOME INTERNET STARTUPS FAIL
The ultimate aim of this piece is to analyze the case of the dotcom 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. It’s strange that
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 from the case study was
as a results of “NO IDEA. A lot of organizations do not simply understand the need for the right
internet technology to make their businesses moves faster and hence simply led to the collapse of
their dotcom dream. An example was Avnash group of companies situated at the northern part of
Ghana , Tamale.

POOR RECRUITMENT POLICY

Insufficient research conducted by most organizations in recruiting the right personnel to manage
the Information Technology (IT) and Information Systems (IS) aspect of their organization. A lot
of these internet Startups failure was as a results of poor recruitments 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 to the failure of most
internet Startups. For example, Voyantis, previoulsly known as Arkivean Internet Startup in
2018 collapsed as a result of recruiting directly their IT staff internally. Due to inadequate
training and educating the company dotcom dream came to an end.

IMMATURED MARKET

Most organizations (internet startups) dotcom dreams failed as results of their interest in
penetrating through markets that were 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 per cent, higher than the regional
average which is at 44.8 per cent. This means a huge number of people were still not serving
through digital services and hence preferred shops offline. Internet startups that were operating in
these market . A case to this point is Uber Ghana trying to penetrate to the northern sector of
Ghana, that is Tamale and it’s neighboring communities. In the early 2000s the mobile phone
penetration at the north was a slow pace and hence deprived a lot of the northerners from
patronizing digital services include that of Uber.

HIGH SET UP AND MAINTAINENCE COST 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. Socials concerns such as privacy,
security and many others are critical to 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 profit burnnt
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