The Top Causes Internet Companies Are Failing
The economy of the 90’s and early 2000’s was fueled by technology. Many internet companies came and went in a short time. Currently, there is a new generation of internet companies, some with amazing ideas. There are of course, many internet companies that have thrived for years, including Google and Facebook. For every successful Internet company, there are dozens, if not hundreds, that have failed. Here, are the top 5 reasons internet companies are failing.
There are a lot of websites with huge followings and awesome products. What is holding them back is a failure to monetize. Even larger companies run into this problem, having a site with hundreds of thousands of daily visitors means nothing if profits are not created. Anytime a website starts charging for content, users flock to free alternatives at the drop of a hat. Anyone starting a web based business needs to figure out how to monetize their customer base.
A lot of internet companies do not have experienced employees. There are fundamental business concepts that are being ignored. Many internet companies have very young employees, which is okay for the tech side. For the business side, internet companies should be seeking out employees that have experience and serious knowledge of what it takes to make money.
The internet is very competitive for many businesses. Any business that is easy to start naturally is going to run into a lot of competition. Groupon is a fabulous business idea that has become very popular. Unfortunately for them, many companies have sprung up that are trying to replicate their success. An internet business can hit the ground running within a few weeks, which makes potential competition fierce.
Many of the greatest ideas are pretty well established. Social networking, search, news, these fields have been conquered. To make money on the internet, one needs to come up with truly new ideas. Unless well funded, nobody is going to unseat the big boys, nor even make a dent in their markets. Thinking outside of the box is important when running an internet company.
People on the internet are very finicky when it comes to choice. What is hot one day, may fall by the wayside very quickly. Myspace and AOL are two internet companies that come to mind. Established sites can lose their dominance in what seems a matter of months.
Gone are the days of massive venture capital investments. Now venture capitalists are reluctant to throw money at anything on the internet. In the past boom, anything that had to do with the internet could get solid funding. Right now, a solid business plan is needed to even think about asking for money. Many internet companies are not even able to get off the ground without adequate funding.
Internet companies have come back to life. The 90’s were an anomaly for internet companies. Now, to succeed, any company must strive to be like a normal business. This means adequate funding, serious employees, and a business plan that will make money. With that being said, there is still a lot of money and fame to be had by starting up an internet business. One just needs to be much more cautious than before.
Kerry Mohr writes about e-commerce, business & more at http://www.lifeinsurancequotes.org.