Same old but different

Why start-up online businesses fail

Same old but different

90% of Internet start-up businesses fail

According to an article in, 90% of Internet start-up businesses fail early. There has always been a high percentage of start-up businesses, which fail early so what’s new?

Sherpa recently formed a partnership with some full-stack developers in SA and UK to form an entity called DDM Collective. They shared some good insight with us which resulted in DDM being formed, offering a comprehensive service ranging from business model, brand and marketing strategy, design and execution right through to the building of basic or advanced e-commerce web platforms.

It seems so many people have an idea – often, very good ideas – and then rush off to burn most of their cash on getting developers to build a monster website platform without fully thinking things through. The expectation is that they can sit at home and their website becomes an ATM.

The reality is that a web-based or online business is like any business. It needs a business model, a brand which differentiates, products which are relevant, pricing which is not too high or too low and an in-depth understanding of the needs, demands and attitudes of the target audience. Then of course, great marketing. And enough cash which goes hand in hand with having patience. Let’s not forget passion and attitude.

If anything, the internet entrepreneurs of today need greater business skills than ever before because it seems like everybody is trying to become the next overnight zillionaire. Most will fail but therein lies the opportunity for those who take starting an online business online seriously.

Even doing things the right way, having the perfect product and exceptional people is no guarantee of success. Here, we must take heart from two young guys from Traf-O-Data who built the perfect product. Unfortunately, events overtook them and the product lost its relevance. The two young entrepreneurs were Bill Gates and Paul Allen. Yep, same guys.

Clearly, being a part of that 90% doesn’t disqualify you from making it to the 10% on the second or third attempt. But first ask the question: “If there was no Internet today, would I still be an Internet entrepreneur or would I rather be an employee?” If the answer is a resounding or even nervous ‘entrepreneur’ then these words from Paul Allen will surely encourage you.

“… Traf-O-Data remains my favourite mistake because it confirmed to me that every failure contains the seeds of your next success…”

Gary Hendrickse
Sherpa CEO and Brand Strategist

Sherpa Brand & Design Agency