The rise and fall of Ghanaianhiplife.com: Lessons from a failedbusiness modelIdongesit Williams PhD StudentCMI Aalborg University Copenhagen
Outline• Reasons for starting the Ghanaian Hiplifesocial network• Operational concepts• Platforms used• The business model• Challenges• Successes• Failures• Lessons learnt
1.Inspiration for the business• The business was inspired by success ofsocial networking hence there was a need tocreate a Ghanaian identity online• How to attract Ghanaians. (niche creation)-- what do they like most (Hiplife, Highlife music)
Opportunities for starting up• Video sharing using Youtube• Free social network platform provided by ning.com• You can start the network with little or no cash• Domain name was $10 a year• Possibility of gauging traffic free via Google analytics• Flexibility in the importation of applications to the site• Possibility of using the text box to put upadvertisements
Conceptual flow of contentPicture sharing (this was the most popular)Blogging (not used much)Ability to customize your personal page and addapplications (lots of wizard applications)BirthdaysWallsBadgesSample Ning platformUsercontentpipeUsercontentpipe
2. Operational ConceptsUser centered approach• Online video concert festival• Broadcasting of member announcementsBroadcasting member posts• Encouraging members to brandthemselves
• Technology platform: A technology that enables the creation of products and processesthat support present or future development• Main Technology Platform was Web 2.0 - is associated with web applications that facilitate participatory informationsharing, interoperability, user-centered design, and collaboration on the World Wide Web. A Web 2.0 site allows users tointeract and collaborate with each other in a social media dialogue as creators of user-generated content in a virtualcommunity, in contrast to websites where users (consumers) are limited to the passive viewing of content that was createdfor them. Examples of Web 2.0 include social networking sites, blogs, wikis, video sharing sites, hosted services, webapplications, etc• Economic platform: Two sided markets/Twosided networks: These are economic platforms having two distinct user groups that provideeach other with network benefits. Example markets include credit cards, composed of cardholders and merchants; HMOs(patients and doctors); operating systems (end-users and developers), travel reservation services (travellers and airlines);yellow pages (advertisers and consumers); video game consoles (gamers and game developers); and communicationnetworks, such as the Internet. Benefits to each group exhibit demand Economies of scale. Consumers, for example, prefercredit cards honoured by more merchants, while merchants prefer cards carried by more consumers.3. Platforms used
Economic PlatformContent Producers• Youtube• Metacafe• Daily motion• UsersNB. The Ghanaianhiplife.combecomes an extendedplatform for Youtube,metacafe and Daily motioncontentContent Consumers• UsersGhanaianhiplife.com was meantto be a homogenous platform asusers were to create and usetheir content. However it wasalso a two-sided market ascontent came from elsewherewhich had nothing to do with theusers.
4. The Business Model(Faber et al (+Osterwalder): Business modelontology) so called business model canvas• Service architecture• Technology architecture• Financial architecture• Organizational architecture (actors)
Service Architecture• Video sharing and the ability to upload videos (Hiplifevideos)• Picture sharing (this was the most popular)• Blogging (not used much)• Ability to customize your personal page and addapplications (lots of wizard applications)• Birthdays• Walls• Badges• News Rss feeds from Google yahoo and some localnews (users not very interested)
Technology Architecture• Internet Service Provider (MTN)• Web 2.0 platform (Ning)• Web hosting (Ning, Godaddy and later namecheap)• Mobile and internet payment platform (Alertpay)
Financial Architecture• IncomeIncome from Google AdSense and other AdSense programsIncome from price differentiated advertisingPlanned for later - income from subscription and specific content access• ExpenditurePaying for ISP services (Pay as you go service)External advertisement,Monthly payment to Ning (a year after the free package, I upgraded)Yearly payment to Godaddy and later Namecheap (domain names)
Domain name providersat a costAdvertisers on thesiteAdvertisment to get usersService platformInternet Service ProviderExpenditureAdvertiser that nevercame onOffline corporatebodiesIncome
Organizational design• Ghanaianhiplife.com (Me)• External platform partner (Ning)• Internet Service Provider (MTN)• Content support from Youtube, Daily motion,metacafe, Facebook etc (Free)• Advertisers• External advert platforms
Challenges• Impossible to post reward to those who deserved to be rewarded• I lived in a country that was not supported by PayPal and other online payments• Google and other online advertiser, refused to allow other advertisers compete on thesame platform. My AdSense account was suspended for anti AdSense activities• Users were only consumers of information and not producers. There were 4 active producers• out of 4000 users and about 50 or thereabout who were only interested in posting pictures.• Local advertisers were refusing to come on board even when we had about 17000 clicks a month on ourGoogle Adwords advertisement campaign. They wanted a brand that they hear on radio and TV. Thatwas their way of testing your popularity. I had to contract an external advert personnel to help out.• Expenditure bill was going up, there was very minimal income from Google (this was lost during theaccount suspension• The other competing advertisers, like Yahoo, Bidvertiser, etc could not deliver a cent• to augment for the loss of the Google account (which was almost nothing).• Users got tired of seeing the same old content and were also not willing to post more.• This was because, most users accessed the site from internet cafes. Some didnt know how to use thesite.• The 3G pre-paid modem had little capacity to upload tutorial videos that was produced to help those whoare not able to use the site.• Illetracy.• NIng platform wasnt very flexible• I had to ward away spammers• Competition with TV. The artists were seen always on TV
Success /FailuresSuccesses• 4000 in three years• Network effect among peopleFailures• No revenue came in
Lessons Learnt• Culture affects the success of the niche you chose to provideservice.• Path dependency in thought of users are important• Critical research is needed into the behaviour of potential partnerplatforms especially when they are big. Will their strive to protecttheir territory hurt you terribly.• Lack of funds hampered the lack of innovation which was possible• Business models must be flexible as issues like partner policy andgovernment policy can• knock you out in a day.• Incentive planning for users should be factored into the initialdevelopment of a business model• Have a proper understanding of how the value chain in the businessyou intend to join works
Things to note• Interdependence of business models coming upas the business world converges.• Competition this days is about business modelsand survival of the fittest• The future of product and services platform isbeing guided by the force of digitization. Hencebusinesses develop their business models aroundemerging technologies as a way of reaching awider audience. However, they also buildprotective covers around them to enable theirever evolving business model survive.
Exercise• What do you think should have been done inthe case study that wasnt done to keepthe company afloat? Was the business modelgood or bad?