The rise and fall of Ghanaian hiplife.com: Lessons from a failed business model

Idongesit Williams PhD Student CMI Aalborg University Copenhagen

Outline• Reasons for starting the Ghanaian Hiplife

social network• Operational concepts• Platforms used• The business model• Challenges• Successes• Failures• Lessons learnt

1.Inspiration for the business

• The business was inspired by 'success' of social networking hence there was a need to create 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 up

advertisements

Conceptual flow of content

Video embedding file sharing

Video embedding file sharin

gPicture sharing (this was the most popular)Blogging (not used much)Ability to customize your personal page and add applications (lots of wizard applications)BirthdaysWallsBadges

Sample Ning platform

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2. Operational Concepts

User centered approach• Online video concert festival• Broadcasting of member announcements Broadcasting member posts

• Encouraging members to brand themselves

• Technology platform: A technology that enables the creation of products and processes

that support present or future development

• Main Technology Platform was Web 2.0 - is associated with web applications that facilitate participatory information sharing, interoperability, user-centered design, and collaboration on the World Wide Web. A Web 2.0 site allows users to interact and collaborate with each other in a social media dialogue as creators of user-generated content in a virtual community, in contrast to websites where users (consumers) are limited to the passive viewing of content that was created for them. Examples of Web 2.0 include social networking sites, blogs, wikis, video sharing sites, hosted services, web applications, etc

• Economic platform: Two sided markets/Two sided networks: These are economic platforms having two distinct user groups that provide

each 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 communication networks, such as the Internet. Benefits to each group exhibit demand Economies of scale. Consumers, for example, prefer credit cards honoured by more merchants, while merchants prefer cards carried by more consumers.

3. Platforms used

Economic Platform

Content Producers• Youtube• Metacafe• Daily motion• Users

NB. The Ghanaianhiplife.com becomes an extended platform for Youtube, metacafe and Daily motion content

Content Consumers• Users

Ghanaianhiplife.com was meant to be a homogenous platform as users were to create and use their content. However it was also a two-sided market as content came from elsewhere which had nothing to do with the users.

4. The Business Model

(Faber et al (+Osterwalder): Business model ontology) so called business model canvas

• Service architecture• Technology architecture• Financial architecture• Organizational architecture (actors)

Service Architecture

• Video sharing and the ability to upload videos (Hiplife videos)

• Picture sharing (this was the most popular)• Blogging (not used much)• Ability to customize your personal page and add

applications (lots of wizard applications)• Birthdays• Walls• Badges• News Rss feeds from Google yahoo and some local news

(users not very interested)

Technology Architecture

• Internet Service Provider (MTN)• Web 2.0 platform (Ning)• Web hosting (Ning, Godaddy and later name

cheap) • Mobile and internet payment platform

( Alertpay)

Financial Architecture

• Income Income from Google AdSense and other AdSense programs

Income from price differentiated advertising Planned for later - income from subscription and specific content access

• Expenditure Paying 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 providers at a cost

Advertisers on the site

Advertisment to get users

Service platform

Internet Service Provider

Expenditure

Advertiser that never came on

Offline corporate bodies

Income

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 the same 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 our

Google Adwords advertisement campaign. They wanted a brand that they hear on radio and TV. That was 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 the account 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 didn't know how to use the

site.• The 3G pre-paid modem had little capacity to upload tutorial videos that was produced to help those who

are not able to use the site.• Illetracy.• NIng platform wasn't very flexible• I had to ward away spammers• Competition with TV. The artists were seen always on TV

Success /Failures

Successes• 4000 in three years• Network effect among people

Failures• No revenue came in

Lessons Learnt• Culture affects the success of the niche you chose to provide service.• Path dependency in thought of users are important• Critical research is needed into the behaviour of potential partner

platforms especially when they are big. Will their strive to protect their 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 and

government policy can• knock you out in a day.• Incentive planning for users should be factored into the initial

development of a business model• Have a proper understanding of how the value chain in the business

you intend to join works

Things to note

• Interdependence of business models coming up as the business world converges.

• Competition this days is about business models and survival of the fittest

• The future of product and services platform is being guided by the force of digitization. Hence businesses develop their business models around emerging technologies as a way of reaching a wider audience. However, they also build protective covers around them to enable their ever evolving business model survive.

Exercise

• What do you think should have been done in the case study that wasn't done to keep the company afloat? Was the business model good or bad?