The Balance between Digital and Physical
A research in the success of Startups
Keywords: startups, success factors, digital, non-digital, websites, functionality, usability, design, interaction, informative, digital world, physical contact.
Thesis New Media and Digital Culture Name: Willemijn van der Holst Student number: 6033008 Word count: 19.362 Supervisor: J.A.A. Simons Second reader: S.M.C. Niederer Date: June 24, 2016
Abstract
A lot of research is already conducted in possible factors that could contribute to successful establishment of a startup. The timing, the team, the idea, the business model, and the funding are important factors that would help startups to become successful (Gross 2015). These factors generally concern ‘non-digital’ aspects. The current research aims to give a contribution to possible factors that would help establishing a startup. This research however, has a focus on a ‘digital’ aspect. Regarding this digital aspect, websites of startups will be examined. It will be investigated in what way a website can be seen as a potential factor for the success of a startup in our current society. In addition, it will be analyzed which aspects of such a platform would contribute most to success. It appeared that the use of a well structured website plays a role in the success of a startup as well. A well-thought color use, the use of well-structured divisions, and reduced information on the screen (for the benefit of a clear overview) were found to be the most important factors of a well functioning website. However, it also appeared that not all success and failure of startups could be attributed to factors of a website. In some cases the success and failure of startups could be better explained with the earlier mentioned non-digital aspects. Therefore, the conclusion has to be made that a website is merely a part of the complex process of establishing a startup.
Index
Abstract………..…2
Introduction………....4
Literature review………6
Important non-digital factors concerning the success of a startup………7
How to make a well functioning website………..12
Methodology………18 Results………..23 Travel………...23 Food……….32 Health care……….…..38 Market places………...44 Education……….50
Fin-Tech and Cleantech………...57
Conclusion & Discussion……….57
Bibliography……….63
Introduction
Digital technologies take an increasingly important role in our world. Everything is fixed by digital connections, from our mobile phones to laptops and other devices with an Internet connection. One could say that we are living in a digital world nowadays (Bersin 2016). Our world is powered by digital online technologies (e.g. websites and social media). In all probability, one could say that this is one of the main reasons why it is so easy to found a startup (Zwilling 2013). However, only 10 percent of all startups survive nowadays (Patel 2015). The other 90 percent fails due to various reasons that are often unknown.
A lot of research is done in factors that contribute to the successful establishment of startups. According to Bill Gross (2015), the timing of launching an idea on the market turned out to be the most important factor. An idea could, for example, be launched too early, when the world is not “ready” for it yet. An idea could be launched too late, when there are already too many competitors. An idea could also be timed and launched at the perfect moment, when this happens a startup has the greatest chance to survive (Gross 2015). Other important factors concerning a successful startup are, among others, the business model, the team, the idea and the funding (Gross 2015).
Since we live in an online digital world – and since this online world, in all likelihood, also made it possible for startups to flourish – it seems to be that this has to be investigated as a potential success factor of a startup as well (Zwilling 2013). As stated before, a fair amount of researches have discovered important success already. However, it seems that a large contribution still can be made in the existing literature about success factors that concern our digital world. Hence, this research project is aimed to make a contribution to this growing body of literature concerning factors of successful establishment of startups and, most specifically, the role of its digital aspect.
The current research will investigate in what way an online platform, in the sense of a website, is needed to succeed as a startup in our current society. This research will also investigate which aspects concerning websites of startups would contribute most to a successful establishment of the startup. This has led to the following research question:
“In what way is a website a potential factor for the successful establishment of startups in our current society, and moreover which aspects of such a platform would contribute most to success?”
Before going into detail of how this research will be set up, first the definition of the term ‘startup’ will be explained in more detail. Currently, startups have been given many definitions. The term ‘startup’ is often associated with incoherent and unstable enterprises (Robehmed 2013). A startup could be seen as a company where solutions are not ensured and whether the enterprise will be a success is still uncertain (Robehmed 2013). For this reason, it is difficult to draw a line between a successful startup (which after this, in all likelihood, will become a “grownup” company itself) and a failed startup.
According to Paul Graham a company that has been able to keep standing for over five years can still be called a startup (Robehmed 2013). A company that already exists for over ten years is starting to be a fully extended company. Still it is not a successful startup per definition (Robehmed 2013). This is because other aspects could play a role in defining a successful startup as well. For example, the number of employees of a company, the number of established offices, valid shares, acquisition by a larger company, but of course revenues and profits are also important matters of concern (Robehmed 2013). All these important matters concern the ability of growth of a specific startup. According to the consultancy company Deloitte a startup is defined as: “fast-growing market innovating new enterprises, which disrupt and revolutionize entire industries” (Deloitte). Also, in the concerned report it is stated that these companies grow more than ten million dollars by their fifth year of revenue, and that they constitute enormous amounts of employment and revenues (Deloitte).
In the current research the focus will be on startups with a potential ability of growth. The current research is aimed to select startups that do not exist for over ten years. Since this research aims to select startups that have the potency and the ability of growth (associated with all above mentioned matters), this research will exclude small businesses. Small business, such as a new small store in the center of Amsterdam, that has not the purpose and ambition of enlargement will not be selected and will not be included as a startup in the current research. The focus will be on
startups that claim to reach innovation and a certain form of “freshness” regarding the future.
In addition, since the current research has its focus on a ‘digital’ aspect, the focus will be on certain digital related startups as well. These startups will be selected by using a selection of the most important sectors concerning startups and its related digital aspect in the sense of a website. This will be further declared and explained in the methodology section of this research. The selected startups will be further elaborated (and after that analyzed) during the empirical research of the current research.
In the next section, the results of the Literature review will be explained and put in perspective. Subsequently, the methodology for the empirical research that will be performed will be presented. After that the results of those analyses will be elaborated. Finally, this research will end with a conclusion and discussion in which an attempt will be made to answer the research question.
Literature review
To answer the research question the first part of this research will focus on research that is already conducted. Since non-digital factors concerning the success of a startup cannot be ignored when answering the research question, these relevant non-digital factors will be elaborated in the first section of this Literature review. This section is called ‘Important non-digital factors concerning the success of a startup’. In this section it will be answered what important ‘non-digital’ factors are concerning the success of a startup. Afterwards, the discussed non-digital factors will be included during the discussion of the current research and will not be ignored when answering the research question in the conclusion.
The second part of this Literature review will focus on what important (digital) aspects are needed for a proper functioning website. This will be answered in the section ‘How to make a well functioning website’. After elaborated all theoretical research, an empirical research will be conducted. Several startups will be selected and after that the associated websites will be analyzed. Eventually, the empirical research and theoretical research will be combined in order to give an answer to the
research question. This will be elaborated by analyzing the findings of the empirical research with the use of the theories conducted during the theoretical research.
In addition, the current research wants to focus on a more explorative philosophical approach at the same time. This research aims to give – apart from the role of a startup’s website as a potential factor of success – a contribution in what way physical contact will keep playing a major role in our digital world. It will try to unravel if a website of a (successful) startup will lead to physical contact, or mostly have its focus on the digital aspect. Previous research showed that a good balance between digital and physical could contribute to the success of a company (Rigby 2014). This is why this research will have a special focus on the physical aspect as well; it will focus on in what way websites of startups fuse digital and physical in order to make a website important as a factor that contributes to the success of a startup.
Important non-digital factors concerning the success of a startup
In this section the focus will be on non-digital aspects that are important concerning successful establishment of a startup. The most important non-digital factors for successful establishment of startups, which are also stated in the introduction, turned out to be the timing, the team, the idea, the business model, and the funding (Gross 2015). In this section these five most important non-digital factors, concerning a successful startup, will be elaborated. These factors will be elaborated since these non-digital aspects cannot be ignored when answering the research question. The current research has its focus on a digital aspect as a potential factor of success of startups, however non-digital aspects will keep playing a major role.
Timing
The timing of launching an idea on the market turned out to be the most important factor concerning successful establishment of a startup (Gross 2015). An idea could, as stated before, be launched too early, when the customer is not ready for it yet. An idea could also be launched too late, when there are already too many competitors on a specific market. An idea could also be launched perfect. At this point a start-up has the greatest change to survive. The perfect timing determines for 42 percent of the difference between success and failure (Gross 2015).
Airbnb, which is a platform for people to find and rent lodging, is in this case a good example. In the first place nobody thought people would rent out his or her house, and vice versa nobody thought they would rent a house of a stranger. The opposite proved to be the truth. Largely thanks to that this concept was perfectly timed, during the recent economic crisis of 2008. People were willing to earn extra money, and the other way around, people were willing to stay for less money in someone else’s place.
An idea could also, as mentioned, be launched too early. A good example of launching an idea too early was the online streaming website Z.com. Z.com was supposed to be an online entertainment platform. Z.com itself was a good idea, included a sustainable business model, had been raised enough funding, and good companies had joined the company concerning the entertainment aspect. The only important factor that was missing was the timing; the consumers were not ready for it yet. At this point, which was in 2003, it was still too hard to watch video content online. Were it launched a few years later and the timing would have been great. When you look at a similar concept like Netflix however, which started streaming 4 years later, it did become a big success. However, apart from the ‘perfect’ timing, Airbnb and Netflix had to accomplish other important requirements in order to become successful (e.g. team, business model and, funding). Merely a good timing would not be sufficient to succeed.
Using these examples, one will notice that an idea can be good, however the perfect timing is an important factor as well. It is important, when establishing a startup, to pay attention to whether the world is ready for it yet. Or vice versa, whether the world is already satisfied concerning a particular idea.
Team
Another important factor is the team. A good execution of the idea is significantly important for a startup’s success. One would say that the better the team spirit is, the better the idea will be executed. According to Edmond Lau, teamwork is incredibly important (Lau 2013). The outputted quality would be noticeable greater when working effectively as a part of a team.
Another remark about effectiveness is that a misunderstanding would be that the more people in a team, the faster and the better the execution will be. ‘Person-month’ refers to the capacity of well-delivered work one person is able to execute per
month (Lau 2013). A person that is working on a project for twelve moths is called ‘twelve person-moths’. Simply uniting twelve people to complete the project in just a month, would only work in an efficient team including a good team spirit (Lau 2013). Only by having combined a well-thought group of people, where the creation of a team spirit and good collaboration is natural, a team is able to effectively execute an idea in a shorter period of time.
In addition, working in an effective team would lead to a feedback design (Lau 2013). When working in teams, people will be afforded the opportunity to give each other feedback. Therefore, people can learn from each other (Lau 2013). Diversity and pluralism – and thus different ideas – within a team would prevent tunnel visions (Lau 2013). The emerging discussions will lead to a more solid and concrete development of an idea. Also, teammates can motivate each other, which will advance the team spirit (Lau 2013). For instance, when executing good rates during a project working in a team would lead to a better motivation since celebrating together is much more satisfying than celebrating alone (Lau 2013).
According to Gross the ability to adapt occurs to be quite important as well (2015). Adaptability is important when noticing that the customers want something else than the initial idea. Since working in an effective team will systematically lead to a feedback design, adaptability of an idea would be easier as well (Gross 2015).
As one will notice the team, as an additional factor of successful establishment of a startup, is quite important. Executing the idea in a great manner would be accomplished by having an efficient team where collaboration goes naturally, and where having a good spirit between each other is a must. Working in an effective team would eventually lead to better results.
Idea
The idea is a starting point to begin with as a startup (Sutevski 2010). The better the idea is defined, the better the starting point will be, and the easier it will be to further develop the idea. Thus, especially in the initial stage, an idea is an important factor (Sutevski 2010). However, the fact remains that a good starting point – and accordingly a good idea as well – can be felt in every phase of establishment of a startup. Therefore, it is of great importance to precisely define the idea from the beginning (Sutevski 2010).
First, according to Dragen Sutevski, it is important to define the products and services (2010). Thus it has to be declared what product or service a particular startup is going to offer. What the features and benefits are, for instance, has to be established as well.
Second, the target market has to be defined (Sutevski 2010). It has to be clear on which market the startup wants to offer the particular products and services. Therefore, the feature customers have to be defined. For instance, sex, age, income, and ethnicity have to be determined. The cities, regions, and countries where the startup will be launched have to be determined as well (Sutevski 2010).
After having decided what the products and services are, and on which market these products and services will be launched, it is important to define the main competitors (Sutevski 2010). This is an important point to think about, in order to make it easier to differentiate as a particular startup from already existing similar companies.
Another noteworthy point that has to be defined whilst establishing a particular idea is the resources (Sutevski 2010). It has to be defined, for instance, what and how much financial and capital resources are needed. Also has to be defined what materialistic, intellectual, and human resources are needed (Sutevski 2010).
These points of defining an idea are essential in order of successful establishment of startups. These above-mentioned points may be used as guidance. By following these steps, other important points of concern will arise. During this process of defining an idea, eventually all essential points will be mentioned. When this process is well executed, this will finally benefit a startup in all stages.
Business model
A business model is a detailed and implemented plan, generating revenues and profits through operations (Investopedia 2016). One could argue that the business model, as an essential non-digital factor, is the continuation of the above-mentioned ‘idea’. As continuation, a clear structured and well-thought path is important concerning the generated customer revenues. A well-defined structure is therefore of great importance (Investopedia 2016). This includes a well-thought approach concerning an appropriate online platform as well.
The online platform of a company (e.g. a website) can be seen as a business card; it is a good and smart way of presenting its associated product and/or service
(Provider of Usability & Web Design Services 2016). Since we are living in a digital world, a great chance is that the website of a company is the first impression people get (Jackson 2016). An online platform can be seen as a way of public interaction between a company and its customers. This is why the website of a company is of great importance for the customer revenues. One could state that the business model must include how a company’s website has to be executed. How a well functioning website, concerning its users and customers, has to be made, will be elaborated in the section ‘How to make a well functioning website’.
Apart from the customer revenues the model has to generate, the model also includes the costs it incurs (associated with all concerned aspects and functions) (Investopedia 2016). A business-to-business model concerns all transactions between companies, while business-to-consumer models concern selling products and services by the company directly to the customer (Griffin 2016). This often happens via Internet, and thus via online platforms (e.g. websites) (Griffin 2016). Due to technological developments, this is made possible (Potts et al. 2008, p. 169). According to Potts these novel ideas of social networks, which concerns production and consumption, could be seen as a development produced by the creative industries (Potts et al. 2008, p. 171).
In short, a business model defines how a company earns money. This can either be by its customers, as by other companies. A successful startup, eventually, has to make profits (Magretta 2002). This is why a business model as another non-digital factor is essential for successful startups.
Funding
Last, one of the most essential non-digital factors concerning successful establishment of startups is funding (Gross 2015). Funding is the amount of money a company can raise with their idea (Francis 2016). Just as stated by Francis, “funding is the fuel on which business runs” (2016).
A startup with a good idea has the biggest change of raising great investors, and thus a greater amount of money to realize a particular idea with. Some startups receive intense amounts of funding, while others do not (Gross 2015). For those that do not, luckily, other ways of funding can be used (Francis 2016). This concerns most of the time existing capital. However, startups initially do not have much capital, since the company is not completely established yet.
Another way of raising money is crowd funding. Crowd funding is a platform (usually online) where people can donate small (or greater) amounts of money; this can result in great amounts of funding (Entrepreneur 2016). A good example of a crowd-funding platform is Kickstarter.com.
In order to reach sufficient amounts of money to establish a successful startup, it is common to make use of a combination of different ways of funding (Francis 2016). The specific ways of funding used, are defined in the business model, which is explained in the previous section.
Summary
These five above mentioned and elaborated aspects – timing, team, idea, business model, and funding – appear to be the most essential non-digital factors concerning successful establishment of a startup (Gross 2015). These essential non-digital aspects will be included when answering the question in what way a website of a startup, as a ‘digital’ factor, is a factor of success as well.
How to make a well functioning website
A website can be seen as “a window of how your organization is run” (Provider of Usability & Web Design Services 2016). When someone wants to get acquainted with a company, as stated before, a great chance is that the website will be the first impression someone gets of the company (Jackson 2016). The more professional and sophisticated the website is, the greater chance a customer wants to represent him or herself with the products and/or the services the startup offers (Jackson 2016).
This section will give an answer to the question what important aspects are concerning a well functioning website. This thesis will make use of three main categories which will determine a proper website. These three main categories are the functionality, the usability and the design of a website. During this research these categories will be seen as three essential main requirements concerning a well-functioning website (Laurinavicius 2015). In this section these three selected main categories will be declared and elaborated.
Functionality
The functionality of a website is the purpose it has to fulfill (Barnes 2016). For startups this mostly concerns fulfilling the services and representing the products it
has to offer in a clear manner. The quality of the functionality of a specific website is determined by how clear the services and products will be represented (Barnes 2016). It is important that all steps that have to be made, in order to fulfill the purpose of a website, will be clear and intuitive.
When analyzing the websites of the selected startups for the current research (which will be further elaborated in the chapter ‘Methodology’), all steps that have to be made will be examined and described. It will be analyzed how a customer will achieve the purpose of the website. This process of ‘communication’ between a customer and a website is called the ‘interaction design’ (Barnes 2016). The interaction design determines how usable and user friendly the website is. By designing a clear structure (by using a structured layout) and an appropriate interface, a particular website creates a proper system of interactions. The better the interaction – and the clearer the steps are that have to be taken – the better the website has achieved its purpose. This also indicates how the three categories functionality, usability, and design are related.
In order to pursue the purpose of the website, examples are that a consumer has to create an account and has to sign up, has to make an online booking, is able to comment in a comment section, or has to subscribe for a newsletter for example. Since this research is aimed to have a focus on in what way digital or virtual contact leads to physical contact, this will be investigated as well. Therefore, it will be analyzed whether the website of a specific startup leads to physical contact. This could be, for instance, when a customer is supposed to purchase a product or a service in a physical store. It is expected that the more interactive a website of a startup is, the greater the physical contact will be. On the contrary, it is expected that the more solely informative a website is, the lesser the physical contact will be.
Several principles will be taken into account when analyzing the functionality of the concerned websites. First, it is important to determine the goal of the website in order to analyze to what extent the purpose is pursued (Wax 2008). Second, the target group will be determined. This is an important consideration since the design process will be different per audience (Wax 2008). With respect to elderly, for instance, a product will probably be presented differently than to younger people. Pursuing the goal of a website will be accomplished in different ways. Third, it will be analyzed to what extent the product or service the website offers is clear. The better the design of the website is structured, the easier it is for the target audience to understand how to
use the concerned product or service (Wax 2008). Fourth, it will be analyzed to what extent the user will engage with the website. Here it will be determined whether the customer is able to purchase a product or service online, or whether the customer is, for example, supposed to sign up in order to reach the goal of the website. Last, it will be determined to what extent the goal of the website is reached.
Every step of a particular process that, in all likelihood, has to be made will be described in the empirical research section. All aspects of interaction will be analyzed. When the website (or parts of it) is pure informative, it will be mentioned as well. In short, the category ‘functionality’ investigates to what extent the websites of the specific selected startups pursue their purpose and what steps have to be taken. Usability
The usability of a website is of great importance since a customer in a split of a seconded has decided to stay on the web page or not (De Schrijver 2016). When the website is user friendly, and a customer has a clear overview of steps that have to be taken, a customer feels more engaged and is more willing to stay on the website. As a result, a greater chance of purchase of a specific product or service will arise. This is why a positive user experience – and thus a high intensity of usability – is quite important.
During the analysis of a website’s usability it will be studied how this will be achieved. It will be analyzed how the content on the website is represented and whether the steps that have to be made through the customer, in order to obtain the product or service, are straight forward, uncomplicated, and intuitive. This will be conducted with the use of the interaction design of a website. During the process of creating a good interaction design, it is important to understand how users interact, and having knowledge of their patterns and behavior is of high priority (Friedman 2008). Most people, for instance, do not read texts on webpages; people rather scan (Friedman 2008). This is one of the main reasons why it is important to have a clear structured, and user friendly website (Friedman 2008).
Furthermore, people look for interesting information on a website. They click on a link when they find something interesting (Friedman 2008). When these kind of considerations are taking into account, it will be much easier to create a website with a high level of usability. Since people follow their intuition on a website – and since this could be different for each person – the focus will not only be on whether the
main purpose of the website will be achieved. It will be analyzed how the homepage, including other sub pages as well, are structured. This could be, for instance, by using a clear structured menu bar, and layout. The use of boxes or divisions (in order to create a clear overview) would also contribute to a structured website.
Every step that can be made on the website will be analyzed once again in order to examine the usability and user satisfaction. When analyzing the concerned websites, several principles are taken into account. First, it will be analyzed to what extent the navigation on the website is obvious and easy to understand. The structure has to be intuitive and self-explanatory (Friedman 2008). Second, it will be analyzed to what extent the user requirements are minimal and simple. The less action is expected from the customer, the greater chance someone will not lose his or her attention (Friedman 2008). Also, the less barriers there are for a customer, the more user friendly a website will be (Friedman 2008). Third, it will be analyzed how the attention of the customer will be attracted. A well structured website will contribute to the usability of a website (Friedman 2008). Fourth, it will be analyzed whether the content of the website is clear and effective. When people feel comfortable with the provided information, it will influence their interaction on the website (Friedman 2008). Last, it will be analyzed how the information on the screen is displayed. For the customer it is easier to perceive important requirements better when the information on the screen is reduced (Friedman 2008). The use of divisions, like already stated, will contribute to a clear and effective website.
In short, during investigating a website’s usability, it will be systematically analyzed and described to what extent the purpose of the website easily and intuitively will be completed by the customer.
Design
The design of a website contributes to a good user experience as well (Hendricks 2015). Since each organization has a website nowadays, it is really important to focus on the web design in order to distinguish as a company by having the best website. As stated, the more professional and sophisticated the website is, the more a customer wants to represent him or herself with its associated product and/or service (Jackson 2016). Previous research has shown that the design elements of a website were perceived as more important than the content of the website (Hendricks 2015).
During the analysis of the website’s design a focus will be on five basic principles. The first principle is the color use. Well-chosen colors can contribute to a clear, well structured, and effective website (Friedman 2008). Vibrant colors may help to attract someone’s attention. Although, using too much colors will make a website unclear (Friedman 2008). A website with a moderate number of colors and a basic background will make it easier to attract customers’ attention to its purpose. A customer will focus on the important things highlighted on the website (Friedman 2008). For this principle it will be analyzed how the concerned websites make use of colors in order to structure the website and attract the customers’ attention to its purpose.
The second principle is the web design’s balance. A balanced layout is easier to understand and gives the user of the website a feeling of stability (Friedman 2008). Using a well-structured layout will give the consumer a good overview, and will highlight what is more important (Friedman 2008). By using, for example, boxes and divisions a consumer will intuitively make the required steps in order to purchase the concerned product and/or service (Friedman 2008).
Image 1. An example of a balanced and clear layout with the use of divisions
Above example (Image 1.) demonstrates how simplicity leads to a balanced overview. The use of boxes (and the moderate number of colors) creates a visual and structured overview, which displays the website’s goal very well. For this principle it will be analyzed in what way the website’s design creates a balance in order to give the consumer a sense of stability. Visual harmony of a website’s design would stimulate pursuing the concerned goal (Friedman 2008).
The third principle strives for clarity. First, as already stated, a structured layout is of high priority (Friedman 2008). In addition, it is of highest priority that the needed and provided information is clearly presented (Friedman 2008). Misunderstandings should be prevented. The content and information have to be presented in plain texts (Friedman 2008). The presented information has to be specific, and use of long sentences has to be avoided. During the empirical research it will be analyzed to what extent the provided information is simple, clear and effective.
The fourth principle concerns the user’s ‘need’ of a certain product or service. In order to purchase a product or service it is important to address the importance of its use (Friedman 2008). During analyzing the startups’ websites, it will be analyzed to what extent the customers’ needs will be addressed and whether the customers will be provided with sufficient information in order to navigate intuitively on the concerned websites.
The fifth principle concerns an effective marketing design (Friedman 2008). This will be analyzed per website using the AIDAS-marketing model. AIDAS stands for ‘Awareness’, ‘Interest’, ‘Desire’, ‘Action’, and ‘Satisfaction’ (Friedman 2008). For the ‘awareness’ it will be analyzed to what extent and in what way the customers’ attention will be attracted. This could be, for instance, by a well-thought color use, use of images and well-framed headings. The use of an overall structured design by, for example, using divisions will also contribute to creating awareness. For ‘interest’ it will be analyzed in what way the customers’ interest will be raised by demonstrating features, advantages, and benefits on the website. For ‘desire’ it will be analyzed to what extent customers will be convinced, by the website, to purchase the product or service. For ‘action’ it will be analyzed to what extent the customer will purchase the concerned product or service effectively. Finally, for ‘satisfaction’ it will be estimated to what extent the website leads to repeat customers. This AIDAS-model is important in order to maintain and gain customers. It is important that designers make sure that the website provides enough information and that the content is clear (Friedman 2008).
The specific websites with its associated web designs will be systematically described during the empirical research. This will be conducted since a well-structured web design contributes to the user experience and usability as well (Hendricks 2015). In addition, it will be analyzed in what way the website looks
professional and sophisticated. The empirical research can be found in the ‘Results’ section.
These above explained three main categories – with its associated aspects – are going to be used during the current research when analyzing the websites of the selected startups. By analyzing a website systematically, using explained and declared categories, the analysis of a specific website will be fully covered. The research and the selected startups will be further explained and declared in the next chapter.
Methodology
Now the required theoretical background information is provided in the Introduction and the Literature review, the current research will continue by conducting empirical research. During the empirical part, this research is eventually aimed to give a contribution to whether digital as a factor could play a potential role in the success of a startup. Like already stated, the focus will be on analyzing websites of several selected startups.
After thorough research on the Internet, seven different important startup sectors were selected. The seven selected sectors are Travel, Food, Health care, Market places, Education, Fin-Tech, and Cleantech. At the time of this research these sectors have been identified as the most popular sectors to establish a startup in. According to different sources, these sectors proved to be a sufficient selection regarding the current research (Laumeister 2014; Novoa 2016 and Tunguz 2016).
After this selection of popular startup sectors, for each sector two startups are selected. One startup of each sector is a successful startup, and one startup of each sector is a failed startup. For each sector a successful- and a failed startup are chosen in order to make a (potential) comparison between the website of a successful startup and a failed startup. How a ‘failed’ or ‘successful’ startup will be defined, will be briefly elaborated. A ‘successful’ startup will be defined as a startup that has reached their set goals and possibly even outperformed their initial expectations. A ‘failed’ startup will of course have the opposite definition. Through using a comparable design, the websites of the relevant startups will be analyzed.
The startups itself are, just as mentioned before, selected on the base of its potency of growth. This concerns startups with the ability of an increasing number of
employees, offices, revenues, profits, valid shares and acquisition. Small businesses, which do not have the goal of enlargement, will be excluded. In addition startups with innovative purposes will be selected. Also, the current research is aimed to exclude companies that exist (or have existed) for over ten years. Lastly, since the focus of this research is on a digital aspect (through analyzing websites), startups are selected with a certain digital focus. These considerations were included during selecting the seven sectors of popular startups.
For the sector ‘travel’ the company TravelBird is selected as a successful startup. The company iGottaGuide is selected as a failed startup. For the sector ‘food’ the company Deliveroo is selected as a successful startup. The company Dine In is selected as a failed startup. For the sector ‘health care’ the company FocusCura is selected as a successful startup. The company HealthSpot is selected as a failed startup. For the sector ‘market places’ the company Fiverr is selected as a successful startup. The company Boo.com is selected as a failed startup. For the sector ‘education’ the company Nimbles is selected as a successful startup. The company Tutorspree is selected as a failed startup. For the sector ‘Fin-Tech’ the company TansferWise is selected as a successful startup. The company Pay by Touch is selected as a failed startup. Lastly, for the sector ‘cleantech’ the company Bidgely is selected as a successful startup. The company Solyndra is selected as a failed startup. Each selected startup will be defined in its associated introduction during the results of the empirical work. Also, it will be declared why the concerned startup is viewed as either ‘successful’ or ‘failed’. This can be found in the ‘Results’ section. However, during the research appeared that similar analyses emerged. Nevertheless each sector is thoroughly analyzed. Although, in order to avoid repetition, the last two sectors are not included in the Results section. Even though, all used materials and resources used during the research can be found in the Appendix and Bibliography of the current research.
Sector Startup Successful/failed Reason of success or failure
Travel: TravelBird (2010)
Successful Timing, idea, and funding (O’Neill 2015).
iGottaGuide (2011-2012)
Failed Timing, and
business model (Petri 2012).
Food: Deliveroo (2013)
Successful Timing, idea, business model, and funding (Williams-Grut 2015). Dine In (2010-2015)
Failed Business model,
and timing (O’Hear 2015).
Health care: FocusCura eHealth (2013)
Successful Timing, team, and idea (FocusCura 2013).
HealthSpot (2010-2015)
Failed Business model,
and timing (CB insights 2016) (Versel 2016).
Market places: Fiverr (2010)
Successful Timing, idea, and business model (Fiverr 2010). Boo.com
(1998-2000)
Failed Timing (Complex
2013) (Chaffey 2014).
Education: Nimbles (2015)
Successful Timing, and idea (Nimbles 2016). Tutorspree
(2010-2013)
Failed Timing, and
business model (CB insights 2016).
Fin-Tech: TransferWise (2011)
Successful Timing, idea, and funding (Price 2015).
(2002-2008) (Complex 2013).
Cleantech: Bidgely (2011)
Successful Timing, idea, and funding
(Bloomberg 2016). Solyndra
(2005-2011)
Failed Business model,
and funding (Stephens and Leonning 2011). Table 1. Overview of selected startups
The websites of these selected startups will be analyzed with the use of the three main categories functionality, usability and design elaborated in the section ‘How to make a well functioning website’. Per sector the websites of each startup will be pragmatically analyzed in a compact manner by using these mentioned categories. On the basis of these produced theories (and the associated described aspects) it is attempted to analyze the websites as objective as possible. Through using the same terms as systematically described and explained in the section ‘How to make a well functioning website’, this research has attempted to be objective in a pragmatic manner.
When analyzing each sector, first a brief introduction concerning the sector will be given. Per startup, a brief introduction will be given as well. Afterwards, the website of the relevant startup will be analyzed systematically with the use of the declared categories. The same order of categories, explained in ‘How to make a well functioning website’, will be maintained when analyzing one specific website of a certain startup. After analyzing the successful startup of one specific sector, the failed startup will be analyzed using the same systematic approach. When the pair of websites both have been analyzed a section ‘summary’ will follow. A first impression concerning a potential difference between the website of a successful startup and a failed startup will be given. To avoid repetition, the first sector (which is the travel sector) will be elaborated in more depth. The other selected sectors will be analyzed more briefly, and the sectors Fin-Tech and Cleantech will not, as already stated, be included in the results section. Also, user experiences of the concerned websites are not been found. This is why the current research focuses on a systematic and pragmatic approach when analyzing the websites.
In some cases, the website of a failed startup was not on the Internet anymore. In these cases, research has been done to collect sufficient screenshots of a website, used by a specific startup when it was still on the Internet. When it was the case that not enough screenshots were found in order to analyze the website by means of its functionality, usability and design, the failed startup has been excluded from the current research. Eventually it succeeded to select failed startups with sufficient content in order to analyze the websites. In some cases, the website was still online. In other cases, sufficient screenshots of the websites have been found when, for example, searching in Google Images with the use of the name of one specific website and in addition using the word ‘website’. When enough images were found, which means that all steps that could have been made on the website could have been determined (in order to analyze its functionality and usability), screenshots of each website were collected. For each selected failed startup folders have been made with the sufficient images in order to analyze the websites of the failed startups. As a result, the websites of the failed startups could have been analyzed pragmatically. Also, in some cases introduction videos were found on YouTube.
After analyzing each sector with its associated successful- and failed startup systematically, the relevant websites will be discussed overall. This will be elaborated in the ‘conclusion and discussion’ section. In this section the theoretical research will be used to discuss the empirical results. First, because the specific used categories when analyzing the websites are explained in this part of the research. Second, the non-digital factors concerning the success of startups are elaborated in this theoretical part as well. As stated, these non-digital factors will not be ignored when answering the question in what way an online platform, in the sense of a website, is needed to succeed as a startup in our current society. This is done due to the fact that multiple factors together will lead to success (or failure).
When all relevant requirements are critically discussed, a final answer will be given to the research question. It will be concluded whether the ‘digital aspect’ (i.e. website) could be seen as a factor of successful establishment of startups. Which aspects of such a platform would possibly contribute most to success will be elaborated as well.
Results
Travel
In our digital world, online travel agencies are popular since it is more convenient to make an online booking, instead of physically going to a travel agency (Nasr 2015). This is why it is so attractive as a startup to create an online platform in the ‘travel’ sector. Both, TravelBird and iGottaGuide are startups selected within the travel sector. However, the concept of the startups is not quite the same. During the current section the websites will be pragmatically analyzed with the use of the functionality, usability, and the design. When answering the research question though, the indicated ‘non-digital’ factors (e.g. the idea) will not be ignored.
Successful Startup: TravelBird
TravelBird is an online travel agency and is chosen as a successful startup since the company exists for over five years (Table 1.). In addition the company has already more than 670 employees in 2016, and the value of the company is during this time estimated to be 156 million in euros (van Noort 2015). This means that TravelBird has a potential ability of growth and can be analyzed as a successful startup.
Functionality
The goal of the TravelBird website is to gain customers who book their vacation, city trip, or day trip on their website. People can make a booking per two, and for some offers children can be included as well. This has as a result that the target group of TravelBird most of the times is couples, and sometimes families. If it is the case that customers want to make a booking for, for instance, six people, the customers are supposed to make the booking three times.
Since the website gives a clear overview of all available offers using different divisions, it might be clear what the purpose is, and what customers can purchase on the website. Assumable is that people are able to make an online booking easily by clicking on a certain offer. When clicked on a specific offer, all the needed information is clearly provided. When someone is interested, he or she can click on a big yellow button ‘View Availability’. After this, an overview of all available dates appears on the screen. The available dates are ‘green’, and dates that are not available are ‘red’. If a person has a particular date in mind, he or she can click on that date.
After clicking on the concerned date, the following steps might be clear and will probably be made intuitively. The customer has to indicate his or her preferences and has to complete the details of the main booker. A first payment during this process has to be completed as well. When all steps are accomplished, the customer will get an email that says that he or she will be contacted if further steps have to be taken. This is all automated and is executed via email. The customer can make an online booking easily, without creating an account or other requirements. If a customer has any questions, he or she is referred to call the customer service. Another opportunity is that he or she can send an email. Also, a customer is able to chat with a customer agent. This can either be executed via Facebook chat, or the chat options of Google+. The website of TravelBird would not have led to physical contact. However, just as mentioned, a customer is able to contact a customer agent (by phone, email, or chat).
Assumable is that the goal of the website is pursued because a customer might make an online booking easily and intuitively. However, the fact remains, when the offer does not concern a ‘family booking’, and when customers want to make a booking for more than two persons, that customers have to make multiple bookings on the website.
Usability
Since the steps to make a booking can be made intuitively, the navigation on the TravelBird website is probably easy to understand. The requirements are minimal since the customer is not supposed to create an account or has to fulfill other requirements. By contrast, the customer can click on an appealing offer and assumable is that he or she can book easily with a couple of steps.
When clicked on a particular offer, all needed information will be provided schematically. This contributes to that the content on the website is clear and effective. Although, like already stated, this information is only provided when a customer has clicked on that particular offer. When a person has not clicked on an offer, all available offers are presented in a clear overview using divisions. This contributes to a reduction of unnecessary information on the screen. By using a well-structured layout and using divisions with appealing images of available offers, which are divided among different headings (e.g. ‘City Breaks’, ‘Family Holidays’, and ‘Sun Holidays’), people’s attention is attracted purposefully. Due to this, the interface of TravelBird’s website is quite user friendly. Except for that a booking has to be made
multiple times when it concerns an offer for two persons, and when customers, at the same time, want to book for a group.
To conclude, the purpose of the website might be completed intuitively. In addition, by use of a menu bar a customer is able to visit sub pages. This concerns pages called ‘Help’, and ‘Contact’. These sub pages are clearly created in order to help the customer. Also, a customer is able to ‘search’ by use of key terms on the website. Lastly, a customer can subscribe him or herself for the newsletter.
Design Color use
TravelBird’s website makes use of a moderate number of colors, which are orange, yellow and blue. These three colors are the main colors of the website. The background of the website is white. The combination of a number of chosen vibrant colors and a basic background, makes the website clear and well structured (Friedman 2008). For important steps that have to be taken on the website, the website uses one of the main colors. For example, for the button ‘Book now’ the website uses the color yellow. Another example is that the website uses the color orange for special offers and discounts in order to attract customers’ attention. The chosen colors are the colors of TravelBird’s logo. This is a black bird, with an orange beak, orange feet, and a yellow and blue wing.
Web design’s balance
The website of TravelBird makes use of a well-structured layout. As stated, the website uses different divisions to give a clear overview of all the offers available.
The example above (Image 2.) shows that the website makes use of a balanced layout to give a good overview and to make the website easy to understand (Friedman 2008). Also, the use of these clear and structured boxes contributes to a feeling of stability for customers (Friedman 2008).
Clarity
All information on the website of TravelBird is clearly presented. The needed and provided information is presented using different headings, and when necessary, important and useful information is given using bullet points. The information is provided in clear texts, using precise and compact sentences. The information on the TravelBird website is simple, clear, and provided effectively, which leads to clarity. User’s ‘need’
For its customers, TravelBird uses slogans in order to address their needs of ‘taking a break’ and ‘going on vacation’. For instance, in their slogans words as ‘beautiful’, ‘relaxing’, ‘peaceful’, and ‘restful’ are founded. Customers might intuitively press on the offer, where after the following steps easily can be made.
AIDAS-marketing model
On the website awareness is created by attracting its customers attention by a combination of several factors. This concerns a well thought vibrant color use on the website. Three main colors (which are orange, yellow and blue) create an overview and a certain form of stability. In addition, special offers and discounts are, for example, presented in orange, which is one of the main colors. A balance that is created on the website with the use of different divisions contributes to awareness as well. These different divisions each include their own offer. Each offer has its own appealing image. Also, attractive and interesting slogans contribute to attracting customers’ attention. Another noteworthy factor that contributes to creating awareness is a presented timer. This timer counts down till when a certain offer is available.
Apart from awareness that is created by using this combination of factors, the website creates a professional and sophisticated appearance as well. Customers’ interest is created by the use of the appealing images and attractive slogans. A combination of these images, slogans, and the timer, should raise customers’ desire.
This will contribute to convincing customers to make a booking. The easy clickable, and appealing offer would contribute the most to what extent customers actually take action. Also the subsequent steps in order to make a booking complete are probably made easily and intuitively. This should contribute to customers’ satisfaction. How successful the booked trip was, would of course contribute even more to their satisfaction. However, the multiple bookings that have to be made in some cases could reduce customers’ satisfaction.
Failed Startup: iGottaGuide
iGottaGuide is selected as a failed startup, since the company did not exist for over one year (Table 1.). iGottaGuide was supposed to be an online platform where tourists were able to connect themselves with tour guides. Both, professional- as amateur tour guides, were able to be included in the database of the platform (CrunchBase). For the associated website sufficient images were found in order to analyze the functionality, usability, and the design. Also, a demonstration video was found on YouTube (YouTube iGottaGuide).
Functionality
The goal of the website was that people could book a tour guide. Furthermore, the goal was that people would have joined the database of the platform in order to be able to deliver sufficient tour guides concerning its customers. The target group were people who were willing to book a tour guide when they visited a certain place. Additionally, the target group were people who knew a lot of a certain place and were willing to help other people by giving them a tour to earn money.
The purpose of the website was immediately clear since a user was able to indicate directly on the homepage where he or she wanted to go, or what he or she wanted to do. Also, a short explanation about the platform was given on the homepage. Users were able to watch a video about the goal of iGottaGuide on this page as well. In addition, at the bottom of the homepage people were able to register themselves as a guide by clicking on a button ‘Click here’. Above the button was a short explanation that said ‘Want to be a guide?’. When only the button had indicated its purpose, the provided information on the screen would in this case have been
reduced and would have made it more simple and clear (Friedman 2008). People would have intuitively clicked on this button.
To what extent users would have been engaged with the platform, depended on whether the user would have been a tour guide, or whether the user would have been a tourist. If the user was a customer, he or she could have indicated easily what he or she wanted to do, or where he or she wanted to go. If the user was a tour guide, then he or she had to register him- or herself. When all these steps were completed, the goal of the website would have been reached. At this point a digital aspect would have led to physical contact. Both types of users of iGottaGuide’s platform, which are tourists and tour guides, were supposed to meet at a physical place. Also, the customer would have been able to contact the concerned tour guide via chat on the website.
Usability
Starting at the homepage, assumable is that the navigation on the website of iGottaGuide went intuitively (by first indicating where someone wanted to go, or what someone wanted to do).
After indicating the concerned preferences, and have pressed the button ‘Go’, the results of different possible tours were provided. A user was able to press on one of the results. After this the user was able to read through the detailed descriptions. When the user wanted to purchase the concerned service, he or she was able to press on a button ‘Take tour’. The content became unstructured though, due to too much information on the screen. Subsequent steps became unclear, which can be considered as not user-friendly (in the next section ‘Design’ this will be illustrated using examples).
However, the requirements were simple when it concerned customers who wanted to take a tour. For instance, people were not supposed to make an account in order to purchase the tour guide service. During the process, customers were supposed to make an online payment. When it concerned people who wanted to be a tour guide, one was supposed to sign up and to create an account. However, this is a logical result since administration requirements concerning the database were necessary.
Overall, the purpose of the website would have been achieved (for both the tourists and the tour guides), although further steps after the homepage became
unclear. Due to this, fluent navigation on the website could have been made more difficult. This might have reduced the fact that customers were not able to pursue the goal of the website intuitively.
Design Color use
The main color of iGottaGuide’s website was blue. This color was presented in three different types of blue, which was from light blue, to darker blue, to dark blue. The background of the website was light blue. The information on the home page was provided using white letters.
Image 3. Website iGottaGuide
Analyzing the above example (Image 3.), one will notice that the white letters used on the blue background were hardly noticeable. The steps that had to be taken in order to purchase the concerned service were not obvious. The color combination might not have attracted attention optimally, which could have cost effectiveness of the provided information. When several vibrant colors were chosen, it might be that attracting customers’ attention would have been improved.
Web design’s balance
Also one could state that the design’s structure was not balanced. A feeling of stability was not created, because a lot of different white divisions were used on a blue background.
Image 4. Website iGottaGuide
Using the above example (Image 4.), one will notice that a lot of information was presented on one screen. This screen shows information provided when a user had searched on the website for a guide. The use of different divisions would in this case not give a clear overview of all provided information. This resulted in a user interface that was not ‘clean’. Probably, a balanced structure would have been created when the information on the screen had been reduced. Information could have become available by using, for instance, clickable words, sentences, or images.
Clarity
As already stated, the structure of the website of iGottaGuide was not structured optimally. A consequence might have been that the provided information was not clear. Image 5 demonstrates as well that the content on the screen was not presented using a well-structured overview.
The use of unbalanced divisions, each containing a lot of information, does not help the user to understand the information in a clear manner. Using simple, and minimal information would have improved the clarity. Image 3 demonstrates however, that the website’s homepage does clearly and simply indicate what the customer is supposed to do in order to purchase the concerned service. This is accomplished due to the use of short sentences (e.g. “Where do you want to go”, and “What do you want to do”), and reduced information on the screen.
User’s ‘need’
The homepage of iGottaGuide’s website emphasis the users’ need of ‘authentic’ experiences, which people will get with a local guide (Image 3.). On this page, a customer was able to intuitively indicate where he or she wanted to go, or what he or she wanted to do (Image 3.). At this point sufficient information was provided in a clear manner in order to navigate intuitively to the next step. After the first step, however, the screen provided the user with too much information (e.g. Image 4 & 5). AIDAS-marketing model
The customer’s awareness was probably not fully reached, because generally too much information was provided on the screen. The information was overall not well structured, and the use of divisions was not symmetrically. This does not contribute to a professional and sophisticated website. The customer’s interest is attempted to be triggered on the homepage by advertising a local and authentic experience (Image 3.). Apart from this, it could be that users would have been distracted when taking further steps because too much information appeared on the screen (Image 4 & 5). This could have caused less desire from customers, and could have influenced how much customers would have been convinced to make use of the service and would have came into action. Customer satisfaction would probably have been reduced due to this.
Summary
Based on the performed analyses for the sector ‘travel’, some first noteworthy impressions are observed. A first potential difference between a website of a successful- and a failed startup is the color use. The website of the successful startup
uses a number of vibrant colors on a basic background, which could contribute to attracting the attention of users. By contrast, the failed startup used a blue background, and white letters were used to provide information. Also, white divisions were used to provide and display information (Image 4 & 5). It could be that in this case the attention of customers was not attracted sufficiently. Second, a difference is noticed in the structure of the two websites. The site of the successful startup was well structured using different divisions in a balanced manner. On the contrary, the website of the failed startup (except for the homepage) used different divisions, which were not presented symmetrically. Lastly, too much information was provided on the website of the failed startup which did not contribute in keeping the website clear and structured.
Food
The food delivery market is a major sector that is estimated to be a 70 billion dollar market (Kim 2015). In approximately 2021 it is expected that the online ordering will be greater than the offline ordering (i.e. to make a phone call to order food) (Kim 2015). However, since the ability of growth of online food delivery services the fact remains that the online food sector is interesting to investigate.
Successful Startup: Deliveroo
Deliveroo is an online food delivery company and is selected as a successful startup since its ability of growth. The company is founded in 2013 (Table 1.), however the value of the company in 2015 was already estimated to be 100 million dollars (Wikipedia 2016). Furthermore, in 2016 the company has already been launched in twelve countries all over the world (Wikipedia 2016).
Functionality
The goal of the Deliveroo website is that customers can order food from their favorite local restaurant that normally does not deliver food. Since Deliveroo tended to join the trend of local and healthy food, the target group seems to be young adults who have a focus on local, organic, and healthy food.
On the homepage one is able to indicate his or her zip code. The homepage says ‘The food you love, delivered to your door’. By indicating your zip code, and
clicking on a big turquoise button ‘Find food’, all cooperating local restaurants appear on the screen. All restaurants are represented clearly by using different divisions. Each division, both next to each other and beneath each other, indicates a restaurant by using an appealing photo and the name of the restaurant. Through the use of a clear and structured design, and reduced information on the screen, the goal of the website might be obvious.
After having clicked on the button ‘Find food’, one is able to click on his or her favorite local restaurant, where after a clear menu appears. People can click on what they want to order, and add everything to the order as wanted. When the order is complete, someone might intuitively click on a big turquoise button ‘Checkout’ right on the screen. The order is completed when the customer has paid. For the first time customers make an order, an account needs to be created. Due to this, next orders will be easier since a customer only is required to fill in his or her username and password.
Ordering food on this platform will lead to physical contact since delivery employees are supposed to get the food at the chosen restaurant, where after he or she will deliver the food to the customer.
Usability
As explained in the previous section, the navigation on the website might be easy to understand. The website is basically an ‘one-pager’ where the user can scroll down to obtain all the necessary information. The user might be able to make the required steps intuitively, which will contribute to a good user experience (Friedman 2008). The user requirements are minimal and simple. The first time someone orders food on the Deliveroo website, as stated, he or she is supposed to create an account. This makes sense since the food has to be delivered at the customer’s address. When an account is created, the easier a next order will be since the customer only has to fill in his or her username and password. This will eventually increase user satisfaction. Also the well-structured design, which will contribute to that the required steps can be made intuitively, will attract customers’ attention positively. This will increase user satisfaction as well. The content on the website is clear and effective which will contribute to a good interaction between the user and the website. The reduced information on the screen and the use of divisions contribute to that the goal of the website will be pursued easily.
