Startup Cemetery

A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

Alikolo

Online marketplace organization

General Information
Category
e-Commerce
Country
Indonesia
Started
In 2014
Business Failure
Business Outcome
Shut Down
Closed
By 2015
Cause of Failure
Lack of Experience
Founders & Employees
Number of Founders
One
Name of Founders
Danny Taniwan
Number of Employees
Between 1 And 10
Funding
Number of Funding Rounds
1
Total Funding Amount
$100K
Number of Investors
1
Description

Alikolo was an eMarketplace organization started in 2014, in Indonesia. The organization's goal was to address purchasers' issues from an online stage. Alikolo’s model was such that sellers could list their product in the e-marketplace and buyers could access the sites to make their purchases. Alikolo would then ensure that the items purchased from the online stage would be delivered to their remote destinations. Initially, they incentivized the delivery by offering free shipping but when the shipping promotion stopped, their sales dropped significantly.

Cause of Failure

As a matter of first importance, the author, Taniwan did not have a clear vision of the quality of the organization in connection to its rivals and that might be because its eMarketplace idea lacked uniqueness. This is highlighted by Taniwan inability to give a reason for which a customer should purchase at Alikolo specifically instead of purchasing from their rivals.

One of the significant slip-ups that Alikolo made was to offer the greater part of the organization’s stake to speculators. This put the founder as a minority investor and limited its involvement and influence in some aspects of the business. This kind of business structure, where the CEO becomes a minority investor frightened off other potential speculators and therefore, Alikolo failed to secure a second round of financing. This eventually prompted absence of adequate assets that could have been used to scale up the organization and assemble an aggressive and more successful platform. Ultimately, the major obstacles that Alikolo faced were internal since it had its leadership lacked experience in both designing and running an organization.

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