How dotcoms can be winners: A customer dissatisfaction approach to analysis

The rise and fall of a number of dotcoms has also severely impacted the VC industry, but there does not seem to have been any in-depth study to understand the economic logic of dotcom businesses. Using the dotcom as a context, this paper argues that the attractiveness of an entrepreneurial opportunity depends on the extent to which it eliminates customer dissatisfaction with the existing alternatives. Building on this logic, the paper examines how dotcoms can work towards elimination of customer dissatisfaction. A close analysis of these businesses shows that many of them did not have a sound business model and that many of their assumptions were questionable. This paper attempts to provide an explanation of dotcom failures using newly developed concepts such as mature latent need, zero customer dissatisfaction and the customer dissatisfaction chain. It argues that many firms failed because they did not establish whether there existed any customer dissatisfaction and hence the opportunity for a dotcom firm to eliminate this dissatisfaction. Furthermore, when they focused on eliminating dissatisfaction at one point firms did not see their capabilities to provide overall positive value. The paper concludes that dotcoms and in turn VCs can be real winners if they apply the logic and concepts discussed here.