Know These 3 Things to Make Money in the On-demand Economy
By now, you’ve probably heard about Uber? A little-to-no-value company transformed itself into a $51-billion on-demand economy behemoth in some 6 years, disrupting the whole taxicab industry and propelling a revolution in the way we buy, spend, and use.
Back in 2009, no one had any idea about Uber. Smartphones and apps were already there, but the ecosystem to properly connect services and consumers was a bit raw. The new generation, meanwhile, strived for more and wanted to purchase anything anytime with a tap on the screen.
The change was inevitable. The advance of technology, as well as the new generation’s urge for immediate gratification of every need, heralded a new era — the era of on-demand economy — where customers get immediate access to products and services by means of technology.
The on-demand hyper-growth is upon us. In the next 5 to 20 years most of the people will be able to get anything within a 5 to 60-minute window. -Gary Vaynerchuk
1. What is the On-Demand economy?
The on-demand economy (also known as access economy or shared economy) is a business model in which companies fulfill consumer demand on the basis of immediate access to goods and services. The model is mostly driven by technology companies that create efficient digital platforms to couple them with and improve existing infrastructure.
Basically, the whole concept of on-demand economy is based on the idea that access is better than ownership. You just rent a thing temporarily rather than buy it permanently because it’s inexpensive and convenient. You hire freelancers for short-term projects instead of full-time workers or contractors.
Renting is also a driving concept of the on-demand model. Suppliers offer goods for rent, while consumers need to rent. Both find it more desirable than owning simply because it entails not only using things efficiently but also interacting with people. A new generation values social interactions and experiences more than owning things.
Yet, not only access vs. ownership made the on-demand business model so successful. The model implies that costs should always go down, while access to products and services become more efficient, convenient, and intuitive. The competition is so severe that companies are forced to improve their operations and value chains basically on a daily basis.
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As a result, consumers get access to quality products and services at a competitive price. It guarantees their satisfaction, yet still, leaves them leftover money to spend more. It accelerates spending and grows the economy.
By Nairametrics.
2. Are we in an on-demand economy bubble?
The one-demand economy is here to stay. It’s proven to not be just a bubble or a short-term trend. But why? How come that dozens of industries got disrupted by Uber and its clones in just several years?
The answer is simple: the on-demand model fulfills new generation’s surge for immediate gratification. In a society with a fast-paced life and constant striving for better and faster goods and services, this business model can’t help being a success.
Nowadays, people just expect more. They want to get goods and services in a cheap, convenient and transparent manner, and any business that doesn’t follow the trend may soon find itself on the outskirts. Not sure about it? Ask businesses suffocated by apps similar to Uber!
Armed with smartphones, apps and 24/7 access to the Web, people expect to buy anything anytime. They demand that businesses offer immediate access because technology allows it. They value themselves as customers and expect to get the best service in minutes.
“The on-demand economy is people communicating by technology. Connect to add value & you win.”
Technological advances revolutionized consumer behavior. It’s not enough to offer an app with quality products and services anymore. People refuse to buy if it’s not at the tap of a button. They demand the process be fast, simple, intuitive and efficient. That’s why companies should relentlessly adapt to the changing market not to lose the competition and get thrown out of the market entirely by Uber-like apps.
A single company can disrupt the whole industry now. Uber for X companies are springing up like mushrooms after the rain. Transportation, food and grocery delivery, dining reservations, family care, home service, travel accommodations, pet care, laundry, and many other industries have already been disrupted. Maybe it’s for your business to embrace the on-demand reality and develop the next Uber, too.
3. How to get into the on-demand economy
The on-demand economy is a hype now, so it’s only natural that you want to capture a slice of the pie. Here’s how.
Find your industry or niche
Uber for X companies are numerous, yet it doesn’t mean that you can’t find a vacant industry to disrupt. Look at an existing market. Do you see any industries where technology can simplify interaction between suppliers and consumers? After you find it, build the MVP, test the business idea, collect data and analyze whether you can trump the competition if you get in.
To deal with competition, you’ll need to work with your target audience: offer free products and services, provide quality and bring value. Your app should be perfect with great features and great UX.
Is it worth a try? Well, over $4bn were invested in the on-demand mobile apps last year.
Build an efficient app
Your app is the main interface between suppliers and consumers. It should be seamless. If you’ve ever used Uber or its alternatives, you know what we mean: rich but easy-to-use features, impeccable UI and intuitive UX. It’s just a flow where you get what you want in the most natural way.
Pay special attention to the design of your app. It should be feasible, have great UI and UX. Hire a mobile app designer to guarantee quality, yet test your design using MVPs before development to ensure you’re going to develop what people are ready to pay for.
What’s the secret weapon of the on-demand economy? The one-click app like Uber. Simplicity is what earned Uber its billions, and it should become your marketing message too. Otherwise, consumers just find another app.
Recommended for you: How Much Does it Cost to Build an App Like Uber?
Ensure the value chain is optimized
Rich features and sleek streamlined interfaces with great UX are necessary to satisfy and attract users in the on-demand economy, yet they’re not enough. If you want customers to use your ‘uberified’ app, in the long run, ensure you walk the extra mile to optimize the value chain.
The whole concept of an on-demand app is about speed and convenience. Thus, you should reduce waiting time between order and delivery. Your customers won’t wait for hours — they want it here, and they want it now.
Work hard to simplify and even revolutionize the value chain. After all, it’s what Uber did and its numerous clones do to succeed.
Attract users and build a network
The on-demand business model is here because of the way people communicate by means of technology. An on-demand business is another Facebook if you wish. Unless your app has visitors and a network of suppliers behind it, it’s useless. That’s why attract users and build a network from the day one.
How to do it? Focus on tech-savvy audiences because they’re first to adapt your app and spread the word about it. Make your presence known at tech events and conferences, and then offer your products or services for free. Collaborate with other networks and make it to the news too.
As soon as your app attracts enough consumers and suppliers, lower the prices. This combination will create a momentum and accelerate growth further.
“Access or ownership? No such question for the on-demand economy.”
Bonus point: What to expect from shared economy?
Although the on-demand economy has been around for some time, it still has a long way to go. Here’s what awaits it in the future:
Explosive growth and expansion to new markets.
Big players inside and outside the on-demand model are flush with money to take advantage of a radical shift in consumer behavior. It’s expected that they’ll invest billions to disrupt more industries and expand overseas.
Growing competition and better quality for users.
There’re dozens of Uber for X companies on the market already, and new players are entering every day. While some of them try to consolidate efforts to improve their chances, some seek the help of big players and attract tons of investment money. Inevitably, the competition will yield better results for customers in terms of better variety, greater UI and UX, lower costs, and quality products.
A shift in spending.
The on-demand economy has changed the way we spend. While more industries get disrupted, people spend less on intermediaries but more on services. People’s spending behavior is increasingly dependent on the immediate gratification of their needs. Thus, businesses need to work hard to make their operations simpler, more efficient and convenient.
Recommended for you: 50 companies that totally rock the on-demand (gig) economy
Final thoughts
The on-demand economy is definitely the future. It offers consumers what they’ve craved for many centuries: immediate gratification of every need at the tap of a button.
Empowered by smartphones, people have developed a sense of entitlement to get what they want in a simple, convenient, and efficient manner. As a result, businesses push hard to improve and optimize value chains, simplify features and make UI and UX of their apps friction-less.
The on-demand business model is yet to change the way people buy and spend globally. However, tech-savvy customers and residents of big cities in the advanced nations have already figured out how beneficial it is. They’re a perfect target audience to work with.
The magic of Uber has done its job — the future is here.
Featured image by Fast Company.
