Is it the next big bang disruption waiting to happen?
Few months ago, when we came out with an Uber alternative for Taxi companies, Taxi Hawk, we were surprised to see a huge demand for an Uber like application in almost every other vertical viz automotive care, transportation, lifestyle, education, sports, restaurants & night life to name a few, and this was not a one off case. Startups are attempting to market “Uber for X” applications which have nothing to do with transportation, and they are getting ample support from Venture Capitalists which are pumping in money by the hour.
What is Uber for X?
For those of you unfamiliar with the concept, Uber is a taxi hailing app that connects drivers with customers. All you have to do is press a button and a taxi arrives at the doorstep. You press another button, and all the payment stuff is complete so that you can go about your business as usual; that easy! “Uber for X” concept, at it’s simplest can be defined as generating/ aggregating demand on mobile devices which is then fulfilled by offline service providers. And it not only has the potential to change the way that customers interact with service providers, as is already happening in the taxi industry, but there is a good possibility that a lot of latent demand can be generated as getting these services becomes easier for the customers.
What is the potential?
Google disrupted Yellow Pages a while back, Uber for X has the potential to disrupt Google. Lofty claims! Right? But once you start looking at all facts and positivity surrounding this whole concept, things will start making sense.
Angels List has around 60-70 startups marketing themselves as ‘Uber for X’ startups, where X can vary from more conventional applications such as groceries, doctors, flowers and laundry to niche ones such as tennis buddies and gay dating. These verticals which have already begun to show some movement and healthy reception, in addition to transportation, include home services, health and beauty, food and dining, care services, delivery and travel.
“Fundamental core of almost every solution includes closing the demand aggregation loop by leveraging excess capacity.“
Whether the service is provided instantly, the frequency at which the service is required by the end customer, the need for background checks of the service provider, etc., varies from application to application but the solution is always easier to use, vis a vis, the current way of using that service.
Let’s analyse this remarkably apt proposition- why Uber for X won’t work for home services and for that matter of fact, many others discussed in this blog post.
I would employ Mike Ghaffary’s framework to verify, should an offline industry be brought online, by using 3 parameters – the ability to standardise content, automating the pricing and transaction, and managing a speedy delivery of that service, to conclude that uberization of home services might fail to see a commercial success.
This vertical, home services, when assessed using above criteria, falls short of uberification owing to variable quality of home service professionals, problems in standardization of find, buy and redeem funnel due to a variable price structure, and ensuring instant deliveries.
Although some startups, who’ve managed to disrupt the ecosystem of home services, have addressed these issues by introducing subtle differences in their workflow. Here’s how.
- Variable quality of home service professionals – Almost all startups have a system of offline background checks, reference checks and interviews for the service providers getting on board. Kudzu takes a slightly different approach and encourages the users to take feedback into account while choosing the service Provide.
- Standardization of find, buy and redeem funnel – If we analyze different players in this space, it becomes clear that many of them have taken an approach which doesn’t focus on standardisation at all while being efficient. One such startup, RedBeacon, allows it’s customers to interact with service providers and get custom quotes based on specifics of the work demanded, while Club Local also allows negotiation to be built into this interaction.
- Instant deliveries – On this account, Handybook closely follows the Uber approach, that of standard hourly rates and instant appointments, while MyTime sells the appointment, allowing users to choose from the open times available on service providers’ calendars.
“All startups mentioned above tackle this complete cycle: demand for a service – service request handled – payment and feedback.“
I believe that every service industry is going to be disrupted in the next decade; what remains to be seen is that who figures out that successful model first. Although, this model shall be custom made for different verticals, the underlying core shall always be demand aggregation through a mobile solution. Once the dust settles, the innovation is going to percolate through to local vendors who would either perish or adapt to this new reality. This script is already running successfully for taxi companies, with Uber having defined a disruptive model, and local taxi companies gradually adapting to these Uber like solutions.
We differentiate ourselves from traditional incubators by focussing on a niche- Sharing Economy. This approach has helped us in creating a specialized marketing and production team which can provide sound, practical advice to associated startups. We see ourselves as a platform enabling On Demand Mobile Services.
If you have an Uber for X idea do reach out to me and I’d be happy to help.