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On Demand Businesses 101

On Demand Business Model #4- Standardized vs Non-Standardized Product or Service Offering

This blog is the part of Juggernaut Special Series on ‘Understanding On Demand Business Models’, where we reviewed different facets of On Demand Business Models

 

‘Choose the car type; hail the car’ – Uber pretty much nailed it when it comes to standardizing the service offering. Streamlined user experience, which doesn’t demand a lot of your cognitive bandwidth, is one of the important factors behind acceptance of these vertically differentiated On demand marketplaces. This doesn’t imply On Demand marketplace in every vertical translates to a straightforward standardization. The challenges arise when you go out of the ambit of fixed price (based on certain parameters), fixed time services.

A good way to look at it is whether you are offering a commoditized or non-commoditized service/product. For commoditized services, there are only few variables that can vary and the user experience should reflect that. While others such as specific home services, renting out apartments involve deliberating over number of variables. This is one of the reasons AirBnB focusses on search and discovery while Uber focusses on seamless transactions and automatic matching.

Number of variables at times also require an open channel between the supplier and the buyer during the selection phase.

One recent pivot relevant to this discussion is Task Rabbit changing its business model from an eBay type auction house to an Uber-type model, which is focussed on standardized offerings in multiple verticals. The discussion about how the London experiment led to changing the face of how TaskRabbit works across geographies, exemplifies the importance of right model needed to sustain even the marketplaces that have already attained liquidity.

 

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