What’s the most sought after business model of the decade? The answer will range from an ecommerce marketplace to online grocery to music streaming. But deep down, there’s an identical pattern that drives all these businesses. The pattern is aptly named On Demand Economy.
Every aspiring entrepreneur is eyeing this business model for all the right reasons, the primary being instant gratification. This particular emotional reaction is the founding ground of the on-demand economy.
Whether it’s the technology that paved the path for on demand business model or vice versa is much akin to the good old chicken or egg debate. Nonetheless, Uber for X is nothing short of The Holy Grail that every entrepreneur is eyeing for and striving for.
We talked to Aseem Ghavri, the Founder and CEO of Code Brew Labs. Creating a versatile and pragmatic app is possible only when the solution provider understands how the industry works. Being a keen observer and a quick learner, Aseem rightfully becomes the go-to guy to know what it takes to succeed in business.
Here’s what one of the most successful entrepreneurs of India has to share with all the aspiring business owners out there…
Choose The Type Of On-Demand Service
While on-demand service brings Uber, Foodpanda and many other names thriving on instant gratification, it’s not always the same. For example, Aseem says, customers may be looking for a scheduled delivery, as they do when ordering groceries. Or maybe they are looking for subscription based services like Ipsy to get recurring orders.
More often than not, Aseem remarks, startup owners tend to overlook this important factor. He believes identifying your service model is crucial to decide a business one should go for. On-demand can mean any of the following three:
Immediate Services
Aseem says this is the true meaning of on demand service, the same model on which Uber works.
The advent of technology has also enabled this model to empower fintech startups, contributing in the success of on demand money lending businesses.
Key Benefit:
Uber for X is the epitome of a successful business idea as it leverages upon customers’ convenience.
Key Drawback:
When you look at this model from resource’s perspective, it can get bit expensive for small scale startups.
Scheduled Services
From booking an appointment with a beautician to scheduling a meeting with a doctor, everything that sets a time frame of availing a service is a schedule based on-demand business.
Key Benefit:
Customer convenience and more efficient service provision.
Key Drawback:
Sudden and abrupt schedule cancellation can render the appointed service provider unavailable for others.
Subscription-Based Services
Ipsy is the epitome of subscription based delivery models. A subscriber will get recurring orders on pre-defined dates without needing to place the order again and again.
Key Benefit:
Recurring revenue, better utilization of time & resources and enhanced customer experience.
Key Drawback:
Customers may not be available to receive delivery at pre-defined dates, and thus, meeting delivery schedules at all times can be difficult.
The choice of your business model depends on the three service provision options mentioned above. And this is where the next, and equally important stage comes. Choosing any business model is followed by two important aspects that determine the success of your business:
- Identifying the problem or need that you want to address
- Creating a plan of action of doing so
Experts cite an example to explain the above two points. There are many ecommerce marketplaces that work similar to Amazon, but on a way smaller scale. These companies are not able to address the last mile delivery due to limited logistics. This is where tying up with local delivery companies comes in handy.
All small scale hyperlocal multivendor stores need to understand this. Otherwise, they will keep dealing with unsatisfied customers who purchased something from them but never received it.
An App Is A Must For Your Business
Being a pioneer mobile app development company since 2013, Code Brew Labs has come across many clients who think ecommerce business can do great through responsive websites alone. Even in this day when there’s an app for almost everything, many startup owners of the on-demand economy consider a mobile app to be a luxury.
On the contrary, mobile apps are an absolute necessity for the ecommerce industry, especially the on-demand kind. According to Statista and many other online research forums, mobile apps improve ROI and conversion rates significantly. But the key lies in knowing how they do so.
The answer lies in the following insights:
- Mobile apps expand your presence in the market.
- Instant accessibility takes away the need of logging in the website.
- Increased average order value through better product recommendations.
- Push notifications of various offers and deals to attract customers.
- Seamless shopping experience.
The One Mistake To Avoid
With his vast experience working with many clients since he started his venture, Aseem realized many budding entrepreneurs make one common mistake. They tend to expand without establishing a strong foothold in their initial market.
Aggressive expansion is good, but it should never be done at the cost of business stability.
He suggests all entrepreneurs to gain a solid traction before scaling up.
Conclusion
The Holy Grail of On Demand Economy is desired by many, but only a chosen few are worthy of it. Becoming a successful entrepreneur is hard. And that is where this blog comes in really handy for all the aspiring business owners out there. Launching a successful business, as explained by Aseem, is more about doing things the right way.
And speaking of the chicken or egg debate that we mentioned earlier. When it comes to figuring out whether technology gave birth to the on-demand economy or vice versa, the debate will never end. What matters is that technology and customers’ desire to get things done when they want are empowering each other. These are two strong forces working in tandem, leading to marvelous innovations in the tech and ecommerce industry.
Remember, it’s all about doing what needs to be done, understanding customer and market needs and figuring out the right solution. Solve today’s problems to become tomorrow’s credible name.
