There have never been more opportunities for small businesses than today. But this fact also makes the competition far more severe. We’re in the middle of a never-ending war for clients and failure is a common part of it.
But how many times can we afford to go through that failure? Considering all the steps required to set up a business properly, starting out again can be on the verge of becoming a Sisyphean task. That is why, not so long ago, the term ‛Uber for X’ appeared.
This term refers to the incorporation of Uber’s business model into any startup idea that provides services (here referred to as the ‛X’). The enormous success of Uber has made this approach a very exciting opportunity for almost every small business startup.
The business model is pretty simple – all you need to do is to enable your customers to receive the required service offline just after they’ve ordered it online. And that’s it. At least on the surface. Now we’re gonna take you deeper.
The ‛X’
The ‛X’ works like a subliminal message, conjuring an old treasure map in our minds. And the truth is not far away since this model of business has turned into a real gold rush. But we live in very uncertain times, so you’ve probably been wondering where’s the catch – what this ‛X’ really stands for?
Uber’s strategy is perfectly clear – it’s all about the on-demand car services. They can drive you throughout the city, to the airport, and they also function as delivery (food included). Does this mean that you’re gonna need an enormous automobile fleet in order to establish your Uber-like small business? Not at all. We live in a capitalistic society where the consumers have become passive, so on-demand services of any kind have become like the new religion.
If we would make the classification of ‛Uber for X’ services and tried to organize them into topical categories then the widest niche would definitely be the one for home and around it – all sorts of cleaning services (laundry, carpet, etc.), repair services (major and minor mending), gardening, dog walking, babysitting, tutoring, etc.
Since the evolution of the internet has made us passive and plain lazy, the next one would be delivery – from trucks and courier services to cafes, restaurants, and shops.
And since all the modern stuff is made short lasting, there would be repair services that are not house-related, from numerous electronic gadgets to cars.
The decomposing process of a modern government health system where it’s easier just to die would also make health services a high demand on the market, starting with the actual visit of the doctor.
Accommodation services have always been easy money, and Airbnb is there to prove it.
But there is still a wide microcosmos of other services, waiting to become the ‛X’. Basically, if your small business has both – service provider and a customer – it can be organized as an Uber-like startup.
Breaking it Down
Ok, so you don’t have to be in the car business, but you think that your small startup can never be that well-developed and spread as Uber. Well, Uber wasn’t developed in a night, either. Its structure might seem complicated at the present moment, but if you look beneath the surface you’ll realize that the essence of every functional system lies in its simplicity. And Uber’s business model is not an exception.
It all comes down to three key factors – the service, the value, and the market. The way you combine these three is crucial for the success of your business – you need a great service which has an undeniable value and the appropriate market for the launch.
Now let’s break down this Uber business model myth and see how they’ve done it.
Two-sided Value
The world is full of great ideas, but a business idea is valuable only if it offers the customer benefits that are obvious and transparent. What makes the Uber specific is the fact that the value of their idea is made by two separate markets – service consumers and service providers. In other words, passengers and driver-partners. Since they pursue different goals, let’s see the value they’re offered.
The passengers can search for rides. Once the ride is there, it’s not some junk from scrape iron but luxury and good quality car. This makes it clear that value should also be seen plainly on the surface. Of course, the most high-quality cars can also get smashed, but they know that their piece in a car business largely depends on swift repairs done by reputable mechanics – there’s a big difference in doing your body works in Epping mechanics opposed to some no-name car repair service, and your customers will definitely notice their difference. The modern world consists of very picky individuals and that’s why Uber offers booking (with the request and match technology), cash-free payment, and the possibility for reviews and ratings. They’ve made themselves available worldwide and decreased the waiting time to a minimum with car approach tracking and ETA.
What driver-partners get is the flexibility of location and working hours, opportunity for an additional income, and the clients that are engaged and aware, which means less drunk passengers.
This two-sided marketplace is mandatory for your Uber-like startup. You can combine babysitters and parents, couriers and customers, maids and householders, doctors and patients, etc., but the most important thing is to define the value which you’re gonna deliver to both.
Demand, Communication, Profit
Every service is designed to make the life easier for potential customers. But before you start thinking about the way in which your service can do that, you need to be sure who your customers are. In other words, you need to know who you create value for.
Uber has identified their customers with extreme precision. Their passengers are those that need to get from the point A to the point B and don’t possess a car (or simply don’t want to drive themselves), those who are in search for a cost-effective solution with included sharing option, and those who want the ride to be a luxurious one. On the other hand, the driver-partners are usually taxi drivers who want to become their own bosses or simply individuals who want to use their own cars to earn extra money.
The next thing to think about is how to attract, reach, and retain your customers. As it was growing, Uber has employed many traditional methods for spreading the word around – media marketing, partnerships, PR strategies, overall digital presence on websites and mobile apps, and word of mouth. But what made them stand out from the crowd is the employment of some creative ones, like their responses to particular weather conditions. Traditional marketing is mandatory, but going beyond it is what will really enable your small business to expand.
Now that you’ve assembled your clientele it’s time to establish the rules of communication. Uber has made a choice of automated interaction, which is probably the best way to go. There is no direct communication with dispatchers, payments are cashless, and even customer support and feedback are handled through the website or the app. Of course, you’re gonna need an Uber-like application, but if you understand the concept building one is fairly easy.
All that’s left is to ask yourself how much you’ll make by creating an ‛Uber for X’ business. Your services won’t bring you profit without a proper revenue strategy. Uber has a simple method of charging for kilometers or miles, but they also have different pricing for different service levels (premium Uber brands and UberX) and the extra ones (Uber Food, Uber Cargo, etc.) And the company’s profits are also influenced by surge pricing. The key is to create a simple charging system and incorporate the ‛special offers’ in a natural way.
There you have it – if your startup idea has services that are fit for the two-sided economy, their very nature is not that important. All you need to do is to ask yourself if their value will really be on demand, be creative in spreading the word, and make the communication simple but functional.
