Due to a large number of enterprises and entrepreneurs trying out the Uber for X model, the repercussions are visible across several verticals. However, it is not always that businesses started using Uber for X end up tasting success. Read on to know the nine crucial factors that determine the success of your startup.
1. Define the problem statement correctly
First of all, you need to have a clear idea about the problem you intend to address with your startup.
Generally, Uber for X startups have to deal with customers of multiple types and mainly have to focus on the buyers and sellers. Hence, the problems you address needs to go down effectively with both the groups.
As of now, there have been several issues when businesses have been trying to address issues related to the on-demand market based on their self prescribed problem.
The founder of Dinnr, a startup that delivers ingredients on demand, has written about the reasons why his startup was not successful.
2. Economics regarding all units
Even if you are good enough on the funding end, it is essential that you have a clear idea about the unit economics. VCs would also ask for the unit economics once your startup reaches a certain stage and hence, you would have to work it out well in advance.
Initially, an accurate value of unit economics would not be predictable. However, you can always prepare a rough draft based on the transactions and eventually it can be turned into a robust model for unit economics.
You can also read about how Prim had failed in its unit economics due to the model it followed.
3. Frequency of Transactions
Uber was successful as the margins were high on an ongoing basis. The users of Uber were reportedly found to spend over $100 each month to use the service.
Services that usually follow the on-demand model usually end up having high retention rates and as a result, the revenues and transactions see a constant rise.
However, low transaction levels might result in the startups facing scalability issues.
4. Meeting the target critical mass
One of the major concerns among platforms that are into multiple sides is to reach the critical mass and entrepreneurs work hard to get to this point.
Once the critical mass is reached, it means that the customers of a startup are not denied of any of their services and the workforce of the startup is engaged above a pre-decided level. When this is attained, a company is said to have attained its critical mass.
5. Choosing the right designs for the business model
Irrespective of which business model is used, be it Uber for X or anything else, the business model design should stand apart from the others and it should be able to differentiate the startup from other offerings in the market. Hence, it is essential to choose the right business model.
6. Scheduled Model or Instant Model
Both scheduled and instant models are suitable choices based on your operating conditions. If your company needs comparatively larger fraction towards infrastructure and supply chain, it is recommended that you go ahead with an instant model and if you are starting your business afresh, you can go ahead with a scheduled model.
7. Aggregated Supply or Integrated Supply
If you are looking for reliability, you can hire contracted suppliers. Whereas, if you wish to include the scalability factor in your business, freelancers would be able to give you optimum results. There are several business models who initially hired contract suppliers based on their initial requirement and as they started growing, they included freelancers. Due to this, they were able to achieve both reliability up to a certain extent above which, it was entirely scalable.
8. Keep the target market size easily reachable
If you have to make your mark as a company, you would have to concentrate on the customers and connect with your customers better. Hence, it is better that you keep the total initial market reachable enough so that you would include quality in your business.
9. Knowledge about operating domain
On-demand startups find it difficult to succeed if they do not have a good knowledge about their domain. Hence, it is essential that you have adequate knowledge about your operating domain so that you would be able to address all customer issues with a better approach.