Why Entrepreneurs Are Moving Towards Uber for X Business Model?
Our life is flooded with dozens of on-demand services. Starting from morning to night, we try to outsource most of our activities. It all started with the famous taxi booking company UBER. Uber started a new on-demand market which is otherwise unheard of. After Uber, many on-demand firms have been started similar to the Uber model. Startups similar to Uber model are called Uber for X. “X” stands for the services they provide. In Uber for X, you need a mobile app that is created from clone script or from scratch.
The shear employment created by Uber for X startups is nowhere near other services. According to Intuit, 70% of the workers in on-demand startups are happy, what more can we need.
Presenting more facts will provide a clear picture on the demand for Uber for X. More than half of the people working in startups have said that their finances improved a lot compared to last year. In the US alone 90 million people i.e. 30% population have used on-demand services like Uber for X.
Below we have tried to explain how Uber for X is helpful for entrepreneurs and users in what way and how new entrepreneurs can make use of this on-demand boom.
How Uber for X is the cup of tea for entrepreneurs
Gone are the days where starting a business is a difficult task. You have to invest a hell lot of money and there is a very few chances that it will be a success. That is not the case of on-demand startups. Since you invest very few money, one can easily recover from any failure.
When Uber appeared, it disrupted the traditional taxi industry. The taxi companies had two options, to adapt or to perish. To survive traditional taxi companies sought the help of entrepreneurs who can help them embrace technology. This is the reason for the on-demand wave. Likewise, entrepreneurs can quickly jump into any industry if it on the verge of disruption. It costs higher to create an app from scratch for businesses, this problem made a lot of people to be reluctant to invest. Then came a boon for entrepreneurs in the form of app clone scripts.
Plethora of IT companies provide app clone scripts. One such is SpotnRides, how we stand different from others is that we have app clones customizable for any services.
Be it any business, whether it is a startup or any of the sort, funding is important. Not everyone can pour tons of money into their startup. Though idea and execution are more important, one cannot completely neglect funding.
Uber so far have received $23 billion in a series of 22 rounds. Similarly, Lyft, Ola, Didi, FoodPanda, Swiggy, GoZek have received fundings.
We can see some funding options open for startups:
- Angel investing
- Venture capital
- Bank loans
- Business incubators and accelerators
- Loans from microfinance companies
- Loans from governments
Getting any of the above funding options depends on a lot of factors. To get invested by the angel investors, the startup founders should have an extraordinary background to win their trustworthiness. One con about angel investing is that the amount invested may not be very big.
Venture capital is the place where one can get big funding. They are professional companies with professional for mentorship and stops funding once the startup goes for an IPO. They invest only on startups with outstanding potential.
Some governments provide short term loans to small startups. For example, the Indian government have Micro Units Development and Refinance Agency Limited which provides loans to small startups and over thousand for startups have benefitted from this. Different countries have different modes of providing loans. So, find the kind of funding you need which is totally dependent on your startup.
Below image gives a brief overview of the possibility of firms getting funding.
Image Source: www.peerbits.com
Popular/Yet to boom areas under Uber for X
Healthcare: One of the most underrated field in the on-demand market is the healthcare. Healthcare startups are there only in the US and UK. Social entrepreneurs who want to bring a change in the society can leverage the potential of the on-demand healthcare business.
Fashion & Style: Nowadays people want to spend less time on beauty even it is a bit expensive. Female with the idea of getting into entrepreneurship can try this field.
Housework: Working class people mainly in the corporate world prefer to outsource the housework. Housecleaning, cooking, and babysitting are some of the works that can be offered by startups. People who want to work part-time can work in these startups. UrbanSitter, TaskRabbit are some of the startups in this field.
Likewise Food delivery, Cab booking, Affordable hotel booking, Courier service are some popular on-demand startups which need no explanation.
Most of the company’s revenue model is product/service sales i.e. it sells its products/services to customers thereby generating revenue. This is not true for all cases, for example, internet giants like Google, Facebook and YouTube provide free service to customers but generate revenue in the form of ads. Two similar startups can have different revenue models.
Some other revenue models are E-commerce, subscription and selling data to name a few. Choose a revenue model that is sustainable for your venture. By saying sustainable revenue model I mean, generating constant revenue in the long run.
Before developing a revenue model for your venture, ask yourself questions like “Whether our target customers are having the purchasing power?”, “Whether our product/service/platform is worth to be considered as a revenue model?”, “Whether our revenue model creates positive cash flow for our venture?” If your answer to these questions is YES, then go ahead with your revenue model.
Mistakes one should avoid in Uber for X startups
Not having a strong foundation: Before making a dive into startups, you should be clear about the business model, revenue model, Complete knowledge about the field. Taking risk is okay only if it is a calculated risk.
Not having a market: Startups should focus on the service/product they offer. They have to do complete market research and find the market status. Dinnr is a web platform that delivers ingredients with a recipe to create meals at home. It was closed because of non-availability of a market.
Unsustainability: Take care of the profit margin in your product/service. Negative margin can make a serious dent in your startup. PepperTap is a India based grocery delivery startup. They gave huge discounts for a long time without any external fund being pumped. They closed after some time.
A Uber for X startup with excellent service and good sustainable model have created a mobile application for their firm. Then what?. They do great marketing and make people use their app. This is done by all Uber for X startups. But the catch is you have to retain the customers.
Some users may abandon the app after one or two use. Customer dissatisfaction and poor service may lose the customer to the competitors.
Providing offers and discounts to retain customers is good but that should not affect the long term sustainability of the venture.
Future for Uber for X
Despite opposition from traditional businesses, the on-demand continues to grow steadily. Demand and reception from the customers is a big boost to the on-demand market. Also, as long as people want to outsource their day to day activities, Uber for X startups will be there. Finally, a sustainable and promising business model with innovation and creativity alone can survive.