The success of the ride-hailing startup, Uber, is inspiring a new wave of business. Today investors and entrepreneurs are embracing the on-demand economy in a bid to make it big, just as this Silicon Valley-based startup did. As a result, there are many uber-like applications in the market right now, some with no connection to taxis whatsoever. Education, babysitting, lifestyle, and food are some of the non-taxi niches, where the uber model of business has been applied.
What Is “Uber for X” Startup?
In the phrase "Uber for X" the letter "X" refers to any service that can are available in the market. On how it all functions, there are a few steps to take note of. First, consumers link up with the providers of various services by ordering via mobile application website. After that, the vendor checks and approves the request, provided everything is within their operational parameters. Note, in other uber-like businesses, there is the need for more than a simple pressing of a button for buyers to be connected to vendors. Most of the time, such companies have several integrated features that check the process while ensuring that swiftness is still achieved. Case in point, to move from a location to another, an Uber customer has to place a request. Then, the user has to wait to be matched with a driver before it arrives to pick them up a few moments later. With that cleared out, let us now look at the keys to success under the “Uber for X” business model.
While you might be tempted to dive into business right away by Uber’s USD 3.17 billion profit in Q2 of 2019, do not succumb. Researching well enough is necessary as it helps you learn of any risks the present and the future might hold. So, given the weight of the matter, you must work with professionals when it comes to economic analysis. This way, you will understand issues to do with expenses, opportunities, and so forth. Consequently, you can learn if your idea is worth investing in. In practice, if you want to create the best GPS app, for instance, it is essential to gather as much information on your target audience, the cost of hiring a reputable geolocation app builder, and the platforms to deploy your app on (Android or iOS). It also helps to learn about your competitors as it can assist in identifying the unique features they offer.
Having a great idea and plan is not enough to make your startup successful. As a startup owner, you also need to source for funding. Uber, for instance, has done 22 funding rounds and collected about $24.7 billion in investment. Some startup funding options you can explore:
- Angel investors
- Bank and microfinance loans
- Venture capitalists
- Government loans
Angel investors offer small to medium funding and often require startup owners to have an excellent background. If you need massive funding, however, venture capital is a good option. Venture capitalists usually invest in startups that show great potential. Governments typically give small short-term loans to startups. To achieve success, you should find funding that is ideal for the type of startup you want to launch.
Critical mass is the number of transactions that a startup records that enable it to become profitable. If you’ve launched a geolocation app, for example, critical mass tells how customers are responding to your service and whether you will succeed in the long run. If the number of transactions on the GPS app is growing, it means that customers are accepting and using the product or service you have launched. It's therefore important for entrepreneurs to focus on reaching critical mass to ensure that their Uber X startup operates efficiently. One way to do that is to start with competitive pricing. Many customers, however, would be unwilling to try out a new product or service if it is not affordable. Also, invest in advertising your product. People won't use a product or service they have not heard of before. If you have a marketing budget, you can use it for advertising on TV, radio, and ad boards. If the budget is tight, however, you can use the web- think Google ads, Instagram, YouTube, Twitter, etc.
As the on-demand market continues to soar, the potential for Uber for X startups will also grow. Having adequate knowledge before you enter the market, knowing where to look for funds, and striving to achieve critical mass are factors that will lead to the success of your startup. Most of all, you should entice people to use your product or app by making it user-friendly, affordable, and reliable.