The glaring success of the on-demand era has brought about a school of thought within the tech community. We have started to believe that adopting the uber business model and joining the on-demand market would be the only step that stops them from achieving maximum success. Although it has succeeded for a variety of companies such as Grub Hub or Airbnb, the variety of failed businesses is also incredibly high. Though it has succeeded for a variety of companies like Grub Hub or Airbnb, the variety of failed businesses is also incredibly high.
If you dissect the on-demand system, you will find that it is based predominantly on three building blocks: immediate distribution, the passivity of consumption, and a fixed cost. Not only did Uber tick all three boxes of the on-demand business model, but he also acted on several other factors that helped it create a smooth ride booking experience for users.
Here are the two factors that added to the success of the company and made it one of the most profitable on-demand companies:
- The business operates in populous metropolitan areas where there is ample liquidity to make the marketplace work.
- The customer base already knew very well how to trust a stranger to take them to locations.
List of On-Demand Brands That Failed Miserably
- Happy Home Company
- Pronto
- Workers On Call
- Homejoy
Reasons behind On-Demand Business Failure
- High Competition
- Reluctance among Venture Capitalists
- Product Incompetence
- Inefficient Resource Set
- Not Being Able to Solve Real Problems
- Under or Over Valuing Demand and Supply
How On-Demand Companies Will Unnecessarily Save Themselves From Shutting Down?
- Market Expansion
- Make Your Customer Needs Your Bible
- Think of Being Monetarily Prepared First
Conclusion
The cases of failures in the on-demand industry have led the business to acquire the reputation of being a card house. Extensive consumer research will be the only way for entrepreneurs to join and succeed in the market.
