Saving Small Businesses with the On Demand Economy
As every consumer industry continues to flood with competition, businesses everywhere feel the saturation of their sector. Large companies are able to stand out easier with deep wallets that allow for brand marketing — but, what happens to businesses who do not have multi-million dollar budgets? In order to build a recognizable brand and the technology to make that brand accessible, small businesses need expertise and resources — many of which have neither of these necessities. Instead, otherwise good businesses are left behind and drowned out by bigger companies as million-dollar marketing campaigns swoop up all of their would-be customers.
Open marketplaces and marketing tactics such as the “get 3” offers have greatly increased accessibility to consumers, while also crowding the marketplace. Low barriers for starting a business has enticed many to trek down the route of entrepreneurship — but the power of branding is often forgotten. With people in all sectors of business attempting to create the next big thing — standardized, convenient products that come from a strong brand are overlooked and underutilized. Yet, branding is not the marketing tactic of yesteryear. This strategy continues to give rise to successful and growing companies — so long as they have the funding to create well-known brands.
While tech startups and big-budget companies are busy with marketing or funding efforts — the backend of their companies can pose challenges as businesses struggle to streamline their services. Meanwhile, small companies have the opposite problem: a perfectly streamlined infrastructure with not enough marketing funds and a virtually unknown brand. This difference in strengths is a reason why small businesses struggle to keep up with large brands — but such a competition could easily transform into a collaboration.
Instead of allowing small business to get pushed aside by big brands — which wastes seamless backend offices — larger businesses with on demand services can collaborate with small businesses in order to bring the customer a new kind of experience. Alone, a tech startup would need to not only develop their brand and technology — but also train and manage a team of on demand service providers. This multi-layered foundation of responsibilities can be brought to the consumer much faster by joining forces with an already existing infrastructure. A form of such teamwork would keep small business from tanking, and would give technology and brand focused companies an instant back office.
By collaborating, each business is able to focus on what they do best
Take Washio, an on demand dry cleaning and laundry delivery service. This company does not actually do the dry cleaning or laundry for their customers. Instead, they enlist the help of small dry cleaning businesses. These kind of partnerships give small businesses a constant flow of work as they quietly work behind powerhouse brand names that attract more consumers. By collaborating, each business is able to focus on what they do best, and leave the rest to their partners. A marriage between on demand services and the streamlined infrastructure of small businesses can ensure that both the big and little fish thrive within the rolling currents of business.
Such thinking can be applied to almost any on demand service that requires a backend infrastructure. A tech startup that is building a brand for cleaning services can enlist the help of already existing cleaning companies for instant access to a streamlined back office. Once the initial training and guidelines for such a collaboration are put in place, the on demand service portion of the company takes care of itself — keeping the smaller company in business and offering customers a highly specialized team of cleaners. Small businesses would be able to keep their own clientele while providing their services to a constant stream of customers from on demand technology.
By creating such collaborations, you are ensuring the survival of the small business owner — who would have otherwise been devoured by a tech startup — which would have eventually figured out how to create its own infrastructure. Consumers, small businesses and savvy, well-funded startups all win if such collaborations become commonplace. Tech-savvy companies can build brands and develop technology, small business can provide the actual services needed by customers — and consumers get a well-established and well-connected on demand service that is able to not only get their attention — but also deliver quality services. While companies that adopt such business models will be outsourcing their actual services, they will essentially help small businesses thrive as they join forces to provide the most ideal experience for the consumer.
For more reading see my 2 other pieces on the On Demand Economy:
- On Demand Economy
- From API to HPI: Introducing the ‘Human Program Interface’
To give feedback or discuss hit me up here or on twitter @madsviktor.
