Sri Lankan Taxi Apps Frenzy!
Me Too Wanna Be App-Trap in “Winner Takes It All Markets”
Every now and then, a brilliant mind stumbles upon an extraordinary user case — a mere 1% of the time. This typically involves taking a well-established business concept, tailoring it for a distinct demographic, and transforming it into a streamlined digital application, craft, or solution. The objective? To bring it to life and put it into action. If the circumstances align just right, or are meticulously aligned, things start progressing smoothly. And then, if fortune smiles upon them, something remarkable occurs — they achieve viral success and generate staggering profits. This is how the Unicorn List came into existence.
Unicorns became commonplace, with smartphones driving economy Now there are enough twenty-thirty-something millionaires in abundance. Envy of the status quo. That makes some get the delusion that Conventional business wisdom plays no role in these. How quiet so? This delusion was a multitude in the last decade, mainly with new tech sensations like Uber, Airbnb, and Lyft or by the localized mini versions of the same as PickMe becoming commonplace.
As always, proper business strategy, acumen, the right team, and sometimes deep pockets or right mentors/ investors play a key role in these new types of sensational business success stories.
This very phenomenal Unicorn business created huge blind spot or “Reality Distortion Field” and real money pit for many Venture Capitalists, investors as well as for most traditional business tycoons who got the envy of ”the lean startup” and try to replicate the same success by “If these kids can do it, so can I” me too theory.
If you dig deep, this is not the real case. The Unicorn list is created mainly due to mobile internet. Then the sensor-driven smartphone created the Mobile Revolution. Almost all these very viral success stories are born out of sheer opportunity windows exploited by smart acumen men. Executed right in time at the right location where 99% of the time with a technological, demographic, or some other key business factor changed/ shifted for a new business opportunity window opened, co-created (invention) or emerged (innovation) by sidelining core business factors.
There is one fundamental difference in most of them in that, if you define just one right formula/ strategy in the Internet Space, Bingo! you are instantly across the board international, as a bonus your scale is the largest ever in human history. The old same same local logistic demographic niche control unit assumptions, business boundaries and pillars are completely different or they can be shattered like sand dunes if you pitch the right formula.
Human History has many Paradigm Shifts from Firewood to Coal, Steam to Gasoline, Gasoline to Plastics & Petro-Chemicals, Mainframes to Personal Computers, PCs to Software, Generic Software to Application-Specific Software, Application Software to Network-ware, Network-ware to Browser-ware (Web apps), Web apps to Native Apps (PC/Mobile) and so on are a few examples of this bigger than life opportunity windows.
In each wave, a plethora of new groundbreaking new business opportunities blossomed and were formed by visionaries. Those who executed them in time, now what we call Unicorns or Billion-Dollar Startups, were born, crumbling down or mostly piggybacking on top of the old conventional business models by newfound mobile internet-centric wisdom and strategies.
Apple iPhone leading Mobile Revolution was the origin of this Unicorn Wave, which delivered all the busted Dot Com Boom assumptions for real. Wired line dial-up telecoms gave way to Always On, On-Demand, and connected Wireless and 2G/3G/4G/5G telco revolution. This changed many conventional business assumptions like being open to business 24/7, 365 for everyone. Cloud remote computing was another build on top of web infrastructure, Biotech or Blockchain could be the next wave, etc.
If Bill Gates’s famous motto was “A PC on every desk,”. What even veteran Bill Gates himself didn’t see coming was a far wilder possibility that was right around the corner — mobile or the smartphone as we call it now. Apple iPhone leading iOS and Android-driven Mobile Revolution created a condition where it’s obvious that that whole world’s all 7 billion people will have a super-computer right in their pockets. Sort of always-on software applications (Apps) ready to be summoned from anywhere in the world right from our pockets.
Hence might software franchise Microsoft Windows miss-read the great mobile opportunity window of the mobile revolution. Remember Nokia Phones (Windows Phones), anyone?
This was an unprecedented but not uncommon occurrence in human history. Most reputed technology pundits and business tycoons did miss to predict or embrace the next wave of technology until some never heard of new name, killing their multi-national empire out of nowhere.
iPhone leading AppStore began with sheer angst of Fart Apps to Angry Birds, then Twitter, Facebook (Mobile App) to Uber, Airbnb, WeChat, Instagram, etc. Those created a new “Phenomenal Business Scale and Reached” for business which has never been possible in human history. Reaching 100M customers in virtually an overnight was made possible. That is an opportunity to treat all 7 billion people worldwide as the Target Market/Audience.
Now any 20-something kid (insightful) can start something novel in his bed and launch tomorrow that can reach 7 billion people on earth in a single run.
But remember you need a real business acquisition model/ strategy to go with, then a follow-up revenue scheme — none of these fancy-hyped, same copy-cat apps have real reason or market to co-exist with established players. Because your very best idea is just dog food for the established player, who has more money, an already established market, a revenue scheme & resources to overwhelm you. As we saw with Snapchat Stories vs. Instagram Stories and Grab vs. Uber, there is already a better one in the market, and people are already hooked-in-to it.
App Ecosystem itself has grown into a billion-dollar FORTUNE 500 business just in short 8 years. A new, previously unheard-of Unicorn List was born out of the sheer scale of the mobile revolution.
This very mobile frenzy created another set of “Me too wanna be” copy cats of those that got famous, also can be considered as big successful go-to-market entries if given a unique demographic, business model or other innovation pivot. Because the MOBILE SCALE is so HUGE, even for a niche market segment we are talking about 10X million user case & user base. So crafting a niche in 7 Billion people crowed is seemingly an easy task, as a matter of fact it is, if you do know where to craft that niche, in such manner with a sound strategy.
Why do over 90% of Startups/ Apps Fail?
What most don’t understand is a real business needs a real business acquisition model/ strategy to go with, then a follow-up revenue scheme, none of these fancy-hyped, same copy-cat apps have no real reason or market to co-exist with established players. Because your very best idea is just dog food for the established player, who has more money, an already established market, a revenue scheme & resources to overwhelm you. As we saw with Snapchat Stories vs. Instagram Stories and Grab vs. Uber, there is already a better one in the market, and people are already hooked-in-to it.
Take from the mighty heavyweight Facebook, Uber, and Airbnb to Sri Lankan PickMe, etc. The diff is
Has anyone got any idea how many Silicon Valley tech veterans to the world over VCs (Venture Capital firms) tried to build a counter app to these burning billions of money of the first mobile (2010, or prior dot com (2000) waves, for that matter? Even Google, Microsoft, and Apple tried to replicate and create alternative social apps to Facebook, Twitter, etc. Think of Google Wave, Apple Ping, and countless others.
Why none succeeded?
Well, these are phenomenal markets, now commonly called “Winner Takes It All Markets.” As the name implies, the winner, the firstcomer, will win and grow bigger ever and ever. In other words, it only matters where your “Most users or customers already are.” No matter what the feature set, fancy UI, innovations, or technology lead (up to a certain level) is, if any alternative idea to go viral takes traction, the first and foremost the user acquiring problem has to be incentivized and resolved. This is a fundamental matter more than any given “fancy spec feature set on paper” for the counter app to be successful. “The ceiling is so high, a multi-million dollar investment budget, advertising, or any special giveaway features simply cannot buy users.” Unless your app has a real strategic incentive and go-to-market mechanism advantage or any other viral killer feature in place, such as demography, cultural pivot, new innovation, or niche market specialty advantage.
The first and fore-mostly, the user acquiring problem has to be incentivized and resolved. This is a fundamental matter more than any given “fancy spec feature set on paper” for the counter app to be successful. “The ceiling is so high, a multi-million dollar investment budget, advertising, or any special giveaway features simply cannot buy users.” Unless your app has a real strategic incentive and go-to-market mechanism advantage or any other viral killer feature in place, such as demography, cultural pivot, new innovation, or niche market specialty advantage.
Most learned this harsh truth seeing their beloved apps were DOA (Dead on Arrival). So soon, when they start to invest and try to enter this App-economy. It’s just like the famous DotCom Boom or Tulip Mania in the 16th century.
And even after a decade of multi-million rip-off tries, that’s why there is no real alternative to Facebook, Twitter, Airbnb, etc., even ten years of trying.
Proven by countless efforts from multi-million dollar investments in social & mobile space by Nokia, Palm, Blackberry, even Microsoft and Google (Wave, Google+Hangouts+Alo, etc.), Apple (Ping/ Friends) and older Hi5, MySpace has never been able to put a single dent on Facebook’s dominance. Not a chance. Nothing will happen with Cambridge Analytica Scandal.
From the copy-cat clone apps, only the ones who had separated themselves by a demographic, new innovation pivot, business or virtual (China’s Great Firewall) boundary were able to survive and be successful.
Differences in business models and new innovations that grew in disguise to Facebook/ Twitter in social space as all the late messaging apps such as WhatsApp (replaced SMS for free), LINE, and WeChat (Cardless Payments) could do it because they were mostly protected by those strategic, demographic, cultural differences. Such China Firewalls blocked Facebook or Google Search etc. That gave small players to catch up with the opportunity to grow and challenge big players like Facebook & Twitter. Still, if you take WhatsApp, which grew in the same regions as Facebook grew because it capitalizes on replacing SMS, not on any of Facebook/ Messenger features, still ultimately, when it becomes a threat, Facebook just brought it instead of killing it such as Microsoft killed Netscape with MS Internet Explorer.
And now there are these pathetic copy-cat-wanna-be apps everywhere. Say in Colombo; there is now a least 50 odd Taxi Hauling Apps in the Play Store itself. This is crazy nuts. Colombo has how many million taxi users? Can you really have a business any bigger than a “Sillara Kade” in these terms?
It’s simple if we do the math PickMe might have been five three-wheeler, two developers, and some Rs 5–1M of small investment to begin with, but when you get traction, and after 30,000 drivers registered in it, it’s now well over Rs. 1B startup. Probably doing the bulk of Colombo taxi rides. The business is in 3–4 years ahead with a good revenue scheme. Even industry leader Uber being a 50USD Billion behemoth and a lot of incentives to drivers who get registered, can’t really take on PickMe ride share now in Colombo.
Let’s do the math.
Say, now take half of these 50 odd never heard of taxi apps, one would have been at least Rs. 3Lks to Rs.1M to develop with, say on average 5Lks per app, which will be Rs.1.15M in total investments/ months of development cycles/time is wasted is a penny for PickMe, and PickMe is a dime for Uber. None could have even gained a third place name in Colombo. Once someone starts to dominate a “Winner Takes It All Market” it’s pretty hard for any new entrant to go viral against a market leader, here in our example, the Taxi Hauling Industry. Doesn’t matter you have a hefty investment budget, promotions, feature set advantage planned. People are already hooked to a “good enough” service where there is “NO” real incentive to switch to another similar service. It’s just another app in 2.5M of App Store wilderness.
Do you hear Hi5/ MySpace anymore when all your friends are on Facebook? No!
As YouTube sensation Marques (@MKBHD ) pointed out, even teenage sensation Snapchat and its CEO daubed as the best product men in Silicon Valley has no absolute chance against Facebook (also Instagram/ WhatsApp) behemoth where already 2 billion people are signed-in. It doesn’t matter what real innovation you bring to the table; to rip off that very innovative feature of Snapchat is just an overnight job for Mark’s Facebook machine to replicate, as he has been shown countless times Twitter Vine Live Videos, with Instagram & WhatsApp Stories, Facebook Live, etc. No chance. Period.
What’s sad is when there are another a hundred small specific niche user cases available to be created, crafted, and catered to as a new market instead of going head-to-head-tug-war with a market leader. You can look into the real new or untapped user case to start your new venture away from where whales fish
Given, for heaven’s sake Colombo is not the next most desired hot-bed to start your fancy Taxi hauling app, not anymore, not now, may be not until a Driver-less Autonomous Tesla Robotaxi Fleet* is ready to be deployed in Colombo streets.
Still, if you really must do another taxi-hailing app, okay, true enough, your traditional cab services are dying and losing their core customers to Uber or PickMe. Let it go. Start from as a logistic delivery app (Also exploited now in 2019), Or why not try to act as a regional proxy/agency/ fleet for Uber and PickMe itself as a service? Or why not do a Recreational/ Sports/ Logistics/ Delivery* hauling specialized app for Cycles/ Motorbikes/ Small lorries* / say Demo Batta has a good start with https://pickmyload.lk/ etc. as a go-to-market strategy? Still, remember, for PickMe, it will be just adding another tab to their already acquired (users & drivers) app.
And if you still insist that you should & could build it, have money and time to burn to build another Uber/ PickMe copy-clone clone, go somewhere in a godforsaken remote part of the country/ world/ demographic/ city* where these services are not available yet. And try to work from there instead. I bet you’ll have a better success rate and ROI on that mission.
Still, it better go check on a successful new foreign app user/ business case, bring it in that new idea, and fit it to a local model such as PickMe did with Three Wheeler instead of applying it to cars to implement an Uber clone locally, which was the winning stake for PickMe.
- If you need hints on where there may be some prospective startup app opportunities, we can sit and talk, give me a #dm @Chanlanka
Cheers, and good luck with your next venture!
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