Are We in an
On-Demand Bubble?
It started with taxis and hotels: hop in an Uber and catch a ride to your AirBnB, and suddenly you’re living the sharing economy life. Soon a dizzying array of companies joined this flourishing new on-demand world — Instacart, TaskRabbit, Homejoy and Postmates are just a few names among dozens more. New companies are cropping up every month to do our bidding, using untapped workers to deliver groceries, flowers or underwear; or to serve as a valet, an errand boy, or an entire customer service team. But how much longer will the wild growth last?
One prominent investor in the on-demand economy, Shervin Pishevar of Sherpa Ventures, argues that in a sense the tide has crested. Speaking today in San Francisco at On-Demand Conference, the first such event devoted solely to this sector, he predicted that “the companies that are going to dominate in the near future probably already exist today. They might be in a seed stage. But are they going to be started three, four years down the road, in the mass consumer space? Logic would say no.” Now, he says, “we’re seeing a little bit of FOMO,” among investors who missed out on the first big wave of on-demand companies and want to get in on whatever’s left. Instead he suggested that entrepreneurs and investors focus on companies that are offering business services or tackling healthcare. (Pishevar was an early investor in Uber, as well as TaskRabbit and Munchery.)
Other venture capitalists, speaking on a panel later in the day, staked out different positions. Patricia Nakache, a partner at Trinity Ventures, believes that ride sharing and food delivery have likely matured, but personal finance and health and wellness remain highly active areas.
Satya Patel, CEO of the VC firm Homebrew, disagreed. “I wish I could say the same thing as Patricia, but we’re not seeing any slowdown,” he said. As he put it, “it’s a great time to be a founder.”
We want to know what you think. Have we already seen the best ideas in the on-demand economy emerge, or is there more big change on the horizon? Let us know by leaving a response below.
