Will your company exist in a post-Uber world?


While traveling in France this summer, I was surprised to hear journalists mention the “Uberization of the world” as a threat to the traditional work structure and employee model. Indeed, in Silicon Valley, tech outlets present the “Uberization of the world” as “everything on demand”, from cars, to grocery and even massages, at the push of a button.

The reality is that both visions are true, and the combination has the devastating power to disrupt many existing business models among the Fortune 1000. If you’re one of these existing incumbents, here are four major questions you and your team should ask yourselves.

Want to hear more from the leaders in this new world? Come meet executives and founders of Uber, Postmates, Airbnb at the second On Demand Conference in New York City on September 15. This event is co-hosted by @Tradecraft, @Semil Shah and myself.

Segmentation

Key question: which segment of our current market want our product but cannot be served today for cost reasons?

In a world where the “middle” is squeezed, technology disruptors can come from the low-end or from the high end, offering services that were previously either not good enough or not affordable. The reality is that dismissing these “niche markets” is dangerous: as they grow, they expand beyond the niche and can disrupt existing players.

Airbnb started with air-beds in spare bedrooms and now feature the houses of famous athletes. Shyp provides on demand pick up of packages — something that many companies have had for years — to consumers and small online businesses with a level of convenience that redefines how millennials see “shipping”. What would it mean if Shyp goes up-market(1) and becomes the defacto “shipping” brand — not Fedex or UPS?

Distribution

Key question: How do your customer discover and purchase your products today?

Aggregating demand and managing customer relationships are the primary market levers of Uber, Airbnb, and Amazon.

Consumers, small business owners, professionals: your customers are online, looking for product information, ready to buy and consume whatever product or service you are currently offering. As millennials become a larger share of the workforce, they are bringing their consumer expectations of convenience and user experience with them.

Having a website is not sufficient anymore: for B2C or B2B services, customers are expecting an engagement/transaction experience as self-serve as possible.

Relying too heavily on (online) travel agencies for legacy reasons, hotels gave away their market power to Booking.com. Taxis treated consumers as commodities, and Uber aggregated these disgruntled customers to create the largest consumer transportation Company in the world, one in which cars are now the commodity.

This change happens for professionals too: freemium or 30-day trial periods for SaaS software put the emphasis on the product experience and a bottom up approach to product adoption vs. a sales driven process where professionals “experience the product” after the product was purchased by their IT team or by executives.

Workflow or Service Delivery

Key question: If we were to rebuild our whole system from the ground up, what would it allow us to do for our customers that we cannot do today?

In a push button service world, customer experience and convenience have become the number one criteria for customers across the spectrum. Holes in your IT system that diminish the customer experience can create an opportunity for an entrepreneur to wedge in and steal your market share.

Equipped with a mobile phone and an app, “field workers” are now part of your IT system, and can become a major part of your customer experience.

Even a company as technologically savvy as Starbucks could be disrupted by an asset-light company that exclusively focuses on fast delivery in dense areas. If 80% of coffee lovers order it “to-go”, is the coffee location as important? What about not having to wait in line and ordering your coffee when you want, not when it is convenient for you to pick it up? This is why Starbucks is actively investing in solutions to stay ahead of the disruption.

Sprig, a San Francisco based startup, redefines the fast casual restaurant industry by providing hot organic cooked food delivered to your door in 15 minutes in San Francisco and Chicago. Sprig has not just invented a new behavior; they have completely redesigned the ‘fast casual’ restaurant customer experience around the convenience that their millennial customers expect in a mobile first world.

Professional services are a particularly interesting category. Most services firms comprise highly educated and competitive young graduates from top schools working long hours and doing most of the work while more experienced case leaders or partners manage sales, client relationships and provide high level consulting.

But marketplaces like UpCounsel on the legal side or HourlyNerd on the management consulting side could completely change the status quo. Associates or analysts from top schools perform standard consulting work, while the platform focuses mostly on client acquisition, billing tracking, and automated workflows. This provides a key part of the traditional infrastructure that consulting or law firms offer, but leaves much more income for associates and analysts than the current system. There will still need to be an assessment layer, and it will take time before HourlyNerd is seen as as prestigious a path as McKinsey. But is it out of the question? What about the numerous mid-tier firms?

Regulation and Trust

Key question: What is regulation protecting me from today? What would a new player who did not play by the rules be able to do?

Regulations have always been put in place at a particular historical moment. But whereas regulations change slowly, technology moves quickly and can make some regulations obsolete — or change the definition of what is socially acceptable.

Again, Uber and Airbnb are prime examples and benefit from a very engaged and vocal customer base which can influence local elected officials.

Professions that require certifications or specific training can also be overruled by advances in technology. Knowing a city is not as necessary in a world where every phone has a GPS in it, in the same way that the role of primary care doctors might change in a Post- IBM Watson world.

Consumer and enterprise companies have previously relied on their brand power to lock customers in by building trust around their product and people. But between user generated reviews and services like Checkr for background checks, marketplaces can now provide trust and safety at a very granular level. This potentially undermines the brand power of incumbents while simultaneously diminishes the perceived necessity of regulation.

Conclusion

New marketplaces extend existing models by leveraging a new customer behavior. In this On-Demand Economy, the customer experience is the key point around which all systems, people and processes should be redesigned. What happened for consumer services like taxis with Uber will happen to business services: this is not a question of how, but when.

Come hear from the new leaders of this On-Demand Economy at the On Demand Conference in New York City and learn from those who are already testing new workflows to adapt to this new paradigm.

Disclaimer: I am an investor in some of the Companies mentioned in this article, including Sprig, Shyp, and Checkr.