What Founders Can Learn from the On-Demand Economy

Has there been a business model that has earned as much attention, funding dollars, and as many spin-offs as the on-demand model? Certainly not in recent memory, and certainly not so quickly.

But just a handful of years after the first on-demand companies rose to become economic powerhouses, the model is experiencing problems, and the many smaller companies in that space have to reinvent the system. The problem is multifaceted and is in part due to the sheer volume of companies competing for consumer adoption. Services that span the full range of customer needs are fighting for traction, and many are falling out.

Last year the sum of venture capital funding that was given to on-demand startups collapsed by 50% compared with the year prior. In fact, the on-demand model often referred to as the “Uber of X,” is also being called the “Uber of failure.”

But out of the mayhem, valuable lessons are slowly being learned. Watchful founders are identifying the symptoms of failure. The model can work when the right service is paired with the right operational support and the right vision. But it has taken billions of dollars in funding and hundreds of failed companies to understand what that mixture should look like.

Lessons to Learn from the On-Demand Economy

While by no means a comprehensive list, these are a few things that founders in and out of the on-demand economy can learn from the last few years:

Copy and Paste Doesn’t Work

It should go without saying, but even though imitation is the highest form of flattery, it doesn’t always make for a good business. That has been proven out in the on-demand space where hundreds of companies copied the Uber model with little to know innovation or even customization to the particular service they were providing.

Lessons to Learn from the On-Demand Economy

But by the same token, the on-demand companies that are still receiving venture capital funding and acquiring users are the ones who have built on top of the model. Scot Wingo, founder, and CEO of on-demand eco car wash service Spiffy put it this way, “Entrepreneurs who are succeeding in the on-demand space today do not operate like the original on-demand companies. They have changed their backend operations, changed their corporate cultures, and are going back to the basics of how to run a quality company and putting the customer first.”

Perhaps the single greatest takeaway is that the first responsibility of an entrepreneur is to innovate, even if only by a few degrees.

Fundamentals Still Apply

At the beginning of the on-demand era, there was an enthusiasm about the model that it was a gold strike. People rushed to open up their goldmine confident that they would also find incalculable wealth without needing to experience the drudgery of building a business in a traditional industry.

Of course framing any opportunity as a gold rush is easier to do in hindsight. In the beginning, it was hard to be a voice of reason and bet against something that had such universal appeal. But there were concrete signs at the beginning that ignored by many entrepreneurs.

No business model in the world allows you to ignore the basic tenets of good business. Every business needs a brand, a path to profitability (one that doesn’t assume the idea will go viral on its own), and core values that consumers can identify with. Most on-demand companies lazily attached their brand and values to the notion of convenience. But consumers want to be able to relate to a brand for its unique qualities – its commitment to excellence, passion for the environment, or desire to help the under served.

In other words, the fundamentals of business are essential in every industry, however great the hype.

Value is Greater than Hype

“Businesses solve problems,” says Wingo. “If your business is not solving someone’s problem or meeting someone’s need, it is not a viable business. So just because people have clothes does not mean they will use an on-demand dry cleaning service. There has to be more to the idea; a value proposition that connects with people.”

Good entrepreneurs have the ability to understand in a meaningful way what value is. Maybe it is instinct, perhaps it is just careful observation, but the most successful entrepreneurs can tell whether a value proposition makes sense or not. That is not to say that they are immune to hype and dollar signs, but that is the difference maker.

Testing every business idea against that principle is also what is changing the makeup of on-demand companies which are increasingly purpose-driven, slow growth, and laser focused on value. Wingo’s startup Spiffy has several of those earmarks, slowly launching in select cities, emphasizing its commitment to the environment, and using full-time employees instead of contracted workers. The industry is likely to see more changes as the winnowing of on-demand services continues.

Founders should pay close attention to those changes and learn from the on-demand saga.

New Year 2017 Wishlist: What Gadgets 360 Staff Are Looking to Buy for Themselves – and Why

HIGHLIGHTS

  • Predictably, there’s a couple of new iPhones in there
  • VR gets a couple of shouts too
  • Gaming seems to be the most in-demand category for 2017

Now that 2017 is upon us, the talk inside the Gadgets 360 lab has shifted to things such as CES, MWC, and of course, iPhone 8 rumours. And, since we spend too much time shopping for tech, we’re also predictably talking about all the gadgets we want to buy.

For many of us, this is also a bit of a break from reality – we’ve had people in our team dream of buying an Xbox One for a couple of years before taking the plunge – but who doesn’t enjoy planning that next big tech buy?

If you’re curious about the gadgets that will be filling the Gadgets 360 office in the coming months – hopefully – then read on to see everyone’s top pick for buying in 2017.

Abhinav Lal: HTC Vive – While this will also entail a PC upgrade for me, I want to enter the world of PC gaming VR, and the HTC Vive looks like the best bet so far.

Akhil Arora: 4K HDR TV – Good 4K HDR TVs are way too expensive right now. I was lucky enough to witness the capabilities of one such TV when it landed in our office, and when Netflix showed off the high-end version. Despite the lack of content heading into 2017, I’m sold on the idea of buying one – if money was no barrier – more so because of how much TV I tend to watch.

Sony Z9D

Devika Chitnis: JBL GO – I am in dire need of a portable speaker. JBL Go has a clean design which is awesome and comes in different pop colours that make the speaker look alive. I am eyeing the orange one. The sound quality is surprisingly good for an affordable portable speaker.

Gagan Gupta: Bose QC35 – Now that I’ve said goodbye to the 3.5mm jack thanks to my iPhone 7 Plus, I need a good pair of over the ear headphones that can keep out noise, expecially on flights and cabs. While the Bose QC35 may not be every audiophile’s headphones of choice, it’s still the best when it comes to active noise cancellation, and it sounds just right with my classic rock collection.

Gopal Sathe: Zotac VR GO Backpack – I’ve been interested in VR since the Oculus Kickstarter first got off the ground. That we are finally “there” is hard to believe. That you can now put on a backpack and enjoy a (largely) mobile yet high quality VR experience is nothing short of magical. If I have the money, I’d absolutely be getting the Zotac VR GO Backpack.

zotac vr go box contents

Jamshed Avari: Geforce GTX 1070 – It really is time to get serious about tackling my Steam backlog. I’ve been putting this off for a long time, but looking at the kind of performance that both Nvidia and AMD have both brought to the table this year, it’s finally time. I’m leaning towards the GTX 1070 because I want enough performance headroom to drive top-tier games at 1920×1200 pixels for at least a few years. The specific graphics card will depend on prices and availability at the time of purchase.

Ketan Pratap: Next iPhone – I have been an Android user all of my life but I guess it’s about time to go for my first iPhone. Considering this year is the tenth anniversary of the first iPhone launch, I expect the next one to come with decent changes both in terms of innards as well as design.

Kunal Dua: What Gagan said.

Naina Gupta: Next iPhone – I have heard too much about iPhone around me but never used it. I want to take experience of 3D Touch, Live Photos, and other unique features of iPhone.

Pranay Parab: Board/ Card games – I’ve been meaning to reduce screen time and spend more time with my friends and family. Card games and board games sound like a way to accomplish this, without spending obscene amounts of money at cinemas and restaurants.

We’ve all played and hated Monopoly (aka Business), but there are great alternatives such as Pandemic, Resistance, Catan, Game of Thrones, Star Wars: Rebellion. I’m also planning to play funny card games such as Exploding Kittens with my friends.

Ravi Sharma: Nintendo Switch – I am not much of a gamer, but the Nintendo Switch (and its hybrid form factor) may finally be the device that pulls me into the fold. The rumoured price tag of $250-300 makes the Switch cheap enough for me to afford it, without sacrificing my budget for a mid-range laptop that I am also planning to buy in 2017.

And games such new Sonic, Mario, Dragon Quest X, Legend of Zelda titles that are expected to be released for Nintendo Switch are enough to satiate my appetite for nostalgia, while the exclusives will hopefully be engaging enough to retain me on the platform.

switch

Rishi Alwani: Project Scorpio – The PS4 Pro has a one year headstart over Microsoft’s next iteration on the Xbox One, that will remain a highly competent piece of kit in 2017. However I’m extremely curious to see how Microsoft leverages its fantastic first-party franchises, such as Forza and Halo to make full use of Project Scorpio, more so with the likes of Scalebound and Crackdown 3 on the way.

Rohan Naravane: Google Pixel 2 – It was great to see Google finally taking hardware into its own hands, and launch the Pixel phones. Since there’s been only one Pixel phone till now, there’s no guarantee if, or when, we’ll see another one. If Google does release a ‘Pixel 2’, which I’m hoping will happen around the end of 2017, then I would certainly want to buy one.

Roydon Cerejo: Manfrotto Advanced Camera and Laptop backpack – I’ve been looking to replace my Lowepro Photo Hatchback (which is still serving me brillliantly) with something that can accommodate a laptop too. This particular Manfrotto backpack seem like the prefect combination of size, versitality and price, for me anyways.

manfrotto bag backpack

Sandeep Kumar Sinha: Sony Smart TV – I need to synchronise my playlists and other streamable content on the devices I own, and, in 2017, my television should have this feature. A Sony Smart TV is a likeable product that I am looking to buy in 2017 as most of the apps I use could be mirrored and projected easily.

Sanket Vijayasarathy: PlayStation 4 – I’ve been meaning to get my hands on the PlayStation 4 for a while now. I’ve played a bunch of PS4 titles at friends’ places, but seeing as how the console is now available for around Rs. 26,000 (for the 500GB model, whenever there’s a sale on), I think the time has come for me to move on to a current-gen console.

ps4 black white

Shekhar Thakran: Tekken 7 – I still have fond memories of playing Tekken 3 as well as Tekken 5 on my Playstation 2 from several years ago. As the game franchise is finally coming to PC with Tekken 7 next year, it is a no-brainer for me. With much-improved graphics and the same old characters, nothing that can go wrong.

Shubham Verma: Microsoft Surface Studio with the Microsoft Dial – The beautiful, large-screen monitor is worth swooning over, and the Microsoft Dial takes things to another level. I keep making different art designs on my laptop, and the Microsoft Dial and Surface pen would make this so much easier. While the price will probably keep me from ever actually buying this gadget, if I had the money, the considering the features and the advanced actions enabled by them, this would be the must-buy package of 2017.

What is Microsoft's Windows 10 S and should I upgrade to Pro?

Windows 10 S is a streamlined version of Microsoft’s Windows 10 operating system designed to improve performance by limiting the programs it can run.

The software can only run apps downloaded from Windows’ Store, making it Microsoft’s answer to Google’s Chrombook.

Announced in May, the company has called the software a “walled” version of Windows 10 that will help computers “run as well as they do on day one as they do on day 1,000”. One reason laptops slow down is invasive software, Microsoft says, so the new system will be welcome to many users.

However, the operating system restricts what apps users can download, meaning some users may want to stick to a more traditional program. For them, there is an option to upgrade to Windows 10 Pro for a $49 (£38) fee.

What is Windows 10 S?

Similar in many ways to Microsoft’s current operating system Windows 10 Pro, the new software has the same task bars, multi-tasking and hot keys as the current system, as well as the same look. The operating system has been showcased on Microsoft’s new Surface Laptop, released on June 15.

So what has changed? Apps installed on Windows 10 S are “contained” to prevent them from making changes to the operating system, which should mean the laptop performs better over its lifetime. Microsoft says the system should boot 15 seconds faster on average than a similar machine running Windows 10 Pro.

Microsoft Surface Laptops with Windows 10 S

It also helps to secure the system by limiting the device to apps that are verified and downloaded through the Windows Store, which prevents malicious and unwanted software from slowing the system down.

The operating system is also designed to lock down and secure devices for use as education tools, tapping into the market that has been dominated by Google’s ChromeOS.

Chrome and Firefox will not be available

One issue that may cause some people to change their operating system from Windows 10 S is the limitation of popular apps. The operating system limits users to Microsoft’s Edge web browser and makes Bing the default search engine.

The restrictions mean users cannot set Google as their default search engine or download the Chrome app. Other search engines like Firefox aren’t available either, while popular systems such as gaming platform Steam and Adobe’s Creative Cloud Suite cannot be downloaded.

More apps are coming to the Windows Store, however, with Spotify and iTunes some of the latest additions. Any user attempting to install an app that is not approved by the Windows store will be met with the following pop up.

Windows 10 S pop up
Windows 10 S pop up CREDIT: MICROSOFT

Should I upgrade to Windows 10 Pro?

If you really want to use apps that can’t be accessed on the Windows Store you have the option of upgrading to Windows 10 Pro, Microsoft’s current software.

The quickest way to upgrade to Windows 10 Pro is by attempting to download an app from outside of the Windows Store, which triggers a pop-up offering the upgrade.

Windows 10 Pro install
Windows 10 Pro install CREDIT: MICROSOFT

The download will be free to users on the Microsoft Surface Laptop until December 31, after which users will incur a fee. The software upgrade cannot be reversed, meaning once you switch to Windows 10 Pro you cannot easily return to 10 S.

The update also won’t be free on cheaper Windows devices, with those under $700 (£550) incurring a $49 (£39) fee for upgrading. Microsoft has not yet confirmed UK pricing.

What devices will run Windows 10 S?

The flagship device for Windows 10 S is Microsoft’s new £979 Surface Laptop. It will also come on a range of new devices from Acer, Dell, HP Acer, Asus and Samsung. These devices will largely be cheaper than the Surface Laptop, although few are available in the UK at the moment.

What Are Top Performing Customer Service Companies Doing?

How well does your company’s customer service measure up? Salesforce.com recently released a survey of nearly 2,000 global companies that are leaders in customer service. The study looked at common service benchmarks, service trends for the year ahead, and the factors that define high-performing customer service teams. Here’s what the survey uncovered about top-performing customer service organizations, and the lessons for your business.

Top performing customer service companies …

  • Have three priorities: “always-on” service, personalized service and faster service. For a small business, outsourcing customer service can offer your customers 24/7 assistance, CRM tools can help you maintain records enabling more personalized service, and setting goals and monitoring results can improve response speed.
  • Value efficiency. Speed is still the number-one metric top performers use to measure their customer service reps’ success. When asked to name their top three metrics, 47 percent choose average handle time, 38 percent say the number of cases handled and 32 percent name customer satisfaction.
  • Empower customer service employees to do whatever is needed to make customers happy. Top-performing companies are more than three times more likely than poor performers to have empowered employees.
  • Are more likely to be heavy users of technology. For example, high performers are more likely to be providing service via mobile apps or to be exploring video streaming as a customer service tool.
  • Excel at predicting what customers need. You can use CRM tools as well as social listening tools to assist in these predictions.
  • Use analytics and dashboards to learn and improve. You can use these tools to measure your customer service team’s key performance indicators, as well as to collect and analyze customer feedback.
  • Tap into the power of self-service and community portals to enable customers to find their own solutions to problems. (That’s a smart move, because the same study shows Millennial consumers overwhelmingly use self-service options first before initiating any type of interaction with a customer service representative.) Creating self-service options can be simple, like putting up a list of FAQs or more complex, such as a searchable database of solutions.

Is your small business on track to be a top customer service performer — or are you already there?

What Weakening Accelerator Companies Mean for Policy

The past decade has witnessed a dramatic rise in the rate of formation of accelerator companies. As the number of U.S.-based business accelerators has increased from one in 2006 to nearly 500 today, and the size and frequency of accelerator classes has grown, the number of high potential startups receiving financing from these entities has increased at exponential rates. But along with that rise has been a troubling trend: the quality of the companies coming out of accelerators has declined. For policy makers that pattern is an important signal.

Before I explain the policy implications, let me start with the facts. Over the past decade, companies in startup accelerators have declined on several dimensions. Today, the average accelerator company produces worse financial projections, has a poorer pitch deck, offers inferior information about customers, has a less developed product. and so on, than the average accelerator company a decade ago.

What Are the Policy Implications of Weaker Accelerator Startups?

Start-ups fall along a distribution of quality from incompetent founders with lousy ideas to the next. That distribution hasn’t actually changed very much in a decade. We know this because the odds of businesses failing at different ages have barely budged, and age-adjusted sales of the average company is approximately the same in inflation-adjusted terms now as it was then.

This pattern tells us something about what is going on. Accelerators are dipping deeper into the pool of potential companies. As they select a larger portion of the quality distribution, the average of what they have picked has fallen. The next Airbnb or Dropbox may still exist among companies coming out of business accelerators. But the fraction of accelerator companies that become unicorns is smaller than it was 10 years ago.

The Policy Implications of Weaker Accelerator Startups

The decline in the quality of accelerator companies points out an important dilemma that policy makers face. Most institutions to support entrepreneurship do not make start-ups better. The more successful institutions — accelerators, venture capital funds, or any other entity — just take a greater share of start-ups than the less successful institutions. As the more successful institutions take a larger fraction of new businesses, the average quality of the companies identified by those entities goes down.

This pattern has implications for public policy. If supporting institutions doesn’t actually improve the quality of start-ups, but instead just affects which ones are selected, then policy makers won’t get very much of a return on their investment in encouraging the development and formation of those institutions. If the money spent will only affect which institutions get the start-ups and not the quality of the companies themselves, then the kinds of outcomes that policy makers care about, like job and wealth creation, will not be changed.

But there are programs that policy makers can support that improve the quality of start-ups themselves. For instance, policy makers could, instead, spend money on training entrepreneurs to better evaluate business opportunities or design products or talk to customers. Government programs that improve the performance of new companies are a better use of resources than these other alternatives.

What you need to know about Apple’s new podcast analytics

The world’s biggest platform for podcasts is going to shed new light on the state of advertising in the space. On Friday, Apple announced it would soon begin offering podcast creators some rudimentary audience analytics.

Here is what you need to know about Apple’s announcement.

The state of podcasting:
• Podcasting started as an Apple-dominated medium, and it remains one. Nearly 80 percent of all podcast consumption happened on Apple devices in 2015, according to research by Clammr, though Google Play and Amazon’s Echo devices, among others, are eating away at that market share.

• Apple remains a dominant hosting platform for podcasts, hosting about 70 percent of all available podcasts, according to Adopter Media. Because of this, the analytics features teased last week won’t affect everybody in the industry, but it will affect the lion’s share.

• Measurement has been a persistent problem for podcasting as a medium. Podtrac, which compiles monthly statistics on show streams and downloads for creators including “This American Life” and HowStuffWorks, is limited to data creators offer voluntarily. This means some prominent podcast publishers, including The Ringer, aren’t counted.

• Podcasting has steadily marched into the mainstream. By the end of this year, more than a third of all Americans will listen to podcasts on a monthly basis, up from 20 percent in 2016, according to forecasts from Bridge Ratings Media Research.

• Because podcasts are a niche product and because of measurement limitations, podcasting remains a small market, about $200 million in the U.S. It is projected to grow to nearly $500 million by 2020, according to Bridge Ratings.

• The lack of audience data has also profoundly influenced the kind of advertising that supports podcasting. Ninety percent of all podcast ads have a direct-response component, according to Adopter Media.

• These analytics are likely being made available because more people are listening to podcasts immediately (77 percent), rather than downloading the files for later listening (27 percent), per Edison Research.

What it means:
While many podcast creators, including Recode cofounder Peter Kafka and Gimlet president Matt Lieber, see Apple’s announcement as a big deal, it still doesn’t put podcasting on the same plane as most other digital media for advertisers.

“There still won’t be good targeting data available,” said Karl Rosander, the founder and CEO of podcast platform Acast. “To really help publishers, Apple needs to share (i.e., get the data through an application programming interface for all verified shows) data with the hosting provider, not only through the publisher’s platform.”

The data that Apple will provide creators will be anonymized, which means that Apple-hosted shows still won’t be able to target people with the kind of audience data that ad buyers expect when using Facebook, Twitter or Google.

But as creators and advertisers accumulate more data about listens, it could wind up having profound implications for how shows are shaped. “Think of all the new jobs for audience dev folks in audio,” Hot Pod creator Nicholas Quah tweeted on Saturday.

As for whether it unlocks the brand advertising dollars that podcast producers have coveted for years, that remains to be seen.  “We are probably a year out from knowing what sort of meaningful audience data this will yield,” said Glenn Rubenstein, founder of Adopter Media. “It remains to be seen if this listener data will sway any of the larger advertiser holdouts who have supposedly been ‘demanding’ it.”