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What to know when building an on demand app

Building An On-Demand App? Here’s What You Should Know

What to know when building an on demand app

Smartphones are no longer the main offender for helping us waste time. The new culprit: On-demand apps.

With the overwhelming rise of on-demand apps, they’ve become an indispensable tool, allowing us to manage our busy lives more efficiently. Uber is the torchbearer for on-demand apps, with their innovative concept of letting us hail a car with a touch of a button. The concept has now expanded to various industries such as restaurants, grooming, flower delivery, laundry, etc. If you need something done, then get it delivered to your doorstep with just a few swipes and a touch of a button.

The On-Demand App Need

The on-demand business is built on the growing consumer demand for instant service. These apps capitalize on an individual’s wants/needs, lack of time and desire for fast convenience. They create an aura of instant gratification by providing doorstep services. The potential for on-demand services doesn’t stop with instant grocery or food delivery, but extends to on-call doctors and beauticians. It has created lots of opportunities for all industries to extend their services to users, who, in turn, benefit by saving a lot of travel time.

On-Demand App Potential

There are still numerous untapped business models and monetary potential in the field of on-demand apps. If you have an already existing business, then converting it into an on-demand app is an obvious solution to increase engagement/purchases/revenue. According to the Pew Research Center, there are still 54% of smartphone users who are yet to make any financial transaction through their phone. This shows that there are millions of customers yet to start paying for these convenient services.

The Not-So-Secret Formula For Success

On-demand apps may seem like an easy concept to grasp, but they have one of the most difficult business models. The main issue is that on-demand apps are not just a digital service (like Snapchat or Facebook), but also need physical services with real-time people running around and getting things done. Uber has a extensive network of cars and drivers, allowing them to efficiently serve users. The business success depends on effective service provided coupled with a fantastic technology to drive sales.

We’ve studied a lot of on-demand apps and the successful ones have these characteristics in common:

Trust: It’s essential to build trust among users to have a profitable on-demand app business. The user should believe that when he touches the button to summon a service, that the service will be completed and fulfill their needs. Why Uber works is that they have enough number of cars, letting users hail one within minutes. They have created trust with their users by providing constant quality service over the years.

Standardized Service: Every time a customer uses the service, they should expect the same result. Such standardization is important to induce a wonderful customer experience. Every aspect of the service, from the delivery to the pricing, should be standardized to help end-users make easy decisions.

On-Time Delivery: Time plays a critical role in making a successful on-demand product. No one will wait for their food for more than 30 minutes and or a taxi for more than 5 minutes. Enough resources should be available to ensure timely order execution.

Efficiency: This aspect is not only beneficial to the organization but also users. There are N amount of working hours and X amount of customers to serve. Even when the X amount increases, they should be served within the N hours. Efficiency plays an important role in succeeding in this business model.

Supply-Demand Chain: It is important to have available resources for serving the X number of customers. When there is a shortage of resource, the customer is let down, which usually causes them to never use your service again. Analyzing your market reach and maintaining enough resource/stock to run a profitable business are the most critical factors in the on-demand world.

Why On-Demand Apps Fail?

Most on-demand apps fail because they don’t take the ‘not-so secret formula’ seriously. Many app developers also don’t succeed because they try to take in more than they can handle. When they fail to understand their end users needs, the chances of failure are quite high. Also, many of these companies don’t try pilot projects or attempt running their service in a native environment (AKA – The real world). Many successful companies (such as eBay, Amazon, etc.) started off in “real world” testing, and now are heavy hitters in the on-demand world.

Venture Capitalists Love On-Demand Apps

On-demand apps have come a long way from when the concept was introduced in 2010. According to CB insights, the on-demand app economy has increased by $9.4B for 263 different projects in just 5 years. Also, there are over 15 apps that have had round 3 funding in less than a year, promising a bright future for these apps. In 2010, only 20 venture capitalists were ready to invest in on-demand apps, but now there are 198 venture capitalists investing in this genre.

The demand for on-demand apps is increasing dramatically. There is both consumer and venture capitalist demand for the best ones. Shameless plug: Our Los Angeles app developers have a lot of insight and experience in on-demand app development. Contact us and let’s talk!