Uber is so successful that the name is now synonymous and interchangeable with on-demand marketplaces that overturn the status quo and leverage technology at scale. Uber did not invent the concept of aggregating disparate supply and demand to create a business, but they did it in a loud, disruptive manner with cheap technology. Others are paying attention and trying to mimic their success.
Today, you don’t have to look far to see an “Uber for X” business. Why? In large part because there are so many cheap, simple, readily available building blocks for creating a marketplace business. While it has never been easier to cash in on the “Uberization” of services across our economy, the tools and strategies you use will make or break your business.
As the founder and CEO of Trustify, a company that seeks to shake up the industry of private investigators in much the same way that Uber did the taxi industry, I’ve seen what works and what doesn’t. For any aspiring entrepreneur who wants to build their “Uber for X” business, here is a guide, complete with free or cheap technology that will prevent headaches and save time.
Step 1: Identify A Marketplace
On-demand marketplaces are delicate balancing acts. You must have significant consumer demand for what you’re selling and freelance suppliers ready to meet the demand in an instant. Too many startup founders play the “wouldn’t it be cool if” game. They then build a product they would personally like, only to find out the hard way that customers didn’t want it, or the labor force wouldn’t play ball.
The Tool: QuickMVP.com
At Trustify, I used QuickMVP.com and the Lean Startup methodology at large to confirm that there was consumer demand for a “private investigators on demand” app before I did anything else. This proved invaluable, and sure enough, we had revenue our first day in business and have grown quickly month over month since we launched.
Just as Uber had to acquire drivers who would not get frustrated and defect, we had to ensure that private investigators were interested in a new, predictable revenue stream and a better way of servicing customers. This came fairly easy for us and PI demand continues to be immense.
Make sure you have the suppliers or else you’ll find yourself in an interesting pickle where tons of customers want what you’re selling but you have no suppliers to do the work. This is one of the many unique considerations of a business model where you don’t truly control supply.
Step 2: Acquire and Manage Customers
Acquiring customers will always be a top priority. There’s no point building your on-demand “Uber for X” app if nobody uses it. You also need to retain customers and turn their network into new customers.
The Tool: HubSpot
At Trustify, we use HubSpot, an inbound-marketing and sales platform that helps companies attract visitors, convert leads, and close customers. HubSpot is a great service for finding and managing customers, and they offer a startup discount.
Step 3: Manage Suppliers and Active Jobs
One of the most challenging aspects of building an “Uber for X” business is connecting disorganized consumer demand with disorganized suppliers. A good CRM with case- management capabilities can help you address this challenge.
Remember, “Uber for X” businesses are not difficult to launch technically. The challenges result from logistics and managing a cloud of suppliers that you don’t actually employ.
The Tool: OroCRM
At Trustify, we use the open-source OroCRM platform to acquire and manage our private investigators and to manage and monitor all of our active jobs. We had considered licensing commercial salesforce services, but decided against them because it was too expensive and did not provide a silver-bullet solution that we couldn’t find in an open-source alternative. Likewise, we considered building our own solution from the ground up. This would give us infinite extensibility, but it would require months to build and the additional labor.
Oro is built on Symfony, a framework of PHP components, so it is powerful, robust, and extensible. Oro is easy to use, and it has a strong API and developer framework for data interchange, integrations, and customer modules. Oro helped us to get to market quickly without a big investment up front.
Step 4: Communicate With Your Customers
Once you’ve connected your consumer with your supplier, it often behooves you to let the two speak directly. The challenge is in protecting yourself from suppliers cutting you out of the equation and working directly with the customer in future jobs. In order to prevent that, it is best to connect customers and suppliers via an intermediary that masks their mobile numbers but still allows them to communicate via SMS or text.
The Tool: Twilio
We use Twilio because it provides an SMS gateway, via an API, that allows the customer and the supplier to communicate without knowing each other’s phone numbers. Twilio SMS allows you to programmatically send, receive. and track text messages worldwide. There are dozen of options, but we chose Twilio because it is a large company that provides developers with tools to build SMS and VOIP applications via a Web API, using the standard web languages you likely already know.
Step 5: Ensure Transparency With Built-In Maps
When customers order an Uber, they can track their driver in real time. This works because Uber drivers have corresponding apps that track their exact location and send the info to Uber, who then sends it back to the customer in a nice display. When Uber first introduced this, it was a novelty. Now it’s taken for granted—even Comcast has tested a system where its cable technicians on service calls appear on a map within its app.
Transparency is a priority at Trustify. Before we came onto the scene, PIs had a reputation of liberal billing, which didn’t sit well with customers.
That’s why we’re developing a mapping functionality that will show customers exactly where their private investigator is when he or she is “on the clock.” Our goal is to remove the unknown from the equation, so that both customer and investigator are happy.