Uber, a $68bn behemoth, has been generating positive press coverage since 2013, and it is no wonder why. The company has propelled a revolution on the market not only changing the way we treat traditional taxicab companies but also disrupting the whole industry. It should come as no surprise that other companies and startups rushed in to capitalize on its business model, giving rise to the on-demand economy and numerous Uber-for-X apps. I spoke to the CEO of Singree, Sergey Grybniak, to find out more about the on-demand trend and the expected Uber-ization of the U.S. economy.
Interviewer: Thank you for joining me today, Sergey. First of all, I'd like to talk about your company. Could you tell me how Singree is related to Uber-ization of the U.S. economy?
Sergey Grybniak: Singree is a full-cycle digital marketing agency that provides a wide range of design, development and promotion services for small and midsized companies. For years we have been perfecting our digital marketing skills to come up with the most efficient solutions for every industry. We guarantee that clients will see their businesses grow and bring more value.
We design and develop websites, e-commerce platforms, applications and marketplaces as well. So far, we have developed several Uber-for-X apps, launched three service-focused marketplaces and even built an OOB module to start an e-commerce marketplace. So, I think, we are quite 'responsible' for bringing the on-demand model to the masses.
Interviewer: Is Singree a U.S.-based company?
Sergey Grybniak: Singree is not a U.S.-based team. But we have been working with U.S. clients since 2011. I found Singree in 2009, and most of the staff (designers, developers, digital marketers, etc.) are still in Ukraine. In the U.S. we are doing business as Clever-Solution.com. Basically, we are an outsource company.
Interviewer: Could you tell me more about the on-demand business model?
Sergey Grybniak: To understand how the on-demand economy works, we need to take into account several factors. First, massive advancement in technology. According to the Pew Research Center, 64% of the Americans owned a smartphone in 2015, up from 35% in 2011.
Second, the rise of technology propelled a change in consumer behavior. Consumers are now entitled to get immediate access to goods and services around the clock. They utilize the power of their smartphones to cherry-pick businesses that efficiently solve their problems or offer goods that they need.
Third, consumers expect that their demand will be fulfilled in a convenient manner. Basically, it means that apps have to be simple to use, prices - competitive, and the service itself - impressive.
Take a closer look at any Uber-for-X app or marketplace, you will find the aforesaid factors. You need to provision goods and services conveniently, immediately and 24/7 to even have a chance in today's competitive environment. It's just how this new convenience economy works, and to be successful you have to be an active player.
Interviewer: It sounds like a huge step forward for the economy. But are there any issues involved?
Sergey Grybniak: Unfortunately, the on-demand model is not ideal. After Uber's initial success dozens of companies have tried to apply its blueprint to another niche. We have got Uber-fox-X apps for cleaning, babysitting, food delivery, laundry, dog walking, etc. but they never reached the same heights as their proud role model. But why?
The thing is that every type of service is different. For example, you don't care much about who is going to drive you to the airport, right? Yet, you will never allow a casual stranger from the street to babysit your kid. That is why, Uber for babysitting will never work unless companies somehow innovate to find a way to sift out responsible people who are experienced in nurturing and more over convince the parent that it is safe.
Another example is Uber for food. Just think about it: you have to deal with dozens of independent contractors who work in their own kitchens. Freelance chefs do their job but they also make mistakes. And there is no way you can control them. Hire professional people? That of course drives the costs up and makes the whole thing useless.
In other words, you cannot just replicate Uber's model and expect a stellar performance. You have to innovate and somehow reconfigure the business to make it work. It is not a press-this-button-and-solve-the-problem thing. There are numerous on-demand solutions that succeed even in an oversaturated market but they are unique, not just spin-offs or copycats.
Interviewer: Makes sense. Do you recommend giving the on-demand a try though?
Sergey Grybniak: Of course! I definitely do. The truth is, nothing is guaranteed but if you come up with a really huge idea and then make it work in a sense that you develop a great app and find ways of delivering your goods or services in an efficient way - why not?
The on-demand model itself is very high potential and, to tell the truth, time is ripe now. You can become an e-commerce marketplace operator, develop a service- or info-focused marketplace, and much more.
Interviewer: Do you have any experience with such projects? Are they a big thing?
Sergey Grybniak: Yes, we do. Just several months ago we launched a car-leasing marketplace called Carvoy. It is different from Swapalease.com or Leasify in a sense that you can not only lease your car online but also get it delivered right to your doorstep. It is extremely convenient.
Another example is Opporty.com. This service-centered digital marketplace allows companies and third-party service providers to find each other quickly and easily. Users can add offers, leave requests and create individual company accounts.
If you are a registered user, you can market your service by simply making an offer. Describe what you do and then just select the best bid. Meanwhile, if you want to find a professional, you just request a service. Describe what you need and your terms and wait for responses.
Opporty.com is a unique project because it empowers small and midsized companies, as well as individual service providers. You are free to compete in any niche you want by making tempting offers and leaving requests that bring value. Receive coins for every action and then boost your account's rank in the respective category.
We have developed an Uber-ized solution for the travel industry as well. Our digital marketplace called Vericost ensures that every traveler finds the best route to their destination. Basically, it takes care of your trip from point A to point B. Just choose where you want to go and Vericost will find everything, including different routes of reaching the destination, multiple air ticket and hotel options, ways of reaching the hotel of choice by local buses, trains and cabs. It is as simple as that.
Interviewer: And what do you think about marketplaces like Amazon or eBay? Is there any chance of competing with them?
Sergey Grybniak: They are huge and, frankly speaking, it does not make any sense to even try to compete with them. What for? You can start another marketplace, though. It can be a niche-specific solution such a marketplace to sell handmade items and crafts (e.g. Etsy).
To become an online marketplace operator, you have two options: (a) develop a custom marketplace from the scratch; (b) use a module solution. The first option is quite expensive but it guarantees that you get an easily scalable platform with unique features. The second option is tempting: you just purchase a module, move the data, set up the platform and start to profit off of every transaction.
Our company is focused on delivering development solutions to small and midsized companies. That is why, we develop online marketplaces on Magento, Opencart and other platforms. They are convenient in a sense that you can start your own marketplace without too much optimization.
Our team also uses an OOB marketplace module called "mOne Shop". Utilizing the module, anyone can launch a marketplace quickly and easily. You just need to be ready to invest in marketing and attract multiple third-party product providers and consumers. We do custom development as well.
Interviewer: Isn't the on-demand economy about to implode like the dot-com bubble?
Sergey Grybniak: I don't think so. As I have mentioned, the on-demand model is not perfect. Some companies succeed but some inevitably fail. Homejoy (cleaning) and SpoonRocket (food delivery) had to shut down. Zirx (valet parking) shifted away from the model. Instacart (grocery delivery) was pushed to cut costs by lowering wages of its couriers.
There are lots of their-business-is-not-great examples. It does not mean that the on-demand economy is somehow broken, though. The market is going through the experimentation stage to find out what works and what doesn't'. If you succeed in matching the demand with a proper supply, it will work like magic.
Businesses hold all the cards. One can develop an Uber-for-X app and someone else can start a digital marketplace - it is all possible. Yet, you need to understand that ingenuity makes a huge difference. You have to be different in terms of usability, service, products, etc. to have a chance. It's all in your hands.
Interviewer: Thank you for joining me today, Sergey. Pleasure talking to you.