app-developments
Mobile Applications

Three steps to help you build the next 'Uber for X' app

The following is a contributed article by Adam Fingerman, co-founder and chief experience officer at ArcTouch, a developer of custom apps that connect brands with customers

 

It’s hard to believe that just five short years ago, ridesharing did not exist. In hindsight, the need for an alternative public transportation option like Uber seems like a no-brainer, and there has been much speculation as to what fueled its rapid success. Many say it’s the problem that Uber set out to solve: the much-maligned process of finding a taxi. Some experts claim the timing – just after the recession – is the single most important reason for its success. Yet others believe it is the ruthless determination led by CEO Travis Kalanick, that is the driving (no pun intended) force for its rapid adoption.

Based on these conversations, it may seem nearly impossible to create another app as disruptive as Uber. However, like clockwork, hopeful entrepreneurs approach us every day with ideas for building the next “Uber for X” app (literally -- that’s how they describe it to us).

Building the next Uber app, of course, is much bigger than the app – it’s a multi-billion dollar business that grew out of an idea for a service, the intersection of needs from two very different customer types, and a foundation that was scalable. Here’s more about the three essential ingredients that anyone who wants to build the next Uber business -- and app -- will need:

 

1.  A Minimum Viable Product (MVP)

Far too often, we see apps and startups that try to do everything at once. Uber has been at it for more than six years, as the company started with a very focused launch back in 2009. Its minimum viable product (MVP) was a luxury car service – targeting a very specific, affluent customer. The infrastructure required to operate what was then called UberCab is a fraction of what it takes to run Uber today – but the service started small and focused. This precision allowed UberCab to get to market more quickly at lower costs, then test, refine and perfect the business model. As Uber expanded -- first from luxury sedans to mainstream cars (Uber X) and then into new geographic areas – they received validation from users, drivers and investors (with 13 rounds of funding reported) at each step.

Like most startups, there’s simply no way Uber could have started bigger -- without the human or financial capital to do it well. But a focused MVP makes a product/service much easier to manage. And it’s simpler to add features over time as a product matures than it is to take features away.  

Those looking to build an app or an entire business should never start by building the complete end product they have in mind. That vision, which is typically multi-faceted and grand, must be dissected before moving forward in the development process. Instead, ask: “What is at the very core of this vision?” and “What features can wait?” Once you take the time to determine the answers to these questions, you can define your MVP – the leanest product you can build to test your assumptions about that product and its intended market. Developers should put all other ideas aside and focus obsessivelyon making the product the best it can be.

 

2. A Market You Intimately Understand   

Coming up with a focused MVP isn’t a guarantee for success. Founders of successful startups almost always have domain expertise about the market from which their idea was hatched. This typically means having direct experience on both sides of a market. You have to understand a seller’s context and what it would take to operate a business, but you also need to know what drives potential buyers’ motivations.

Take Uber. Co-founders Travis Kalanick and Garrett Camp both led other startups in the San Francisco Bay Area, and had deep experience with the Internet and mobile technologies. Kalanick has said the pain of not being able to find a cab while at a tech show in Paris served as inspiration – an experience he understood as a user and a problem he knew he could solve. If there was a gap, it was in understanding the business of providing rides.

So, Uber started small so they could slowly learn the driver side motivations -- reportedly beginning with just four black cars in downtown San Francisco. This small-scale start also is what helped them solve the supply-and-demand Catch 22 that is inherent to this new evolution of collaborative services. An influx of customers are needed to encourage drivers to participate, however an abundant amount of drivers are needed to meet the demand of customers.

Kalanick, now CEO of Uber, also understood that the tech population, particularly attendees at major events, would be most responsive to an MVP luxury service delivered through mobile, and that these were precisely the type of people who, in true early-adopter fashion, would become brand advocates. Winning these early influencers was crucial to early growth driven by word of mouth -- long before Uber had the funding to spend on other types of marketing.

Those looking to become the next Uber of X need a clear strategy for how to find that all important intersection of buyers’ and sellers’ motivations -- but the answer is almost always going to be to start small.

If you are a later entrant to an established market then you need a different strategy to attract buyers and suppliers. To take on Uber directly, you’d need something extremely compelling to get riders to switch (to take the time to download your app, add their credit card, and use it), and to get drivers to switch (or at least drive for both). It’d be an uphill battle to catch up and compete with all those rounds of funding and years of domain expertise.

Some competitors have offered steep ride discounts, which might work for a period of time if you have a lot of venture funding, but it’s not sustainable. You could also offer to pay drivers more than what Uber pays, but that might mean you’re taking a loss on each ride, and at some point you need to be profitable to survive.

 

3.  A Reproducible Business Model              

The most incredible thing about Uber is its recent growth. Investor Bill Gurley of Benchmark called Uber the fastest growing company that he has ever had – and he is an investor of eBay.

One of the key growth drivers for Uber has been the ability to take its MVP – a driver/rider luxury ridesharing service built in San Francisco – and reproduce it. Doing this meant developing platforms over time that could be leveraged in other regions or with different products. There is lots of discussion in the tech world about the Uber platform – but really, the company owns several platforms:

  • a (physical) network of vetted drivers and cars
  • an online marketplace that intelligently connects buyers and sellers
  • a backbone for a free-agent sellers economy, giving solo practitioners a tool to make a living on their own — without corporate overhead
  • a place for buyers to find services at competitive and transparent prices
  • an ecommerce system that accepts money from buyers, and pays sellers
  • a feedback and rating system for both buyers and sellers
  • an infrastructure and an operations staff to support millions of buyers and sellers, 24×7

Over time, Uber has taken these building blocks and – lather, rinse, repeat – rolled them into new locations and new services, making their growth exponential. From luxury car service to mass market ridesharing. From San Francisco to hundreds of cities around the world. From ridesharing to food delivery and package delivery.  

As a business grows and its offerings evolve, its app must also, if it hopes to reproduce the engagement that catapulted it to success as it enters new markets. As with Uber, in many cases the app is the main way a customer interacts with a business. The app must evolve in parallel with the business. That might even mean eventually creating different apps for different customers, markets or use cases.

It is important to analyze customer data and feedback and continuously develop a deeper understanding of consumer behavior and needs. Iterating on an app satisfies users, which in turn creates an extended sales team of happy brand advocates that will eventually create a virtuous cycle to sustain a successful business over time. With the right idea, domain expertise and strategic growth planning, your business and your app just might become the next “Uber “for X.”

PREVIOUS ARTICLE

« Banks finally welcome cloud computing cover

NEXT ARTICLE

Bionic exoskeletons: Why haven't they replaced wheelchairs? »
author_image
IDG Connect

IDG Connect tackles the tech stories that matter to you

  • Mail

Recommended for You

International Women's Day: We've come a long way, but there's still an awfully long way to go

Charlotte Trueman takes a diverse look at today’s tech landscape.

Trump's trade war and the FANG bubble: Good news for Latin America?

Lewis Page gets down to business across global tech

20 Red-Hot, Pre-IPO companies to watch in 2019 B2B tech - Part 1

Martin Veitch's inside track on today’s tech trends

Poll

Do you think your smartphone is making you a workaholic?