5 Reasons why On-Demand Services Fail; What No One Tells You? (Part-2)

The year of 2016 has been a testing period for startups all across the world, especially the ones operating in developing economies. Anticipating strong market growth, many on-demand startups tried their fortunes, only to falter, and eventually, fall out of the competition altogether. Before we end up blaming the market for that, let us also take a moment to understand that in the ashes of many failed startups, a few others found their fire. Therefore, the market wasn’t to blame, but their own operational errors, and this is what no one discusses. For the failed ones, the market is an easy target, citing trends that either don’t exist or the ones that never had an impact on the fate of their enterprises. Let us understand why startups fail, and what can they do to escape this vicious cycle.

  1. Market Expansion: They came, they saw, and they forgot their objectives. This has been the fate of many startups that haven’t been keen on expanding their existing markets. For how long can your enterprise cater to a single city, county, or even country without driving growth in their profits? Many startups fail because they do not focus on acquiring new customers and keep themselves confined to their existing customer base. The problem with such an approach arises when the existing user base finds a better option in a newly launched contemporary, thus leaving the enterprise high and dry with sudden decline in profits or surging losses.

  2. Create what the Market Needs: If Edison created the electric bulb in 2016, he too would have been on the list of failed startups. As an enterprise, your focus should be on creating what the market needs and not what you can offer. Often, a good product has a bad end because the market is not ready for it. Don’t be the enterprise that thought wireless earpods would be cool because they are the future. If you want your idea of future to be accepted, ensure that the product is affordable, has sustained use, and stands firm on user expectations. Innovation needs ideas and investments, both, to last, and without either of them, it’s just a theory no one pays for.


  1. Research, Re-Research, and Repeat: Yes, the eagerness to make quick money in on-demand economy is unparalleled among enterprises, and yet, most of them tend to discard the importance of a thorough research. The money you raise would depend upon the market you are looking to cater, and if you get that wrong, you would either miss your goal or end up with massive investments locked in an otherwise dead market. Spend according to your market trends, potential customer needs, and most importantly, how the economic situation warrants. In a period of recession, how well would the idea of an on-demand Dog-sitter service perform?

  2. Timing is the Key: When it comes to on-demand economy, the timing of service launch is integral to the fate of the enterprise. It won’t be a great idea for meal-delivery services to be launched during the season of frost, like it won’t be a great idea for college supplies and textbooks service during the holiday season. When you should launch and market your enterprise is going to heavily depend upon the factors that drive the timing of the market. Not only should your users be there to spend on your services, they should also be present in the first place. Alongside, ensure that your marketing strategy and promotional offers cater to a market that is active.

  3. Scaling and Revenue: You can’t deal in kilometres with a scale that works for centimetres. Scaling is an important phase for any enterprise, and as a leader, your focus should be to improvise and improve your business operations as these have a direct impact on your revenue. Without any scalability prospects, you are merely subjecting your enterprise to doom. To keep up with the competition in the market and in order to expand the existing user base, increased revenues would also be important which would only come from a carefully thought out plan of business operation and eventual expansion.

November 30, 2016



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