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Show of hands: How many of you have tried to think of a way to “Uber-fy” your company?
I’m guessing you just raised your hand. In fact, the Uber chapter in tech history has probably inspired far more copy-cat businesses than any other in recent memory, with Uber-inspired laundry and food delivery, hair styling, and even flat-tire service. The only problem: it’s not a profitable model—even for Uber.
In the first half of 2016, Uber actually lost $1.27 billion, one of the largest tech losses ever seen. Even Amazon lost $1.4 billion in 2000 during the dot.com bust and then Jeff Bezos fired 15 percent of the workforce. For new companies looking to follow Uber’s model of “grow first, make money later,” the risk might be higher than the potential reward.
In fact, I’d say the road to hell is paved with failed “Uber-of” apps, with many realizing there just isn’t enough mark-up on delivery, fast-food, or tire-changing to leave enough black in the bottom line. While disruption is exciting, I’d say more companies would be profitable—in the long run—if they chose to embrace a culture of change.
I get it: disruption is sexy. It’s more thrilling, and offers bigger potential for fame, big-money buyouts, and social media coverage. But I’d argue it also leaves a lot more room for going down in flames. Change, on the other hand, leads to longevity and profitability. Most companies would benefit more from focusing on creating products, services, and experiences that meet evolving customer demands. The following are just a few tips to keeping your company afloat in the Uber-of age.
With the Uber model, companies are focusing on providing a service quickly—often to their own demise. Many are realizing it just isn’t realistic to offer on-demand service with real people and commodities, especially at the low prices customers are demanding. Even Uber has had its share of problems, settling lawsuits with drivers to the tune of millions of dollars, and facing an ever-evolving list of competitors in the market. Rather than jumping in head-first with a trendy business model, take stock of what might be a more realistic, scalable, and adaptable way to grow.
Think Beyond Big Picture
Just because you start in one industry, that doesn’t mean you’ll stay there. Netflix started as a movie rental service but later evolved into on-demand streaming and even transformed into award-winning content creation. Amazon and Google had similar epiphanies, moving far beyond their initial scope of work to take on everything from brick-and-mortar shopping to cloud storage. These companies didn’t just seek to copy someone else’s disruption model. They chose to work with their strengths and create their own.
Choose a Scale-worthy Model
Many companies, like Luxe, have been unprepared for the uber-amazing success that came along with their on-demand apps—so much so that they were forced to raise prices and suffer scathing customer reviews when employees couldn’t keep up with demand. Take a moment to take a rational look and determine if a new model is easily scale-able for your business. If not, plan accordingly—there could be dark days ahead.
Spot the Gaps in the Market—Yours or Others
Where and how are customers feeling unsatisfied or unfulfilled? How could your company help fill that gap? Uber succeeded because many felt taxi companies were holding them hostage to high rates and poor service. Where’s the hole in your competitor’s business model? What about the greater business market?
Rock Out, Instead of Rocking the Boat
I’ve said it before, but I’ll say it again: evolution is often more powerful than revolution, at least for companies hoping to make a lasting mark. Rock out to your own strengths and grow steadily from there, rather than seeking to overturn the boat.
Take What Works
The sharing economy may not be as friendly as its name implies, but it has offered lots of insights and wisdom into what works, what doesn’t, and what customers ultimately want. Take what works for your company and allow it to grow your company in a unique and meaningful way.
Uber is an amazing company that will likely go down with the likes of Google for changing how we live and work in the new digital economy. The only problem: Uber isn’t for everybody. Heck, Lyft isn’t either! Don’t be afraid to go your own way in the new business market—so long as your way is open to sudden and frequent detours.
Additional Resources on This Topic:
Creating a Culture that Embraces Tech Change
Innovation vs. Transformation: The Difference in a Digital World
This article was first published on Forbes.
Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio