Quote of the month:
So many people walk around with a meaningless life. They seem half-asleep, even when they’re busy doing things they think are important. This is because they’re chasing the wrong things. The way you get meaning into your life is to devote yourself to loving others, devote yourself to your community around you, and devote yourself to creating something that gives you purpose and meaning.― Mitch Albom, Tuesdays with Morrie
“The Future of the On-Demand Economy”
by Merlin Kauffman, Founder of Soothe
The On-Demand Economy has its roots in the Sharing Economy. At the core of each is the connection of peer-to-peer through the filter of technology - a “collaborative consumption” model that seeks to make it easier to connect consumers with services. It makes sense that an economy suffering from high levels of unemployment would give rise to such a business model.
Workers with free time to spare have responded to apps such as Airbnb and Uber with enthusiasm. It was an ingenious innovation that introduced many to freelance work for the first time. In LA, in particular, the on-demand economy has allowed artists, actors, musicians, and anyone in a non-traditional career to create their own schedule and be their own boss, plus capitalize on the desire for flexibility. This new model has affected spa and wellness businesses by allowing individual providers direct access to their clients, eliminating spas, which often take a large percentage of earnings.
Uber is the poster child of the On-Demand Economy that captured the Tech world’s imagination and spawned countless related businesses in different markets. The markets are not new - we have had taxis and drivers for centuries. What the On-Demand model creates is an instantaneous fulfillment of consumers’ needs. Instead of booking an appointment in the future for services we want now, we can have the services when we want them. The On-Demand Marketplace eliminates uncertainty by ensuring availability, providing automated scheduling and safeguarding quality through vetting, verified identity, and customer reviews.
The On-Demand Economy is booming with hundreds of apps primed to provide services at the push of a button. The ability to provide a high quality and consistent experience is what sets different companies apart. Any business model requiring an individual provider to visit a customer’s home must implement a rigorous evaluation process, which should involve a background check, certification verification, and a live demonstration in front of a recruitment team. Customer reviews provide critical feedback for the providers to help them improve their skills and level of service.
Many may bemoan that market share is being taken away from traditional brick and mortar shops, such as spas, blow dry bars, and nail salons. However, this puts the power into the hands of the individual provider, who can earn more by connecting directly with their customers. On-Demand companies have little overhead and can afford to give their service providers a larger share, while keeping the price consistent for consumers through included gratuity.
As consumers are conditioned to grab their mobile phone, rather than their car keys, the on-demand trend will continue to increase. More apps will emerge that modify consumer behavior to seek the more efficient route. Sitting in one spot and getting exactly what they want, when they want it - all for a lower price - will become the de facto standard. This is especially crucial because the value is in saved time through having the service come to the consumer. Supplying a curated, high quality experience combined with marketing prowess will create the winners in the marketplace.
Merlin Kauffman is the Founder & CEO of Soothe, an on-demand massage therapy service. The inspiration for Soothe came to Merlin while attending Harvard Business School’s elite Owner/President Management program in 2012. Kauffman tried in vain to book a massage after 7 p.m., which led to an epiphany-like moment about his future business. Soothe works by connecting certified massage therapists to consumers in real-time via the app or website. Founded in 2013 using his personal funds, Soothe has now expanded to 7 cities across the U.S. and recently launched a corporate wellness division that promotes well-being for employees. As a teen, Kauffman founded eWireless.com, and later True Magic, a company that specializes in buying domain names. Kauffman says, “Being an entrepreneur is in my DNA. I could never imagine working for anybody else because I have always been focused on envisioning the innovation I would like to create for the world.”
Listen To This Interview with Merlin Kauffman by Donna Cohen
Are You Getting The Full Picture From Big Data? – Joe Leung