The use of technology is the first factor that distinguishes Uber from other taxi companies in the last century, and technology is the key to great success .
In this article, we analyze the types of startups that have disrupted various traditional industries, then take a look at their customers and examine the pattern they have used to make money in business.
Using the verb "disrupt" about startups is a common occurrence. But what does it mean to discredit an industry?
When Uber was launched, and taxi companies in various cities sued the company. But experts knew that Uber had come up with a good idea for its business and found a way to circumvent the limitations that had previously existed in the taxi industry. Uber drivers did not need to take rigorous exams to obtain a certificate of no criminal record, did not need to buy or license a New York taxi driver, and Uber's automatic payment system eliminated the possibility of passengers leaving without paying a fare. When Uber's name came to the fore, many people became concerned about tarnishing or changing the global image of New York City; A city full of yellow taxis circulating in Times Square. Now the city has taken on a new shape and has become a city where people apply for Uber via mobile.
Today, 3% of Americans (equivalent to 9.75 million people) use car-like apps like Uber for their inner-city travel, and New York yellow taxis are still on the streets.>
Distracting an industry means producing a new product that engages the public and makes people think about the mechanism of the world.
The most successful industry distractors like Airbnb and Uber are so People's daily lives are so entrenched that it is impossible to imagine a world before their presence. Remember the last time you did not use your mobile phone to request a car?
What is a single startup?
A single startup is a company that produces a product or service Launched using technology. Of course, ready-made companies with the aim of providing a new technology-based approach to existing services or products can also be called single startups. For example, Uber was created by combining an old service (taxi service) with technology (application) with the aim of creating a new experience of instant taxi demand. But due to the increasing use of technology in various industries, startups today can be summarized in three words: innovation, scalability and growth.
What does" Tech-enabled "mean?
"Tech" means software and hardware products. For example, applications that you use frequently, such as Google and Facebook, fall into the category of software, while devices such as smartphones, laptops, and tablets fall into the category of hardware.
Another meaning of the word. "Single" is Knowledge-based Startups, companies that use technology to advance in sciences such as physics and chemistry. Telsa and Genetech, for example, are two knowledge-based startups.
Core technology is the core of all knowledge-based startups and the first factor that distinguishes a company from its competitors.
For example, Insacard's job, at first glance, is to buy the products you want from stores and deliver them to your door. But in fact, the services of this company are more than their mobile application.
Instacart has developed a sophisticated technology system that provides information on the assets and inventory of thousands of vendors at the moment to users who are ordering their goods. p>
In which markets are startups active?
Each startup operates in a specific market. A specific market is a group of people who, with common interests and tastes, intend to buy a specific product or service.
Most startups are divided into the following two categories. Of course, some startups fall into both categories.
Business to Costumer (B2C)
Consumer or Customer Pattern refers to a real person whose products or services are Purchases the company for personal use. Business to Costumer Business or B2C business is a business where products are sold directly to consumers. The most famous B2C brands in the world are Disney, McDonald and Nike.
Many B2C brands define their sales market based on demographics. Demographics include the following information:
For example, according to statistics released in 2015 by Pew Research, the majority of online taxi application users were white, black, and Latino men and women with a college degree. They ranged in age from 18 to 49, with an average income of $ 75,000. The geographical location of these people has been in and around the city.
These statistics help online car request companies such as Uber and Lift to more accurately select their target audience and better understand their audience demographic data. Uber, for example, can create an advertising campaign for travelers over the age of 50 who are out of town. This will double the number of passengers or users.
Business to Business (B2B) business model
B2B startups, also known as enterprise startups Recognized are companies that sell their product or service to other companies (or legal entities). B2B companies are companies created to support other businesses.
Some B2B companies produce part of a product and sell it to distributors, and distributors sell the final product to customers. . Intel, for example, sells its processors to Apple, and Apple uses them inside its MacBooks, and eventually the MacBook is sold to consumers.
Other B2B companies select their buyers based on the size of their company and their production capacity in the market. The size of the company is one of the points to consider because selling a product to large companies requires a larger product line, a more sophisticated product, and more customer service. Companies have different needs depending on their size and offer different services.
Organizations are divided into the following three categories based on size (number of employees).
Businesses Small and Medium (SMB) between 0 and 100
Medium Market (Mid-Market) between 100 to 1000 employees
Large companies (Enterprise) more than 1000 employees
A startup for To succeed, one must thrive in an industry called "Establishing market-share" or achieving market domination. A start-up must determine its target audience according to the needs of the population and know that it will have a chance to succeed in the market. In fact, most foreign investors analyze a startup based on the degree and chance of success in the market.
If there are other competitors in the startup area, enter that market, saturated market -saturated say. Although it is not impossible to penetrate a saturated market, competing with fewer competitors is always a better option.
To be successful in a saturated market, a startup must focus on a very specialized topic and a limited audience. Then offer solutions to audience problems and add value to other competitors' products.
For example, today there are many sources of news coverage, from television networks such as CNN and NBC to reputable newspapers such as the NY Times, WSJ and online news sites such as the Huffington Post and Buzzfeed.
In 2013, two individuals, Danielee Weisberg and Carly Zakin, conducted a thorough and comprehensive research in this area. During this research, they concluded that people do not need another communication channel to read the news, but need a simpler way to read the news.
The two researchers resigned after their research. And focused full time on their new company called theSkimm. theSkimm is an email service that reviews all the news published the day before and sends you an abstract on a daily basis. This email takes ten minutes to read daily and is suitable for those who have a busy daily schedule.
This system separates news by topic, allows the audience to share (added value) and finally updates Staying in the audience helps (solution to the problem). It is interesting to note that theSkimm has a larger digital audience than the prestigious New York Times.
Some of the factors to consider when analyzing a startup's potential to gain market share include:
Overall market scale: The sum of those who have the potential to
buy the product or service offered.
Growth potential: The extent to which the market in which the startup is active has the potential to grow in a given period of time.
Number of competitors: What is the number of companies and startups that sell a similar product or service.
Company strength: What is the intellectual, financial and technological capital of the company that makes it superior to competitors.
Examples of Startup Businesses
A startup business model is one that a startup company follows to achieve business revenue and profits. The business models of startups and traditional businesses are similar. But instead of shops and stores, startups do business in the context of technology. Many startups do not know at the outset which business and financial model they should use for their business. That's why they spend so much time finding the right path.
Given that each business model is unique to the same business, here are a few categories.
Definition: The term police market has been used since people shopped in physical locations such as shops and stores. The word literally means traditional market, but in its literal sense it means a place, both online and in physical space, where a financial transaction, purchase or sale takes place. Companies that use the police market model; Receive a fixed fee as a fee from other vendors who are trading on their platform.
Examples of Police Market Business Model:
Business to Customer=Uber, Amazon
Business to Business=EquipmentShare
Although Consumer Internet Business Models, such as social media, equate success with more followers, Police Market startups focus They focus on the ability to make a profit. This makes them dependent on the Unit Economics. An economic unit is the amount of money that is exchanged in each transaction.
The basic idea of profitability is just one phrase: "You have to spend money to make money."
Every business It must first weigh its costs: I was clear on the lights, staff salaries, advertising and marketing costs to attract more customers.
If a startup is profitable from an economic point of view, its final margin in Each transaction is more than the cost of selling it. (In simpler terms: If a company is profitable in terms of unit economics, it either makes a profit or does not make a loss in every sale.)
If you are more comfortable with statistics:
A startup is profitable for unit economics if:
Things to Consider When Checking Police Market Startups
Gross Merchandise Volume (GMV): Total sales of products or
services over a period of time
Take Rate: Total Wages Company Receipts from Sellers
Net Revenue: Rake Multiplied by GMV
Customer Acquisition Cost (CAC): Percentage of Customers Who Buy Multiple Sites from the Site
Attraction Cost Customer Lifetime Value (LTV): The final cost that is spent on attracting more customers in a given period of time divided by the number of customers attracted
Software as a service (SaaS)
Definition : SaaS companies produce software and sell certificates of use to their customers. These companies make money in many ways. Some of these companies only charge once to sell their software; This method is called "lifetime sales certificate". Companies that use this method usually charge a fee to upgrade their software.
But most SaaS companies use a membership sales model. In this model, the user pays monthly or annual fees to use the application and in return receives services for updating the application for free.
Example of Software as a Service (SaaS):
Business to Customer=Company Adobe Creative Suite
Business to Business=Salesforce
Tips to keep in mind when considering software startups as a service.
Monthly recurring revenue Or Monthly Recurring Revenue (MRR):
Income earned each month through the membership system.
Annual Recurring Revenue (ARR): Income earned by the company each year through various means.> Revenue Growth: The rate of increase in the company's annual or monthly revenue Gross Margin: The difference between total revenue and expenses
Conversion Rate: The number of customers who become one after entering the site They become customers of the website. Customer Lifetime Value (CLV): Percentage of customers who make multiple purchases from the site.
Customer Acquisition Cost (CAC): The final cost spent on attracting more customers over a period of time. Can be divided by the number of customers attracted.
Lifetime sale Certificate of Use:
Until 2013, Adobe Creative Suite service for sale for life certificate Was offered. The service included Photoshop, Illustrator, and Design. The total price of the set was $ 2,500, which of course had an additional cost for updates and new features. Cloud has changed. Users have access to in-app instructional videos and in-app updates by purchasing a monthly membership. To encourage users to purchase memberships, Adobe offers a free 30-day membership to customers who are new to the company's services.
Adobe Creative Cloud is a B2B and B2C business; Because this company gives a discount for the use of companies and in addition, its services are also available for personal use.
Definition: Hardware startups that use Technology designs and manufactures their products and eventually sells them. Hardware companies can reproduce and sell their products with minor changes in features and updates. Next, most hardware companies produce different types of a product and make the customer feel the need to buy.
Example of a hardware-to-business model
Business to Business=Apple and Microsoft
Business To the customer=Apple and Microsoft
Tips to keep in mind when reviewing hardware startups.
Revenue: The company's total revenue over a period of time
Working Capital: Money that circulates daily in a business.
Replacement or up-to-date cycles Replacement/Upgrade Cycles: The frequency of purchasing alternative or updated products.
Definition: Consumer Internet companies are companies that are an online application or service. For personal use. That is, these companies create platforms or platforms that are very exciting to use and people want to share them. Many startups that use this template did not have their application ready when they started, but eventually made a lot of money.
Example of Consumer Internet Business Pattern
Business to Customer=WhatsApp
Tips to Consider When Consuming Consumer Internet Startups.
Number Number of Active Users per Unit of Time: How many users
use your product over a period of time.
User Retention: The number of users who use a product over a period of time Use a product or service.
User Engagement: How often users use your product and how much time they spend using each product.
Revenue Growth: Increase in annual or monthly revenue of the company
Revenue Per User or Revenue Per User: The cost that each user spends on your product or service at a specific time.
Definition: E-commerce businesses sell their products online and make a profit from product sales.
By 2015, only 8.1% of Global trade was done online. But e-commerce has made the shopping experience easier. Customers can browse the corporate website and compare prices and make purchases without leaving home. . . .
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Website/App Traffic: .
Conversion Rate: .
Average Order Value (AOV): .
Customer Lifetime Value (CLV): .
Customer Acquisition Cost (CAC): .
API . .
Number of Customers: .
Volume per Customer:
Revenue, Minus Cost of Goods Sold: .
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Source: Phone Arena