What is the On Demand Economy?

And Why does it Matter?

Consumer behavior is changing the access to goods and services. Increasingly the seamless access to these things means, the speed of delivery or deployment of the service is increasingly key and mediated by omnichannel consumer requests and needs on the go, already on a customer journey. 

The internet makes human desires more easily attainable

This instant gratification, this feeling of immediacy, well it is facilitated by those companies and retail stores going on the cloud. This is often, upon first observation, the business of technology companies, of SaaS. However, in the near future this is becoming embedded with all business, all retail, even with traditional brick and mortar banking in how they adapt to the real digital world via new technology. 

You might then say, we are at the start of a golden age of the on demand economy. It is after all: 

The consumer demand via the immediate provisioning of goods and services.

What is immediate and how fast is instant? As IoT, FinTech and 3D printing matures, this is indeed a different world. Those companies and brands that can tailor themselves to this new world that understand the high-value relationship of each touch point perfectly, not just each customer, will then be able to deliver this expectation. 

As you can imagine, doing so, necessitates a level of data augmentation that requires the customer experience is embedded with tagging, analytics and marketing automation that's timed to the preferences of the consumer. In the near future, this is all automated via algorithms that learn about the customer, on an individual and personal level down to the kinds of emotional experiences that trigger buying. 

Now this may sound like buzzwords in 2016, but this is reality in 2020. It's moving that quickly. Digital evolution is permeating older institutions and norms that are required to adapt, but some of them will be unable to. 

Arielle Morganstern, inspired me to give this some thought in how emotional triggers influence the timing of the best content that can influence a buying decision. Years of technological innovation lead to increasingly, micro transactions of marketing and attention to influence a consumer to identify with a brand or product. Given the competition in the attention and digital message ecosystem, the variable of timing is increasingly the key. A company like Urban Airship, understand this well. 

The convenience economy that is emerging has the same characteristics of the cloud. Cheaper, faster, lighter, simpler. In a sense, this is an age of disruption, where legacy systems make way for cloud SaaS that are highly specialized and do things not just better, but exponentially better in a different way.

Increasingly the real world is not brick and mortar cities and stores, but the world within the clouds, the digital world that the physical space must struggle to keep up with and emulate. This creates a gap between what consumers want in digital search, and the physical providing of the service, transaction or goods. 

So the real world is then the future of digital evolution. Retail, Healthcare, Education, Financial services - are being turned on their heads. This is both exciting and yet daunting. It's also pervasive. It's seamless and requires machine-intelligence to be optimized. It's no longer about a pitch, it's about an experience. 

Services of the on demand economy (ODE) are both more efficient and more scalable than their competitors. If your solution or SaaS isn't, it isn't a native ODE solution. Many companies will pretend to be, but the test will be their market. The key will be for a startup to be an ODE and the first one in their target market. In this manner, Facebook and Uber could be said to have brought the world a more seamless way of doing what they do. 

Rise of the Freelance Entrepreneur 

But ODE just isn't about tech solutions, it's about the new employment narrative in a more flexible economy. 

Every week, a new service seems to launch that aggregates and organizes freelance labor (those with excess time) to help those who have money but not time

Not only can SaaS turn industries upside down, the people who work for these startups are increasingly consultants, contractors and freelancers. I've written before about the Rise of the Freelancer that explores this new trend in greater detail. 

The On-Demand Economy is here to stay. It will represent the fastest and most significant shift in spending since the advent of internet commerce.

Let's not forget recent history: Uber. Airbnb. Instacart. The most talked about companies of 2015 all fall into one category: on-demand. This is a powerful trend, that doesn't get enough analysis if you ask me. The idea that customer experience is part of a living person that for the first time in history can be part of Big Data is telling. What the on-demand economy (ODE) is leading to is quite obvious: a world of predictive analytics automation. In that world, circa 2035, there is no human sales or human marketing, because machine-intelligence has gone far beyond what humans can do to impact other humans. 

As the age of automation hits society, freelancers will be the only ones to truly win out. SaaS startups will become so cheap to start and will copy off each other so much, that a quantum computing SaaS or app, will be able to do soon what an entire company can do today. This is then, a story of how technology will outpace traditional employment roles. People don't believe it, because for the most part we can't fathom what exponential technological change looks like five years from now, let alone 15 of 30. 

Most startups will fail for one simple reason, they weren't built properly to scale. That is, they don't meet the conditions to be an ODE solution or enterprise. 

The other reality is also quite simply, legacy industries will fail and be disrupted, it's just a matter of when. Will it be by a SaaS ODE solution or by machine-intelligence itself a few years later. For, in this reality, every high growth high margin (HGHM) market quickly reaches saturation levels because the solution is so seamless and proliferates so quickly because its scalable.

 This occurs until every aspect of society has been served. Every market has been integrated with a new infrastructure, the on-demand economy of the IoT. It's a pervasive world that responds to you in real-time, anticipating your needs literally nearly before you do. This is neither rocket science or science fiction, it's quite inevitable, it WILL occur rather quickly from here on in. 

What is Tinder but an on demand economy app that helps you locate potential partners? We know that 2016 is a big year for location marketing, and this is catering to the mobile reality of how consumers search for services in the moment. The first solution to meet the requirements of a consumer desire is the most likely to convert. So the ODE solution has to be THE solution for the problem it solves in the real world (digital search by voice as mediated by personal virtual assistants). 

Siri, where is x, y, z.

It's mediated by an algorithm and your desires are analyzed by algorithms, and analytics is building up on you in the Big Data matrix and this is happening now. For a list of companies that are aspiring ODE solutions, go here. Anyone can do this, try to build an ODE provider for yourself.