Winners of the Habit Economy

habit (noun): a settled or regular tendency or practice, especially one that is hard to give up.

Habit Economy: a set of businesses that have become successful because they induce a habit driven by benefits, primarily convenience that fulfills a gap in supply.

Google Searches, Facebook updates, Twitter tantrums, Instagram preens, Hola, Zomato, Swiggy, Big Basket, Uber, Grofers, OLA, Netflix are all moving parts of the habit economy, successful because they now are hard to give up, their convenience is tough to surrender. Each one of them started as an experiment for most of us and became the only way to function.

While Google, Facebook, Twitter and Instagram could be explained away by the fact that the most fun things were happening in those arenas, and the benefits are usually related to personal gain, services like OLA and BigBasket filled in a gap. Not having a driver in Mumbai means that one needs to add an additional hour to the travel time to any destination - 30 minutes to find a safe spot to park and another 30 to recover from the nerves of driving. In such a scenario came OLA - a ride hailing service that was not new to the city - we had cab fleets like Meru and TabCab and the ubiquitous Black / Yellow Taxis. OLA provided users like me with the convenience of getting a clean ride at short notice without the hassle associated with traveling in Mumbai. What started out as an experiment and an occasional use item soon because the default mode to travel. Everytime I want to travel beyond Bandra, I reach out to the OLA service.

Same is the case with BigBasket - a grocery delivery service. My family started ordering small quantities whenever we were stuck elsewhere and did not find time to go out to shop at the local hyper mart. Eventually within months the entire month's requirements were ordered and delivered during lunchtime or between meetings. It has come to a point where items needed the next day are ordered and delivered within a short time. The hassle of going to a shop and buying has been cut out of the equation. a habit has been formed. The same is with services that help order and deliver food. y entire office is addicted to the hassle free order and delivery of lunch everyday to the point that most of them have stopped carrying lunch boxes.

In both the cases OLA and BigBasket were consistent and quality was assured, they have now become habits that are hard to give up. However there are others that provided the same level of incentives but were chucked out of the usage window because of indifference and lack of consistency of service. Prime amongst them is the meal delivery service HolaChef. What started out as an excellent service has now become an afterthought - the food delivered is never close to what is promised, prepacked snacks are stale and out of date and when the orders are not fulfilled, the refunds are sketchy. Grofers too has issues with their delivery team and turn around times for any item extends to beyond 72 hours in Mumbai. A packet of bread that can be bought in 10 minutes from across the streets takes 48 hours to get delivered by Grofers.

The point I am trying to make is simple - there are a dozen other services that are needed - househelp, handyman, sharing of unused appliances, books, used clothes, parking bays, curated entertainment - the list is endless. Each one of these has the potential to become an habit, an habit that can have a fee attached to it. And each one of these has equal potential to fail because of lack of application and consistency. convenience like a drug needs to give the user satisfaction and a 'kick' that makes the user want to come back for more. If this economy is gamified in a subtle manner, it would be hard to kick the habit.

This economy that is driven by habits of people then begins to sustain an entire ecosystem of businesses that dovetail into each other. Dangerously balanced upon each other's value chain. Anyone of them can trip and fall.

The Habit Economy has not yet reached its tipping point and every service that gears towards providing a huge benefit, a giant wow will succeed. The challenge is to build something that consistently delivery that feel good factor. The others that cannot match will die through a hundred cuts in valuations, investments and ultimately customers.