Online marketplaces today must do more than just connect people and establish trust through those connections. To stand out, marketplaces need to go deeper and deliver a more end-to-end (E2E) user experience.
We are entering the third generation of marketplaces. The first generation was solely about liquidity. (Think Craigslist, where a simple list of posts with requests or provided services are available.) The second generation came into being as inventory amounts exploded, making the discovery process more challenging. Marketplaces, like eBay, Airbnb, and Etsy, built trust via reputation systems and social validation to help the discovery process become seamless.
Now, this third generation is making discovery redundant or unnecessary altogether. The prime examples of this are Uber and Lyft. Those companies make the search process incredibly simple and remove the discovery process (e.g., you don't interview your taxi driver). These E2E solutions go deeper at both ends—supply and demand—to remove friction in the experience.
Uber's success has inspired the term "uberization."
"The concept of 'uberization' has taken the general meaning of disrupting any industry through the use of technology to circumvent unnecessary bureaucracy and legislation," states author David Glance of The Conversation.
Here are a few examples of industries that have already been "uberized" and a couple that are ripe for uberization.
Renting or purchasing a property is a long, arduous endeavor and often a headache in competitive metropolitan areas. The fast-paced, high-demand market for apartments has pushed real estate to evolve and move a majority of the discovery process online.
Renters today can use digital platforms to bypass the real estate broker (and their fees) to contact the renter directly.
Suitey, a technology-powered real estate brokerage for New York City, is able to solve these conflicting incentives between customers and agents through professional in-house brokers. Through understanding the users' behavior and search preferences, Suitey can also recommend properties that the customer is interested based on price, location, and other factors.
2. Automotive Re-Selling
Traditionally a face-to-face industry, buying a used car—from negotiating prices, dealing with a salesman, getting the right information, and doing the paperwork—will make anyone anxious. The playing field is rarely level as sellers always know more, and so buyers have a bad experience.
Beepi solves many of the inherent issues in the used car market by making buying a used car as simple as buying a laptop from Amazon. Beepi does a full 185-point inspection, guarantees the quality of the cars listed, and does all the work behind the scenes to give both buyers and sellers a hassle-free experience.
3. Personalized Tasks
The freelancing industry has exploded as roughly 30% of US citizens now have a second income performing freelancing services. Companies are also taking advantage of this trend—especially SMBs that can now hire with great flexibility and "on demand" through digital marketplaces.
Services like Contently for writing, Rev for transcription, and SuperTasker (which my company PeoplePerHour launched recently) for production and editing of bite-sized digital content examples of such E2E marketplaces. The uberization analogy stems from the "black box" approach: The customer puts a request in with one click, and the black box does the rest, returning results from highly curated, trusted taskers within minutes.
Two Companies Ripe for Uberization
In today's world where everyone has a smartphone and text-based messaging is king of communication, the wireless industry is one ready to adapt into an E2E service. Due to technology, we now know where Wi-Fi is most used (metropolitan cities vs. rural suburbs) and where it is most needed (corporate parks at lunchtime). In a demand-generated setting, Wi-Fi services can be concentrated in needed areas and given to those who need it most, for an appropriate price based on willingness and need.
The amount of data collected and analyzed makes financial services another industry ripe for uberization.
Typical credit services require detailed assessments and approvals through face-to-face processes before becoming "accepted." Here, an E2E marketplace can use collected data points from the user as well as assessment criteria from the financial institution (risk, amount, overhead) to determine eligibility. This model can then also provide recommendations on better fitting financial options, leading to increased revenues.
"This 'end to end' experience, starting from curation on the supply side with more control of quality to a much more personal and defined service on the buyer side, removes friction from the overall transaction environment," says serial entrepreneur Fabrice Grinda, who has led and supported several ventures in new generation marketplaces.
What the user doesn’t see is that for this to work, a true E2E solution is needed, starting from tight curation of checkpoints, constant upgrading of supply, and algorithmic intelligence overlaid on big data layers.
The once laborious discovery process is condensed to one click.