Different challenges faced by on-demand startups


Many years back, lots of on-demand startups started showing up in the industry. However, all of them were considered an epic failure that would not survive the market. Nevertheless, many startups came out as successful companies that are now ranked among the top companies in the world. So, have you built an excellent mobile application recently? Do you think that this app is going to be the answer to numerous problems? Then you might be feeling great about it and you might be thinking that your idea is unique. However, that is not reality.

With the advancement of technology, thousands of startups are barging the industry every day. They are increasing in number every day. Owners are proliferating with more and more ideas. The internet has helped us and transformed us into the proper tech users. It has enabled us to learn and access to information very easily. Thus, people are coming out with newer ideas every single day. App-based services like online food ordering, online car booking, online grocery shopping, navigating apps, etc. have become the global hits of the market. As on one hand, many startups experienced the success of the industry, on the other hand, many startups failed miserably.

The Era of Automation

In this era of automation, technology and innovation play a significant job in expanding the proficiency of an association. Automation has an indispensable job in the business procedure streamlining. There is significant programming software that can be sent in the logistics framework. This saves a lot of time because manual dependence for the management is not considered relevant anymore. Additionally, precise tracking helps in improving the executives of process management. The worker subtleties and record subtleties can be overlooked by utilizing explicit programming framed for these particular assignments. Subsequently, the logistics firm should grasp the newer technological evolutions for expanding its efficiency and credibility.

When the whole world is big on digitization, a single click on your phone can do wonders. Many years back people never thought they could do everything on their phone. Starting from shopping to bank transactions to even booking a doctor’s appointment. Amazon’s one-day delivery shipping has shown people how a particular item can reach them in no time. If you are running or planning for an e-commerce start-up, then you should be very particular about the logistics. This aspect of your business can be the reason for your success and if not properly dealt with it can be the reason for your downfall. If you are failing to ship the products according to your customer’s desires or if you are, spending an excessive amount on shipping, then your business is bound to failure. Maybe you are selling items that are very sustainable like apparel, environment-friendly décor items for the home, or non-toxic toys, etc. whatever may be the product mix, and you should always be ready to deal with the present e-commerce situations. Your company should be able to outgrow its current e-commerce levels. All your dreams related to your business can become your worst nightmare because when it comes to logistics everything is unpredictable. You may be an expert in your industry; logistics can still ruin your business, as it is a science on its own. It is always very tricky to master all the logistical tactics. 

The best advantage of a native digital brand start-up is that your company is not bound by procedures and legacy systems. You can apply best practices for your business from the beginning itself rather than just discovering later along the way. You can start with the best and proved practices that can help your business grow and flourish from the beginning itself. You can incorporate new technology and better analytics for your business which will help you in cost control and will help you deliver your brand promises. After all, any inventory that is stacked up on your shelf represents the investments that you have done for your business. You should always track your inventory so that you can look after your cash flows. This will open a broad way of complex analysis of inventory which guides you to your strategic business planning.

Major challenges faced by the on-demand startups

There are several challenges a company faces when it first enters the industry starting from thriving for visibility to dealing with a highly competitive market. Let us discuss some major problems:

Very competitive market

As the demand for the hyperlocal on-demand services increases, thousands of new startup companies are opening up that are catering to every need of the customers. Many entrepreneurs are jumping on the process of opening up a startup without planning for it properly. You first need to have a clear vision of what you expect your future to look like before jumping to conclusions. To co-up with their competitors, they are offering their services at a minimal amount. As the competition in the market is massive, the startup needs to compromise in some aspects to stay valid and evident in the market. They spend a lot of money on delivery aspects like transportation, infrastructure development, and labor. Due to insufficient funds, the budgetary constraints act as a huge roadblock for the new entrants. Due to the lack of knowledge and experience of the entrepreneurs, they fail to create a strong impact in the market and end up shutting down completely. After spending a lot of money on the workforce and the marketing ventures, they are facing a serious crunch in their financial states and this ultimately leading to the demise. 

Investment difficulties due to reluctance by the venture capitalists

The failure stories of startups keep hogging the popular headlines and newspapers every day. This has made the investors very skeptical. The honeymoon phase between the startups and the VCs is final over, and the investors are mainly interested in the numbers. They have slowly backed off and started analyzing the actual credibility of the on-demand businesses. The VCs have become very particular about these startups and have started demanding them to prove their relevance to their business model. However, the financial draft or the funding of the startups has not dried up yet. The companies that have a calibrated financial model are most likely to hit the jackpot. The VCs have the vision that the startups that have a long-term objective plan are more likely to excel in the market and thus these companies have become the focal point of the investments for almost all the investors.

Understanding logistic management

A logistics firm is an inventory network process that executes, plans, and controls the proficiency, viability, and capacity of the products, its benefits, and data related to it from the purpose of origin to the point of utilization to meet client prerequisites. Strategic assets, for example, tanks, pipelines, and boats, have the fundamental goal of making items, gear, and crude material, stream simpler all through the process to amplify benefits. The calculated assets arrangement generally is applied to frameworks for its reliance and related requests and supply of items. Overall, in the calculated model appraisal, hardware with unwavering quality, which profoundly influences benefits, is not considered. Much of the time, logistics is additionally not considered in the RAM examination. The primary conversation right now is the significance of including plant dependability issues and calculated assets, which together have a perplexing model. The fundamental strategic assets in a treatment facility are tanks, which give oil to refining plants. Such tanks diminish framework inaccessibility at whatever point siphons or other hardware that supply oil to the tanks shut down.

Logistics managements organize streamlining that is deficient without incorporating estimation, examination, and inputs. You have to quantify the amount of yield when you introduce new processes in the system. This is significant as it suggests the achievement or disappointment of the procedure. Estimation devices and programming ought to be incorporated that effectively decides and arranges the data according to the prerequisite. Your future arranging is intensely reliant on the deliberate data. The measurements identified with various tasks.

Slender profit margin

In the United States, there are several new entrants in the on-demand market and for this reason, the prices are optimized in a lucrative way for the customers. High prices can harm the growth of revenue generation and sales of the business, as the high prices can drive away existing and new customers. The market rules state that the quality of your product or services you are offering to your customers should match the pricing you set for the same. Your price should not linger around the higher ends or even the lowers end concerning the quality of your customers. As you should not charge more, in the same way you should not charge less. This can have a great impact on the profit margins of your business. Regarding the persistent competition of the market, startup companies cut down on their prices of the product to stay visible and evident in the industry. Most of the startup fails to optimize the cash flow of their business and thus they fail to reach the break-even point. If you want your service to become scalable, you need to stand out in the market by fighting out all the odds. This can happen only when you understand that you need to burn some cash to standout. You need to present something better than what other products in the market is already providing the customers. If you start losing your orders, it will be very difficult for you to make money at such a point. Therefore, you need to price your products very carefully and reasonably so that you can constant counts of orders. However, whatever may be the case the startups end up losing either their customers or they end up losing money.

The incompetence of product in the marketplace

Your entire startup idea will be a major failure if the product you are planning to bring in the market is not of superior quality. The customers will go for your product only if your product and edge out the quality of the other existing products or services of the market. Many hyperlocal startup fail in improving the quality of their products over the years. This happens because they focus more on monetizing their business by creating a strong customer base. However, they fail to realize that this would work only if their product is up to the mark. If you want to create a strong customer base, you first need to know how to keep them satisfied with your product and services. According to an analyst, the market size for such businesses is growing every day.

The on-demand business is growing every day and it is adding more and more value to the U.S markets. To maximize their customer engagement, they offering their new and existing customers with some exciting offers and discounts. However, they fail to understand that this is not a permanent solution to increase customer engagement. They need to think of some better to gain the trust of their consumers and learn to enhance brand loyalty. Such particular bizarre tactics of customer engagement depreciate the value of these startup companies, as the investors are very skeptical about the discount model of marketing. 

Supply-chain management

Supply chain visibility is table stakes today. It wasn’t too long ago that visibility was a “nice to have”. Now it is “a must-have”. It is important to know what is going on inside the supply chain at all times. At times, there are potential disruptions in the supply chain; there are market opportunities, and things keep on changing with time. Therefore, it is very important to have visibility on both the upstream and down streams. This gives you the feeling of comfort to see all those processes taking place and you have full control over everything. This helps you to respond to potential disruptions or opportunities that might arise when a shipment is in transit. Every company whether it is a big or small company, supply chain visibility is important for every business or company. If you are an importer or exporter or even have a multi-national shop, you still have all the same fundamental components involved in your supply chain. 

You got a lot of things that can happen and go wrong when a shipment is in transit. The smaller companies are a lot easier to communicate internally. They have fewer people involved in the supply chain in servicing your customers. Bigger companies have more stakeholders and more finance groups. They also have many buyers and several logistics people are involved. Overall, it is a big crowd. Therefore, internal communication becomes difficult. This is the reason why a good visibility tool is required to not only manage shipments and supply chains effectively but also it gives all those stakeholders insides the visibility of your company. This latter part is important too as it makes the internal flow of communication much easier to manage. When supply chain visibility is concerned, there are certain things you need to focus on.

Inefficient resources

If you are lacking in expertise in the operations that is related to the major domain part, then this might result in the downfall of your business. The situation is very similar in the case of startups that are operating under the on-demand business domain. If a suitable workforce is not employed for the job, then the development of the startup can be at stake. Moreover, if the workers are not efficient enough to co-ordinate in the team or they are unwilling to perform with the associated team, then your startup will be dysfunctional. This will ultimately lead to a complete shutdown of the company. Most of the company that has experienced the downfall is mostly because of the lack of a skilled workforce. Before appointing the employees for their particular job segments, they should get trained first. 

You need to provide them with proper training before you let them handle your company’s whereabouts. Funds can dry up very easily for the startup companies and if the high profile executive exits the company, then this can have a jolting effect on the overall growth of the company. Often startup companies end up hiring employees without assessing them properly on their skill sets. A startup needs to have a proper set of employees to develop and grow. In most cases, startups fail to recruit professionals due to a lack of capital. They fail to motivate their employees as they fail to provide them with raise benefits. As the on-demand startups are a niche domain, you must hire people that have some experience in the same filed.


There are thousands of Startup Companies opening up every day.  In this rush, how will you manage your company to stay on the highlighted spot of the industry? All you need is to keep all the above aspects in check, and then you are all set. The most important aspect of success for an on-demand startup is to stay goal-oriented and to have a proper plan. You need proper demand planning before you get started with your startup company.

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