On-demand Business model for startups

Over the past couple of years, the trend of using on-demand services offered by different industries has become more popular than ever. And that is because of the rising demand for mobile apps, and the on-demand business model has established itself to be successful.

While the earlier on-demand services were restricted primarily to on-demand ride only, today, it has become a part of several sections such as food delivery, in-house services, healthcare consultation, electronics, etc. The result of this immense expansion is that the on-demand economy has today become a revenue-generating machine.

The Basics of On-Demand Business Model for Startups

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According to Burson-Marsteller’s on-demand economy survey, 86.5 million citizens of the United States have used on-demand services. Moreover, the on-demand model for startups has enabled a flexible working model for individuals. Approximately 46% of people are working in this economy conveyed that they work because of flexible work schedules.

While the expansion of the on-demand business model is beneficial for the economy, it comes with some challenges for the startups to enter such a fiercely competitive market.

This article cum handful-guide is for every entrepreneur having sufficient funds to get into the on-demand services. This guide will help you understand what an on-demand business model is, how it benefits you, and all you need to do to enter this market.

Understanding what is an on-demand business model

As the phrase implies, on-demand refers to providing customers with their desired items or services as and when needed. The on-demand business model for startups is entirely reliant on speed and simplicity, making it alluring for everyone. It is characterized by three factors, VARIETY, ACCESSIBILITY, and ZERO COMPROMISE.

Understanding what is an on-demand business model

The variety term refers to the ability of the customers to select their desired product or services. It is more about exploring the needs of the industry, understanding what your audience wants, and how you can fulfil them.

Accessibility is all about being available all the time when your customer needs you. If you are not available on the go, you are not part of an on-demand business. Bridging the gap to reduce delivery time and keeping inventories stocked up is an essence of an on-demand business model.

On the other hand, zero compromises are the differentiating factor for your business. If you can provide personalized services to cater to the customer’s demand, you will surely win the market.

Let us understand why the on-demand model for startups is so successful and in demand.

Let us understand why the on-demand model for startups is so successful and in demand.


One of the most significant benefits of an on-demand business model is convenience. People, these days, are more inclined towards services that they use at their convenience. The on-demand business model provides an easy-to-use interface and innovative features that simplify different services for nearly real-time usage.

Accuracy and reliability 

Startups need to establish trust in their customers. And an on-demand business model truly helps businesses prove themselves as trustworthy by exceeding customer expectations. With on-time delivery and order fulfilment of assigned duties, you will satisfy the customer in every aspect.


This is one of the significant factors for the immense popularity of the on-demand business model. The services under the on-demand business model umbrella are cheaper than conventional services.

Gaining a competitive edge

With the increase in quality, accuracy, and speed, businesses can quickly gain a competitive edge. It becomes easy for businesses to differentiate themselves from others. By providing services in the market at a lower price, businesses can easily attract potential customers and provide better value for the services they provide.

Improve performance and security

It becomes easy to improve the performance of your business without compromising the quality of services. While customer demands are constantly changing, it is essential to adopt such rapidly changing customer demands. With on-demand services, you can change your application on the go based on the changing demand of customers, which will help you uplift the performance of your business.

Optimize value chain

The on-demand business model is all about speed and convenience, and it is intended to reduce the gap between order placement and delivery. This, in the end, improves the value chain.

What is all it takes to enter into the on-demand business market?

There is nothing specific when it comes to on-demand business. If you want to get into the venture of on-demand business services, you need to work out a couple of things to achieve the desired success.

  • Understand and find your niche

Of course, there are many market players in the on-demand business. But it doesn’t mean you cannot make your place in such a crowded market. And the first thing you have to do is identify your business niche.

Once you find your business niche, the next step is to identify the unique selling point. Start with collecting data, optimizing it, and analyzing to understand whether you can survive in the market or not. It will be easy for you to filter out what will work best for you and target the intended audience.

  • Develop an efficient application

One of the best things to make a grand entry in the on-demand business is to develop an efficient application. It is a crucial ingredient to achieving desired success for startups. Such an application could be a vital tool to bring all the necessary features to give a boost to your on-demand business.

It will be a primary tool to establish strong communication with the customer with an intuitive and engaging user interface. It will help you bring natural traffic to your business.

  • Work on optimizing your value chain

Simply adding attractive features and intuitive design won’t help you achieve your on-demand business goals. It is essential to make sure you optimize your value chain too.

It would be best if you worked to reduce the gap between your online order journey and order fulfilment. It will help you increase your app’s value to the customer. A waiting time will encourage customers to find an alternative. And in the end, you will lose the majority of your traffic. This strategy has already helped many companies, and you can even utilize the same to succeed.

  • Try to attract users and develop your network

The ultimate goal of the on-demand business model is to entice users and engage with them. It would help to attract new customers via various social media platforms. You can represent your application in various social events to attract new customers.

Factors to be considered for ensuring the selection of a successful business model

Factors to be considered for ensuring the selection of a successful business model

Think about commoditization. You must count the variables related to your product or services. Set up a precise process to simplify the usage of your on-demand application for the users. You should offer enough freedom to the users to have an outstanding experience with your application. Figure the specific model that works for you and apply it.

Concentrate on the supply chain and the app. You should always try to reduce the supply or opt for the small business at the initial stage. You can choose either of these approaches to streamline the supply chain.

The pricing model. When it comes to on-demand business, pricing plays a vital role. You should be very transparent. Everyone, including your customers, is aware of the product’s price and with whom you are competing. Therefore, you must keep your pricing as competitive as possible. It will help you convert your one-time client into a regular customer.

Don’t forget your stakeholders. While developing an on-demand app for your business, you must consider the stakeholders as they are the ones who will help you grow your startup business.

Closing Remarks

The on-demand business model is like a roller-coaster ride, and the future is undoubtedly promising for this business model. However, you must consider a couple of things to make a noticeable and profitable entry into the market. You must understand your business niche and invest gradually to leverage improved ROI.

How Can AddWeb Solution Help?

The on-demand application development industry is on a continuous roll, and it is reaching sky high with each passing day. Thus, it is essential to provide a new dimension to your business by partnering with an innovative on-demand web app development company to help you reach your target audience and land you into a zone of profitability for your business.

AddWeb Solution is a globally recognized on-demand app development solution provider to help your business discover infinite possibilities of mobility solutions. With more than 9+ years of experience and hundreds of on-demand apps developed, we strive forward to empowering your business.

Frequently Asked Questions

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