When people think about Uber, the first thing that comes to mind is the consumer-facing app. It's of the most visible pieces of the company and also the easiest to explain. But when considering the products and technology that define Uber, the majority of products exist behind the scenes; examples include the matching algorithm that finds your driver within seconds, the mapping technology that shows you a car driving on the streets (in the right direction!), the operational tools that allow kittens on-demand requests. And the list goes on.
In a similar vein of things that aren't visible externally, there are also APIs that complement and enable these product flows to exist like Braintree's and Stripe's payment processing, Twilio's SMS and voice communications, or Layer's rich messaging. These kinds of companies allow other companies to focus on their core business and allow them to scale in parallel. One can only imagine how far behind many companies would be if they had also had to build these kinds of systems from scratch.
And now that the on-demand economy has become a model for many more businesses, there's a new wave of companies coming out that are looking to build infrastructure specifically for them. It's still early in this era but I think the companies in this space that succeed will have three main characteristics:
- their product offering doesn't create a competitive advantage
- their end-users will be the companies, not the suppliers (i.e. the 1099 worker)
- their addressable market extends beyond the on-demand space