Schlaf's Notes

The “uberification” of our economy signals a fundamental shift in the way that local services are discovered and fulfilled.  In my research I’ve mapped more than 70 startups redefining the segments listed above.  Since 2009, Venture Capitalists have poured more than $1.75B into these companies (excluding Groupon, Seamless and OpenTable) and I expect this will continue to grow.  This funding figure is conservative since CrunchBase, Mattermark, and CB Insights don’t have complete funding information for each company. Additionally, I excluded more than 30 “online to offline services” that haven’t launched a mobile app but likely will in the next twelve to eighteen months. Some of these services include MakeSpace, Paintizen, Boxbee, Moveloot, Homejoy, Manicube, and Blue Apron. Finally, I decided to exclude apps where demand is fulfilled digitally such as Doctor on Demand.  

Despite being three to four years into the ODMS trend, I’m super bullish on the road that lies ahead and I believe there are still plenty of untapped opportunities. For example, apps are emerging in categories like elderly care, medicine, real estate, and security. Additionally, there are a variety of B2B services emerging such as office cleaning, supply replenishment, tech support, and fleet management.  Finally, a sub-trend I’m observing is startups that create “infrastructure” to power a variety of ODMS. One company that comes to mind is YC-backed Rickshaw which solves delivery and logistics for a number of the services in the above market map.  

There are common challenges when building an ODMS such as offline logistical complexity, low barriers to entry, customer acquisition at scale, and aggregation of regional / local supply (see Exec and Cherry for case studies).  But the entrepreneurs and companies that overcome these challenges await numerous multi-billion dollar market opportunities.  The U.S. economy is largely driven by the service sector so it’s only a matter of time until all of our services are accessible via our mobile devices.  The implications are huge for large companies like Google and Craigslist as well as thousands of regional and local service providers.  Hundreds of billions of dollars of enterprise value are up for grabs.  At RRE, we have been spending a lot of time thinking about ODMS and would to hear how you think the space will evolve over the next 12 to 24 months.