Would you like to be the next Uber or GrabTaxi? Here are 6 key attributes
December 9, 2014
So, Grab Taxi has put Singapore technopreneurship on the world spotlight. Last Thursday, 3 Dec 2014, Anthony Tan, the founder of GrabTaxi announced that Japan’s SoftBank has invested US$250M into the company. As most of you know, GrabTaxi is the rival to the Silicon-Valley based Uber, who themselves just announced another huge tranche of funding that would put Uber’s valuation to as much as US$40B! Now, if you didn’t already know, both GrabTaxi and Uber are taxi-hailing mobile apps, the former with a more robust back end model through onboarding owners of private vehicle as a pool of taxi service providers, while GrabTaxi is offered to all cab drivers, hence no onboarding. Obviously, both companies have different customer value, but one thing is clear, they serve the taxi-riding market which is growing even in the face of increased public transport infrastructure in Singapore. So, what makes for a successful tech solution that will attract tons of funding? In this article, we uncover the 6 key attributes that make for a successful tech solution:
The key ingredient for attracting tons of funding is a large customer base. GrabTaxi obviously serves the taxi-riding community. According to LTA, average daily taxi ridership in Singapore in 2012 was 967,000. This was 4% higher than the previous year. Assuming that GrabTaxi connects 10% of these rides and makes $0.30 per trip, that would already put close to $30,000 in GrabTaxi’s coffers a day! The law of large numbers is on GrabTaxi’s side, and this makes for a very sweet deal for the investors.
Common, simple need
GrabTaxi’s value proposition is simple – connect commuters with available taxis within the vicinity as fast as possible. What GrabTaxi has that is superior to all the other cab operators is the vast number of taxis on the road. While the taxi operators’ apps apply only to their company’s taxis, GrabTaxi can connect any taxi with any company to a commuter. This allows them to service waiting commuters much faster than taxi companies can. This simple need, much overlooked by taxi companies, is what makes GrabTaxi’s value proposition to investors more inviting.
Napping (or no) incumbents
The incumbents before GrabTaxi came along were the cab companies who operated a complicated network with complicated pricing. It caused the system to slow down, and customer service was its ultimate casualty. Without an alternative system, the cab companies could pass off sub-standard service with no consequences. All that changed when Uber and GrabTaxi came into the scene. Suddenly, commuters have a much better alternative, and they are ditching the incumbents in droves. That they have no recourse except to cry foul to regulators just goes to show how badly napping the taxi companies were. They were figuratively caught with their pants down! Uber and GrabTaxi are both great news to commuters, and equally great to investors.
If you want tons of money, make sure it can be scaled and applied across national lines. The system cannot be different in Taiwan as it is in the Philippines and Singapore. If the whole customer experience is the same, as it is with Uber and GrabTaxi, across countries, take-up rates will increase. After all, when people travel, what do they need? Taxi service! Ka-ching! Ka-ching!
Ease of use
If it takes more than 2 button clicks to get what someone needs, that’s already too complicated. The GrabTaxi app discovers your current location, and asks for your destination. Then see the cabs nearby and the rates, and book that. Just two clicks and you’re done! The easier the use of the app, the higher the likelihood of adoption. The higher the adoption rate, the bigger its value to investors!
A gung-ho growth mentality
The last attribute for a big investment is a gung-ho mentality. You need to sell your vision on a bigger scale. It needs to grab more business faster than any other company. You need to disrupt the current status quo with a competitor-crushing mentality. If you can deliver that to the market, investors will certainly sit up and notice. And you will well be on your way to mega funding.
So there we are, 6 key attributes to do a GrabTaxi or an Uber in your industry. I suppose it is time for you to start building your new solution!