5 companies weigh in on the state of the on-demand economy

Sam Dewey

The economy of now. The on-demand economy. The instant gratification generation.

Call it whatever you want, but today’s tech-savvy users know what and when they want things. As it turns out, they want everything, and they want it now.

And tech companies have taken note.

From on-demand food and alcohol delivery to on-demand dry cleaning or pet care, it seems companies in every vertical are cashing in on consumers’ growing desires to get things exactly when they want them most.

We sat down with five tech startups in Chicago that have grown out of the economy of now. Here’s are some of the challenges they face — and what they think’s in store a few years down the line.

Fresh out of Techstars Chicago’s latest group of graduates, Urban Leash is the answer to a pain point many animal-loving working professionals know all too well: how can you find reliable dog walkers on a minutes notice?

“Most dog walking companies require set weekly schedules and don’t take last minute requests,” said Urban Leash CEO and founder Lina Pakrosnyte. “But most of all, there’s a real lack of transparency about what goes on during each visit. Urban Leash provides a convenient way for pet owners to request walks when it works with their schedules. Our mobile technology creates transparency and keeps them informed throughout the whole process. In addition, we’re empowering a whole new wave of individuals to make a living doing what they love on their own schedules.”

Urban Leash is one of the companies involved in 1871’s new Economy of Now forum, a council aimed at supporting business owners working in the on-demand economy. Urban Leash's app allows users to place requests for pet care whenever your furry-legged friends need it most, providing pet owners with updates, GPS tracking, notes, and pictures of the experiences.  

Where is the economy of now headed over the next few years?

“With technology advances, every industry will be touched by economy of now. It’s a natural progression as our lives become busier and product and services become more accessible,” Pakrosnyte said.

What are the biggest challenges to working that sector?

“The biggest challenge is that we’re managing a two sided marketplace. Balancing out the supply and demand becomes very important,” she said. “That’s why we’re constantly innovating and improving our platform to make operational logistics a smooth process.”

 

After raising a seed round of over $1 million and opening a second brick-and-mortar storefront last November, Foxtrot is poised for a big 2016. The company marshals everything from craft beers, wines, and spirits to food and other sundry gifts and essentials in order to deliver them across Chicago to users who place orders through their mobile app.

“When we started, we saw a gap in the on-demand space that wasn’t being filled by anyone out there — rather than launching a generic delivery service that was essentially an aggregation of every possible restaurant or store out there, we wanted to create a company focused on cutting through the noise to curate a selection of goods people actually want, and make the ordering process just as streamlined,” said Mike LaVitola, the company’s CEO.

Foxtrot occupies a unique position in the economy of now in that they very intentionally built up a retail presence to harmonize with their on-demand app. Unlike some companies in the space — who rely on warehouses to store mounds of products — Foxtrot has cultivated a seamless user experience, in both the virtual and real world.

Where is the economy of now headed over the next few years?

“With such a rapid influx of companies that are trying to find their place in the sector, I think over the next few years we’ll see an increased emphasis on services focused on highly-specific customer segments,” LaVitola said. “As the sector grows, the clutter grows with it, so companies will have to find their niche. For those with services focused on physical goods, I think we’ll see deeper integration between retailers, manufacturers and distributors.”  

What are the biggest challenges to working that sector?

“With such a tight delivery window, your execution has to be near perfect and customer inquiries need to be solved almost instantaneously. Building a foundation with a solid operational base and a great customer experience is what has given us the ability to provide amazing products and services in ways that haven't been possible before,” he said.

 

The economy of now may very well find its epicenter in the explosive popularity of on-demand transportation options. Via, a New York-based ridesharing company that just made its way to Chicago last fall, is one of those options — on-demand transit for a flat, $5 fare.

“We set out to revolutionize public transit,” said Chris Snyder, Via’s operations principal for Chicago. “This means moving beyond a system of rigid routes and schedules towards a fully dynamic, on-demand network. We built our technology from the ground up to make this vision possible: our algorithm matches multiple passengers headed the same direction with a nearby vehicle (typically a large SUV), all in real time.”

With Via, users may be asked to walk a block or two to a centralized pickup location, just as they’d walk to a bus or subway stop. But the result is a more efficient, tech-enabled transportation route that responds to and evolves with changes in use and demand over time — whether it’s a fast-growing neighborhood far-removed from the convenience of the CTA or a quicker route to circumnavigate a horde of Blackhawks fans.  

Where is the economy of now headed over the next few years?

“First, I think we're going to continue to see tremendous growth of on-demand or ‘smart’ disruptors in traditional sectors of the economy,” he said. “Second, some degree of consolidation is inevitable. Third, we're already moving to an ‘economy of soon,’ in which predictive analytics will start to anticipate demand at an individual level."

What are the biggest challenges to working that sector?

“While technology has evolved dramatically, most existing transportation networks and regulations remain woefully outdated. Our challenge is to work with cities and regulators to find collaborative and innovative ways we can build a framework for the future as the on-demand space continues to grow,” Snyder said.

Launched in Chicago in 2014, DRYV is on-demand service for laundry and dry cleaning services, enabling top-tier dry cleaners to deliver clean and freshly-pressed clothes right to your door.

Rather than disrupting an outmoded industry — the hip thing many startups are aiming for — DRYV wants to partner with dry cleaning operators to empower them to grow their business, not replace it. That way, efficiency, quality, and affordability thrive.

“We identified an industry that would be better off with the help of technology and a modern user experience,” said Dan Parsons, DRYV co-founder. “It happens to be convenience is the #1 determining factor for how Americans chose which cleaning option to go with, so part of our technology is powering on-demand service.”

Where is the economy of now headed over the next few years?

“It’s all about optionality, the consumer of the future will expect complete optionality and logistical freedom. We’re focused on leveraging data, and becoming a national network which will embrace this future consumer,” Parsons said.

What are the biggest challenges to working that sector?

“People have very different usage habits and expectations. You have to build a very complex system, that’s dynamic in nature but simple to use … that is challenging.”

 

Although technically based out of San Francisco, Sprig set up shop in Chicago in June of last year, making this their third market to date. A champion of eating healthy, tasteful food, Sprig’s app pairs busy professionals with fresh, ready-to-eat meals for lunch and dinner every day of the work week (plus brunch options on weekends).

Though some would say there may be a few too many cooks in the on-demand meal delivery kitchen, Sprig’s Chicago growth manager Kris Linney said the company differentiates itself with great ingredients, clean cooking, and convenience.

“To have the ability to help transform the way millions of people eat is an incredible opportunity,” he added.

Where is the economy of now headed over the next few years?

“We believe that Sprig is helping to bring delicious, affordable food to the people of Chicago and San Francisco,” Linney said. “We believe that delivery food too frequently needs to be an expensive, unhealthy option, and we set out to change that.”

What are the biggest challenges to working that sector?

“The biggest challenges are distinguishing your brand and demonstrating the value you offer customers,” he said. “With so many companies joining the on-demand space, it can be difficult to communicate with consumers. It is crucial that your brand sticks out and you are able to quickly and clearly communicate what values you offer. At Sprig, our food is of the highest quality ingredients — our produce is organic and our meat is sustainably sourced. Our average delivery time is 20 minutes, meaning you get your food delivered to you in a fraction of the traditional time.”

Photos courtesy of each featured company.

Have a tip for us or know of a company that deserves coverage? Shoot us an email or follow us on Twitter @BuiltInChicago.

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