Rocking the On-Demand Suburbs

I’m rockin the suburbs
Just like Michael Jackson did
I’m rockin the suburbs
Except that he was talented
I’m rockin the suburbs
Ben Folds, 2001

One of the difficulties to date for geo focused on demand services is managing to penetrate the suburbs. The suburbs are significant; while the idea that two thirds of the US population live in the 100 largest metropolitan areas is mostly factual, the truth is somewhat more nuanced. From the Daily Beast:

Both the 2010 Census and other more recent analyses demonstrate that America is becoming steadily more suburban: 44 million Americans live in America’s 51 major metropolitan areas, while nearly 122 million Americans live in their suburbs. In other words, nearly three quarters of metropolitan Americans live in suburbs, not core cities.

By a margin of nearly 3:1, the suburbs represent a prize far larger than do core, downtown, metropolitan areas.

But getting there won’t be easy. From a Twitter conversation this past weekend based on Fred Wilson’s recent blog, Kozmo:

The fundamental challenge is twofold: (a) First, the lack of population density makes achieving delivery windows, cracking unit economics, and “scaling” outright difficult and (b) While a city might have a particular culture, each city has multiple suburbs, each with their own nuanced differences. For example amongst Chicago suburbs – Evanston, Lincolnwood, Skokie, Park Ridge, Oak Park – some are university towns, some trend younger, there are unique religious differences in each, etc.  The marketing and logistical complexities are considerable. In fact, these challenges are what make Uber’s seemingly endless penetration into the suburbs, many barely at 100,000 persons, all the more extraordinary.

It was this series of practical complexities that drove our seed investment in Curbside (well, that, and an exceptional founding team!) As the name suggests, Curbside powers on-demand pick-up of goods from a variety of retailers at, well, the curbside. Even if you’ve tried the legacy in-store pickup programs from certain retailers, you would’ve still had to deal with parking, wait in line, often wait for your orders to be aggregated, lug bags back to your car, etc. Curbside makes the pick-up experience delightful: simply pull up & employees, having tracked your approach via GPS, will be waiting for you – pop the trunk and you’re good to go.

The beauty of the model is that while it of course works in downtown metropolitan areas as well, it solves the suburban density conundrum that delivery or at-home on demand providers grapple with by aggregating what would otherwise be dispersed, inefficient, demand and centralizing it into known checkpoints. Put simply: it inverts the on-demand model by pulling consumers towards a known landmark rather than pushing a dispersed workforce towards them – while layering on the delightful experience consumers have come to expect. I’m sure there are other models – Uber, as mentioned, has minimal launch/maintenance costs for secondary/suburban markets which appears to be working for them as well.

Lastly, while I’m generally hesitant to generalize my personal anecdotes, I’d imagine my experience being a father of a 2.5 year old (with a second, Gd willing, to arrive shortly) will resonate with most young parents. While on demand services are a definite convenience, the reality of having children demands lots of time out of the house: parks, weekend activities and the like. For my young son, the grocery store is actually the ultimate in Sunday entertainment (sorry Instacart!). But after a couple reps of buckling/unbuckling the carseat, he’ll pretty much lose it. Thus, there is definite value in services that can cater to those centralized locations – and enable me to leverage my existing movements – for example, servicing my needs from Target and CVS while I shop with my son at Mariano’s.

Given that birth rates rose in 2013 for the first time this millenium, if my experience resonates, the suburbs – argues Joel Kitkin in Forbes – will be the battleground:

Virtually all the metro areas where there has been the strongest growth in families from 2000 to 2013 are highly suburban, highly affordable and located in the South and Intermountain West…Of course, there’s a steady drumbeat in the media proclaiming that families with children are returning to dense cities and expensive regions. In reality, the numbers don’t add up.  Among the 10 large metro areas with the lowest percentage of children are New York, Boston and San Francisco-Oakland, where the percentage of 5- to 14-year-olds is 11.5%, the lowest in the nation except for Pittsburgh (10.8%).

If you’re building products focused on the suburbs or non-core metro areas, let’s talk. More than anything, I’d be curious to learn how you’re conceptualizing your project.

About the author

Ezra Galston
Ezra Galston

Consumer focused hustling @Chicago Ventures, Young Entrepreneur @Foundation Capital, Class 18 @Kauffman Fellow, and Chicago Booth MBA. Former professional poker player, with 4 years experience doing marketing/biz dev in the online gaming industry. Launched a "poker hedge fund" in 2011, a record label in College, and produced a festival screened short film in 2006.

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