“Two newlyweds spend their honeymoon in a rented loft instead of a chain hotel. A first-time mom rents a stranger’s truck in her neighborhood to pick up a baby crib. An entrepreneur taps the crowd to fund a new product on kickstarter rather than seek traditional investors.”
Ever since Jeremiah Owyang took the stage at LeWeb 2013 and presented his and Altimeter Group’s research and report on the collaborative economy I’ve been convinced: The collaborative economy will be one of the next big things. Jeremiah’s impressive keynote back then made clear that this is a new business model that will upset most industries in the years to come.
How’s that? Well, we’ve already seen some strong examples of the collaborative economy in action (Airbnb, Uber, TaskRabbit etc.), and the VCs are backing it up.
With the social technologies of today’s world the stage has been set. The collaborative economy is built on social media, you could say. With social media, the media landscape was turned upside-down and democratized in a way unimaginable by most people.
Next up is the democratization of physical goods and professional services.
You can watch Jeremiah’s keynote here:
In short, the collaborative economy is about sharing. It’s about people wanting access over ownership. And it’s about people getting what they need from the crowd. In doing so, they bypass all the large corporations and their goods and services.
Myself, I’m particularly interested in the impact the collaborative economy will have on the logistics space (I’m trying to keep track of it via my list of logistics startups). For instance, if crowd shipping takes off and all the empty cars on the freeway are filled with goods via services like Barnacle, how will that affect the freight forwarders and the whole inland transportation business?
How disruptive is it?
Since Jeremiah’s presentation at LeWeb I learned that home rental services like Airbnb are under scrutiny in both Europe and the US, and short-stay regulations are already in place in New York. Also, last year Uber’s service in New York City was hit by a restraining order sought by car service companies and industry groups.
These actions speak more than a thousand words: The collaborative economy really is explosive. It threatens to disrupt economies big time. Why else would governments take to such desperate measures? Honestly, I don’t buy the tax argument (“people don’t pay taxes of the profits gained from renting out their property or time”); there are hundreds of ways to solve that problem.
Late Summer 2013, Jeremiah left his role at Altimeter Group, where he was an industry analyst and a founding partner. He wanted to focus solely on the collaborative economy, and so he launched a new company called Crowd Companies which is basically a council for large corporations.
“What role do companies play, if people get what they need from each other?” That’s the question Crowd Companies wants to answer.
Sharing is the New Buying
But how big is the sharing economy today? Who’s sharing? And why are they sharing?
Until earlier today, when Crowd Companies and Vision Critical (a software company that specializes in gathering insights from the crowds) published a new report entitled Sharing is the New Buying, those were some of the questions about the collaborative economy that were left unanswered.
The report is an open report, and you can read it here:
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The main takeaways from the report, based on input from more than 90k people in the US, Canada and UK, is that:
- Even though the collaborative economy is young, it’s already mainstream. In the past 12 months almost 25% have used the latest generation of sharing sites or apps, such as Etsy, TaskRabbit, Uber, Airbnb and Kickstarter.
- The sharers are young, but not that young. They are more likely to have children at home than the non-sharers.
- The sharers are urban. But it’s not because sharing is only an urban mindset, necessarily. It’s more due to density of population, because high density makes sharing easier. Also, sharing startups will usually launch in high-density areas.
- The main reasons why people share are convenience and price. Perhaps surprisingly, people do not list e.g. altruism or sustainability as important reasons for why they chose sharing over buying.
- The sharers are affluent. They might be price-driven, but they are less likely to be low-income.
- The sharers are online. For example, a high percentage of sharers use social networking on a regular basis (73% compared with just 55% of non-sharers).
What should companies do?
The final chapter of Sharing is the New Buying reads like a guide for companies to tap the collaborative company.
Like with social media, the collaborative economy affects nearly every part of a company, all the way from the executives over Finance and Legal to HR. “It demands nothing short of a business model transformation,” the report states.
The report lists what each business function must look at and act upon in order to get it right. For businesses and employees that list could turn out to be pivotal for the journey ahead.
So, in summary, first people learned about the collaborative economy and realized that this movement and business model is likely to have a major impact on the economies in the near future.
Now, with Sharing is the New Buying, we’ve gained some real insights into the state of the collaborative economy and the behaviors of the people likely to use or already using these services. The report underpins the idea that sharing as a business model will grow in the years to come. And it also provides businesses with a recipe for success boiled down to each business function.
What I would really like to see next is monthly numbers on the collaborative economy versus the ‘old’ economy for all the affected industries. Not only for US, UK and Canada, but global numbers. Simply in order to track how large a share of the markets we’re dealing with – and for executives to judge if they should act or not.
What do you think? Don’t hesitate to share your thoughts below.