Words: Jeremiah Owyang in VentureWeek
We are witnessing the emergence of a new industry of collaborative enterprises that let consumers bypass traditional, inefficient companies to get the products and services they want.
Zipcar (automobiles), Airbnb (rooms to rent for vacationers), and BookCrossing (a social book sharing community) all help people find what they want quickly, cheaply, and efficiently — from each other.
From Etsy to TaskRabbit to Lyft, the sharing economy is on the rise. Your customers are sharing products rather than buying them — and that’s a disruption to you.
Sharing is not new, but with the emergence of digital connections, it is taking on a different dimension. The sharing mentality is making a dent in economic models, businesses, and resource-inventiveness. The traditional roles of business and consumer are blurring. Consumers are now creators, producers, financers, hoteliers, and more. People are bypassing traditional businesses to find custom services and products that better fit their needs.
This change will be more obvious as the millennial generation moves from a culture of owning assets to a culture of owning experiences.
Your consumers are asking:
- Do I need a new snow blower, or should I just rent one when the need rises?
- Do I need a new car (and all the miscellaneous services to support it – gas, insurance, parking fees, maintenance), or can I just borrow one when I need one to run errands?
- Should I rent out my spare bedroom and make some cash while supporting the tourist influx into the city for the big concert?
If large corporations think that web-based sharing companies will take years to achieve scale or disrupt the current climate, they need to think again. Internet in households and on a mobile device, magnified by social connections, is powering these businesses like never before. Tech giants like Facebook and Google want to bring the Internet to every household worldwide and have added these goals to their company mission statements, so demand for these services is only going up.
The survey findings highlight numerous opportunities for established businesses:
- No single category of the emerging sharing services enjoys more than 10% of population patronage, signaling room for growth and new players.
- The number of neo-sharers (sharers using emergent sharing platforms) is set to double in the next 12 months.
- The emerging-sharing platforms like Etsy, Uber, and Taskrabbit are set to grow at the same rate as the mature re-use marketplaces like eBay and Craigslist, spelling similar consumer acceptance over time.
- Nearly half of the neo-sharers are millennials, so we can expect this trend to grow in the coming years, and that’s one of biggest reasons corporations need to wake up.
- Neo-sharers engage in mainstream life-style choices and hence look a lot like your average consumers – so if you can reach your consumers you can reach these sharers!
So why adopt the collaborative economy, and why now?
- The millennial generation is moving away from an ethos of ownership to one of access, sharing and community support, driven by altruism (sustainable living) and pragmatism (cheaper goods and services in a tough economy).
- An ecosystem of middlemen, startups, and early adopters, enable these exchanges and provide trusted platforms to fund, design, develop, rent, sell, and service offerings from within communities.
- Sharing businesses are fostering new-age parallel services and businesses.
- The Internet of things is able to tap into unused resources and turn them into revenue through sensors and other hi-tech monitoring.
The economic impact could be huge. I estimate that each properly shared car replaces nine or more purchased cars, with obvious ripple effects to the auto manufacturing, dealer, insurance, and financial sectors that serve the car market.
Whether you’re a big company or small, nearly every vertical is being impacted by the sharing economy. So what should your company do about it?
The first step is to recognize this change and disruption that is growing with every new user connected to the Internet or a smart mobile device.
The next step is to create a culture for innovation and change in the organization to be nimble in response to these changes.
Then you want to look for the opportunity in this new ecosystem and have the courage to change what’s ‘not working’.
Corporations can not only just stay relevant, but also lead the charge in their own community. North America is leading on this mindset, but I am really excited about the potential for the sharing economy in Asia.
This April, I will be speaking at the Crowdsourcing Week Global Conference in Singapore on how the collaborative mindset can propel Asia into a new era. Asia has 1 billion people online, but this is just 30% of its population. This number is increasing every day along with smartphone usage, and a high percentage of these users are from English-speaking countries. Crowdsourced labor is helping micro-entrepreneurs, and Zhu ba jie, China’s crowdsourcing platform, boasts more than 8 million workers.
The travel industry is set for disruption and creating a ripple in Asia with parallel services booming.
We live in a very exciting age, and now is the time to shape the conversation on what the future of collaborative business will look like in the coming months and years.