The Next Phase of Social Business is the Collaborative Economy

Above Image: Market Opportunities for the Collaborative Economy by Vertical, from Sharable Magazine follow them on Twitter.What’s the next phase of Social Business?  That’s the question I’m frequently asked.  Without a doubt, the next phase is the Collaborative Economy.

[Collaborative Economy is next phase of social. Social networks share ideas, yet collaborative economy shares products & services]

What’s that the Collaborative Economy?  It’s where brands will rent, lend, offer subscriptions to products and services to customers or, even further, allow their customers to lend, trade, or gift branded products or services to each other.  This unstoppable trend is fueled by the social web.  Its specific features include relationships, online profiles, reputations, expressed needs and offerings, and ecommerce.  Brand customers are already starting to conduct these behaviors among themselves using TaskRabbit, AirBnb, Lyft, and many others tools.  Some of these are disruptions for brands.  Others are opportunities.

[The next phase of Social Business is the Collaborative Economy; Brands will enable customers to share, trade, lend, gift products and goods using social technologies]

While this movement will have broader global and economic impacts, at Altimeter we’re focused on disruptions to corporations.  We’re knee deep in interviews for our next report on the Collaborative Economy.  We have interviewed startups, venture capitalists, brands, social business software vendors, authors, and thought leaders.  We are dissecting data of 200 sharing startups for a broad overview of what it means to business.

Matrix: Phases of Social Business

Phase	Department Impacted	Notable Examples
Phase 1	PR and Brand	Dell Hell incident, Kryptonite Lock
Phase 2	Marketing realizes an opportunity to conduct outreach	Corporate blogs: Fast Lane by GM, Microsoft blogs, IBM Blogs
Phase 3	Customer Support	HP massive online communities, Home Depot Communities, Comcast Cares
Phase 4	Product Innovation	Starbucks Ideas, Dell Ideastorm
Phase 5	The Business model, supply chain, various other departments	Using social tools, customers are sharing, selling, and renting your goods to each other

Caveat: There are many broader impacts inside of a company that also impact HR, recruiting, supply chain, IT and other departments.  Those cited above are just a sample of the most often publicized impacts.

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Brands Already On Board: Toyota, Barclays Card, Avis, BMW, Walmart
What are some examples of companies that are already taking advantage of this new social business trend ?  Here are a few from the Master List of Brands Participating in the Collaborative Economy:  Toyota, OnStar and BMW are allowing cars to be rented so that they can stay current with car sharing or lending services like Lyft, RelayRide, Zipcar and Uber.  Barclays Card sponsors and supports bicycle sharing in the city of London, associating their brand with the movement.  Retail giant, Wal-Mart, is considering competing with TaskRabbit and Amazon by allowing customers to deliver goods to each other.

[The first phase of Social Business impacted branding and PR, then it shifted to support and product development. The next phase impacts core business models]

Ecosystem Opportunities Aplenty
What are the immediate business opportunities?  There’s a long list, and the report will probe them in detail, but it will include sponsorships, partnerships, investments in startups, building branded communities that enable renting and gifting, customer advocacy programs, and more. I’m seeking a “Software as a Service” (SaaS) startup that would enable this for brands and dedicate an entire post outlining the market opportunities.  For example, on just the retail vertical, yesterday I met with Neal of Sharable Magazine, and he shared many opportunities for retailers.

[Social Business + Sharing Economy = Collaborative Economy]

Paradigm Change Required in Corporations
So there you have it, the next phase of Social Business goes beyond marketing and customer support.  It changes the fundamental business models and relationships that we have with our customers.  The big change that brands will have to face is that they will have to care about the relationship between customers as they trade and rent your products between themselves.

Collaborative Economy Requires a New Business Mindset

Company Mindset:	Traditional Mindset	Social Business Mindset	Collaborative Economy Mindset
How they think:	Brands are in charge. Deal with it.	Brands are in charge. Deal with it. Customers are in charge. We are listening, and we will engage. We care about your current experience with our goods.	We must now care about extended life of good after we sell it, and the relationship between customers.
Strategy they deploy:	Brand Experience	Customer Experience	Marketplace Experience

 

Stay tuned for Altimeter’s report on the Collaborative Economy in just a few weeks. I’ll be presenting the findings at LeWeb, which is themed on the Sharing Economy.  Thank you, Vivian Wang and Neal Gorenflo for the inspiring interviews these past few days.