Report: Corporations must join the Collaborative Economy (Slides, Video)

Adopt the Collaborative Economy Value Chain
Right now, customers are sharing media and ideas on social technologies, in the near future, they’ll use similar technologies to share products and services, which will cause a ripple of impacts far more disruptive than what we’ve seen before.

[The Collaborative Economy is an economic model where ownership and access are shared between people, startups, and corporations]

 


Disruption: Customers are now sharing products and services with each other, like AirBnb (vs hotels), Lyft (vs buying cars), Lendingclub (vs banks), 99 Dresses (instead of buying clothes), odesk (vs traditional hiring methods) as an alternative to traditional sales, in fact, our small list of 200 startups only has a portion of the services that have emerged, enabling this trend.

At Altimeter, we’ve been tracking this space, including a number of blog posts tagged Collaborative Economy (list of startups, list of corporations involved and more), an upcoming free webinar that you can join, and I’ll be announcing some private events for our clients to dive in further. Tomorrow, I’ll be keynoting LeWeb which is solely focused on this topic, and will share the video and slides shortly.

The executive summary encapsulates what you need to know:

The Next Phase of Social Business Is the Collaborative Economy. Social technologies radically disrupted communications, marketing, and customer care. With these same technologies, customers now buy products once and share them with each other. Beyond business functions, the Collaborative Economy impacts core business models.

Customers Are Sharing Goods and Services – Redefining the Buyer-Seller Relationship. Every car-sharing vehicle reduces car ownership by 9-13 vehicles; a revenue loss of at least $270,000 to an average auto manufacturer. The cascading impact to the ecosystem has far-reaching impacts to auto loans, car insurance, fuel, auto parts, and other services. For corporations, the direct impact is revenue loss that results from customers sharing products and services with each other.

Innovative Companies Are Already Moving Into Collaborative Economy. Some companies have joined this movement. For instance, Toyota rents cars from dealership lots, and Patagonia partnered with eBay to encourage customers to buy and sell its used products. NBC has partnered with Yerdle, a startup founded by former Walmart executives to foster peer-to-peer sharing. This movement impacts every industry.

Adopt the Collaborative Economy Value Chain. Companies risk becoming disintermediated by customers who connect with each other. The Collaborative Economy Value Chain illustrates how companies can rethink their business models by becoming a Company-as-a-Service, Motivating a Marketplace, or Providing a Platform. The forward-looking company



Above: In conjunction with the report launch, the findings and market opportunities were shared at LeWeb, who’s focused on this topic.

Above: Short Version from LeWeb (matches above video)


Above: Bloomberg TV interview.

Altimeter conducted a number of research interviews, as well tested the thesis with business leaders across multiple spaces. Special thanks to Loic Le Meur who triggered the ‘aha’ for me last year, on how this is the next phase.

Customers Are Empowered in the Collaborative Economy Era
Above Graphic: The first phase era of the internet allowed few to publish, yet disseminating knowledge, the second social era empowered everyone to share ideas, and now, the third era, the Collaborative Economy, empowers customers to share goods and services, continuing to shift power to the crowd.Select Coverage of the Report

125 Replies to “Report: Corporations must join the Collaborative Economy (Slides, Video)”

  1. Thanks for this its a good report. i particularly liked the stuff around reworking the value chain. The only problem is that the report is is titled “The Collaborative Economy” but is 95% about collaborative consumption and almost totally ignores the spheres of collaborative production and generation and others…

  2. thank you form this good report.
    Next step of this collaborative economy probably will be collaborative funding. Crowdfunding is changing the way people is living economy, from customers to “custowners”.

  3. Absolutely agree with everything you say here and I think the following industries have the greatest opportunity for growth in the collaborative economy if they rethink their business models.

    Those with products that have:

    1. High amounts of down time

    2. Rapidly diminishing value to original purchaser

    3. Comparable alternatives

    … as well as those with products that are built specifically for sharing.

    #1) High amounts of down time

    You already mentioned the automotive industry and for good reason.

    Living in NJ and working in NYC myself there’s at least ten hours every weekday where my car is just sitting in a parking garage and the value of that car to others in that time is much greater than the wear and tear of the associated drive time.

    Why don’t I share my car during that time?

    It comes down to risk and convenience. If, when I purchased my car, Jeep offered me a package deal assuming all of the risks of sharing my car (repairs, theft, etc.) as well as the management of making connections I’d give the program serious consideration.

    Would Jeep end up losing money through the very act of setting up a service that makes it easier for other people to not buy their product?

    Perhaps, but taking ownership of the program earlier rather than later would put them in a much better position to take ownership of the market.

    #2) Rapidly diminishing value to original purchaser

    Books, magazines, movies, video games … they’re all used for a few days or weeks and then put on a shelf to collect dust.

    While companies like Microsoft are trying to address this issue by ensuring that their products can’t be shared, it’s a risky venture that may turn off many would be buyers. On the other hand, by continuing to enrich the product over time and allowing for mass personalization it’s possible to continue to make money off the product even after it’s resold.

    #3) Comparable alternatives

    Why do I have to pay $200 to spend one night in a room that’s smaller than my garage? While there’s so much personal attachment and risk associated to one’s own home that it’ll be a long time before hotels have to fear local home owners/renters as significant competition, in time, anything can happen.

    With that said, if home rental does take off, hotels may need to redefine the service they offer.

    Staying at a hotel isn’t as simple as the location; the hotel adds value with a daily cleaning service, room service a concierge and more. Why not bundle all of those services up as part of a home rental offer? Sure you won’t be staying at a Hilton but being assured of the same level of customer service one would receive at a Hilton makes it easier for both home owner and renter alike to do business.

    #4) Built specifically for sharing

    Finally, the biggest opportunity may be in those products built for sharing. Why can a single arcade game cost operators $10,000 or more when video game consoles cap out well under a thousand? Quite simply the arcade market can bear the cost due to the large user base when a console is priced to a single user.

    By designing to the distributed budget of a collaborative economy companies can make products that are significantly more powerful at the same end cost to consumers. Why sell 1,000 widgets at $499 each but cripple their capabilities to meet a number when you can make just as much money selling 100 widgets at $4,990 each to an audience capable of sharing?

    Keep up the great work here, love this post and I’m looking forward to see what’s next.

  4. Sharing is only ONE business model Brian. Consumable goods, like razors can move to a subscription model. See “Dollar Shave Club”

    This is a form of “access” vs “shared ownership”

    The net takeaway –most product types are impacted.

  5. Now there I’m going to disagree with you, while subscription
    models continue to evolve I don’t see a connection between a 1-1 subscription of this nature and the collaborative economy.
    For the most part razors simply aren’t shared any more than a wedding ring would be shared due to the high degree of personal attachment.

    Yes there’s much more than sharing here but I also do feel
    that there are some industries that are nearly immune (for better and worse) to the movement.

  6. yes i’d read that and hence the 95% comment, although i’d refute your use of the words “in depth”.

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