In just the last few days, the market has noticed how P2P sharing and customer collaboration is picking up. From my vantage point, this indicates that the market is realizing that the Collaborative Economy is the next phase of sharing. It bears repeating that the first phase of sharing is in the realm of media and ideas, which we call Social Media. The next phase of sharing is in the physical realm (goods, services, space, and money) which some call the Collaborative Economy. Because of my corporate focus, I use this broader term, as it encompasses the Maker Movement, crowd-funding, and co-innovation, which are all parts of companies sharing with the people beyond P2P
This transition doesn’t come without pain. The heat from friction is an indication that the balance of economic power is changing. A silicon valley cab company you know, the old style kind that are yellow, not a sleek, tech-enabled black town car claims that Uber and Lyft have eaten away at 30% of their business. The battle continues between NY and Airbnb, where advocacy group Peers.com has obtained 88,000 signatures in support of restrictive legalization. We see market forces reacting to each other, as enablers of this movement and companies who want to leverage this force, adopt the same strategies:
- Salesforce plants an enterprise software flag. Salesforce has published the four business opportunities that remove barriers to the sharing economy. I shared the stage with Peter Coffee at the Magnet360 event in Minneapolis a few weeks ago, where we focused on the Collaborative Economy with a large hall filled with marketers. Peter does a fine job bringing a tech perspective that focuses on how mobile devices, big data, and analytics can fulfill these market desires. I anticipate that enterprise software vendors like Salesforce, IBM, Ariba, Adobe, and Lithium are well poised to help large companies enter this space.
- Accenture explores new insurance revenue models. Accenture has published a three part series on sharing and insurance. They explore untapped opportunity for new insurance providers to offer new forms of coverage as people continue to borrow goods instead of owning them outright. Lisa Gansky’s “Access trumps ownership” Mesh mantra focuses on how power changes as more things become interconnected. Now, large financial institutions can benefit from this new opportunity by providing new ‘asset-light coverage policies’ that protect both owners and those who borrow goods, space, and more.
- Motorola and others embrace the crowd. Motorola has forged ahead with cross platform Phoneblox, while other examples of co-innovation are emerging. This radical phone is modular, made to last, and designed for the whole world. It makes currently dominant Apple feel like ‘the man’ shifting the “Think Different” moniker over to Motorola’s court. Imagine a product that’s community built, community designed, with components that can be 3D printed, shared, or modified, similar to the characteristics of the internet. In addition, Innocentive has launched a thought piece showing how many large brands, like Anheuser-Busch, Coke, General Mills, Nokia and Unilever, are embracing co-innovation. They aren’t the only ones. FON is even launching a product that shares its Wi-Fi signal with others, making sharing intentional and increasing its value.
- Ikea enables a marketplace of used goods. Like eBay, Ikea encourages people to exchange second hand goods rather than buying new. People are sharing, selling and renting products in a second hand market. Savvy brands will enable this practice. Ikea collected used furniture, did a media blitz promoting it for sale, and launched a marketplace using online tools, Facebook, and media buys. All of the used furniture was sold. Why would a company encourage the sale of used goods rather than selling new? The answer is simple: commitment to community, environment, and driving deeper engagement that can yield return sales later. A few months ago, I identified this as a software market waiting to be fulfilled. Thanks to Juho Makkonen for the link.
- HP commits to 3D printing. Meg Whitman announced that the company will have 3D printer solutions at the industrial or enterprise level by 2014. Although there are numerous examples on the consumer side, HP makes a play for the mid market. This enables creation of complex parts, from medical to devices to become highly personalized, built at local level, and all on-demand. Manufactures, suppliers, and retailers who are focused on centralized production, scheduled shipping of standardized parts need to revaluate their business model. Because of HP’s client footprint, and existing supply chain relationships, they could scale the roll out of these printers, quickly. (Added Oct 31)
- The government grants crowd-funding. The SEC allows Crowd-funding . Certainly this is not a ‘company,’ but the SEC weighing in on crowd business models holds weight. In support of boosting the economy, small businesses that struggle to get support from traditional funding institutions can now more easily tap the crowd. The SEC has reduced the friction of crowd-funding by allowing those who seek to raise capital from the crowd to “bypass the traditional costs of going public, which usually involves hiring costly investment bankers and accountants.” This means that innovation will come from the smaller companies and will be heavily supported by the crowd, who will fund them, further shifting power.
So there you have it, in just a few short days, we’ve seen a proliferation of business-focused articles emerge, with a focus on how large companies will develop new business models in the next phase of sharing or else be disrupted by it. If you’d like to learn how these business models must change, see my Slideshare on the Future of Business Models, or read my larger body of work on what this means to business, or peruse my running list of brands that are moving into this space.
Images used with creative commons license by Andrew Stawarz