The crowd is bypassing traditional companies by sharing goods, services, space, and money with each other in the Sharing Economy. People are being empowered to build their own goods in the Maker Movement by crowd funding, tapping global marketplaces, and preparing to accelerate this with 3D printing. You see, the crowd, is starting to perform like a company: self-financing, self-designing products, self-manufacturing, and self-selling to each other.
So, what does this growing trend mean for traditional businesses?
In my closing slides to corporate audiences about the Collaborative Economy, I attempt to tie everything together on this one summary slide. While it’s best understood after the full presentation, the slide can, hopefully, stand on its own. I’ll try to succinctly summarize how we achieved each of these insights, so you can quickly grasp the changes that are occurring. Let’s break down these specific five points into further detail.
1) People are empowered to get what they need from each other. The Sharing Economy empowers people to get products from each other without have to buy new from traditional retail or wholesale sources. Whether they’re sharing cars, homes, or money, they’re depending on each other to get information. Further, they’re making their own goods and products by tapping a global marketplace of individual makers. Soon, 3D printing become a force that will catalyze this at scale. It’s not new. We saw this ten years ago with social media people were bypassing corporate communications, marketing, and customer care to obtain information from each other.
2) The crowd is becoming like a company bypassing inefficient corporations. Of course, this is forcing business change, as the internet tends to bypass intermediaries that don’t provide lasting, value added services. Rather than buy vehicles, people can rent or borrow cars from each other. We’re also seeing the rise of peer-to-peer lending in LendingClub (funded by Google), which has served up $2.8billion in loans in a few short years bypassing traditional banks. Watch this LendingClub chart carefully. This growth rate is starting to take a significant bump in a vertical line.
3) Corporations must use these same tools and strategies to regain relevancy. Just like we did in social business, to match customers launching blogs, video, and social networking accounts, we saw corporations apply the same strategies to engage in the same channels. Taking a cue from the first phase of sharing, which we call social business, we’re already seeing over 50 corporations that have transitioned into the Collaborative Economy, with significant upward rewards.
4) This requires business model change. No one said this is going to be easy. Significant new mindsets and business investments will be required to satisfy this paradigm change. BMW now rents cars in addition to selling them. Toyota is giving away 1,000 cars for the social good. TOMS shoes now offers a marketplace selling other people’s products beyond their own. Nokia voluntarily gave up their specs to their phone cases to allow 3D printing to occur. U-Haul allowed the crowd to fund their own vehicles. We will need internal champions (whom I call catalysts) who are able to lead this change inside of big companies and turn those large gears a different direction.
5) The crowd will become the company, making corporations resilient. We’ve seen the crowd become the media and the communications in the first phase of social business: Customers became the marketing and customer support departments. Just as we saw companies integrate customers into their media and communications, expect them to integrate them into their business models. Expect new models to emerge where the crowd is augmenting traditional business processes. They will co-fund, co-ideate, co-design, co-build, co-support, co-deliver, co-market and more for a growing variety of products. We’ll also see new forms of marketplaces emerge where products that customers make will be sold alongside those of big brands.
Companies that do this will achieve Resiliency: They’ll be agile, innovative, connected, empowering others, built to last, and profitable.
The power of the crowd is the real deal. The crowd gives citizens and consumers alike the ability to tap into network effects to accelerate idea generation, capital acquisition, and break established inefficiencies.
Brands that play stay.
Jose, I’m progressive, and on the left of center on this. I see the end state is crowds and companies coexisting –just as they always have. Thank you for sharing your thoughts.
The gold in this is in the list of companies in #3 who are leveraging the crowd. Many of my clients *might* be open to trying crowd collaboration but wouldn’t know where to begin – the list shows that peers are doing it and provides some ideas on how to get started. Thanks for sharing this, Jeremiah.
Thank you Mr Weaver
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Thanks for this Jeremiah. I (and am sure others here) totally appreciate the emphasis on the mindset shifts. Recently, our Move The Crowd team attended a day of workshops in NYC focused on fundamentals and next level strategy for social enterprising students, small biz owners, interested parties and others- expecting a lot of deep digging and mindful intention- and instead witnessed a real lack of focus on vision/mission/purpose (in fact it was mentioned to not even worry about *all that*, just focus on identity). It felt more like a navigate the old system but with a fresher, “do good-er” lens. This worries me. I remember some great points you had at the Pop-Up Panel in NYC (and a quick twitter chat we had) about this but wondering if you could say more here about the value of, well…..values.
Your post is spot on, Jeremiah. The trend indeed isn’t something new. Do you remember the huge protests against major clothing companies for using real fur? Back then, there were no social media, yet thousands of individual consumers acted as one. I do think, though, that the ‘new’ technologies gave this trend a big boost.
It™s interesting to wonder how powerful the production companies will be in, say, 10 years™ time. I™m guessing that most of us will have a 3D printer then, ready to produce many of the things we want. The more empowered we™ll become as consumers, the more we’ll act independently. We won™t need companies that make paperclips if we can create the exact same paperclips at home.
Most companies exist because they add value to the customer. Companies will have to change their business plan to stay ahead. Personally, I think the future will be about supporting the empowered consumers. Many companies won™t solely be producing for consumers anymore; their job will also include enabling consumers to produce stuff, by supporting them, and offering superior customer service. Consumers might become the most important employees out there. Can™t wait to discover the possibilities that lie ahead!
Very interesting article. It looks like the sharing economy would affect primarily
the B2C companies. While the B2B companies can can be affected by #5 due to comments and criticism of the company via social media,
etc., how do you imagine, if at all, that it would affect B2B otherwise?