The Collaborative Economy is a complex ecosystem composed of many unique players.
These many players are jostling about, partnering, competing, and disrupting each other. It’s key to understand the many players in this movement before blindly stumbling into this market. This post took weeks to prepare, and it’s my attempt to catalogue a very complex market that has broad, global economic impacts being felt by many people. By no means is this market breakdown complete, so I seek your feedback in the comments.
This space is diverse.
There’s a wide range of political groups: from grandstanding politicians, to left-wing sharing communal hippies, to conservative incumbents resisting the movement, to libertarians seeking as little government regulation as possible as possible. There’s a wide range of social ideologies: There are environmentalists, to people’s rights activists, to technologists fascinated by the latest trends, to local neighborhood leaders, to federal regulators and government leaders. There’s also a wide range of economic classes: from billionaire investors, to bootstrapped entrepreneurs in their 20s, to the working class, to retirees forced to host strangers at their home to avoid foreclosure.
It looks complex to the outsider.
It’s impossible to analyze this market and expect to put each person into one single box. Life is complex, and nearly every person can fit into multiple categories. The sections below are categorized into four major groups: 1) The People, 2) The Technologists, 3) The Established and 4) The Influencers. Each specific group contains a breakdown of its constituents. Thanks to Robin Chase, who provided additional insight into the nonprofits in the space.
This guide will help distill a complex movement.
| Players | Examples | What they want | What no one tells you |
| Providers | Makers, Airbnb hosts, Uber drivers, Lyft friends, TaskRabbits and others who provide services, space or resources to others. Get more detail on Providers, Platforms, and Partakers. | They seek to make a living, to have a lifestyle where they control their own destiny and have the rights and benefits that should accompany doing so. | They’re potentially at risk of not being insured, protected or providing benefits similar jobs have. Expect them to move closer to organizations, like the Freelancers Union, which offer health and wellness services, retirement options and other resources. |
| Partakers | People who buy Etsy goods, Airbnb guests, Uber riders, Lyft passengers and others who purchase the services from Providers. | Our research found that these folks seek ease of use and pricing above all, followed by unique experiences and achieving altruism by helping others or participating in a more sustainable lifestyle. | Our research found that the rate of adoption will double this year alone, with more folks using these services sooner than previously thought. |
| Displaced | Taxi drivers, hotel workers, traditional manufacturers, and others who are losing their jobs as providers assume their positions. | Want their jobs, rights, and lives back. In some cases they’ve taken to protests, violence or joining unions. | Many taxi drivers have become Uber or Lyft drivers because of the opportunity to achieve a more flexible schedule, although their rights, wages and benefits are still up for discussion. |
| Non Profits, NGOs | The Freelancers Union, Shareable, Sustainable Economies Law Center, OuiShare, People who Share, and Peers. | Focused on the empowerment of people or advancing sustainability, these offer education, resources, and more to this growing market. | These groups are pro-movement, but many are partnered with the startups (Platforms) and large corporations to yield benefits, as well as work closely with regulators to drive action and change. |
The Technologists
| The Players | Examples | What they want | What no one tells you |
| Platforms | The startups. Airbnb, Lyft, Etsy, TaskRabbit, oDesk, Uber, Lending Club and more. There are over 9000 startups, many regionalized in specific countries or cities. | They want to provide a scalable, two-sided marketplace of buyers and sellers offering value added services. They must protect their interests, those of the partakers and providers. Many are heavily VC funded and have goals for adoption and valuation. | These startups are less altruistic than one may think. Advocates have criticized them for becoming the new lords of feudalism. There are over 9,000 startups, as indexed by the Mesh Directory, hosted by industry leader, Lisa Gansky. |
| Investors | Angels who’re getting the platform going, traditional VCs, often from Sand Hill, and Corporate Venturing, like Google Ventures, who’s invested in Uber. In the last 8 months alone, there’s been over $2.5b of funding, with over $2B the years before. | Maximum return on their investments. VCs are known to often want to achieve 5-10X return after 5-10 years of investment. | The requirement for return on equity puts pressure on Platforms to monetize the marketplaces they manage, which, critics suggest, will minimize the abilities of both providers and partakers. |
| Advocates | Sharing advocates include both lobbyists hired by the Platforms and non-profits like Peers. | To achieve market acceptance of the benefits of the maker movement, sharing and the impact it has on society, people and the global economy. They seek to educate, foster grassroots and lobbying support, and achieve change from the established. | There’s been scrutiny about where funding actually comes from in this category. It’s quite clear that Uber has hired traditional DC lobbyists to advocate for their issues to regulators at the federal level. |
The Established
| The Players | Examples | What they want | What no one tells you |
| Incumbent Corporations | Taxis, hotels, banks, retail, consumer goods and more. | To protect and advance their business models. | There have been over 90 instances of traditional corporations who’ve deployed in the collaborative economy (see timeline graphic). At the same time, a lobbying group for hoteliers has formed to battle Airbnb specifically. |
| Lobbyists | Hoteliers and taxi commissions have formed associations or hired lobbyists. | To protect the interests and rights of the industries, owners or workers they represent and to ensure a level playing field so that startups do not gain an unfair advantage by avoiding regulations and taxes paid by incumbents. | Multiple journalists have told me that advocates and lobbyists against the movement provide them with stories, data, and research, both for and against this movement. |
| Governments | Municipal, state and federal governments and departments, like the California Public Utilities Commission or the European Union. | To find the balance between supporting innovation and new business models, while, at the same time, protecting the vested interests of industries, current systems, safety and security and to yield taxable monies. | Governments are not all reacting the alike. Some cities adopt quickly. To wit, Airbnb now pays 14% hotel tax to the city of SF. Some cities ban it all together, as Vegas has banned all ride sharing. Feds are also looking at the issues of crowd-based funding and of crowd-created currencies like Bitcoin. |
The Influencers
| The Constituents | Examples | What they want | What no one tells you |
| Press and Media | The New York Times, the Wall Street Journal, Fast Company, Salon, TechCrunch, INC, Wired and SFGate, have deployed journalists and columns dedicated to this topic. | To be the leading coverage of this new market as it breaks, providing insight to the impacts and outcomes. | This industry recognizes and distinguishes disruption from collaboration. It was disrupted from peer-to-peer social media over the past 15 years. Now it reports by having adapted to P2P. |
| Thought Leaders | Lisa Gansky, Neal Gorenflo, Mark Hatch, Rachel Botsman, Chris Anderson, Dale Dougherty, Robin Chase, Arun Sundararajan, Jeremy Rifkin, and many, many others. | To lead the discussion in the market about the benefits and risks of these global and economic changes. Their business models tend to inform and influence by means of writing, speaking, consulting, forming associations, and advancing their investment portfolios. | This is just the start. Expect a wave of thousands of Collaborative experts to emerge, just as we saw the rise of ninjas, gurus, and samurai in the social media space. |
Closing Thoughts and a Request for Feedback
In the future, we should expect new players to emerge as unions form for worker rights or new co-ops that enable a new type of startup that straddles both technology and people. Use this guide to help maneuver this ecosystem, rather than blindly charging in. Conducting this market breakdown isn’t easy and the results are not necessarily perfect. I look forward to your feedback in the below comments.
Creative Commons: Image by Divya, Image by Chicago Cell, Image by LukeW, Image by Mkeefe
Edits were made 12 hours later, added People who Share and tweaked language in other sections.
Missing Swapdom (shameless selfpromo)
Loved the round up, once again, CUDOS!
Sharing it away.
Fenia
Very clear overview, thanks!
There is one important group you overlooked – service gate keepers. For example, if I want to book a cab service through a hotel, it is likely the concierge or desk attendant will use an established service who gives them a kick-back for booking through the regular service. Likewise, I recently came back from a three-week trip to Australia – NZ. The travel agent received renumeration from each hotel and travel service she booked.
There is a very powerful secondary economy of favors that has operated in large cities for decades. My view is that they would resist new business models and that the sharing model might have difficulty adjusting to these historical expectations.
Ifigeneia, thank you for this feedback.
Mark, that’s a group that I had not fully considered, so thank you for this feedback.
Yes, there’s an entire network of people that are impacted as people collaborate. In addition to the Service Gate Keepers, there’s also the Chinese auto workers who may lose jobs as people share cars more –rather than buy them –or the concierge who lose money as people book home dining on Feastly, rather than going to a restaurant.
With that said, I tried to generally encompass this group with the players known as the “Displaced”. Do you think that section properly describes this? It’s the third item down in the grid.
Thanks Diedert
I follow your articles ever since I came across your presentation on SlideShare on “The Future of Business Models”. Keep up, we’re following!
Great summary, thanks Jeremiah! I only miss one group: services and tools provided to platforms (payment, trust, ratings and service aggregators). But their interests and fears are pretty similar to what the platforms have.
This really helps illustrate the concept of Collaborative Economy, however I don’t think you need to be a Libertarian to question Government’s role, in the end their only function is to inhibit and/or tax all the other players.
I love this.
Great piece! Wonder if the enablers should be highlighted?
Thank you for making it simple to understand how sharing economy has been shaped for decades , As a part of Y gen. i will use some of your arguments to write it in my own language(Turkish) , Sharing makes it better for all of us.
http://www.web-strategist.com/blog/wp-content/uploads/2014/05/Honeycomb.jpg – love it
Niki
There are a few enabling forces, that span beyond individuals. For example, the increase in density makes it more possible, as well as the focus on sustainability, from a cultural perspective.
Then on the Economic side, the global recession triggered a lot of the interest: Airbnb, LendingClub, and Uber and Lyft kicked off around 2008 when we were at the height of Occupy.
Lastly, there’s a number of technologies that emerged that enabled this. While eBay and Craiglist are 15 years old, they didn’t have the adoption of smart phones, apps, internet of things that were prevalent now.
But if I were to outline WHO the enablers are, I would look at many groups, the people, the entrepreneurs, the NGOs, and the VCs, they catalyzed this perfect little storm.
I’ve outlined more details on this, here:
http://www.web-strategist.com/blog/2013/05/09/the-three-market-drivers-causes-for-the-collaborative-economy/
Hey, Jeremiah: V useful overview and welcome the various identities and roles you have identified – also the additions in the comments below. How much do you have any over time data on 1) entries of different components and 2) changed interdependencies among them? I am in Stanford for a few months. Would be great to have a chat locally.