While wading through posters featuring my daughter’s favorite boy band of all time, we picked up a reminder of a simple credo that is all-to-often forgotten – All I Really Needed to Know I Learned in Kindergarten. Based on the New York Times bestseller of the same title, this book detailed 19 lessons taught in kindergarten to help develop happy, productive, and successful social citizens.The lesson that topped them all? Share everything.
When it comes to the business world, the word “share” is very rarely uttered. However, the Sharing Economy (also known as the Networked Economy or Collaborative Economy) is turning this seemly simple lesson into revenue-generating opportunity.
The Sharing Economy – a new way of doing business
In 2014, we saw the first signs of the Sharing Economy blossoming. The value of a six-year-old, home-sharing startup increased to more than US$10 billion – soaring past the value of one of the world’s hotel industry mainstay. Then, weeks later, a ride-sharing startup exploded in the market with a valuation of US$18.2 billion, almost as much as the top two car-rental leaders combined.
Not only did these two deals show the power and promise of the Sharing Economy, but they also sent a warning to the corporate world that a significant disruption was coming. Thanks to a heightened focus on innovating technology, we are now living in a world where goods and services are exchanged directly, innovation and production are crowdfunded, and products are shared on an as-needed basis.
Believe this wave of change doesn’t affect every industry? Think again.
According to the Collaborative Economy Honeycomb, nearly $2.5 billion invested in startups and services over the last six months in 2014. As a result, the sharing economy is affecting 12 industries – and showing no signs of slowing down.
Jeremiah Owyang, the founder of the group that created this insightful model, observed the reason for the growing adoption of this concept, “The net benefit for big companies is the ability to connect to the ecosystem for co-innovation, create new business models, and sell one product many times, whether that’s by charging per use on a subscription model or by facilitating a secondary market for used goods.”
4 ways to every business can succeed in the sharing economy
As startups that appear out of seemingly nowhere and forward-looking competitors gain momentum and success with this new business model, well-established brands can no longer operate as normal. Sure, their way of doing business may appear to work well. But, can’t we all afford to change a little to service customers better and find a new way to generate revenue?
In the Center for Business Insight inquiry How Brands Can Take Advantage of the Sharing Economy, there are some simple and highly innovative ways businesses in all sectors can take advantage of the Sharing Economy.
- Meet the growing demand for sustainability. Using technology to operate more responsibly, greener, and transparent isn’t just a nice PR or marketing gimmick. It’s a mandate. In a world of limited natural resources and growing waste, the ability to maximize the value of every resource mitigates future risk of disruption.
- Pump up innovation. Whether you’re outsourcing, crowdsourcing, or partnering, working with sharing services can bring a new source of expertise and perspective. With a fresh pair of eyes and brainpower, innovation is taken to a new level at a fraction of the cost when hiring a new full-time employee.
- Expand offerings and reach new markets. The Sharing Economy offers new opportunities to expand beyond core competencies while supporting and validating the power of partners. Consider Goodwill. This nonprofit is not known for its ability to transport donations. However, Goodwill participated in a pilot project in which donors could call on a quickly growing startup (Uber) to pick up items from their homes and deliver them to Goodwill’s donation centers. The effort gave Goodwill much more visibility in the city, and Uber got the chance to rebrand itself as more than just a ride-sharing company.
- Join the disruption. Companies no longer want to be taken by surprise. However, many still are – especially in the case with overnight success of startups. A 2013 Boston University study revealed a 0.05% drop in hotel bookings in Texas for every 1% increase in Airbnb listings, while ride-sharing services such as Uber, Sidecar, and Lyft have driven taxi ridership down in some cities by as much as 30%. And if you can’t beat ‘em, what the best thing to do? Join ‘em … but find a way to do it better.
What are you waiting for? Seize a competitive edge in the Sharing Economy now.
Check out the Center for Business Insight inquiry How Brands Can Take Advantage of the Sharing Economy.