Welcome, this industry newsletter shares key market changes, in a twice-monthly publication, curated by Jeremiah Owyang, Founder of Crowd Companies™, you can subscribe to the email newsletter on the footer of the homepage.
Understanding the On-Demand Workforce: Who is the on demand workforce? What do we know about them? These questions have been answered in separate studies and surveys conducted by Stanford graduate students and the Wall Street Journal. A thumbnail review indicates that:
- They earn an average hourly wage of $18 per hour.
- More than 25% either have a full-time job or operate another business.
- There are nearly three times more men than women engage as independent contractors
- Nearly 70% of the on-demand workforce is age 34 or below.
Check the May 20th article on MarketWatch.com for more information and links to both the study and the survey.
R Street Institute Presentation to the FTC: The free-market think tank recently had the opportunity to participate in the Federal Trade Commission’s Sharing Economy Workshop and to speak to issues of regulatory concern to the FTC. Whilst recognizing that “startup firms … are at once dynamic and naive by their very nature,” R Street also recommended that consumer protection mechanisms be narrowly tailored so that the subjects of protection and safety are directed at consumers rather than competitors. This salient insight alone can have a positive impact on development of new regulations at all levels of government. The transcript of the entire presentation is available on R Street’s website.
Merriam-Webster Makes ‘Sharing Economy’ Official: The terminology is included and defined in the latest update to their unabridged, online dictionary (along with 1,700 other officially recognized words and acronyms). The official Merriam-Webster definition of the Sharing Economy is, “Economic activity that involves individuals buying or selling usually temporary access to goods or services, especially as arranged through an online company or organization.” The scope of the Collaborative Economy goes well beyond that definition, but the important fact is the the term ‘Sharing Economy’ is worthy of inclusion. That speaks to its increasing consumer impact. Read the article at Time.com, or, if you have the time, read the Merriam-Webster dictionary and find all of the newly included words.
Mary Meeker Delivers Annual “State of the Web”: The former Wall Street analyst, turned venture capitalist delivered her annual “State of the Web” presentation at the Core Conference in Rancho Palos Verde in May. Her 126-slide presentation is an analyst’s dream come true. Here are a few, random takeaways to whet your appetite:
- 1995: 80 million mobile phone users. 2014: 5.2 billion users.
- 1995: 0.06% of the world population use the internet. 2014: 39.0%.
- 1998: Internet sales were less than 1% of total retail sales. 2014: Now 9%.
- 2008: Average time/American adult/day using digital media: 2.7 hours; 12% on mobile.
- 2015: Average time/American adult/day using digital media: 5.6 hour; 51% on mobile.
Meeker’s in-depth report reveals an abundance of amazing statistics as well as insights into where the Sharing Economy is taking us. An overview is available at Medium.com. The entire presentation is available in slide format at recode.net.
Sharing Promotes Sustainability: Reuters recently published a ground-breaking story on the Sharing Economy that, along with the usual synopsis, shared some uncommon insights. It also gave Millennials a label of “NOwners” that accurately describes their propensity for sharing versus owning. When 77 million NOwners embrace sharing, the result can have a significant, positive impact on the environment. Many of them not only recognize that potential, but are also driven by it. One particularly amazing insight is that the one thing that Millennials do buy and keepis their smartphones – the number one platform that enables sharing. The Sharing Economy is not just the right idea; it is the right idea at the right time. For more information and insight, read the entire story.
Caterpillar Invests in Yard Club: Crowd Companies has been an evangelist to large corporations, urging them to see the coming disruption of sharing startups as an opportunity to be embraced rather than a movement to be resisted. Caterpillar was named as a major contributor to Yard Club’s most recent investment round. Although equipment rental companies have been around for years, Yard Club allows contractors to earn income on their own equipment that would otherwise be sitting idle between jobs. Caterpillar’s investment not only lends credibility to the currently regional rental platform, it partners in and promotes Yard Club’s growth. A Caterpillar vice-president noted that their dealers “will use this tool as another avenue to strengthen customer relationships by increasing the utilization rates of heavy equipment and lowering the total cost of equipment ownership.” That’s exactly what we’ve been talking about. To learn more about the Yard Club/ Caterpillar relationship, check the story on CNBC.
Australian Government Clarifies Tax Rules for Sharing Economy: On May 19th, the Australian Taxation Office issued a clarification concerning the tax responsibilities of people participating in the Sharing Economy. The communique was specifically “most relevant for people providing the service, not organizations that facilitate bookings.” The advisory differentiates between income and sales tax obligations. Generally, the income tax appears to be cut-and-dried, but the sales tax rules are more complicated. The Australian tax law differentiates between an enterprise and a business. with each having a their own tax basis. The actual clarification is available in its entirety at the Australian Tax Office website. It is an interesting read for anyone in the Sharing Economy.
Image by Pexels used under Creative Commons license.
I partnered with VentureBeat’s market intelligence arm (VB Profiles) to further develop data on the funding, valuation, and employment impacts to the growing Collaborative Economy, this post originally was posted on VentureBeat’s website written by John Koetsier of VB Insight, I’ve republished their content, to share the key findings and you can find a summary of the research here.
Sharing is big business. Big big business.
There are now 17 billion-dollar companies with 60,000 employees and $15 billion in funding in the sharing or collaborative economy, according to Jeremiah Owyang and VB Profiles, a market intelligence firm partly owned by VB. That includes the venerable eBay, founded in the dim mists of technological antiquity, and relative newcomers Etsy, Chegg, WeWork, Airbnb, and — of course — Uber.
Uber uber alles, right?
While most of the startups are relatively recent — many became billion-dollar companies in less than four years — they have their roots in tough times, Owyang says.
“Many of these startups birthed from the trough of the 2008 recession,” he told me via email. “The startups received unreported friends and family money, then got market traction with adoption, then were able to seek out traditional investors, resulting in the investment boom a few years later.”
Owyang classifies collaborative economy companies in a honeycomb rubric with 12 core verticals or categories, including transportation (where Uber and Lyft belong), space (where Airbnb sits), and goods (where he’s placed Etsy and eBay). Interestingly, the largest number of billion-dollar companies are in those three spaces, plus a fourth: money, which features LendingClub, FundingCircle, Prosper, and TransferWise.
Other spaces, such as utilities, municipal, health, food, and corporate, have yet to see any kind of billion-dollar players.
Interestingly, eight of the 17 are based in California, while 12 of the 17 are U.S.-based. That preponderance may not last, Owyang says.
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“While these startups are often based in the SF area, they often serve global national markets,” he says. “Ola is an India-based ride sharing company that is well-funded, and existing Chinese tech companies are building their own versions which means that publicly funded data is unlikely to be surfaced. France’s BlaBlaCar recently received $100 million of funding which they used to purchase a competitor, earning them the title of largest ride sharing company in Europe.”
Perhaps the most unusual thing about the space?
The collaborative or sharing economy has received $15 billion in funding — more than the entire social networking space that has spawned giants like Facebook, Twitter, Snapchat, and more. If that’s any indicator, the collaborative economy is still in its infancy, and many more billion-dollar companies (and unicorns) are coming soon.
One thing that these often counter-cultural startups won’t do is totally upend our capitalistic one-percenter economy.
“It’s worth noting that the early hope that this sharing market would foster altruism and a reduction of income inequality can now be refuted,” Owyang says. “The one percent clearly own the sharing startups, which means this is continued capitalism — not idealistic socialism.”
The 10 “unicorns” among the 17 billion-dollar sharing economy companies? Owyang defines those as the companies that are still private.
- Prosper: $1.7B
- Ola: $1B
- Uber: $40B
- Instacart: $2B
- Lyft: $2.5B
- WeWork: $5B
- TransferWise: $1B
- Airbnb: $10B
- FundingCircle: $1B
- Kuaidi Dache: $8.8B
The full Collaborative Economy ebook is available at VBprofiles.
Welcome, this industry newsletter shares key market changes, in a twice-monthly publication, curated by Jeremiah Owyang, Founder of Crowd Companies™, you can subscribe to the email newsletter on the footer of the homepage.
Lyft Gets a $100M Lift from Tibbens and Icahn: On May 9th, Lyft announced that former Amazon executive, Rex Tibbens had joined the company as COO. The man who led the development of Amazon’s Prime Now one-hour delivery service is sure to give Lyft a boost. Nine days later, Lyft revealed that Carl Icahn had invested $100 million in the company, bringing Lyft’s total funding stack to more than $860 million. The company put some perspective on the news, saying, “What some forget is that just two and a half years ago, Lyft was an experiment. An experiment that challenged the transportation status quo and tapped into the core of humanity.”More information is available at Circa News.
Sharing Economy Caucus Created in Congress: “Americans increasingly rely on the sorts of innovative services the internet has made possible – services that bring Americans together while providing a new measure of convenience by providing opportunities to conduct business in more efficient ways. The Sharing Economy Caucus will focus on these pioneering industries and ensure Congress is taking all of the necessary steps to facilitate, rather than hinder, the next great idea.” Those are the words of Congressman Darrell Issa (R-CA) as he announced the establishment of a bipartisan Sharing Economy Caucus sponsored together with Eric Swalwell (D-CA). Check the report in Forbes to learn more and see important insights from other Collaborative Economy insiders.
Staggering Statistics of Uber’s Growth: Articles that follow headlines like that usually focus on funding and valuation. This one is about where the rubber meets the road. The statistics are simply staggering. A recent study has revealed that Uber’s overall market share more than tripled in Q1 2015 compared to Q1 2014, from a 15% share to 46%. The research was reported on a city-by-city basis, indicating in each the growth of Uber and its impact on the taxi business. Washington, DC, is a telling example. In Q1 2014, the split was 80% for taxis and 20% for Uber. Twelve months late the split was 51% for taxis and 49% for Uber. Check the original story in the Washington Post to see the incredible impact of Uber in major U.S. cities.
New Sharing Markets Create More than New Customers: They even create more than new jobs. They created new opportunities. Some of the opportunities they create are in what would seem to be unrelated fields. Take Shannon Liss-Riordan, for instance. She is a Boston attorney whose entire career has been focused on worker misclassification lawsuits. Typically that involves companies that purposely classify employees as independent contractors in order to above paying benefits. The rise of the sharing economy has transformed her from attorney to über-attorney. That’s über with a lowercase “u” and an umlaut. Her career is taking her everywhere that freelancers are used to ensure that contractors operate within the law. To read more about her story, visit Fusion.net.
Collaboration Thrives on Mutual Benefits: It always has. It always will. It is the concept upon which the Collaborative Economy was established. Everyone who participates receives some kind of benefit. However, as our own Jeremiah Owyang pointed out in an article for Fast Company, the growing businesses in the Collaborative Economy are going to need to remember who made them successful, lest they turn too much attention making more money. They have got to maintain social responsibility to the communities in which they operate and for the people to whom they provide services. Owyang uses the example of how Etsy is attempting to share its success with its creators and users. Read the article in Fast Company to learn more about this critical insight.
Airbnb Accused of Exacerbating San Francisco Housing Woes: San Francisco Board Supervisor, David Campos, recently claimed in a news conference that Airbnb is a “significant contributor to the housing shortage” in the City by the Bay. Respected economist, Arun Sundararajan, responded that “Any sort of creative disruption tends to have winners and losers. I just don’t see a scenario in this case where the losses are going to outweigh the wins.” The ability to be an Airbnb host can sometimes be the difference between being able to pay the rent or not. Ironically, that’s exactly why Airbnb came to exists. Read the story in Time to learn more.
Collaborative Economy Challenges Consumer Trust: Brand-e recently summarized a report from PwC on the state of the Collaborative Economy. It was interesting to note that almost 20% of all U.S. consumers have participated in some way in the sharing economy. Although nearly 60% of those, although interested, have voice reservations and concerns. Most of those concerns relate to trust issues. That becomes a problem at a time when people are indicating that they are less likely to trust strangers than they have in the past. It has become clear that providers need to find ways to add a trust element to their platforms. The PwC report concluded that “Identifying, and upholding, quality and trust metrics will be critical to success in this evolving model.” The entire report, much of it in infographic format, is available at PwC.
Image by Ben Grey used under Creative Commons license.
Etsy, at least, may have figured it out. (This post originally appeared on Fast Company)
Over the last decade, there’s been an outpouring of concern about how Facebook, Google, and other Internet companies treat their user data. This concern continues as the next generation of startups, like Uber, Lyft, Homejoy, and Postmates, are being taken to court by people like worker rights lawyer Liss-Riordan, who formerly filed class-action lawsuits on behalf of truck drivers, waiters, delivery men, cable installers, and call center workers.
Industry leaders have written about how these collaborative economy startups must start sharing value with their own community in order to quell concerns over worker rights, citing examples of how startups like Quirky and models from cooperatives are paving the way by sharing the financial rewards with their own community. Along with the entrepreneurs that run tech startups, we can all learn from these models.
Etsy, a 10-year-old marketplace, features makers from around the globe, and is a registered B Corporation. Recently, the company filled for an IPO. That’s right: Etsy, the social good marketplace empowering mom and pop artisans to sell their wares is now a ticker symbol listed next to companies like Walmart, Exxon, Coke, and Ford.
Etsy’s B Corporation status signifies the organization is aimed at doing social good—not just creating profits for investors at all costs. B Corporations are expected to focus on the fair treatment of workers and partners, and be responsible stewards of the environment, all while providing economic returns to the company investors.
According to the B Corporation website, Etsy has a rating of 105 out of 200 points. The average B Corporation ranks 80 points, which would likely be higher than the average Wall Street traded company that may be primarily focused on investor returns. While there are questions about the profitability of Etsy, the market appears to be responding positively to the IPO, and it is now valued at a market cap of $2.4 billion dollars.
So how will Etsy able to balance out the needs of investors while serving its social good mission?
One way is by offering creatives and partners the opportunity to purchase equity in the company before the IPO. Etsy reserved 5% of its shares for these providers. This was a smart move for the company, as it fosters one of the highest form of loyalty with its community: shared destiny. As Etsy performs well in the market, creators who purchased the shares benefit as well. Those creatives have already seen a 39% increase in the value of those shares since the IPO.
Etsy isn’t the only company to share the rewards with their community. Other large companies are also following a similar path:
- U-Haul launched the U-Haul Investors Club to enable the market to invest in its trucks, which offer a share of the dividends of vehicle performance
- Hasbro partnered with 3D printing maker community Shapeways to offer up the IP of toys and let makers glean revenue from every created product
- Barclay’s Card created the Barclays Ring, which enables communities of committed customers to design and use the credit card as well as distribute profits to the their favorite non-profits.
- GE partners with Quirky, where inventors who submit new product ideas share in the financial rewards.
As we go forward, companies that care about longevity of their relationship with their customers will share the rewards with community, fostering long term loyalty, deeper engagement, and advocacy from customers and partners. As companies like Uber and Airbnb prepare for their material events, they might consider sharing the rewards with their own community. In the end, companies that share the ongoing wealth with their community are more likely to survive, since the interests of all parties are aligned for the long-term.
Disclosure: Barclay’s Card is a customer of Crowd Companies, founded by Jeremiah Owyang.
[Illustrations: Petr Vaclavek via Shutterstock]
Welcome, this industry newsletter shares key market changes, in a twice-monthly publication, curated by Jeremiah Owyang, Founder of Crowd Companies™, you can subscribe to the email newsletter on the footer of the homepage.
Questions Cropping Up About Sharing Valuations: Jason Zweig’s recent article in the Wall Street Journal opened with this sentence: “Investors weren’t wrong; they just paid too much to be right.Investors weren’t wrong; they just paid too much to be right.” He was talking about the bubble at the turn of the millennium when investors were pumping more cash into tech firms than they were worth. Much more. And it was not based on normal calculations, but on expected growth. The point of the article is that investors are repeating the trend by investing in sharing startups as a group the same way they did with techs and dot-coms. Whilst S&P components are typically valued at about 16 times earnings, Uber’s estimated valuation, based on funding, is $41 billion dollars, about 50 times the S&P price-to-sales ratio and 100 times its 2014 revenues. Read the entire article in the Wall Street Journal.
Airbnb Success Not Harming Hotel Business As Alleged: There can be no doubt about the success of Airbnb. Its success is often cited as the standard for other collaborative platforms, defining them as “The Airbnb of _______.” Critics have created a lot of hoopla over the “damage” that Airbnb has done to the established hotel business. However, a study by two Boston University professors, based on empirical data, has more narrowly defined the alleged damage. In short, the study found that the impact on major hotel chains is miniscule. Airbnb caters to a significantly different clientele, ones that the chains might never get and ones that cheap hotels might sometimes get. The insightful, 28-page study is available here.
Gett Is the App to Tap to Get Things Done: London-based ride service, Gett, has announced that it is preparing to offer a one-stop app for that adds delivery services to its basic service. Founder and CEO Shahar Waiser said that “We plan to become the first app you to tap to gett things done. Everyone will use it and no one will remember how they coped without it.” Although the company has not announced which new service(s) it plans to launch in July 2015, it could be anything from Gett Pizza to Get Dry Cleaning or Gett Plumber. Gett is available in 32 major cities worldwide. Read more about Gett becoming a collaborator aggregator read the article in Entrepreneur.
Universal Avenue Gets $2 Million in Seed Capital: MOOR Capital recently invested $2 million of seed funding in Sweden’s Universal Avenue, a collaborative sales site that trains and manages freelancers as brand ambassadors for online technology companies. Once certified, the freelancers select from an array of brands to represent. There are no set hours or work locations. Wherever the freelancer goes, he or she may present their brands to businesses that might operate more efficiently or effectively by using the brand. Brand ambassadors are paid commissions. The startup company is operational in Sweden and Greece, but could easily become a worldwide success story. Read more in the April 27th issue of Arctic Startup.
To Disrupt or Not to Disrupt?: That is the question. California Senator Mike McGuire has introduced legislation (SB 593) that may help everyone involved understand disruption more clearly. Disruption of business is always to be expected, whether from the Collaborative Economy or from other competition. The disrupted entities may not like it, but they didn’t get where they are without disrupting someone else. Disruption of state and local regulations, however, is not acceptable, whether from the Collaborative Economy or entrenched corporations. Sen. McGuire is an advocate of the Collaborative Economy. His legislation is intended to ensure cooperation with regulations while allowing for disruption of business as usual. Read more in the Lake County New.
Amsterdam Named First “Sharing City” in Europe: Although London and a few other major European cities would covet that official title, Amsterdam’s vice-mayor has already given it unofficially to his own city. On February 2, 2015, he unveiled a major metropolitan collaboration that may truly be the first of its kind in Europe, if not the world. Citing research that 84% of Amsterdam’s citizens embrace the sharing economy, the city has brought together a number of leading community, corporate and collaborative entities to “utilize as a city, the chances the sharing economy offers in the areas of sustainability, social cohesion and economy.” Peter de Groot, a director at Achmea, the Netherland’s largest insurance company, shared a sage insight for all followers of the Collaborative Economy: “The sharing economy provides local connection and reduces social isolation.” Read more about this subject at sharenl.nl.
A New Sharing Opportunity?: A recent post in 21st Century Supply Chain proposed a potential new opportunity for some enterprising entrepreneur in the sharing economy. It all began with a question posed about why it costs $100 to send a piece of mail from Ottawa to Caracas and why it takes three to five days to get there. When one realizes that there are often multiple daily flights from major city to major city, one also has to wonder if these is an opportunity to connect senders with flight passengers to carry important mail. It would be like a courier service, but achieved by crowd collaboration, just like Lyft or Uber or Roadie. Could this be the next big opportunity for a bright light in the sharing economy? Read more at 21st Century Supply Chain.
Image by GotCredit used under Creative Commons license.
If you’re reading this, you already know how important energy is to us. It powers our transportation, logistics, industry, agriculture, homes, and the very digital device you’re using now.
What’s the Collaborative Economy? An economic model where technologies enable people to get what they need from each other –rather than from centralized institutions. This has impacted cars, hotels, banks, retailers, manufactures, and more.
How is the Energy Sector being impacted by the Collaborative Economy? You might be amazed to learn that P2P lending, Makers, and sharing are causing some changes. This week, I keynoted the North West Energy Conference, Efficiency Exchange, present were 500 energy professionals from utility companies, manufactures, and consultants were in attendance. I shared with them a few examples of how we’re seeing bottom-up, democratized startups enabling people to collaborate among themselves for energy creation, storage, and sharing.
Here are some of the examples I cited:
Crowdfunded Solar Enables the Maker Movement of Energy
What’s a maker in the energy sector? Anyone who’s creating their own energy, and, perhaps, sharing it with others. Solar Mosaicenables thousands of people to have access to affordable solar loans, gives investors opportunities to fund renewable power, and allows clean energy supporters the power to spread the wealth of energy from the sun throughout their communities. Respected industry leader, Lisa Gansky, is on the board.
Yeloha Connects a Marketplace of Solar Energy “Makers”
Yeloha is a new company that launched last week. They’re a network that allows for the sharing of solar energy between “sun hosts” and “sun partners.” For the 80% of Americans who would like to install solar panels on their roofs can’t afford to, Yeloha provides them with access to purchase solar energy generated by their neighbors.
Tesla to Provide Home Energy Storage, Enabling Local Resiliency
Tesla is now offering a home battery storage system for residences. The target market for these batteries are homeowners interested in backup storage from their solar panels in case of an outage, or for those living off the grid. This makes local neighborhoods more resilient and, combined with solar, potentially more independent.
Dutch startup enable P2P sharing of power credits
Vandebron arranges for consumers to buy electricity from independent producers. Based in the Netherlands, Vandebron, currently has 12 producers providing enough energy for 20,000 households. Customers receive their sustainable energy through the national grid, but from sources (typically farmers) and methodologies (wind, solar) selected by each individual customer. The company’s revenue stream is from subscriptions, which keeps them at arm’s length from promoting consumption.
Cities and contractors are sharing large equipment, increasing efficiency
MuniRent enables public agencies to easily share heavy duty equipment internally and with other agencies. Yard Club benefits both contractors who own equipment and those looking to rent. The owners get to make some money on their equipment, while the renters save money compared to what they would pay traditional equipment rental companies. This, of course, begs the question: How else might cities and the companies who work with them become more energy and resource efficient?
Other Collaborative Economy startups enable efficiency in transportation and goods
Ride sharing apps like Sidecar, Lyft Line, Europe’s BlaBlaCar and Uber Pool aim to maximize the number of passengers in a car, increasing efficiency of time, energy used, and traffic. Auto and Boat sharing apps like Getaround, RelayRides, Zipcar, BMW DriveNow, and Boatbound increase utilization of vehicles by allowing them to be shared. It goes without mention that Yerdle, Craigslist, Tool Sharing spots enable local communities to increase utilization of un-used goods, reducing global shipping and manufacturing.
We’re in the Early Days of the Collaborative Economy, As it Begins to Permeate Society.
These examples are on the horizon. There are just a few. Some of them have just birthed or have not yet been widely available, but there’s enough evidence to see how sharing and crowdfunding people are enabling to “make” and share energy independently, which could literally create shifts in the balance of economic power. In December 2014, we launched the Collaborative Economy Honeycomb 2.0, featuring a Utilities hexagon which is broken down by Telecom and Energy. Some of the previously mentioned startups were not yet operating. We’ll include them in the next iteration of the graphic. This market is changing rapidly.
Above: This Collaborative Economy Honeycomb maps out how
P2P Commerce is impacting all areas of society,
including Energy (Purple hex, bottom left)
Leaders in the Energy Sector Will Shift Ecosystem Roles, Providing More Value
In my presentation, I provided the business leaders of the Energy Sectors examples of how other large companies in other industries are adapting (see timeline, or detailed database), by creating and enabling P2P marketplaces around their companies or by providing a platform for others to co-create with them. In the case of the energy sector, large utilities could first enable solar on homes, take a revenue cut of the excess energy created, and provide marketplaces that enable the distribution of that excess energy within in a region. The role could shift to facilitator or enabler as the crowd continues to buy in.
To learn more about my vision about how large companies can participate, here’s my full body of work.
Etsy Launches IPO on Nasdaq: Today is April 16, 2015. It is early morning in New York and the markets are not yet open. When they do, sometime during the trading day, Etsy, the artisanal online marketplace, will float its initial public offering at an opening price of $16.00 per share. At an offering of 16.7 million shares, the company’s valuation will be $1.8 million. Paying homage to its roots and its vision, the IPO has been structured to allow 15% of the shares to small investors for a spend of up to $2,500 each. More information is available at the Wall Street Journal.
BlaBlaCar Continues Expanding with Two New Acquisitions: French ride-hailing company, BlaBlaCar has acquired Germany-based Carpooling.com and Hungary-based AutoHop. These acquisitions continue the company’s successful expansion strategy of making “a lot of small acquisitions, because that’s the best way to find talented entrepreneurs who are passionate about the industry,” according to COO Nicolas Brusson. BlaBlaCar, which offers shared rides from city to city, now has 20 million members who are engaging in two million rides per month. Detailed coverage is available at TechCrunch.
Investors Pour Money into Alternative Lending Platforms: The funding of new lending platforms just keeps pouring in. We watched three major stories unfold in just two days so far in April, and each recipient is based in the San Francisco area. ApplePie Capital raised $34 million to help fund its platform for lending exclusively to small franchise operations. Patch of Land, a crowd-based, real estate lender raised $23.6 million. But the headliner has to be the $165 million raised by Prosper Marketplace. Adding irony to Prosper’s infusion is that this round included strategic investors, some of which have considered Prosper as a competitor in the past.
PriceWaterhousCoopers Releases Sharing Economy Survey Results: PWC is saying that the sharing economy is “an undeniable trend” after releasing the results of its recent survey. Of the 1,000 participants, 43% agreed that they consider owning things to be a burden, whilst 83% agreed that sharing makes life “more convenient and efficient.” On the other hand, as many as 69% indicated that they have trust issues that need to be overcome before becoming users. The trust issue was viewed as the most significant to overcome on the road to a successful, global sharing economy. On the other hand, the driving force seems to be a combination of increasing shared usage resulting in less personal debt stress and less negative environmental impact. Read more at re/code.
Baidu Investing in Ride-Sharing Startups: Baida, the world’s largest search engine company, has made investments in two Chinese ride-sharing apps during the second week of April as it seeks to gain control of a larger share of the mega-companies that are arising out of the sharing economy. Although the amount invested in Tiantian Yongche and 51 Yongche is currently undisclosed, it is in the tens of millions. Baidu has already invested in Uber. Interestingly, Sequoia Capital is also an investor in the two Chinese startups. Baidu’s initial play is to get into the market to compete successfully against entities backed by Alibaba and Tencent. These are strategic investments designed to set up for future mergers and acquisitions that will put control of the “consumer friendly” ride-sharing into the hands of global powerhouses. Check out the story in the South China Morning Post.
Solar Power Joins the Sharing Economy: Amit Rosner, CEO of Yeloha says that the mission of the company that he co-founded is “To create and accelerate the confluence of the sharing economy and solar energy.” His company has recently received $35 million in venture capital funding to launch into the P2P marketplace with solar energy. The company is promoting the installation and use of solar panels through the creation of Sun Hosts and Sun Partners. Those who are willing to become hosts are incentivised with free installation. Neighbors who cannot, or do not wish to, install panels may sign up as partners, allowing them to purchase solar power from the guy next door. Although the cost and green benefits are obvious, readers may want to learn more at treehugger.com.
Image by JD Hancock used under Creative Commons license.
No, I’m not talking about the latest episode of Heroes. I’m talking about the people formerly known as your customers. You may be asking, “What powers do they have? Who gave those powers to them? What are they going to do together?”
I’ll be glad answer that.
They are powerful.
They have new powers, and you can see a collection of stats, that enable them the ability to get all the information they need about you in real time using social networks, mobile devices, and the internet. They can find ratings and reviews about your products as well as your competitors, compare prices and, now, have it delivered to them in under an hour from “the crowd” by using services like Postmates, Instacart, Deliv.co, Google Shopping Express and many others. They can also choose to buy a product one time, and then share it many times with their peers, rather than the whole group buying the same product over and over again. WARNING: This will cause extreme disruption to companies that sell ‘stuff.’ This powerful crowd is also able to act like traditional companies in their own right. They can become like hotels and host people at their own homes using Airbnb. They can transform into restaurants by having strangers over for dinner. They can even morph into a rental car company by chauffeuring or letting friend or even complete strangers borrow their cars. In their most advanced state, these empowered people can build their own products and goods, using Quirky, Etsy, Shapeways, TechShop, MakersRow, CustomMade and other sources, many of which are invisible to the corporate eye.
What it means: Your customers are now starting to be your competitors.
Technology is giving them strength.
Who’s giving them these powers? Small tech companies and big tech companies are. There are hundreds of new startups that have emerged to enable ordinary people to share goods, services, time and space with each other at distinct local levels. Links on Craigslist (from used cars in Chicago to baby goods in Paris) are becoming like distinct companies. These startups are being funded by venture capitalists who see how “two-sided marketplaces” at scale. Also, these are startups have incredibly low upfront costs. A handful of people can build a successful company in a few short months. Big companies are giving ordinary people super powers too. Facebook, Google and Apple immediately come to mind. Most of these sharing startups are using Facebook connect, an instant plug-and-play trust network. Apple’s instant app availability means global distribution at a local level to anyone carrying a smart phone. The average guy on the street can obtain a high-powered, locally-focused app on demand.
What it means: They can get much of what they need from each other –rather than from corporations.
They are organizing as a collective.
While not everyone adopts the empowered state, we often see higher adoption within high density, progressive markets and is common among younger-aged people who were born sharing using the internet. In our last post, we explored how the Millennials will become the dominant workforce generation in less than 15 years. Like all great movements, they have opposition, and these empowered already have many challenges that combat their efforts.
The resistance is coming from municipalities and corporations that do not espouse change and its potential impact on their traditional controls. Dozens of other hardships rise to face them as they come into their own. But the crowd is pressing on relentlessly. Cities are scratching their heads on how to regulate these new P2P business models, and the startups are assembling lobbyists, and getting their users to vote, protest, and be heard. Using communication tools, they will connect to each other, and collectively build their own voice.
What it means: They are connecting to each other, and are self-organizing like a organic company.
The term “customer” or “consumer” is becoming antiquated.
People who used to have the custom of buying from corporate entities will no longer be customers if they are enabled to get what they need from each other. The term “consumer” is unpopular word in sustainability circles, especially as they seek to share products amongst each other, rather than constantly buy anew. This is a new breed of people. They have power. They have strength in numbers. They are organizing. And big technology companies are backing them. This blog, and my ongoing career mission as a whole, is focused on helping corporations connect to their customers. In order to do this, corporations must take the time to listen and to understand how customers are changing.
What it means: They’re empowered to turn their homes are hotels, their cars, taxis, they’re makers, funders, lenders…they’re micro-entrepreneurs
Savvy corporations will collaborate with the empowered people.
Savvy corporations that want to benefit from this massive economic revolution will collaborate with these empowered people, and, in return, create resiliency within their corporation. Make no doubt about it, this is a business opportunity. But if ignored, this is a threat that could unravel corporations.
What it means: Corporations who want to be resilient know the crowd becomes part of their company.
(image used with creative commons licensing, by Lalit, a prior version of this was posted, two years ago, this one, is updated)
It pays to share, as the crowd shares your brand for you.
Marketers first adopted the internet and then social media. The next digital phase is the Collaborative Economy. What’s that? If you’ve heard of Airbnb, Uber, Lyft, Kickstarter, Indiegogo, and the Maker Movement, this is the Collaborative Economy.
Just as social media enabled people to create media and then share media, in this next phase, the Collaborative Economy enables people to create their own physical goods as well as share their existing physical goods. In both of these examples, they are using digital technologies to make the sharing happen.
This following honeycomb graphic of the Collaborative Economy clearly illustrates the many different industries that are being impacted.
View full-size image.
Crowd Companies has been tracking this movement and is aware of at least 150 leading brands that have recognized the need to adopt and embrace the Collaborative Economy, and we have a Google spreadsheet to track how brands are using the concept in marketing and more. Each of them has acted in some way to deploy shareable products, host marketplaces, and work with makers to innovate. Here are eight companies that clearly demonstrate what marketers can do to adopt this collaborative revolution and to promote the sharing concept.
1: MasterCard and Lyft
Mastercard partnered with Lyft to extend its “Priceless” marketing campaign during the Christmas holiday. It decked out the interior of Lyft vehicles in Christmas decorations and handed out gifts such as cookies and concert tickets.
2: KLM and Airbnb
KLM customized a private plane for use as a unique Airbnb experience, giving a whole new meaning to “flights and accommodations all in one place.” To be fair, the plane didn’t actually fly anywhere. It was the accommodation. And it was luxurious to say the least. Three lucky families got to spend a night in the stylish apartment-in-a-plane equipped with a host of amenities not available in even a luxury hotel room.
3: Comcast and Airbnb
Comcast created three unique Xfinity Watchathon Week Airbnb properties. Families in San Francisco, Chicago, and Baltimore spent an entire week in selected Airbnb properties whose interiors were redecorated to match the sets of Game of Thrones, Boardwalk Empire, and The Wire. Not only did guests watch their favorite series, they were immersed in it.
4: Ghirardelli and Lyft
— soraya ghoudsifar (@sorakita12) February 10, 2015
Ghirardelli sponsored a Valentine’s Day contest and sweetened the ride for some lucky Lyft passengers. Every Lyft rider in San Francisco enjoyed a car packed with free Ghirardelli chocolates. One lucky passenger and a loved one won a getaway in San Francisco, including a two-night stay in a fancy hotel, unlimited Lyft rides, an exclusive tour and shopping spree at Ghirardelli, and of course, lots of chocolate. Sweet!
5: Citibank and the City of New York
Citibank sponsors a New York bike sharing program, which means its brand is pedaled all over the city. With the full backing of the New York Department of Transportation and the sponsorship of Citi, thousands of on-demand bikes and hundreds of bike stations are available and easily accessible. Increasing consumer demand is now prompting expansion to neighborhoods north and east of Manhattan.
6: MADD and Uber
MADD partnered with Uber to prevent drunk driving on St. Patrick’s Day. According to a report issued jointly by MADD and Uber, “It is estimated that every 52 minutes someone is killed in a drunk driving crash.” Uber and Mothers Against Drunk Driving are working toward a world where more options empower more people to make the right choice — where a safe, reliable ride home is always within reach.
7: Honda and Indiegogo
Honda and Indiegogo partnered to preserve iconic American drive-in theaters. The people at Honda figure that without cars there would be no drive-in theaters, so it made sense for them to launch an Indiegogo campaign to engage the crowd in an effort to help save the 368 remaining icons of a bygone, but missed, era.
8: Nordstrom and Etsy
Nordstrom features Etsy products, including home decor items, clothing (even bridal gowns), and accessories. Perhaps the next Vera Wang will be discovered at Nordstrom. There are currently 15 Etsy makers whose products are cataloged by the upscale retail giant. This is a model of corporate marketing vision and resilience embracing the Collaborative Economy for the benefit of all concerned.
Because of the increasing popularity of sharing startups, more and more businesses are considering how they can join in on the “sharing” — either through individual projects or by partnering with other brands. And the industry is moving fast as more and more entrepreneurs come up with business models that build upon the Collabortive Economy model and compete with traditional commerce models. If you want to keep up, consider how your brand can be more “sharing” and how you can facilitate sharing within your customer base.
The Collaborative Economy’s Money-Making Middlemen: The sharing economy resemble the California gold rush of the mid-1800s. A lot of people got involved. Some struck it rich. Only a few got filthy rich, but they created their own wealth by supply everything from tools to Levis. The Harvard Business Review identified three groups who are striking it rich in the Collaborative Economy. Power Sharers like Breeze and YardClub,are cropping up in large cities, where there is lots of demand. They buy assets in order to rent them to participants in the sharing economy. Power Operators, like Pillow and ZenDrive,provide support operations for freelancers, allowing them to focus on their primary business. Power Organizers, like Peers.org, provide platforms that create uniformity and trust for providers and customers alike. Read more at this link to the Harvard Business Review.
The National League of Cities Issues Major Report on the Sharing Economy: The NLC issued a 44-page report on March 10th that addresses how the sharing economy impacts five key areas in urban settings: innovation, economic development, equity, safety and implementation.Clarence E. Anthony, CEO and executive director of the National League of Cities noted that, “There is an enormous potential to empower our communities with innovative new approaches to doing business.” The report asks and answers questions like, “Where do politics and innovation intersect as cities work to create new policies?” as it provides an analysis of what is currently happening in U.S. cities on the ground, in order to assist city leaders as they seek to make sense of the sharing economy. A copy of the complete report is available online.
Prequel to Open as DC’s First Successful Equity Crowdfunding Campaign: Prequel, a 17,000 square foot restaurant in the Penn Quarter district of Washington DC, is slated to open this spring as the first fully-crowded funded restaurant in the city. Following DC’s recently established crowdfunding guidelines, Prequel was able to raise $220,000 from 339 DC residents within 30 days using the EquityEats platform. EquityEats previous campaigns, which have focused on certified investors, have been unsuccessful. Read more about this story in The Washington Post.
The Technology Layers of the Collaborative Economy: The March 3rd edition of The Huffington Post featured an article by our own Jeremiah Owyang. In it, he revealed the five layers of technology that enable the Collaborative Economy to exist. In fact, the Collaborative Economy would not be able to function efficiently without sharable technological resources (e.g., smart phones), mobile apps, application inter-connectivity, trust enabled by social media, and cloud services. For more in-depth information about the technological enablement of the Collaborative Economy, read the full text of Jeremiah’s article here.
Collaborative Economy on the Rise: The sharing model in Asia has evolved into what is now known as a Circular Economy. In this model collaborative consumption is regarded with as much favor as Goods as a Service and other elements of the Collaborative Economy. The Circular Economy includes more emphasis on remanufacturing and recycling, as well as sharing the benefits gained from collaboration. Corporate giant, Phillips, supplies Asian companies with free, high-efficiency lighting in return for a portion of the energy saving. Singtex, a Taiwanese firm collects used coffee grounds from Starbucks locations and recycles them into products like T-shirts, socks and soap. Eco-Business has published an in-depth story on this growing phenomenon.
Joinem Raises $5 Million to Launch New Service: Joinem, touted as “the first community-powered digital retailer to monetize the full potential of social commerce,” has raised $5 million in new funding to launch its WePower collaborative purchasing website, introducing group buying to the Collaborative Economy. After successful beta testing, the Dallas-based enterprise is set to introduce its new platform that combines features of the sharing economy, mobile technology and ecommerce. WePower searches and connects seekers with suppliers to leverage the crowd’s collaborative power to secure the lowest prices for quantity purchases. To understand how Joinem will deploy WePower, read the article in Business Wire.
Yahoo Travel Promotes Sharing Services: Yahoo Travel ran a story on March 9th that promoted parts of the sharing economy as a means of reducing travel expenses while also enjoying an upscale experience. It wasn’t a big surprise to see Airbnb accommodations promoted as an option to hotel rooms. Airbnb wins on price and amenities. The story also recommended another emerging source of business ride-sharing that is cropping up in major urban corridors, such as LimoLiner, servicing Boston and Midtown NYC. The cost of LimoLiner is substantially less than air or train fare and the experience comes replete with first-class everything, including on board attendants, complimentary meals, WiFi, and “sparkling clean restrooms with fresh cut flowers.” Read the original report on Yahoo to learn more how inexpensive, no-hassle luxury is emerging in the sharing space.
“Ride-Sharing” Is Banned by the Associated Press: Although it could be considered a subtlety, as of January 2015, the Associated Press has officially begun referring to ridesharing as ride-hailing. This does matter in discussions about the Collaborative Economy because the AP sets the general standard for terminology used in written communication. The AP Stylebook has been updated to include “Ride-hailing services, such as Uber and Lyft use smartphone apps to book and pay for a private care service or, in some cases, a taxi. They may also be called ride-booking services. Please do not use ride-sharing.” See the story in Greater Greater Washington for more information.
Is the Sharing Economy Really About Sharing?: Not according to Giana M. Eckhardt andFleura Bardhi, or any dictionary. Sharing refers to divided use, which is an aspect of the broader subject matter. This is why we prefer to use the term Collaborative Economy. Collaboration denotes working together. The authors rightly observe that this so-called sharing is, rather, economic exchange and, as we have continually maintained, an access rather than ownership model. When they stated that, “The access economy is changing the structure of a variety of industries, and a new understanding of the consumer is needed to drive successful business models,” they have validated Crowd Companies’ raison d’être. Read their entire report in the Harvard Business Review and Jeremiah Owyang’s blog post “It’s Just the Economy.”
Image by Greg Lobinski used under Creative Commons license.