The Disruptive Nature of the Sharing Economy: Finding the Next Great Opportunities
Many of us suffer from a sinister and often contagious disorder, something I call just-in-case disease.
We own toolboxes full of tools, just in case we need to fix something. We have kitchens full of appliances just in case we want to prepare a meal. We have cars in our garages just in case we need to go somewhere. We even have closets full of clothes we know we’ll never wear just in case we get desperate.
Wealthy people suffer from an even more extreme form of just-in-case disease. They own yachts, summer homes, extra cars, fancy jewelry, snowmobiles, and even private islands just in case they need something to keep them entertained.
Many of these items are hugely valuable assets that only get used occasionally. In the grand scheme of things, they represent an incredible waste of natural resources – hardware, buildings, real estate, equipment, and art – all sitting around collecting dust.
We’ve all become stuffaholics, addicted to more, more, and don’t-stand-in-my-way because I want more!
When it comes time to get rid of our stuff, we suffer from another affliction, separation anxiety. When it comes time to say goodbye to our stuff, we find ways to avoid giving it the death sentence and actually throwing it away.
As a result of our separation anxiety, we’ve created a massive self-storage industry to “age our stuff” just a bit longer. In the U.S. alone we have over 2.3 billion square feet of rentable storage space.
Nigel Marsh sums it up well when he says, “There are thousands and thousands of people out there leading lives of quiet, screaming desperation, where they work long, hard hours at jobs they hate to enable them to buy things they don’t need to impress people they don’t like.”
There is, however, a cure for this ailment, and its called the “sharing economy.”
The sharing economy is creating some amazing business models around the use of “other people’s stuff.” Here’s why it will be such a disruptive force in our future, and some of the next great opportunities in this space.
Libraries were the world’s earliest form of the sharing economy
History of the Sharing Economy
When it first started, sharing didn’t make sense as a for-profit business model. Sharing was always done as part of charitable organizations.
Libraries – The earliest form of the sharing economy happened thousands of years ago with libraries. Information was both scarce and valuable, and it didn’t make sense to keep scrolls, books, and codices hidden behind locked rooms.
As a result, the earliest form of libraries were born as public reading rooms, and to prevent people from stealing the priceless manuscripts, each codex was carefully chained to a podium or table.
TED – Another important marker in the sharing economy happened in 1984 when Richard Saul Wurman noticed the significant convergence between Technology, Entertainment and Design. As a result, the TED organization was born, but it wasn’t until 2006 when the first six TED Talks showed up online.
This sharing of ideas from the world’s top experts has mushroomed into a cultural phenomenon with thousands of new TED and TEDx talks happening all over the world every year and hundreds of millions viewing them online. Listening to these talks is free, but company sponsorships have generated massive revenue streams for TED Inc.
One of the earliest players in the sharing economy was Zipcar
The Sharing Culture
Some of the early pioneers of the sharing economy were Zipcar, founded in 2000, and later Airbnb, launched in 2008. Both happened before the term “sharing economy” was even invented.
Later, the concept was popularized by Rachel Botsman and Roo Rogers in What’s Mine is Yours (2010) and Lisa Gansky in The Mesh: Why the Future of Business is Sharing (2012).
Here are some of the key players who have emerged in this space. The first six are car-sharing services:
- Zipcar – Industry pioneer Zipcar has calculated that one of their cars replaces 15 private cars. They now have 1.7 million car-sharing members in 27 countries and were recently acquired by the Avis Budget Group for $500 million.
- Uber – Launched in 2010 in San Francisco and started as a black car service. It then added SUVs and compact cars, and is now in 25 countries.
- Sidecar – Launched in 2012 in San Francisco, Sidecar’s smartphone app matches everyday people in their own car with people nearby for shared rides. They now employ thousands of drivers in the Bay Area.
- Lyft – A ride sharing service for people to find rides from “regular” people who have a car. The service only takes “donations” because it is not a taxi service.
- RelayRides – Google Ventures-backed RelayRides enables people to borrow cars from neighbors. They can rent the cars by the hour or by the day. If the car has OnStar, users can open the car automatically through a mobile app. This service is now available nationwide.
- Getaround – As a peer-to-peer car sharing company, Getaround lets people borrow cars from others. Owners who are out of town can also leave their car with Getaround, which will rent out the car, clean it and take care of it. Getaround cars are covered by a $1 million insurance policy from Berkshire Hathaway. It currently operates in San Francisco, Austin, Portland, San Diego, and Chicago.
Finding real homes with real pet owners for your pet
Other Sharing Services
- Lending Club – Forget houses, cars, and dogs, Lending Club’s peer-to-peer network will help you get cold hard cash. It is cheaper than credit cards for borrowers and provides better interest rates than savings accounts for investors.
- Fon – Startup Fon enables people to share some of their home Wi-Fi network in exchange for getting free Wi-Fi from anyone of the 7 million people in Fon’s network.
- Poshmark – People buy or sell their clothing through Poshmark’s mobile app. They can also display their virtual closets and find friends who have similar styles.
- DogVacay – Instead of dropping your dog at a kennel when you’re gone, these are real homes with real pet owners who will take good care of Spot and Brunno for you. It’s cheaper than a kennel and gives dogs a more comfortable place to stay
- Task Rabbit – Founded in 2008, TaskRabbit is a mobile marketplace for anyone looking to hire people to do jobs and tasks, ranging from delivery, to handyman to office help. All the “rabbits” are interviewed and have their backgrounds checked before being listed in the system. Its workforce, now over 4,000, includes students, unemployed workers, retirees and stay-at-home moms.
- Airbnb – Since Airbnb launched in 2008 in San Francisco, about 4 million people have now used the site. Last year it topped 10 million guest-stays in more than 190 countries worldwide.
- Cannabeds – Launched in Colorado where marijuana is now legal, Cannabeds is an Airbnb clone focused specifically on places to stay where vacationers can kick back and enjoy a little recreational weed.
- Boatbound is billing itself as the Airbnb of boat rentals with a nationwide network that allows you to reserve a boat in any city with a nearby lake. -
- Zaarly is a peer-to-peer marketplace for people to provide services for others. Zaarly focuses on creating “stores” for sellers to market their services, from home repair to iPhone repairs.
- Spinlister – Rent a bike from a neighbor, someone nearby, or any organization with too many bikes.
Eight Big Opportunities Ahead
In looking at all the inroads the sharing economy has made so far, you may think that the big opportunities have already been exploited. In reality, this is a movement that’s just getting started.
Here are just a few that come to mind:
1.) Commercial Real Estate – Traditional real estate thinking demands long-term leases and huge commitments, something that no longer makes sense in a fluid, rapidly-changing economy. Think in terms of coworking for musicians, artists, makers, and small retailers to fill the growing number of empty big box retail stores.
2.) Alternative Healthcare – In healthcare, the providers are far more organized than the consumers and those in need. It only makes sense that pooling, organizing, and developing communities of need will open the door to many unexploited opportunities.
3.) Tiny Home Pads – A growing number of people have adopted a nomadic lifestyle will small little homes on wheels, all under 200 sq ft. Similar to an upscale campground for longer-term residents, the tiny home movement is in need of support communities with pads and hookups for water and power.
4.) Experience Sharing – Every experience can be optimized around the right group size, personalities, ages, backgrounds, and interests. As an example, specialty tours could be developed for niche groups like Australian sailors wanting to learn French cooking and pottery making while traveling through Brazil.
5.) Travel Sharing – When enough people want to go to Cleveland, a bus, airplane, or boat can instantly be scheduled and everyone leaves. Travel no longer has to be restricted to scheduled times, places, or destinations.
6.) Capacity Sharing – Most concerts, theaters, and sporting events have unfilled seats. With the right kinds of online brokerages and exchanges unfilled capacity becomes an instant asset.
7.) Sharing Executives – Bored with the same old job and responsibilities, let’s try a new management team this week and shake things up a bit.
8.) Future Libraries – It seems somewhat ironic that the originators of the sharing economy have been disrupted by the modern sharing economy, but that’s exactly what’s happening.
When books were an expensive luxury that only the wealthy elite could afford, it made sense to pool these valuable resources in a public place. But while libraries were all about sharing, they somehow became more focused on books and less focused on sharing.
However, libraries have been adapting quickly. Over the years, they have added the sharing of art, videos, and even tested such unusual things as pet sharing, seed sharing, and lending such things as hand tools, baking pans, fishing poles, telescopes, and knitting needles.
In Canada, some libraries serve as sites for sharing emergency equipment such as backup generators, heaters, rescue equipment, lights, and more.
With a little ingenuity, your local library could easily become the community-sharing hub for virtually anything.
“The universal cure for our just-in-case disease is a just-in-time mindset!”
Brian Chesky, CEO of Airbnb, summed it all up well when he said, “There are 80 million power drills in America that are used an average of 13 minutes… Does everyone really need their own drill?”
So is the sharing economy only for those with a charity mindset? Not hardly. Some are estimating the value of Airbnb to be over $2.5 billion. Zipcar recently sold for $500 million and some estimates place the value of Uber at well over $1 billion. The sharing economy is indeed big business and getting bigger.
The universal cure for our just-in-case disease is a just-in-time mindset.
With our sharing of goods and services in ways that drive transaction costs to a fraction of what they would be otherwise, “just-in-time” is about to become the universal mantra of tomorrow’s business elite.
About the author:
Thomas Frey is the innovation editor of THE FUTURIST magazine. His Web site is Futuristspeaker.com
Essays and comments posted in World Future Society and THE FUTURIST magazine blog portion of this site are the intellectual property of the authors, who retain full responsibility for and rights to their content. For permission to publish, distribute copies, use excerpts, etc., please contact the author. The opinions expressed are those of the author. The World Future Society takes no stand on what the future will or should be like.
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