From high tech to human touch
Imagine a world where access is more important than ownership. Where people exchange objects among themselves, produce their own goods, and trade their time for goods produced by others. Imagine a world in which people do business with other people and not with companies.
No, this is not a newly discovered piece of the song by John Lennon. Nor it is an anti-capitalist utopian manifesto, or the portrait of a secret reclusive community in a lost forest. This is the world of the sharing economy, a movement that emerged less than a decade ago in the heart of the American economic engine, the Silicon Valley, and has been gaining strength and challenging the most traditional business models throughout the world.
I’ve lived in this world for 75 days – and I continue to explore it for the last 4 years, across 3 continents. In this post series, which brings together content I wrote for the book Future Value Generation (by Daniel Egger), for my blog, and new material, I’ll share with you what this experience has taught me, and why you too will be impacted by the sharing revolution and how to leverage it for your career or business.
Living the change
It was mid-2013 when I moved to the San Francisco Bay Area, California, and first noticed on the streets a car with a pink mustache. I found it odd, but thought it was local fashion - because, you know, San Francisco.
Exploring life and business in the San Francisco Bay Area
Shortly after, while seeking housing, a friend asked me, surprised, why had I not looked on Craigslist; or why not rent an Airbnb until we could find a more permanent option. Later that week, when I returned home carrying my groceries, a neighbor suggested I should find out more about Instacart, where someone would do the shopping for me. To assemble my furniture, a colleague recommended hiring a TaskRabbit. Before long, I found myself surrounded by businesses that had in common a key feature: they were technology-based platforms that connected me with people (not with companies) that would solve my problems.
Intrigued, I started studying about this new way of doing business that is revolutionizing important economic sectors. I soon understood that, rather than reading about this so-called sharing economy, I needed to live it to be able to understand its real dimension. That is when I launched The Share Experiment: for 75 days, the sharing economy would be the first choice for everything that I needed.
Moments of sharing during my 75-day experiment
But what exactly is this sharing economy
Also called collaborative economy, peer-to-peer economy, or mesh economy, the sharing economy, to use the more widely adopted term, is as much a social phenomenon as an economic one. At the same time it revives the intrinsic gregarious characteristic of human beings, which for millennia have collaborated and exchanged goods within communities, this new model leverages the potential of information technology to connect and empower individuals on a level never seen since the industrial revolution established the relationship dynamic “company-individual” that prevailed until today.
Image credit: “Sharing is the New Buying” report by VisionCritical and Crowd Companies
Why it matters
To understand the transformational potential of the sharing economy, consider the case of Uber, the highly known online platform that connects people who have car with people who need transportation. The young company, founded in 2008, now operates in more than 550 cities in 40 countries (including Singapore, from where I write this series), connecting hundreds of thousands of drivers (professionals and amateurs) with millions of users.
Uber has enabled over 1 billion rides. Creating 20,000 new “jobs” per month, the company is one of the highlights of this new economy, especially after having raised billions of dollar from investors, reaching an estimated market value of more than $68 billion, making it the most valuable startup in the world - and surpassing giants such as Ford and GM. All of this, without owning, producing or even managing a single car (some of these elements have evolved and I’ll talk more about this in future posts).
Just like Uber, other similar companies across the world have developed their platforms to compete in the transportation market: Lyft (the one of the aforementioned pink mustache, across the USA), Sidecar, BlaBlaCar (in the UK) and Grab (in Asia). And this trend of new business models based on the sharing proposition has affected other important economic sectors:
- Airbnb, with over 2 million listings, in about 200 countries, is nowadays considered the largest “hotel chain” in the world
- eBay, Craigslist, Etsy, Yerdel and Nextdoor enable the exchange and trade of goods and services, posing a competition to traditional retailers
- RelayRides tackles on the car rental business allowing travelers to rent out their cars while away
- Feastly turns houses into restaurants
- TaskRabbit developed a network of service providers, competing with an array of offline vendors
- Indiegogo and Kickstarter replace the bank by crowdfunding
- Desks Near Me offers co-working space for companies which do not want or cannot afford a private headquarter
- TechShop is a makers space that offers tools, some of which very expensive, to be rented by time of use, replacing investments on ownership
The image below (courtesy of Crowd Companies), illustrates the breadth of this movement:
Image credit: “Collaborative Economy Honeycomb 3.0” by Crowd Companies
This is just a small sample of a universe estimated in almost 10,000 (yes, ten thousand) sharing economy companies spread around 133 countries. These companies are not only breaking the rules of various industries, with an economic impact that is still shy of its potential. They are also causing people to deeply reflect on the meaning of ownership and of human relations:
- In a world where technology platforms connect you to the crowd, giving quick and efficient access to mostly whatever you need, does it make any sense to opt for owning?
- Additionally, this new business model challenges traditional models of work and employment by enabling alternative sources of income via these person-to-person relationships.
- Finally, and even more deeply, the sharing economy drives a complete review of how human relate within community.
The revolution is much bigger than it seems to be.
A bumper-sticker message that became a disruptive business trend
Key takeaways from this episode:
- The sharing economy rose in the heart of the capitalist America
- It has spread worldwide as an alternative to the traditional company-make/people-buy trade model
- By providing technology-based platforms that connect people to people, these new companies create highly lucrative two-ways marketplaces while eliminating the need to possess onerous assets (cars, buildings, tools)
- The sharing economy is both a social and economic phenomenon
- It matters because it is shaking traditional industries (banks, hotels, auto, education, finance), birthing multinational players with enormous valuations that generate revenue and create jobs
Next episode: How was my experiment and what are the key elements that made the sharing economy possible
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