Point: The collaborative economy enables new business models (and disrupts old ones).
Story: The collaborative economy is growing as individuals find new ways to connect directly with their peers to share or rent their assets and skills. The collaborative economy includes sharing assets like spare rooms (Airbnb) and cars (RelayCars) or consumable goods (CampusBookRentals, Toyswap) or services (TaskRabbit, oDesk).
The peer-to-peer rental market alone is worth $26 billion, according to Rachel Botsman, and that doesn’t include peer-to-peer-lending or crowdfunding, which is predicted to reach $5 billion this year. Altimeter Group’s sample of 200 collaborative-economy startups revealed that one-third had received VC funding, amounting to $2 billion overall and an average of $29 million per company.
Consumers are sharing and collaborating with each other as new platforms make search easier and verification more secure. The collaborative economy is expanding rapidly because it:
- appeals to consumers who want to make money from their unused assets (RelayRides avg $715/mo)
- appeals to companies who want to rent out extra office or warehouse space or equipment
- appeals to individuals who want to earn extra income running errands or doing one-off tasks
- appeals to individuals and companies who want to rent assets at a lower-cost or on a short-term basis
- is good for the planet: renting a car when you need it means fewer cars need to be built. Patagonia is partnering with eBay to encourage re-sale of its used clothing rather than have it go to the landfill.
Some collaborative-economy startups are partnering with existing players. For example, Deliv partners with retailers who want to offer same-day delivery to customers. Big companies, seeing potential disruption as well as opportunity, are entering the market as well. BMW is offering rentals from its dealership in San Francisco, and GM invested in RelayRides, which connects car owners who want to rent their cars with consumers who want to rent them by the hour, day or month. GM gave RelayRides access to GM’s OnStar Navigation System, which is installed in 6 million American cars. Anyone who has an OnStar-equipped car and wants to rent it out can sign up on the site and then use the OnStar app to let the approved renter unlock the car via the app rather than handing over the keys.
- Explore new business models enabled by the collaborative economy. Altimeter’s Jeremiah Owyang and Chris Silva offer three models: Company-as-a-Service, Motivating a Marketplace, or Providing a Platform. Or, use Alex Osterwalder’s Business Model Canvas to think through changes in the nine elements that make up a business model.
- If you’re an established company, think about ways you could be disrupted, and consider jumping in or planning a counter-move.
- If you’re a startup, consider providing a platform that connects and verifies the parties involved. Be aware of legislation and incumbents who may seek to legal action (bus companies blocking ride-sharing services like Ridester.com) or running afoul of licensure or insurance laws.
- And whether you are an individual or a company, think about the under-utilized assets that you have sitting around. Perhaps there’s a way to monetize them.
The Sharing Economy, Economist March 9, 2013
Rachel Botsman, What’s Mine Is Yours: The Rise of Collaborative Consumption
Crowdfunding tries to grow up – May. 6, 2013 – CNN Money