The Collaborative Economy
By Adriana Rocha
Mobile and social technologies have changed communications, marketing, and customer care. There are many evidences that such technologies will disrupt market research as well, despite the resistance of a “more conservative” side of this industry. In a recent article, I mentioned that we are entering “The Golden Age of Market Research Technologies”, since I believe we are just beginning to learn and effectively applying the usage of social and mobile technologies to innovate and create new opportunities for market research. But if you believe that such technologies will not cause more disruptions, keep an eye open on the next big trend: with the same technologies, consumers are now sharing products and services with each other, bypassing existing companies and institutions.
Beyond new business functions, a new consumption model is rising (also called “collaborative consumption” or “collaborative economy”) and will impact core business models. In this new economic model, the crowd becomes a company! Scary? Have a look into some indicators:
- Hundreds of start-ups like Airbnb, Yerdle and Lyft have emerged to let people share goods and services
- Venture Capital funding is accelerating this trend: more than 2 billion dollars has been invested thus far by VCs in collaborative economy startups, with $28mi average funding (Lift raised US$60mi in funding in May 2013)
- WikiSpeed ( a business that crowdsourced designs, production and development ) has created a SAE-registered, road-legal-approved car, the Wikispeed Car, now on sale in limited quantities
- Start-ups such as HandShake provide platforms for consumers to control and sell their own personal data
With this new trend, companies risk becoming disintermediated by customers who connect with each other. Let’s analyze, for example, the possible impact for the automotive industry: every car-sharing vehicle reduces car ownership by 9-13 vehicles; a revenue loss of at least $270,000 to an average auto manufacturer. The cascading impact to the ecosystem has far reaching impacts to auto loans, car insurance, fuel, environmental impacts, auto parts, and other services. For consumer goods companies, the direct impact is that consumers can now purchase one product, and share it among many others, reducing revenue in traditional business.
My recommendation: instead of fighting against the new, embrace it, rethink your business model. The forward-thinking companies will probably motivate a marketplace, provide a platform, adopt a company-as-a-service model, or maybe the three of them. Thoughts?
The Collaborative Economy by Altimeter