Dear Brands, I just got disrupted. I willingly let a stranger drive off in my car, and I found it unnerving. Last week, I wrote a heartfelt letter to you that our relationship has changed. I shared that I don’t want to breakup, but I want an open relationship. I don’t want to buy products, I want to rent, borrow, share, or swap products. The world has changed, and with it, our relationship. I know that it’s uncomfortable to hear that customers are now buying your products once, then sharing many times with each other, as your revenues will be decreased.  This movement, called the Collaborative Economy (see all my posts on this topic) is on the rise, so I decided to go through the experiment, so I could feel what you’re going through. I put my own family assets at risk to feel disrupted. I put our cherished family car up for rental on RelayRide, a site that allows people to share their care with neighbors, rather than purchase. As the first to own this car, I have an attachment to it, and have taken rather good care of it for many years. Saturday morning, a young Duke student picked it up from me for the weekend. I didn’t know who he was, nor do we have any shared contacts. While RelayRide promised me they screen renters and provide insurance, I couldn’t but help see a piece of me go as he drove off. It felt unnerving on many levels. For one, I allowed a complete stranger to take my asset, I questioned: what’s he doing with it, will it come back in the same condition, what about liabilities such as accidents, traffic or unaccounted bridge tolls?  Secondly, I was unnerved because my training to be a good capitalist in business school didn’t train me for these new models. Thirdly, it concerns of what my current insurance company would think.  Fourthly, it’s unnerving because most of our clients at the company that I own serves brands (aka, I make money from brands). The good news is, everything was just fine. This morning, I woke up, and the car was left as planned on the curb and keys were left in the mail slot and I’m now $50 richer. But what did I learn? This new collaborative economy requires trust. The trust to let go, trust in the startups that you may partner with, and that most people are good. This is just the start, to take this experience further, I’m renting the car out for weeks, and also for two months starting in July. Now back to you brands, while I chose to be self-disrupted, for many brands you don’t get the choice. This disruption is among us, there are over 200 startups that empower consumers to buy once –and share many times without buying again. Some of you will be adopt this trend and change your business model –some of you will not, and risk disruption. In both scenarios you will be unnerved, just as I was. The collaborative economy is unnerving, but we will go it together. Jeremiah Owyang Speaker, Writer, Business Owner, Consumer

 

For my third year, I spent yesterday at the Maker Faire, in Silicon Valley.  Unlike any other year, the crowds were overflowing, suggesting this movement was growing faster than the cottage industry before.  To put this into context, the maker movement is yet (another) disruption to brands, here’s the lineage:

[Disruptions Summarized: 1) The Internet democratized knowledge, 2) Social Media empowered crowd, 3) Collaborative Economy endows crowd to buy once, share many, 4) the Maker Movement aims at buying from brands no more.

I must honestly confess, I struggle to keep abreast of all the new technologies, and I suspect corporations are experiencing the same.  It's my full time job, I attend these events on weekends, and we've a company dedicated to tracking and helping companies navigate, and I see the disruptions accelerating. Here's what the maker movement means to corporations and brands:

[The maker movement empowers people to build their own products, and share with each other --rather than buying from brands]

Those involved in the maker movement are creating their own goods and products, using recycled materials, or improving on existing products. Some are selling the goods to each other, some trade, and some simply just use for their own personal usage. They use technology, skill, community, and massive fairs to connect and grow. So what are the disruptions to corporations and brands by the maker movement?

Brands are disrupted by the Maker Movement.

• Technology empowers the maker movement.  The movement is already connected on digital communication channels, see Make magazine, social networks and online marketplaces like Etsy that enable individual artisans to sell, trade, or buy unique goods.  Furthermore, the birth of 3D printing is spurring on a new class of goods created beyond jewelry and toys as furniture or home designs emerge
• Several key industries are ripe for disruption.  Energy can be disrupted from biomass converter creates energy from leaves, walnut shells, from a variety of solar solutions. Also, consumer goods, industrial goods, toys, media, consumer electronics, can be impacted from 3D printers, a call out section directly below.  Additionally, even in dense living, food supply chain be impacted as home gardens and solutions become more available.
• The maker movement is accelerating. Having attended a few of these events, I was surprised by the sheer volume of attendees yesterday. As technology becomes mainstay for future generations who are all connected and learning to use technology, our next generation will be more adapt at creating –rather than consuming. In many ways, this is just a swing back to the old village ecosystem where every family had a key skill: smith, baker, cook, and beyond, Yet now, we’re not bound by geographic limitations of knowledge, goods, or materials.

Technology Call Out: 3D Printer Market Accelerating While there were many technologies feature, I wanted to focus on one area of heat, 3D printers. Previously, Altimeter saw the 3D printer market as fragmented, with the industry not cohesive. While the space is exploding, there are dozens if not hundreds of 3D printers on the market, and an entire expo hall dedicated to them, each with a variety of specs. We expect consolidation as the market matures. Some key findings yesterday: Investor and my key contact Vivian Wang shared with me that over 90 types of materials can be 3D printed. Beyond plastics, we witnessed items printed from concrete, salt, metals, and even wood. The wood was sawdust mixed with plastic to create fibers, which result in mostly sustainable product creation. Digital designs and CAD files are being shared using online networks, with all the associated issues DRM comes with. Some artisans sell designs or create custom. There were entire playsets printed 3D printers, furniture, stainless steel jewelry, and we saw Autodesk (an enabling brand) being a key sponsor. 3D scanners can reverse engineer products and turn into CAD drawings. This means IP and copyright for company form function will be difficult to control and enforce. There’s been a cambrian explosion of printers, there are many brands, makes, materials, and it’s not clear they’ve interop or there’s a market leader

 
 
Opportunities abound: Brands can leverage the movement.

• Mindset change: become an enabler of this movement.  I spent time with RadioShack  (thanks Cosmin) at the show, who showed they were enabling this movement. They were providing free training for soldering education and hands on work, and also hosted a popup store selling components and controllers like Arduino.  In previous years, Google, Yahoo and other tech companies have sponsored booths to enable future creators and engineers.
• Build a marketplace that builds new products around you.  While I’ll cover this more in depth on my upcoming report on the Collaborative Economy, brands can host a marketplace around them, enabling customers to buy and sell and make their future products on hosted communities.   See how Shapeways enables 3d printed jewelery artists to host, sell, and offer products –now, imagine a branded website from your company. 
  
• Offer customized products directly to consumers.  Rather than become disrupted as consumers purchase 3D printers, instead provide or host them.  The future of Target, Walmart, Nordstrom, or Macy’s could be to host a showroom, then print out 3D products in near real time, or for immediate pickup.  Imagine retail stores shifting from show and sell to show and make.

On a related but broader context, Altimeter has found four major business themes from the disruption these movements are causing, read about the highlights here, and a formalized report comes soon. Below are some select 6 second vine videos and images which help to illustrate the experience

Above: Combustion cars being converted to electric

Above: Turn biomass (Leaves, wood, in this case, walnut shells) into electricity to power your home

Above: Close up of the 3D printed wood

Above: Intricate 3D printed plastics

Above: Close up of the 3D printed wood

Above: 3D printed stainless steel and bronze jewelry

Above Video: 3D printed Concrete, Salt, Composite and more

Above: Rather than buy toys, print them

Above: 3D Printed Wood.

Above: The massive 3D printer pavilion

Above Photo:  Google showcases interconnected screens at Google IO conference in SF.

By Chris Silva (cross posted) and Jeremiah Owyang, Industry Analysts at Altimeter Group

Last year’s over hyped skydiving was replaced by down to earth by grounded product enhancements.

We’re live from the Google IO conference in SF with 6,000 developers, press, and media in San Francisco’s Moscone event center. We noticed a lot of Glass Explorer units (which surprisingly was barely mentioned in the keynote) we’ve purchased two to test, and will write up a detailed post on them after we’ve done a thorough test.

Today’s Google’s announcements were a wreck; a series of products flipping in front of you, rather than a well laid out showroom. To make sense of this patchwork set of announcements from a fragmented company, we’ve identified some top level trends:

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Key Trends at Google I/O:

Products enhanced and interconnected –no major new products announced.

• Google can coordinate across all of your screens, making multi-screen easier showing its ability to tie together all of your experiences across the Google-system.
• Ironically, Google did not mention Google Glass. We believe this is because it was overhyped last year, failed to meet production deadlines this year.
• Google+ had several enhancements including a new 3 column layout akin to flipboard, deeper content with flippable content cards, Hangout now extended to multiple browsers, Google+ profiles have improved sign on capability–but no adoption numbers were touted in this flailing social network.

Google is virtually replicating planet earth, but “improving” the quality.

• Google maps is becoming a *Virtual World*. 3D experience with our uploaded photos. With virtual goggles like Occulus Rift you can walk through this virtual world, experiencing our world in just a few mouse clicks.
• The company announced the ability to use more granular location to allow better targeting of mobile users with apps and offers, finally bringing the inherently local capabilities to mobile that we’ve been awaiting.
• Retailers and hospitality should take note, Google maps now integrates photos of your stores from the inside. Internal decor matters to the search process.

Google knows what and who you love as we trade convenience for our data.

• Google announced that they could identify highlights of top photos in your albums, they were able to identify important photos based on facial recognition of your family, grouping these as important. Google knows who your family is –and what’s important to your heart.
• Google is becoming more like a media company, music streaming (Google All Access,) photo editing, magazine-ing of the G+ stream. “Google makes the world better with data.” Google+ becomes like a magazine,
• Speech recognition across the desktop and mobile and bringing personal context to all of their services, doing things like making everyone’s view into maps personal, with their important landmarks highlighted.

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What it means: An unsaid contract. Google better organizes our world –and sells us back the experience

The big takeaway is Google is trying to let consumers experience as much of your brand before they buy it, for examples a search user can experience the inside of your store, the reviews, the photos and find the fastest way there –before ever leaving their chair. As such, Google or their advertisers, may influence the purchase decision.

In mobile, It’s about the services, not the devices: While leading with mobile products last year to get people into their sandbox. In social the story focused on rich media differentiating the Google+ network and it became clear that social-first products like Hangouts and Google+ sign=in will make a broader play across more Google and non-Google products. , across data and search – whether maps or analytics – Google wants to up the ante in the tools it offers developers and, in turn, the companies and brands they empower.

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The Pithy Bottom Lines:

• For consumers, if you’ve bought into the Google ecosystem, expect the tools and products to get better but know you’re the product
• For brands: If you want to play in Google’s sandbox, you’ll ultimately need to pay.
• For Google Competitors: As Google has entered media, any industry is up for grabs; they may be your competitor and just not have announced it yet.

Is Facebook paid, owned or earned? The answer is yes.

Facebook is all. They integrate advertising units along with content created by brands on their Facebook pages, and allow for consumers to share their opinions right in the comments. Sometimes, ads look like social content, and it’s hard to distinguish the difference. At Altimeter, we see this convergence only increasing, and these Venn diagrams will continue to have overlapping circles of paid, owned, and earned.

To meet this converging media types, Altimeter kicked off a research project with Rebecca Lieb (a fantastic speaker in her own right), Jessica Groopman (expert researcher), and yours truly.

We found that companies must now integrate their marketing process, strategy, and tactics so each channel leverages each other. In fact, we’ve identified a few workflows that help marketers, and their agency partners do just that. If you’ve read the report, some of this is a rehash, but I wanted to share the story in the above embedded video of how I like to articulate it while on stage.

So here’s all three components in one location: The report that started it all, videos from a keynote speech to 2,500 marketers at Marketo Summit in SF last month, and all the slides. Wishing you all best in your efforts to converge media.

And yes, turn those phones on when I speak, not off.

The Converged Media Imperative: How Brands Must Combine Paid, Owned & Earned Media from Altimeter Group Network on SlideShare

Above: The Converged Media Report. we’re proud it’s been viewed over 128k times.

Above: The speech, from Marketo Summit in SF. Thanks to CMO and host, Sanjay Dholakia for the intro, I start around the 7min frame.

Marketo Keynote: Converged Media (Paid+Owned+Earned) #MUS13 from Jeremiah Owyang

Above: The slides form this report.

Brands Focused on Managing Social Proliferation
For those that like to be where they money be, this data is for you. Altimeter’s research continues to survey buyers of disruptive technologies, and continues our coverage on social technologies. In our recent Q4 survey to enterprise buyers, focused on marketing business decision makers, which are global national corporations with over 1000 employees, we posed a series of questions in our survey battery. In particular, we wanted to find out where decision makers are bullish on investing and found the following trends on marketers with intent to increase spending:

• To manage proliferation in enterprise, marketers purchase social media management systems.  Altimeter has been covering this software category since March 2010 (see all posts), and has published reports on how companies are managing social using software.  These social media management system tools, which allow brands to manage marketing, support, and employee interaction of social continue to spread throughout the enterprise (data). We’ve also seen deal size for this specific market on the increase over the past few years, some deals crossing over the six figure dollar range.  We’ve also found that companies are straddled with a number of social accounts (on average, 178 social media accounts) as social strategists struggle to avoid being constantly reactive in a role of social sanitation.
• Insufficient tools means investments in education programs key for employee masses.  A solution requires a strategy, education, business processes, then with software to facilitate.  While most marketers realize that technology is a key method to achieving their goals, they know that education within an enterprise is required for social business success.  Marketers invest in educating various business units (departments, regions, and product groups) to ensure they properly know how to use these technologies and avoid risk.  Yet, in our previous research, we’ve seen that brands are eager to educate, they don’t put large dollars against this investment.   To help corporations solve this need, we’ve launched our own Academy offering, and are working with large brands, agencies, and consulting firms to roll-out.
• Surprise! Marketers “volun-told” as system integrators of fragmented software.  The opposite of volunteering is being volun-told (credit: Zena Weist).  Marketers have been VolunTold that they are unwilling system integrators in the era of VC funded startups who’ve created clones serving similar use cases.  As a result, brand side marketers and their agency and consulting partners are investing in integration disparate software together to commonly share data, in order to manage a single customer journey, or obtain data on one persona or customer type.  While Oracle, Adobe, Salesforce, IBM, and others offer suites, don’t expect this trend to go away anytime soon, as the proliferation of new web tools means that brands will forever be rushing to catch up.

Summary: Companies seeking to scale social in their enterprise.
So there you have it, today’s buyers are investing their resources and time on scaling social within their organization before it spirals out of control. They’re deploying software, coupled with internal training, and then trying to glue together many pieces into one system. While I’m not going to provide insights to each one of bullets, here are a number of other trends from this data that we can discuss in the comments.

Dear Brands, I want an open relationship. All my life, we’ve had a committed and dedicated relationship. You told me what to buy, I bought it, bought it again. But now, it’s about to change. I don’t want to buy from you directly, I want to rent, subscribe, and borrow your goods. If I end up buying your product, I want to use it with others to resell, rent to others, swap or lend. It’s not you, it’s me. Our world has changed, and along with it my preferences. From a more socially responsible mindset, economic pressures to be efficient, and how easy technology makes it for me to find other other consumers who can satisfy my needs.  Here’s how my behavior has changing: I will use AirBnb to find vacation spots –rather than stay at hotels, I use Uber and Lyft to get around town rather than hire a traditional taxi, I just put my spare car on RelayRide to rent out to others, for my wife’s birthday, I bought her a subscription to Rent the Runway –rather than buying her a new dress. At work, we’ve tapped into LiquidSpace to rent office space on demand, I use Taskrabbit to hire folks at the office rather than using traditional staffing models, we’ve bought refurbished laptops for our staff, and most of our software is already on demand. Because of this, I’m more interesting in renting, subscribing, or borrowing products –rather than buying outright. If I do choose to buy a product, I want to make sure it has great re-sale value as I can sell it or rent it out and make money. It also means that the relationship I have with other people matters. Now, I rent my car to on RelayRide or sell my used electronics on Gazelle the trusted relationships I have with other customers matters as much, if not more, than my relationship with you. I still love you, but in a different way. If you want to be in a relationship with me, recognize it’s not exclusive, what happens between us has changed. I need you to change as I want to rent, borrow, subscribe, co-op, and swap, –rather than buy. Ergo: I just want access to your offerings –I don’t need to own then. Sincerely, Jeremiah Owyang Speaker, Writer, Business Owner, Consumer PS: To learn more, you can read the rest of my thinking on how brands can leverage this movement, called the Collaborative Economy.

Image credit used with creative commons, by MyEye.

Above Image: Fire Dancers metaphorically ignite movement in Union Square, the center of SF commerce.

Your customers are trading products and goods –rather than buying them from you! Want to know why? We’re conducting research in a pragmatic method to find out why, and then answer what companies should do to respond. Below is a preview of the upcoming report.

[Business Disruption: Consumers don't need to continually buy from companies, as they are sharing, renting, lending, goods & services among themselves]

I’m knee deep in interviews for the upcoming report on this topic, the Collaborative Economy, which will answer how corporations can be part of this sharing movement –and not be left behind.  In my previous post, we’ve made the case this is the next phase of Social Business, and have probed 200 startups from the sharing movement, and have compiled a list of brands that are already participating like Barclay’s, Toyota, BMW, and Walmart.

[This rising behavior is being caused by three major trends: social, economic, and technology drivers]

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Analysis of Three Market Drivers: The Causes for the Collaborative Economy
In the research interviews, books, and content I’ve consumed, I’ve found some patterns on the causes of the movement.  I don’t expect this to be a comprehensive list, and request your additions in the comments.
 

1) Social Drivers

Social Drivers	Root Cause	Example
Population Density	While also listed in Economic Drivers, the density enables sharing to happen with less friction.	Zipcar took off in urban SF, where owning a car is impractical. Zipcar’s scattered storage lots gave customers quick access to wheels, often walking distance.
Mindset of Sustainability	Greening, Cleaning, and Sustainability have been hot topics for years, this bolsters the need for economic conservation and long term thinking	Many of the startups we interviewed discuss how this is about re-use or preservation of resources, rather than buying new products anew.
Lifestyle Trend among Youth	In Shareable Magazine’s book, Share or Die, Neal Gorenflo writes that this sharing mindset is common among college students who’ve limited resources.	For resource strapped students, Chegg enables students to trade textbooks –rather than buy the high margin bookstore.  Furthermore social networking is normalized in their behavior.
Altruistic Mindset	In some use cases, gifting or paying it forward is common in this movement, see list of gifting startups.	A recent UCLA poll found that over 75 percent of incoming freshman believe it’s “essential or very important” to help others in difficulty, the highest figure in 36 years.
Independent Lifestyle	IWe heard from Molly Turner at AirBnb that many renters of homes found this service empowering. They’re own homes were revenue generators, giving them freedom.	Similarly, Taskrabbit advertises their rabbits are: “College students, recent retirees, stay-at-home moms, young professional”, enabling those who may not seek a full-time profession

 
 

2) Economic Drivers

Economic Drivers	Root Cause	Example
Increase in Earth Population	Massive China and India are at 17% and 30% population growth rates, respectively, America at 22% citing wikipedia.	When I was born in the 70s, world population was in aprox 4b, today it’s 7.1b, When I reach 75, pop will be 9b, data here.
Strained Resources	The interviews yielded a general sentiment that Earth resources are finite and the cost to retrieve more costs more than re-using.  Those with less money are more inclined to trade, or activate their inventory for revenue.	All around me, recycling programs are evident, even in the salesforce office there are recycled plates, utensils and paper
Economic Disparities	Where there is a divided between have and have not, these sharing systems naturally seek to shift resources	For example, we saw a boost in Bitcoin value as Cyprus was under economic strain.
Excess or Idle Inventory	One of the root causes of this movement is idle resources sitting by the wayside can be shared and often monetizes	Rachel Botsman discusses in her iconic TED speech that the average usage of an electric drill is a mere 12 minutes
Inaccessible Luxurious	Those who can’t afford it, can now rent it. One successful Gen X banker told me “Access is more important than ownership”	Why buy $100k Lincoln Towncar when you can rent an Uber for 30 minutes, saving cost and headache.
Influx of VC Funding	Startup investors have put billions into this market of fresh new startups, our research shows that within 200 startups there has been over $2 billion of funding.	Category leader Uber has received nearly $50m of funding and AirBnb has received a whopping $120m

 
 

3) Technology Drivers

Technology Drivers	Root Cause	Example
Social Networking Technologies	These technologies provide three key features: 1) Social profiles and reputations features 2) Social graph that enables people to connect with other people 3) Transfer of information, in this case, need for resources or supply of them	AirBnb in itself is a social network, there are seller profiles, and renters have their own reputation with verified IDs they goods traded are locations.
Mobile Technologies	Access to resources or people requires movement for a majority of these services so mobile platforms, devices for information to transfer	Many of the startups are mobile driven, for example, Lyft has a thin website and suggests users download mobile apps for this transportation site
Payment Systems	I the end, this is a marketplace of goods and services. Systems and platforms are required to broach the transactions that may use traditional ecommerce or new bartering methods	Taskrabbit asks me to use my creditcard while other systems like Bittorrent are fueled off Bitcoins.

 
 
What it means: This is a long term movement –not a passing fad
So there you have it, I see three categories and at least thirteen distinct drivers for the Collaborative Economy. Like social was to us in 2007, this is a broader movement that impacts many aspects of society and therefore business. If these market drivers are long term (often social and economic ones are) then it means this movement is likely to persist and only increase in velocity. If you thought social business was disruptive, this next trend will impact us at a much deeper level.

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Related Resource:
I’m not an expert on this topic, so instead, I’m interview them.  We’ve interviewed these sources for the upcoming report (full sources to be cited in report), I highly recommend following them to learn more about the impacts of this movement.

• Shareable Magazine: This forerunner has been tracking this movement for years. See founder Neal’s lifestyle.
• Lisa Gansky: Author and has a large database themed the Mesh, early pioneer
• Collaborative Consumption: Famed author, TED speaker, this group is leading the charge.
• Sharing Economy Slideshare from Loic Lemeur, who’s leading the LeWeb conference with the theme on Sharing.

• The Economist: The rise of the sharing economy
• The Economist: All eyes on the sharing economy

Image Source: David Yu, creative commons license.

Altimeter Data Above: Social spreads further to the edges in Hub and Spoke, and Distributes to Multiple Hub and Spoke, aka “Dandelion”

Social Business Evolution Spreads In Corporations
Altimeter’s most recent social business buyers survey of global national corporations with over 1000 employees has yielded interesting results. One data set that we’ve carefully watched over the years, and perhaps I’m most known for, is how companies organize their internal structure for social business. Over a year ago, we conducted this same study, to glean where the market is; we’re back with additional benchmarking data, and you can read the full report of Social Business Evolution (embedded below) This most recent data resonates the trends that we’re hearing and seeing in many of our brand side clients, here’s my take:

• Decentralized gains no growth. Companies in this model are afflicted with unchecked proliferation and will have to eventually undergo considerable investments to clean up mis-managed or worse, un-managed efforts.  This unscalable model leaves companies fragmented in an uncoordinated method.   We predict this structure will eventually dissipate as companies must formalize their programs.
• Centralized remains stagnant, holds at under one third.  This model, in which a single business unit (often corp comms) manages the program on behest the corporation is a short term fix.  While many regulated companies can easily make the business case for a single group, it cannot scale –and this group will eventually become overwhelmed with requests from business units.
• Hub and Spoke loses 6 points, yet still dominant.  This popular model, in the previous year, sinks 6 points.  Why this drop?  Companies are seeing that social is spreading beyond a coordinated team (often referred to as a center of excellence) to a broad set of business units including regional, departmental, and product lines.   Despite the dip, this continues to be the dominant model most corporations are in now.
• Dandelion model shows growth.  In this model, decision making and management for social spreads to various business units –beyond the centralized team.  This sign of maturity often means there’s coordination in the center, but freedom for local groups to manage within guidelines.  We expect this model to continue to rise year over year.
• Holistic remains elusive. This very challenging formation, where a majority of all employees use social for business in a safe and consistent manner continues to remain miniscule. Why?  This requires a cultural mindset of trust from leaders, and a workforce that is trained and ready to accept social into every fabric of employee and customer relationships.  Don’t expect this model to grow anytime soon.

While I’ve your attention, I wanted to share that I’ll be hosting a webinar on Social Business Readiness, and share how we’ve helped many companies get ready internally, such as this project on Social Readiness roadmaps, (here’s a screenshot), I’d love to help your corporation get situated in a scalable model for social business. On a related note, Altimeter Group continues to hire, we’re seeking a COO and Senior Consultant as we continue to grow.

The Evolution of Social Business: Six Stages of Social Media Transformation from Altimeter Group Network on SlideShare

Above Image: Market Opportunities for the Collaborative Economy by Vertical, from Sharable Magazine follow them on Twitter.

What’s the next phase of Social Business?  That’s the question I’m frequently asked.  Without a doubt, the next phase is the Collaborative Economy.

What’s that?  That’s where brands will rent, lend, provide subscriptions to products and services to customers, or even further, allow customers to lend, trade, or gift branded products or services to each other.  This unstoppable trend is fueled by the social web, the specific features include relationships, online profiles, reputations, expressed needs and offerings and ecommerce. Customers are already starting to conduct these behaviors among themselves using TaskRabbit, AirBnb, Lyft, and many others tools –some of these are disruptions and opportunities to brands.

[The next phase of Social Business is the Collaborative Economy; Brands will enable customers to share, trade, lend, gift products and goods using social technologies]

While this movement will have broader global and economic impacts, at Altimeter, we’re focused on disruptions to corporations.  We’re knee deep in interviews for our next report on the Collaborative Economy, and have interviewed startups, VCs, brands, social business software vendors, authors, thought leaders, and are dissecting data of 200 sharing startups, for a broad overview of what it means to business.

Matrix: Phases of Social Business

Phase	Department Impacted	Notable Examples
Phase 1	PR and Brand	Dell Hell incident, Kryptonite Lock
Phase 2	Marketing realizes an opportunity to conduct outreach	Corporate blogs: Fast Lane by GM, Microsoft blogs, IBM Blogs
Phase 3	Customer Support	HP massive online communities, Home Depot Communities, Comcast Cares
Phase 4	Product Innovation	Starbucks Ideas, Dell Ideastorm
Phase 5	The business model, supply chain, various other departments	Using social tools, customers are sharing, selling, and renting your goods to each other

Caveat: There are many broader impacts inside of the company that also impact HR, recruiting, supply chain, IT, and more, the above is just a sample of the most well discussed impacts.

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Brands Already On Board: Toyota, Barclays Card, Avis, BMW, Walmart
What are examples of companies that are already taking advantage of this new social business trend now?  Here’s a few from the Master List of Brands Participating in the Collaborative Economy:  To stay current with car sharing or lending services like Lyft, RelayRide, Zipcar, Uber and more Toyota, OnStar and BMW are allowing cars to be rented.   Barclays Card sponsored and supported bicycle sharing in the city of London, associating their brand with the movement.  And retail giant Walmart is considering allowing customers to deliver goods to each other, to compete with Taskrabbit and Amazon.

[The first phase of Social Business impacted branding and PR, it shifted to support and product development. The next phase impacts core business model]

Ecosystem Opportunities Aplenty
What are the immediate business opportunities?  There’s a long list, and the report will probe them in detail, but they’ll include sponsorships, partnership, investments in startups, building branded communities that enable renting and gifting, customer advocacy programs, and more. I’m seeking a SaaS startup that will enable this for brands, and dedicated a whole post outlining the market opportunity. For example, on just the retail vertical, yesterday, I met with Neal of Sharable Magazine, and he shared opportunities for retailers

[Social Business + Sharing Economy = Collaborative Economy]

Mindset Change Required in Corporations
So there you have it, the next phase of Social Business goes beyond marketing and customer support, it changes the fundamental business models and relationships that we will have with our customers. The big change that brands will struggle with, as is it means that brands will have to care about the relationship between customers as they trade and rent your products between themselves.

Collaborative Economy Requires a New Business Mindset

Company Mindset:	Traditional Mindset	Social Business Mindset	Collaborative Economy Mindset
How they think:	Brands are in charge. Deal with it.	Customers are in charge, we’re listening and will engage. We care about your current experience with our goods.	We must now care about extended life of good after we sell it, and the relationship between customers.
Strategy they deploy:	Brand Experience	Customer Experience	Marketplace Experience

Stay tuned for Altimeter’s report on the Collaborative Economy in just a few weeks, which I’ll be presenting the findings at LeWeb, which is themed on the Sharing Economy. Thank you Vivian Wang and Neal Gorenflo for the inspiring interviews this last few days.

A market opportunity for the innovative entrepreneur and visionary VC, a new market awaits to be charted.

Opportunity for Enterprise Software in a New Category
I see a market opportunity, and want to get the word out to entrepreneurs and innovative brands. The number of startups are on the rise to support lending, borrowing, funding, trading, or gifting products and services, and brands are at risk of falling behind.There’s a business opportunity for an entrepreneurs, VCs, to create a movement that can enable brands to take advantage of this movement.

Market Demand
We’re more than half way done with interviews on our next report on the Collaborative Economy (and what it means to corporations), which I’ll be sharing as a keynote at Leweb, and one thing is for sure, this is an unstoppable trend:

1. Some early clues from our analysis of 200 startups that there’s been over 2b of funding, and of those funded, they’ve received close to $28m, on average. These startups aren’t going away.
2. We’re also seeing brands starting to jump in, in particular, innovative Walmart is considering to allow customers to deliver products to each other, in order to compete with the monster known as Amazon.
3. Of course, the macro trend is this is a societal trend, as consumers have fewer resources, less land, and population increases, we will rely on trade and barter systems.

Use Cases and Scenarios
The goal is to enable brands to directly rent, lend their products or services to the market, or build a community that enables their customers to do it on their behalf. Imagine a branded Hyatt, Hilton or W Hotel version of AirBnb that rents out luxury guest rooms in a neighborhood you’re traveling to. Or a branded service of local talent for rent by Manpower, Kelly Services, or IBM services. Or imagine renting your neighbors Lexus, all powered by a version of Lyft or Zipcar that’s hosted by Toyota? This trend isn’t that new, over 6 years ago, we saw the rise of branded Online Communities, which comprised of 125 startups, but today, the dominant players are Jive, Lithium, Telligent, and a smattering of others.

Feature Requirements
There’s a number of features including:  An online marketplace or community, reputation features, ecommerce capabilities, APIs to connect to other program, and an aggressive marketing plan.   A professional services team for integration and implementation will be needed, as well as strategic services required to educate and provide business level strategy.  There’s also opportunities for digital agencies to provide branding and content, as well as communications teams to launch and seed with ongoing media aircover.

Market Contenders
Some of the initial players that could assemble these features rapidly are social commerce vendor known for ratings and reviews, Bazaarvoice, who has over 50% of the retailers already on their platform, or Lithium or Jive, a brandable community software and social management solutions that top enterprise companies are already using,  I can also foresee that Salesforce developer ecosystem could quickly put these tools together into a platform and brand for leading companies like Burberry.  I do think because most of these player are entrenched in their current business models they will not pivot fast enough, so there’s room for a scrappy early round startup to emerge, disrupting the space.

So there you have it, from your trusty Industry Analyst, there’s a blue ocean market opportunity on the horizon, and I see zero players to date.  Leave a comment if you know of a company seeking to solve this.  Contact me at jeremiah@altimetergroup dot com if you have more clues, or leave a comment.

As these vendors emerge, I’ll cross link below.