Archive for June, 2013


Collaborative Economy: Live Like Royalty Without Owning a Throne

19

Apple World

Ever wanted to live a life of luxury, but are just a few billion dollars shy?

Now, with simple web technologies, anyone can have access to just about whatever they need, without having to own it all.  In fact, I’m already living this way, as I wrote in a personal, heartfelt note to brands, telling how I want to have an open relationship.

As part of my ongoing research into the next phase of social business, I’m covering the Collaborative Economy, where people are sharing goods and services using the internet.  You can read the definitive report, or peruse all the posts.

A Collaborative Economy of Shared Ownership and Access to Luxury Emerges.  While many associate the Collaborative Economy with activating the mundane, such as unused meeting rooms, your spare bedroom, or renting an everyday car, there’s a slice of this industry that’s focused on luxury.  Rental isn’t anything new, but now idle inventory from companies, as well as individual private owners, is emerging in a new ecosystem.  Here’s what we’ve found:

  • Marketplace Solves Needs:  Consumers Want Access to Luxury; Owners Saddled with Idle Inventory.  In our research interviews, I chatted with a young financial services executive who was likely making six figures.  He gave a key quote: “I just want access to luxury –I don’t want to own it.”  For those that own luxury goods, they also know what a pain it is to do so.  One popular idiom about luxury goods is, “The two happiest days with your boat are they day you bought it and the day you sold it.”  Owning luxury is often net-negative when all costs are counted.  To solve these business woes, a new market of Collaborative Economy startups have emerged that enable shared access and ownership between individuals and companies.  For the most part, traditional, big retailers and corporations are not activating in this market, which leaves them exposed if this second market of buyers continues to act like their own companies.
  • First Mover Opportunity:  An Open Market for Traditional Brands and Retailers to Forge the Way.  Big retailers and big luxury good creators have a great opportunity.  They should offer these same services of rental (which we call “company as a service”) to their own customers, giving access to rental products at a subscription.  The upside includes  access to new markets that could be an entry to try goods or using them in a long term commitment on a subscription basis, thereby forging early brand loyalty.  While there will be product wear and tear, the opportunity to sell a product ten times, instead of once, is there for the savvy retailer who can activate its unused or unwanted inventory.  Retailers and big brands have at least two business opportunities: 1) Enable idle luxury inventory to be available on demand in the ‘company as a service’ model, 2) Activate a marketplace of buyers and sellers around them which we call ‘motivate a marketplace’.
  • The Future Becomes an Ecosystem of Luxury Access for Anyone.  At the Surfair launch, where planes can be accessed via a monthly subscription, I spoke to the owners of the startup who are trying to connect with town cars and luxury cars so that, as folks land on ground, they can then use an on-demand luxury car.  This of course, could tie to luxury stay locations, services, and personal assistants, all ready to go.  Expect that these companies will partner together, forging a consumption chain all tied to the luxury market.  One of leading venture capitalists in this space is the former social software executive of Leverage Software, Mike Walsh, of Structure Venture Capitalists, who has investments in Boatbound, Uber, Surfair, Popexperts and more.  I follow him, and I think you should too.  Taking a page from Peugeot’s focus on mobility beyond cars, expect new types of luxury services to emerge on demand, including a network of spas, men’s clothing, sports cars, shared services at airport lounges, and access to specialized local fine dining.

Summary:  Market disruptions and Opportunities for Big Corporations
Corporations that cater to the luxury lifestyle must quickly recognize that these changes are imminent.

  1. Consumers may also want access to, not just ownership of luxury goods.
  2. Unused inventories of luxury goods are being activated.
  3. There are impacts to financing, ownership, and insurance for this changing market behavior.
  4. Business opportunities emerge for corporations to partner with startups.
  5. Brands can now offer products on demand as a service, not just sell them.
  6. Brands can motivate a marketplace of buyers and sellers around them, adding new value and taking a cut of all market transactions.  If you want to know the business opportunities, the definitive report on the Collaborative Economy tells corporations more.

Case Example Overview: Fourteen Examples of Luxury on Demand
Kings and queens anointed!  Here are 14 key examples with my notations of how they work and their business model so that you can see what’s happening in this luxury market across an entire lifecycle of luxury.  Leave a comment if you know of others.  Here’s a few notable examples:


Screen Shot 2013-06-17 at 4.15.28 AM
Above: Industry figurehead Uber provides access to towncars that come complete with a suited chauffeur freeing up towncar inventory. I’ve met investor Shervin Pishevar, who’s watching this space. Model: On demand service to shared access.

Screen Shot 2014-05-06 at 11.46.12 AM
Above: Take a step up from Uber and order exotic rides,including bullet proof cars from Toro Ride. makes sense for the celebrity and political echelon.


Screen Shot 2013-06-17 at 4.16.19 AM
Above: Surfair (I was at the premiere launch) provides a monthly all you can fly subscription saving time –and maybe money– to have access to your own plane –rather than own and maintain one. Model: Subscription to shared access company.


Screen Shot 2013-07-08 at 3.22.49 PM
Above: Uber now provides helicopter service starting in NY to the Hamptons, which includes town car rides to and from the heliport, a chopper for 5, and a car ride to your mansion, all for $3000.


Screen Shot 2013-07-12 at 7.10.31 AM
Black Jet provides access to private jets –without the saddle of ownership. Hat tip to steketee for pointing this out.


Screen Shot 2013-06-17 at 4.12.49 AM
Above: Bag Borrow or Steal provides rental to accessories and ability to sell your own (even cleaning services), and activates potentially unused inventory. Model: Two sided marketplace, rental, and value added services.


Screen Shot 2013-06-17 at 4.13.13 AM
Above: Rent The Runway makes today’s top fashions accessible to anyone. Model: Rental with value added services.


Screen Shot 2013-06-17 at 4.15.15 AM
Above: BoatBound allows owners to rent and anyone to get access, in this two sided marketplace enabling the owner and those who want access to it. Model: Two sided marketplace of buyers and sellers, or as they cleverly put it “pier-to-pier”.


Screen Shot 2013-06-17 at 4.26.42 AM
Above: TurningArt allows individuals to rent art –rather than own it, and also enables unused inventory of art to be put into market. Model: Rental service with value added services.


Screen Shot 2013-06-17 at 4.16.48 AM
Above: OneFineStay provides top line luxury home rentals or vacation rentals for the most high end traveler. Exotic lofts in NY, or beach bungalows in the tropics are all at hand, freeing up unused second homes. Model: Two sided marketplace of buyers and sellers.


Screen Shot 2013-06-17 at 4.25.49 AM
Above: Roomorama provides quality locations rather than hotels for the discerning traveler, and also activates unused inventory of luxury locations. Model: Two sided marketplace of buyers and sellers.


Screen Shot 2013-06-17 at 4.25.18 AM
Above: Dogvacay finds a place for your pooch to stay at a local home –rather than a kennel. It also enables folks at home to activate their homes into services. Model: Two sided marketplace of buyers and sellers.


Screen Shot 2013-06-17 at 4.25.02 AM
Above: Deliv means access to any good through a one hour delivery services with local retailers and merchants. It also enables merchants to get items moving off shelves, and enables a new marketplace of delivery service. Model: On demand service.


Screen Shot 2013-06-17 at 4.18.16 AM
Above: PopExperts Get trained by experts in a variety of practices such as meditation, golfing, language learning. It also enables experts to find clients, regardless of location. Model: Two sided marketplace of buyers and sellers of private high-end training.


Screen Shot 2013-06-17 at 4.17.16 AM
Above: Fancy Hands (hat tip Chris Carfi) enables anyone to have access to virtual assistants, in this membership model, it also enables the internet worker to find new clients. Model: Two sided marketplace of buyers and sellers.


Screen Shot 2013-06-17 at 4.17.53 AM
Above: Need a quiet, clean, and luxurious place to work on demand? Breather gives the discerning access to a private studio. It also enables unused small inventory in crowded cities, like NY, to activate unused inventory. Model: Two sided marketplace of buyers and sellers, with upgrade of idle properties to a standard of quality.


Screen Shot 2013-06-17 at 4.12.10 AM
Above: LendingClub enables anyone to act like a rich uncle (or find one), lending money to peers. This model cuts out banks, with a 1% fee to the startups, enabling money to be shared. Model: Two sided marketplace of buyers and sellers.


Update: See also rent a Rolox, hat tip David Schatsky.

Please leave a comment if you know of other examples.

Infographic: Collaborative Economy Startups Proliferating

14

This inforgraphic is part of my ongoing coverage of the collaborative economy (see all posts), which is the next phase of the social business. What’s that? We’ve published a seminal report on what it means for corporations including video, slides and additional resources.  Altimeter’s segmented 200 sharing startups to find out why –and how –these disruptive startups are spreading across many verticals, here’s some of the key findings:

  • Excessive influx of startups in every industry. One of the findings is that there is a cambrian explosion of startups, caused by a few reasons: 1) Low cost to create startups in today’s software as a service and open source technology startup market 2) Influx of VC funding 3) A strong desire to solve the needs of sharing goods and services among people. Of course, this comes with a downside, as I see 5-15 startups in nearly every category, for examples a variation of car share ownership, shared car usage, shared car services and more being offered.
  • Some startups seek to partner –or disrupt– corporations. There’s a handful of disruptive startups to corporations that are emerging, that I wanted to point out, in particular: Yerdle, which is founded by former Walmart executives, is designed to allow neighborhoods to share and gift products –rather than buy them. Relayride which has partnered with big players like GM and OnStar for distribution and access to vehicles with OnStar technology, and soon to emerge Feastly, which will enable pro-sumer chefs to enable their home kitchens to invite guests over to eat –disrupting restaurants.
  • Expect many to die out –but VCs will fund accelerators who will likely succeed. So what does it mean? It means this large flood of startups means a hype market, and most will not stand the test of time. However those that receive rapid market adoption will be hunted by VCs for cash injection to further dominate their markets. I interviewed many of the startups for this research, and must aren’t ready to partner with corporations, they intend to disrupt, in order to raise their profile, funding, and value. Expect corporations to be disrupted before they adopt, just like in most technology markets.

Infographic: Collaborative Economy Startups Proliferating
Below, enjoy this infographic that summarizes just 200 of the thousands of sharing startups like AirBnb, Lyft, and a host of others, this data was taken from a list I compiled with the help of a Taskrabbit on this post here.  We’ve segmented the startups by funding, use case, business model, and integration with social networking features.

Market Overview: The Collaborative Economy Analysis of Over 200 Startups in the Space

Internet Phases: Past, Present, and Future

13

Thanks to you, last week’s Report on the Collaborative Economy was readily received, and has been viewed over 26,000 times.  The media and bloggers alike have picked up on it.  As we digest what it means, it’s important to recognize that this is the next phase of the internet and the next phase of social business.  An interesting finding is that the second era (social) and the third era (Collaborative Economy) use the same social technologies but, instead of sharing media and ideas, people are sharing goods and services.  This is all part of a continuum.  We need to understand how our careers will progress as the market moves forward with us.

 

[Social technology enabled the sharing of media and ideas called social business –The same tools enable sharing of goods and services called the collaborative economy]


Screen Shot 2013-06-11 at 5.53.45 AM
Internet Phases: Past, Present, and Future

Attribute Brand Experience Era Customer Experience Era Collaborative Economy Era
Driving technology CMS and HTML Social technologies Social technologies
Years 1995: Internet had 14% American adoption 2005: Business blogging disrupted corporations 2013: AirBnb, TaskRabbit, Lyft, gain mainstream attention
What is shared Vetted Information Personal Ideas and Media Goods and Services
Who shares Few Many Many
Who receives Many Many Many
What it looks like Brands and media talk, people listen Everyone talks and listens Buy once, share many, need to buy less
Who has the power Brands and publishers Those who use social Those who share goods and services
Who is disrupted Traditional mediums: TV, Print Corporations, governments Corporations, governments
What must change Media models Communication and marketing strategy Business models
How corporations responded Created their own corporate website Adopted social tools internally, externally Learn to share products, enable marketplace
Software needed CMS and design tools SMMS, monitoring, communities Marketplace, ecommerce, communities, SMMS, Monitoring
Services needed User Experience, Design, Content Social strategy, community managers, communicators Agencies that help with trust, customer advocates, ?
Who wins Those who adopt Those who adopt Those who adopt


What it means to your career, clients, and company:
Change in our careers is good.  It leads to new opportunities, growth, and even fun.  It often requires us to step out of our comfort zones and be prepared to adopt new paradigms.  With that said, here are three insights to remember as we enter into this next phase.

  • Prepare for the next phase in your career as we shift eras.  The internet continues to evolve and, with, that our careers do as well.  The mid 90s saw the blistering heat of the “dot bomb” era.  As the internet became a dominant force, it subsided with the global recession and industry implosion until we saw the second phase emerge.  We dubbed it “Web 2,” where information creation and consumption was democratized by all.  The next phase uses the same principals of sharing and democratization, but involves goods and services.
  • Take what you’ve learned in social business and apply it to the Collaborative Economy.  If you’re in social business, you’re in a good spot.  The same rules apply about letting go of control, shifting to engage, and connecting with customers.  Learning to listen for understanding, engaging with customers, developing programs where customers become your advocates, and applying scalability,  all topics I’ve researched deeply, will apply to this next phase.
  • Change is in inevitable.  Prepare for this next phase now.  The next phase has already begun.  Last week’s LeWeb received international acclaim, and funding to sharing startups is on rise.  Even cities like Amsterdam are opening up to the potential of companies like AirBnb.  Mainstream media is covering this movement.  We must prepare for the next phases of our careers now.  We can and will do this together.

I hope this graphic and matrix help to clearly articulate our next phase.  Save it, share it and activate on it now.  If you’d like to join me on a webinar to learn more and ask questions, you can register on this page.

 

Remember, those who adapt, win.

Report: Corporations must join the Collaborative Economy (Slides, Video)

122

Adopt the Collaborative Economy Value Chain
Right now, customers are sharing media and ideas on social technologies, in the near future, they’ll use similar technologies to share products and services, which will cause a ripple of impacts far more disruptive than what we’ve seen before.

[The Collaborative Economy is an economic model where ownership and access are shared between people, startups, and corporations]

 


Disruption: Customers are now sharing products and services with each other, like AirBnb (vs hotels), Lyft (vs buying cars), Lendingclub (vs banks), 99 Dresses (instead of buying clothes), odesk (vs traditional hiring methods) as an alternative to traditional sales, in fact, our small list of 200 startups only has a portion of the services that have emerged, enabling this trend.

At Altimeter, we’ve been tracking this space, including a number of blog posts tagged Collaborative Economy (list of startups, list of corporations involved and more), an upcoming free webinar that you can join, and I’ll be announcing some private events for our clients to dive in further. Tomorrow, I’ll be keynoting LeWeb which is solely focused on this topic, and will share the video and slides shortly.

The executive summary encapsulates what you need to know:

The Next Phase of Social Business Is the Collaborative Economy. Social technologies radically disrupted communications, marketing, and customer care. With these same technologies, customers now buy products once and share them with each other. Beyond business functions, the Collaborative Economy impacts core business models.

Customers Are Sharing Goods and Services — Redefining the Buyer-Seller Relationship. 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, auto parts, and other services. For corporations, the direct impact is revenue loss that results from customers sharing products and services with each other.

Innovative Companies Are Already Moving Into Collaborative Economy. Some companies have joined this movement. For instance, Toyota rents cars from dealership lots, and Patagonia partnered with eBay to encourage customers to buy and sell its used products. NBC has partnered with Yerdle, a startup founded by former Walmart executives to foster peer-to-peer sharing. This movement impacts every industry.

Adopt the Collaborative Economy Value Chain. Companies risk becoming disintermediated by customers who connect with each other. The Collaborative Economy Value Chain illustrates how companies can rethink their business models by becoming a Company-as-a-Service, Motivating a Marketplace, or Providing a Platform. The forward-looking company



Above: In conjunction with the report launch, the findings and market opportunities were shared at LeWeb, who’s focused on this topic.

Above: Short Version from LeWeb (matches above video)


Above: Bloomberg TV interview.

Altimeter conducted a number of research interviews, as well tested the thesis with business leaders across multiple spaces. Special thanks to Loic Le Meur who triggered the ‘aha’ for me last year, on how this is the next phase.

Customers Are Empowered in the Collaborative Economy Era
Above Graphic: The first phase era of the internet allowed few to publish, yet disseminating knowledge, the second social era empowered everyone to share ideas, and now, the third era, the Collaborative Economy, empowers customers to share goods and services, continuing to shift power to the crowd.Select Coverage of the Report

Dear Brands, Our New Relationship Awaits

5

Letters with tilt shift

Dear Brands,

My last two heartfelt letters have been awkward for our relationship.

But they had to be written.

I told you that customers don’t need brands, since we get products and services directly from each other using the sharing startups.  In my first letter, I wrote about how I wanted to have an open relationship. Then, in my second letter, I confided in you what it felt like to have my own relationship disrupted.  The good news is that I see a solution for us to finally be together.  The only way is for us each to “give a bit” to grow into something bigger.

It may be difficult for us both to adjust, but we’ll end up in a better place.

Even though some customers don’t want to own your products, you can still give us access to them.  Even though we customers will want to share your used products with each other directly (and not have to buy from you again), we see a place for you to be involved.  Even though we want to build our own products, we see that you can help provide us with a way to do it.

I still need you, but you’ll have to meet me half way.

It will require you to give something to the relationship to get more in return.  The only way for us to maintain our relationship is for both of us to give a bit to grow something together.  We can have a fresh new relationship and be part of a collaborative economy together.  It all starts in a few days.

In my next letter to you, I’ll show you how we can be together in the Collaborative Economy.

Our new relationship awaits.  I’ll write to you in a few days.

Sincerely,

Untitled

Jeremiah Owyang
Speaker, Writer, Business Owner, Consumer