Archive for May, 2014


Study: How Corporations are Deploying in the Collaborative Economy

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Can big brands learn from Uber, Kickstarter, Airbnb and the Maker Movement? Yes, they can. They’re using the same strategies as those startups to connect to their markets and they are doing it at a rapid pace.

The Collaborative Economy is a movement. People are empowered to fund and build their own bespoke goods in the Maker Movement, and people are using new technologies to share what they already have in the Sharing Economy. In both cases, people are empowered to get what they need from each other – rather than buying through traditional channels.

As new business models are emerging, corporations aren’t standing by idly. They’re adapting and changing quickly. (You may access this detailed timeline.) While we’ve yet to see return on investment numbers from any of these early deployments, our research of this same sample set indicates that the frequency of brands deploying has been increasing, even before the launch of Crowd Companies six months ago.

A bit about the data and methods: An ongoing list of efforts has been collected from industry leaders, readers, and the brands themselves. We then tagged each of the deployments into specific categories. Most case examples are tagged in more than one instance, as they have overlapping deployments. Data was collected up until April 2014, yet even more examples are emerging. We defined a corporation as “a company with characteristics of companies usually over 1000 employees or over a billion dollars gross revenue.”

Three Graphs: Corporations in the Collaborative Economy

  1. Industry breakdown
  2. Major strategy
  3. Specific tactic(s)

Chart02c

Chart 1, above: Across the nearly 77 case examples up until April 2014, the greatest number of the deployments were from the retail industry, followed by the auto industry, then the technology space, then hospitality. In some cases we included consumer product goods and durable goods which impact the retail space in the frequency count.

Key findings:  Companies closely related to consumer-type business models are most impacted and, therefore, have done the most deployments.


Chart03b

Chart 2, above: Across the broad spectrum of the collaborative economy (e.g., maker movement, crowd funding, sharing economy) corporations are employing  tactics that are related to the sharing economy. The one isolated instance of a co-op, where the company is owned by the customers and employees, is REI. The second most common strategy was tapping the Maker Movement, often in the form of co-innovation, also known as outside-in innovation or other variations of that phraseology.

Key findings: Corporations gravitated towards sharing economy business models, often through sponsorships and partnerships with leading players like Uber, but this doesn’t guarantee business model resiliency beyond the media pickup.


Chart01

Chart 3, above: This chart is a subset of the preceding “Strategy” breakdown, shown directly above. We found that most companies are employing “brands as a service” tactics, which means products are sent on-demand or are available as rental business models, instead of through ownership models. In particular, BMW, Peugeot and Daimler rent cars directly to drivers, and hotels like Westin and Cosmo rent workout gear and dresses on Rent The Runway, respectively.

Key findings: Brands deployed “Brand as a service” which often equates to a rental model, or on-demand model, to meet new market demands of “access over ownership.” Much of this was achieved through partnerships with players like Uber or other on-demand entities. A few companies have launched their own marketplaces or partnered with other companies that offered similar services.


Conclusion: Brands must adopt Peer to Peer Commerce Models
Large corporations continue to adopt disruptive technologies. Twenty years ago they adopted the internet. Ten years ago they adopted social media. Now, in 2014, they’re adopting the methods of the Collaborative Economy. The internet phase required an online B2C model. Social media shifted to peer-to-peer communication. In this next phase, brands must offer their own peer-with-peer-to-commerce models. In each of these phases, business model shifts and mindset changes were required, letting go of some control in order to gain more business. To learn more, find my body of work on the collaborative economy which includes research, frameworks, graphics, data, and case examples.

A Six Month Update: Crowd Companies Creating Collaborative Success

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IMG_1736 GROUP SHOT
Above picture: Attendees of the Spring 2014 Crowd Companies Summit hosted by Autodesk in SF included corporate business leaders, entrepreneurs from collaboartive startups and special guests.


A few days ago, Crowd Companies reached its 6 month anniversary, so I felt that this would be a good time to provide an update on the company’s growth and on the state of the market.

The Collaborative Economy Movement is Growing Quickly. As a movement, the Collaborative Economy has demonstrated tremendous growth and market churn. This movement, which empowers people to get what they need from each other, continues to expand. There are over 9,000 startups in the space and there was over $850 million in new funding in the month of April alone. Adoption by people is projected to double by the end of 2014. The mainstream press and local media has begun to regularly spotlight the Collaborative Economy movement. It’s getting hard to open a newspaper and not read something about this subject, whether it is news or op-eds. This is a sure indication that, not only is the movement growing, it is here to stay.

Regulatory Upsets and Business Model Changes Show Disruption. Naturally, this has caused considerable disruption for some local governments, regulators, and traditional business models as power shifts hands to the people. Change is almost always met with opposition. There have been protests from incumbents like taxi and hotel unions. Many local governments have pushed back at some startups. State governments have moved in a variety of directions. On the other hand we’ve seen progressive corporations collaborate with new business models. In fact, there are over 80 examples of traditional corporations who’ve deployed in this market. Data seems to indicate that there is no end in sight to how the movement may totally reshape our world. There’s been increasing attention on the market, as conferences across the globe, like OuiShare, MakerFaire, MakerCon, SHARE, and my own Resilient Summit, launched to support new and existing players and to help them define their place and reach their growth potential within this ecosystem.

Crowd Companies Milestones
Crowd Companies, an association for business leaders who want to be part of this new Collaborative Economy movement, has grown as well. Here’s a few council stats:

  • We launched with 24 Fortune 500 companies as founding members on Dec 10, 2013, at LeWeb.
  • We’ve grown 41% in six months.
  • Our membership now includes 34 major corporations, see list
  • Our Council includes more 120 business leaders who are at executive, director and department head levels of their companies.
  • We’ve had over a dozen collaborative, online calls and sessions, including speakers like Lisa Gansky and Mark Hatch and a number of startups from the movement.
  • A representative from the White House spoke at one of our sessions, indicating the administration’s support of the Maker Movement.
  • We’ve hosted three physical events, including our Spring Member Summit in San Francisco, an immersive experience hosted by Autodesk, 5M, and TechShop.
  • We’ve launched a key research report in the space with partners at Vision Critical, and had media coverage in leading publications like Fast Company, Wired, and the Wall Street Journal.
  • Most importantly, our members are unlocking business value from peer-to-peer connections, learning from industry experts and finding startups to with which to partner.

Looking Forward. What’s to come in the future? This market, which I see as the natural next phase to follow social media, should continue to churn as startups get funded and disrupt traditional business models. Governments at federal and local levels will continue to recalibrate how they approach this market. The people who use these services will continue to gain power and the movement will continue to formalize as a new ecosystem (unions are already starting to forge). Just as corporations changed their communication models to adapt to social media, corporations who want to succeed will adopt new business models that use these same strategies in order to partner with the crowd. Social media was a ten year growth trend. I expect this market to follow a similar pattern, but with far greater impact as the physical world is being democratized through technology.

Keynote Slides: How Crowds and Companies both Share

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The above embedded presentation is my keynote at the 500 attendee SHARE conference today, I’m also on the conference board of advisors. This San Francisco conference has over 450 attendees spanning the sharing economy startup space, government, investment, and corporate to understand how these new collaborative economy models impact all areas of society. I’m pleased to present after industry pioneer Lisa Gansky who’ll set the stage for the industry. My focus? To explain how this collaborative economy is not limited to peer to peer only –but how corporations can and are playing a role.

Why focus on corporations? There’s at least three reasons: 1) If we can influence just 1% of their business model towards this new economy, it has global impacts to millions of people and long lasting impacts to resources 2) Corporations often build the very things that we’re sharing, and they must understand the new behaviors in this market, so they can address these new needs. 3) Lastly, when corporations nod towards utility of resources via sharing, it signals this behavior type starts to become more mainstream. While there are a number of other reasons, I’ll close my preso on five final takeaways:

Five Final Takeways (slide 31)

  1. The core of the sharing economy is always about people.
  2. Yet to make it sustain, we must engage governments, regulators, and corporations.
  3. Corporations who want to succeed will build shareable products, designed to last.
  4. Corporations will enable marketplaces of used goods and services.
  5. Crowd and Companies will work together for new business models for share

In this presentation I shared data from the collaborative economy timeline, a frequency of brand deploymentpeople adoption is going to double, the full report on behaviors, and the recently launched collaborative honeycomb. On a closing note, Deloitte University published a point of view on this growing collaborative economy, and noted that brands have a role. Companies are learning how to share with the community, to find new business models where both parties are going to benefit.

 

Framework: Collaborative Economy Honeycomb

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honeycomb_collab_econ

Above: Version 1.1 of the Collaborative Economy Honeycomb
Added new Airbnb logo

Understand the Collaborative Economy market in one, single image. Please share widely, with attribution, non-commercially:

The Collaborative Economy enables people to efficiently get what they need from each other. People use powerful technologies that enable Crowd-funding, Peer-to-Peer lending, the Maker Movement, and the Sharing Economy. If you look closely, the crowd is becoming like a company: self-funding, designing, producing, and sharing what people already have.

Similarly, in nature, honeycombs are resilient structures that efficiently enable many individuals to access, share, and grow resources within a common group. Various types of bees work in a collaborative manner to feed, care, and nurture offspring, thus growing the colony. The honeycomb structure itself supports the whole by spreading the load across the structure, wasting little in its design, and easily replicating at scale.

In this visual representation, the sharing economy is organized into six discrete families of goods, services, space, food, transportation and money. These are broken down into 14 sub-classes, including bespoke goods, personal services, and workspace, within which we have identified dozens of example companies, like Airbnb, Uber, and Shapeways. In previous taxonomies, we noted five families, but now we’re witnessing significant growth in the food sector, deserving its own hexagon.

The companies listed in this graphic are just a small representation. There are over 9,000 such companies, varying by country and geographical location. To access the full directory companies, visit the Mesh Index, at meshing.it/companies managed by Mesh Labs run by Lisa Gansky.

Notable Industry Stats:

One of the inspirations for this graphic was the work of friend and former colleague, Brian Solisdid, on the first phase of sharing, which originally catalogued social media as the Conversation Prism. While we explored a variety of ways to present the information, the radial-like nature made the most sense. Brian was generous with his time, providing feedback, insight, and more, based on his experience managing many variations throughout the years.

Published in celebration with today’s Ouishare Festival in Paris, with a focus on the Collaborative Economy and the impacts it has on society. A Thank You to Lisa Gansky @instigating, Neal Gorenflo @gorenflo, Shervin Pishevar @sherpa, Mike Walsh @mwalsh, Brian Solis @briansolis, Alexandra Samuel @awsamuel, of Vision Critical @visioncritical, and Vladimir for the graphic design.

The crowd is becoming like a company.

 

Update: More on Facebook.