In the embedded presentation above, I assert that 2015 Is the Year of the Crowd, and make the point in a few ways:
- The growth in nearly every sector of society with the expanded Collaborative Economy (healthcare, logistics, municipal, corporate and more), see Honeycomb 2,
- Massive funding in this space, which has overtook funding to popular social networks, see spreadsheet,
- How the disruptive incumbents are pushing back –legitimizing the movement, see disruption deck,
- How brands are moving into this space, their adoption is clipping upward, see timeline of brands,
- How Crowd Companies, a council for large brands that we founded, which has experienced over 100% growth, see Crowd Companies.
Below is the predictions slide, which calls out an area for discussion across the whole movement. In particular, read Lisa Gansky’s piece on Fast Company on how the startups should start sharing the value with the people that are making them popular. I’d love to hear your thoughts on what the future spells for the Collaborative Economy in this coming year.
Ten Minute Video:
This presentation was from the LewEb keynote in Paris on Dec 9, 2014 (picture of audience), you can watch the live video, to get the full context of the slides, below:
Above Image: Honeycomb 2.0, click and access multiple sizes stored on Flickr, Please share widely, with attribution, non-commercially.
The first version had six industries –now it’s twelve
I’ll be releasing this graphic on stage tomorrow at LeWeb conference in Paris, on a session called 2015: The Year of the Crowd.
Seven months ago, in May 2014, we published the first version of the Collaborative Economy Honeycomb, which is also embedded at the bottom of this post. It contained six families of industries that are being impacted by P2P commerce, including: 1) Goods, 2) Food, 3) Services, 4) Transportation, 5) Space, and 6) Money. Today, we felt obliged to update the graphic, as it’s quickly expanded into many other industries and verticals. While many of these startups have been around for years, the new Honeycomb contains additional startups in the six original hexes, as well as noting expansion into these areas:
- Health & Wellness: For example, Helparound.co enables P2P diabetes care, including sharing of insulin and pumps.
- Logistics: For example, Postmates enables the final mile of delivery, and Roost enables P2P home storage.
- Corporate: Now corporations can have their own Uber-like experience with LocalMotion or build their own Airbnb with Near-me.
- Utilities: Power sharing with Vandebron, crowdfunded solar with Solar Mosaic, and WiFi sharing with Fon.
- Municipal: Cities are sharing street cleaning vehicles on Munirent, and public bike systems are heavily funded with Velib.
- Learning: Numerous startups enable students to share books on Chegg, as well as online training led by instructors and peers.
It’s worth noting that in the newer hex areas, they are often fewer logos as the market is young –in the more central hex areas, we had to remove logos due to excessive market crowding –a sign of market saturation in one area. I expect to see new hex areas in data, analytics, and a variety of new startups that offer help to providers such as insurance, financial services, benefits and more.
About this multi-month project
For transparency, these startups reflect those that were recommended by our members, industry experts, or which have received notable funding in the recent months. You can learn more about the funding, on this massive funding spreadsheet which has over 530 rows of funded startups, totaling over $7 billion in funding. The startups selected in this honeycomb have a Western market focus. You can create your own blank version of the Honeycomb for your own for your personal, business, or regional use, embedded below.
There are numerous folks we want to thank
We received input from our own Crowd Companies members and industry experts, and drew inspiration from folks like Brian Solis, who guided on the first iteration. To see a massive directory of over 9,000 startups in this market, please advance to the Mesh Directory managed by industry leader Lisa Gansky.
Additional input from: Lisa Gansky (@instigating), Neal Gorenflo (@gorenflo), Shervin Pishevar (@sherpa), Mike Walsh (@mwalsh), Brian Solis (@briansolis), Alexandra Samuel (@awsamuel), Bill Johnston (@billjohnston), Angus Nelson (@angusnelson), Augie Ray (@augieray), Jeff Rodman (@jeffreyrodman), John Sheldon (@jsheldonus), Jamie Sandford (@jsandford), Arun Sundararajan (@digitalarun), Jonathan Wichmann (@jonathanwich) and Vision Critical (@visioncritical). and special thanks to Vlad Mirkovic of Transart Design.
Access the services directly
Below, you can access direct URLs to each of the startups listed in the Honeycomb graphic, except for the cryptocurrencies which are decentralized resources. Again, this is just an example list of the 9,000 startups in this ever-expanding, heavily funded startup space.
Below: Each region, business, and personal usage will vary. In the spirit of openness and collaboration, we offer this blank template below (or access various sizes) for you to customize for your needs.
Below: For reference, the first Honeycomb (version 1.0), with the original six categories, is below:
Above image: Social Business Replicated by Collaborative Economy, Ver 1.1If you’re a social business professional, you’re in a prime spot to advance your career to the next phase: the Collaborative Economy.
For over ten years, I was a social business professional. I helped Hitachi launch their program as a full time employee in 2005, started this Web Strategy blog, joined Forrester Research, and became a founding partner at Altimeter Group. I saw the genesis, evolution, maturity, and integration of an entire market in less than a decade.
Today, another decade later, I’m witnessing the birth, growth, and emergence of the next phase of social connection: the Collaborative Economy. In social media, people created media and shared it on social networks. In this next phase, people are creating physical goods in the maker movement and by crowdfunding, and sharing them in revolutionary movement that we call the Collaborative Economy.
In the preceding graphic, you’ll see that many of the Social Business software players that I’ve researched are now replicating in the Collaborative Economy space, from profiles, data, APIs, apps, analytics players, corporate platforms, and more. I’ll be sharing this graphic and other data at my keynote at LeWeb in a week where I’ll be forecasting 2015 the Year of the Crowd.
Social Business was a fast-moving industry that’s starting to integrate into corporations. If you saw how that industry birthed and grew, and were a leader or practitioner, you’re ahead of the pack and can grow your career in this next phase, the Collaborative Economy.
If you’re a Social Business professional, here are a few resources to get you caught up to speed:
Click on the above image, or you can advance to the Spreadsheet of the Collaborative Economy Funding, to see a multi-tab analysis of funding, which I update on a regular basis. Caveat: This sheet is incomplete: People continually submit new data to me, and early stage funding is often not reported in public.
The Collaborative Economy continues to be a darling of tech investors. In a few short years, these companies have received incredible amounts of funding, totaling nearly $7 billion across 169 startups, with no signs of it slowing. Startups continue to seek investors to raise more funds, and investors are pressured by their own partners to get into the sharing and collaboration space. Here’s a few previews of what you’ll find in the sheet:
- This sheet contains ten tabs, with the main data tab having 513 rows, and five dynamic graphs, it includes:
- Summary tab
- Funding by Date (and year-by-year graph, and month frequency)
- Funding by Value in descending order (and graph)
- Funding by round type (a form of value)
- Funding by Industry (and graph)
- Comparison to popular social networks (and graph)
- As of today, there’s been a whopping amount of $6,884,248,411 funded in this market
- Span of Analysis is 12 years, however most has happened this year
- The transportation space has received the greatest amount of funding (see graph), dwarfing all other industries
- Total Startups Funded: 169
- Total Funding Events: 512
- Average Amount Per Funding Round: $14,933,294
- Average Total Funding Per Startup: $40,735,198 (that includes the outliers, like Airbnb and Uber)
- If you remove the outliers (Airbnb and Uber), the Average Total Funding Per Startup is $28,931,647
- There’s been more funding in this market than in Social Networks, by 26%, which I’ve written about on a prior post
Over the years, I’ve analyzed social network funding and the resulting social business software funding, and can see some patterns that are likely to repeat. Don’t expect most of these startups to succeed, as many are clones in a winner-take-all marketplace. Funding continues to pour in, and I expect us to cross the $7 billion marker in just a few months.
Transportation dominates the funding space, with Uber, Lyft, and BlaBlaCar taking the lion’s share. This is “market one” to be impacted, as there are significant numbers of idle vehicles that can be activated using mobile technologies. Crowdfunding, P2P Lending and other crowd-based currency industries are next, closely followed by physical space, and physical goods. Expect additional funding to follow in these categories.
I hope this sheet provides additional market clarity. You can use this funding data to forecast which types of startups will matter in the coming years. I had created a sheet tracking 2014 data, as I saw a surge in Q2. I am now abandoning that for the above sheet, due to the initial project success.
Social networks were the first phase of digital P2P. They enabled anyone to create media and then share it. The Collaborative Economy is the second phase. It enables anyone to create goods and share what they already own. So, how similar or different are the funding amounts for these two movements? This post provides some insight.
There are many ways to compare industries. I’ve conducted analysis on: adoption rates, attitudes, growth rates, and, in tech-heavy industry, funding rates. While investors have often known to be wrong, funding indicates bullish attitudes based on financial analysis and gut reaction to new markets. It’s a metric we must analyze.
If you want to see the full perspective of funding, advance to the Google Sheet of Collaborative Economy funding. Please note that there are multiple tabs.
To produce this comparison, we gathered publicly available information about consumer-facing, popular social networks, like Facebook, Twitter, and LinkedIn (and 17 others) to find out how much money a mature market, complete with winners, losers, and IPOs, has been funded. Next, we gathered public data about funding in the Collaborative Economy (Uber, Airbnb, Indiegogo, and hundreds others) to see what we could find.
A few analysis notes:
- Popular social networks are reported to have been funded by $5.4 billion over the last decade. Mostly “consumer” Collaborative Economy startups that enable the sharing of goods, services, food, money and vehicles, have been funded $6.8 billion
- If you compared, percentage wise, the Collaborative Economy has been funded 26% more than popular social networks.
- This isn’t an apples-to-oranges comparison: There are few fewer social networks (we looked at 20) than Collaborative Economy startups (we tabled 497). There is no public data for many social networks that died by the wayside lack.
- Often, funding in early stages is not reported, so it’s impossible to ever truly know what the total funding amount for many companies. Early seed and angel rounds aren’t typically reported.
- While social networks aren’t likely to be funded significantly greater, I expect that many Collaborative Economy startups are going to receive significantly more funding.
- I didn’t tally up enterprise social business software funding (community platforms, social media management systems) as there isn’t comparable software for the Collaborative Economy …yet.
This doesn’t mean that all Collaborative Economy startups will succeed. Markets often only have room for three players – not like the dozens of transportation players currently available. It could also mean that Collaborative Economy companies need to be more resource-intensive to lift off the ground. It certainly means that investors, many who funded social networks, are also bullish on this next phase of P2P sharing.
Below is my most recent essay to the WSJ Accelerator series, a dedicated section for the the fast-moving business audience. In this essay, I explore how we’re drinking our own champagne at Crowd Companies, by exploring and adopting crowd-based services.
The Ups and Downs of Crowd-Based Resources
Entrepreneurs today have no shortage of crowd-based services to augment their business models. Most people are probably familiar with Lyft and Uber, the ridesharing transportation services, but a large and dynamic industry of crowdsourced tools has emerged to help manage many aspects of running a business.
I’m currently experimenting with, adopting and using a number of shared services for all areas of my business. My company logo and design work, for instance, was mostly crowdsourced, using services such as crowdSPRING. Our research and content efforts are often augmented using companies like Elance-oDesk to hire experts on demand.
Our company’s social media accounts are handled by community managers from CloudPeeps. Prior, I’ve hosted company events at an Airbnb property, crowdsourced food from Feastly chefs and used photographers from TaskRabbit.
For company operations, rather than having a typically expensive long-term lease in San Francisco, we utilize co-working spots at the Impact Hub, LiquidSpace and Breather. I coordinate my schedule and events using virtual assistants from Zirtual. I depend on Shyp for shipping items on demand.
While we have full-time employees, often our independent, on-demand folks become core parts of our team. We even list our virtual assistant on our company website because she is often our key point-of-contact for our partners and customers.
From my experiences, here are some of the positives of using crowdsourced services to help manage your business:
- On-demand and cost-effective services. Why have a four-year lease when you are not going to be there all the time, or a full-time employee when you’ll only be working with them as needed? These services enable you to tap into dependable resources quickly, and allow you to only pay for what you need.
- Access to global, specialized talent. As the world moves to a freelance economy, we’ll see more specialized workers for tasks and projects become available on demand. Hiring, training and managing specialized workers isn’t practical — ‘sharing’ them enables both optimized utilization and talent when you need it.
- Less administrative overhead. One of the upsides of sharing models is to allow the burden of management, taxes and benefits to be shifted to the startups that offer the services. Some crowd-based companies make their employees full time and others classify them as 1099 contractors. Since performance is rated, clients can simply and easily change workers, using the same sharing service, if their work style isn’t matching company needs.
But crowdsourced services are not perfect. Here are some of the negatives I’ve noticed:
- New challenges. Using shared services has its own management and communication challenges. Managing crowd-based services can be more time consuming and may require patience, as you have to teach these providers your needs. In some global, online workplaces adjustments must be made for differences in culture. Crowd-based creative services, like Tongal, offer ancillary services to help clients manage the many moving parts.
- Quality can be sub-par. The old adage of “you get what you pay for” is often accurate in the crowdsourced market, especially if you don’t properly manage the services you use. Global and local marketplaces have overachievers and underachievers — it’s the law of probability. Your entire management team must be clear on goals, onboarding and clarity of communication in order to operate effectively.
- Debate over treatment of workers and globalization. Right now, there’s a debate over how ridesharing drivers and freelancers should be treated. Some don’t earn health and retirement benefits, and they often don’t have a voice with regulators. Expect new advocacy groups like Peers.org and the Freelancers Union to fight for the growing number of on-demand workers.
Now that we’ve explored the ups and downs, it’s important to prepare your company for these crowdsourced services. First, ensure that your institutional knowledge and business strategy are kept close to the chest and are your core skills. Then develop skills to manage crowd-based services by preparing clear goals and business metrics for real-time feedback and success.
Now your startup can efficiently and professionally tap crowd services for your business.
Mr. Owyang is the founder and chief catalyst of Crowd Companies, an association for large brands in the collaborative economy. He lives in Silicon Valley.