It’s almost a new year, and we have a lot planned for 2016 to help our members grow their Collaborative Economy programs here at Crowd Companies, which we founded two years ago. I wanted to share with you five items that we’re focused on:
- Content and discussions that focus on “how to” deploy in innovative markets,
- Leading our members through the six-phase Innovation Journey methodology,
- Over five physical events, plus private roundtable dinners for members,
- An additional topic focus, the “Autonomous World” (drones, self driving cars, AI)
- New employees, to serve our growing member base
Next year, we’ll focus even more on the “how to” of program development, providing the in-depth tools you need to determine opportunities and begin defining initiatives related to the Collaborative Economy, innovation, and other disruptive technologies. To do this, we have a number of offerings planned:
Building Out “Crowd Innovation Journey” Resources, a Roadmap for Business Change
If you attended our October Main Event in San Francisco, you’ll remember our Innovation Journey, a framework we developed to guide members through the six stages of program development, prototyping, and deployment (see below).
In 2015, we began organizing existing Vault resources by phase of Innovation Journey, and in 2016 we’ll be building out a series of useful tools that align with the initial stages of this journey. These tools may include:
- Member Program Spotlights
- Company Adoption Survey
- Feasibility & Readiness Diagnostic
- Use Cases by Industry Vertical
- Business Case Template
- Partner/Supplier Tools
- Collaborative Economy Business Models Report
Hosting In-Person Events and Online Session, Group Calls
We have five in-person events planned for 2016 (with some additional regional roundtables in the works), in addition to your monthly session calls with industry thought leaders and group calls with fellow members. These events are included in your membership:
- Tour and Salon: Future of Mobility in the Age of the Autonomous World, Jan. 21 | 3:30pm – 8:00pm | Silicon Valley
- SXSW Brunch Member Panel and Social, March 12, 2016 | Austin, Texas
- Spring Summit: Co-innovation for your Brand, April 28, 2016, with optional evening tour April 27 | Hallmark HQ, Kansas City, Missouri
- European Summit: The Global Collaborative Economy, June 22, 2016 | BMW HQ, Munich, Germany
- The Main Event, October 5-6, 2016 | San Francisco
- Regional Roundtables, Feb in NYC | Others to be determined
Expansion of Crowd Companies’ Topic Coverage: Autonomous World
As previewed by our kickoff event of the year, Crowd Companies will be broadening its coverage in 2016 to include additional topics that affect our innovative members. The council will continue to support its members as they deploy Collaborative Economy programs, while also expanding its focus to assist members as they adapt their business models to other tangential technologies that stem from these crowd movements.
The first focal point you’ll begin to see content and resources emerge around is what we’re calling the “Autonomous World” where robotic hardware and software perform tasks once performed by humans, often using the same business models from the collaborative economy. In January, we’ll be hosting a member event where we’ll examine the impact of self-driving vehicles, drones, and artificial intelligence on all industries and society as a whole. Also release a research report for members and and a related infographic for public consumption.
Adding a New Member Success Manager to our Crew
Finally, we’re pleased to announce the newest Crowd Companies staff member, Carl Bohlin, whose primary goal will be to understand our members needs, and strategically matching them to a variety of innovation resources that the council offers. Crowd Companies has over 200 members, spanning 50 companies, across multiple countries, as such, Carl will work with Angus on member success initiatives to assist the council in its growth along the Crowd Innovation Journey. He has more than 7 years experience in managing peer-to-peer councils at Forrester and Giga, and has a background in IT and financial services. Carl joins us on the east coast.
If you work for a large company, and want to learn more about membership, please submit your details to our online submission form. 2015 flew by, and I’m looking forward to growing with you all in 2016. Let’s keep the momentum going. Cheers to you and your loved ones in a prosperous new year!
In a recent webinar, I joined Andrew Reid, founder of Vision Critical, to discuss the new rules of the Collaborative Economy. The webinar explored three paths established companies can take to successfully compete with the likes of Uber, Airbnb and Instacart: through price, convenience and brand.
As we revealed in the webcast and in the accompanying report, brand is the most useful path for companies with strong brand recognition and positive brand sentiment. This is particularly true in markets where customers are sensitive to risk.
This finding might seem counterintuitive. Afterall, startups—the small guys—have driven the growth of the Collaborative Economy. But our report, based on feedback from more than 50,000 North Americans, clearly shows that in almost all categories of the Collaborative Economy, a single player dominates the market. That’s why Uber is practically synonymous with ride-sharing, Kickstarter with crowdfunding and Airbnb with house-sharing.
Positive brand recognition is huge for top players in the Collaborative Economy. For instance, more than 40 percent of North Americans have heard of market leaders like eBay, Craigslist and Uber. Many of these same players also have positive reputations, as the infographic below shows.
In short, the scrappy innovative startups of the Collaborative Economy have become big brands themselves.
The big lesson: your brand still matters in the Collaborative Economy. The rise of on-demand technologies doesn’t change the fact that brand recognition and market dominance are still closely related. In fact, across all age groups, brand is as important as convenience in determining whether a customer will consider sharing or buying. Brand trust determines whether buyers will choose traditional buying over sharing, and vice versa.
The enduring importance of brands is good news for established companies. Here are three strategies for companies that want to take advantage of their brand name in the collaborative economy.
- Partner with companies that have strong positive brand sentiment. This provides a level of brand trust, which is useful in encouraging people to try your initiatives in the collaborative economy.
- Leverage your own brand to increase your collaborative capacity. Determine if your brand has strong positive recognition, and if it does, make sure your brand is front and center as you launch sharing programs.
- Focus on customer experience to build your brand. For companies that are already well known, providing a high caliber of customer experience assures the continued strength of your brand—a necessary step in attracting customers in an era of collaborative consumption. Engage with your customers frequently to identify ways of providing a more seamless experience, and build your brand over time using customer insight.
For a deeper dive on the use of brand as a competitive advantage in the collaborative economy, watch a recording of the webinar The New Rules of the Collaborative Economy.
In the on-demand, peer-to-peer movement called the collaborative economy, many rising startups are offering convenience to attract new users and customers. In this new economy, Uber and Lyft provide rides with just a few quick clicks on a mobile app—no credit cards or cash to fuss with. Buying on eBay today is often easier than going down to the consignment store to find pre-owned goods. Finding a professional on TaskRabbit is more convenient than the traditional way of hiring full-time staff.
As we revealed in The New Rules of the Collaborative Economy, a report I co-authored with tech strategist Alexandra Samuel, convenience is the number one factor cited by people for their latest participation in the collaborative economy. More than three-quarters of the people we engaged with said convenience was the reason they used a sharing service—beating price and product or service quality.
In the report, based on a study by Vision Critical, the leading customer intelligence platform provider, we also revealed that about a third of would-be buyers are swayed to consider sharing services that make it easier and more seamless to access goods and services.
On the flip side, however, fewer people are interested in conveniences that could come from buying (services like a home furnishings or gift store that offer personal shopping and delivery). In other words, adding extra services to traditional ways of buying might not suffice. In the long-term, rethinking your infrastructure to enable on-demand and instant access to your products and services is a necessary step to competing in the collaborative economy.
In the short-term, established companies that want to offer convenience for sharers have a few strategies:
- Emphasize convenience for your affluent, professional customers. These people place a premium on their time and are more likely to switch to sharing if it’s more convenient to do so.
- Leverage sharing startups to offer convenience. Many sharing startups already have the structure to offer web-enabled instant access to products and services. Partnerships with startups could be an easy for companies to offer the convenience that today’s empowered customers are looking for.
- Bring local and customer-made products to your store experience. At our upcoming webinar, we’ll share some examples of big retailers that are bringing maker goods from sharing companies like Etsy to make it convenient for customers to buy unique products with a local flavor.
To learn how established enterprises are using convenience to compete in the collaborative economy, please join me for a live Vision Critical webinar on December 1.
If you want to compete with startups like Instacart, Uber and Etsy, there’s one aspect of your product or service that you might want to re-evaluate: your price.
As we revealed in The New Rules of the Collaborative Economy, a report I co-authored with technology strategist Alexandra Samuel, cost savings is a key driver in the growth of the collaborative economy—the economic phenomenon where people get the products and services they need from each other instead of buying them by traditional means.
The report, based on a study by Vision Critical, the leading customer intelligence platform provider, shows that price is a significant driver to the growth of the collaborative economy. We found that a great majority of sharing transactions are at least partly motivated by price. Our study shows that getting a good price is an extremely or very important factor in 68 percent of sharers’ latest sharing transactions.
In fact, we found that more than half of traditional purchasers—those who choose traditional ways of buying instead of using a sharing service—will consider the collaborative economy if it means saving 25 percent. Cost is an even bigger factor among younger customers like millennials and Gen Zs.
For traditional companies that want to win back customers who are now participating in the collaborative economy, price is a critical competitive tactic. If the buying option were less expensive, an overwhelming majority (70 percent) of sharers would consider buying instead.
So what does this mean for established brands that are in the crosshairs of the collaborative economy movement? These tactical considerations are a good start:
- Lower your price, if possible. Financial savings is a big motivation for sharers in the collaborative economy, and your customers will switch from sharing to buying if it means more cash in their pockets. Offer other value added services, such as on-demand services, insurance, and more.
- Reduce cost of ownership via rental. For companies that sell expensive, infrequently used products, enabling access via rental models to your products could be an easy way of participating in the collaborative economy. We’ll share some real-world examples in our upcoming webinar.
- Empower your customers to sell back pre-owned goods. Establishing a used goods marketplace could make sense if your customers are already buying or trading your pre-owned products. Not only does this prove product durability, a commitment to the environment, it also provides opportunity for upsell later.
Join me on December 1 for a live Vision Critical webinar for a deeper dive on how to use price as a competitive tactic in the collaborative economy.
Participation in the Collaborative Economy has grown by 25 percent in the past year alone. That’s one of the key findings we shared in The New Rules of the Collaborative Economy, a Vision Critical report I co-authored with tech strategist Alexandra Samuel.
As the infographics below shows, more than 110 million North Americans now do some form of sharing in the Collaborative Economy. More than half of North Americans now get the products and services they need from each other, peer to peer, instead of buying from established corporations.
The rapid rise of the Collaborative Economy raises an important question for businesses: what’s driving the growth of this movement? More importantly, is it a permanent shift in customer behavior? Data in our report, which draws on input from more than 50,000 North Americans, provides some crucial insight on these issues.
We found that a big driver of growth in the Collaborative Economy is the adoption of newer forms of sharing services. In 2014, 16 percent of American sharers engaged in only one form of sharing: by buying and/or sharing pre-owned goods. This year, that number is down to 10 percent because people are trying a broader range of sharing services.
Looking at the various categories of sharing services, we’ve seen an across-the-board increase in sharing. Sharing of goods is still the most common form of participation in the Collaborative Economy, but there’s also significant growth in crowdfunding, space-sharing and custom products. Online learning, a sharing category we included for the first time this year, is already seeing a 15 percent participation rate.
The growth of the Collaborative Economy isn’t about to stop anytime soon. Based on people’s intent, we’re predicting that eight in 10 Americans will be part of the Collaborative Economy by 2017—a 20 percent increase from 2015. Growth of “neo-sharing”—participation in the latest generation of sharing services—will fuel the overall growth of the Collaborative Economy. For every person who has participated in a form of sharing in the past 12 months, there’s a new person who intends to try that type of neo-sharing in the year to come.
Clearly, the Collaborative Economy is here to stay. Combating startups, complementing sharing services and gaining a deeper understanding of the empowered crowd is an urgent call for established corporations today.
So what does this mean for established corporations? Three things:
- This is not a fad or trend—it’s a movement that’s here to stay. Adoption is accelerating due to social trends, economic conditions, and availability of powerful technology.
- Not all behaviors are the same. As indicated above, the sharing of goods is dominant, but every industry must first understand how their market segment is changing.
- Established companies must lead this movement by changing their business models to suit the needs of changing customer preferences. We’ll share more, in our upcoming webinar.
To learn more about the growth of sharing, join me inThe New Rules of the Collaborative Economy, a live webinar with Vision Critical founder Andrew Reid on December 1.
Above: Version 1.1, with updated data. Version 1.0 is available here.
Collaborative Economy valuation is through the rainbow-beaming clouds. These highly funded, fast-growing, media-hounded startups are the portfolio darlings of any venture capital firm, while this crowd-based, on-demand, collaborative category enables people to access resources from peers using efficient mobile devices.
The Collaborative Economy market has received a total of $25 billion in investor funding, but not all companies are equal. Using the “mythical” creature lexicon of Silicon Valley, we’ve sorted Collaborative Economy startups based on highest valuation. We didn’t even include the “Little Ponies” that are valued at $10 million – $100M as the list would be in the hundreds.
Working with VC Dave McClure of 500 Startups, who has been championing a number of these fun terms, we constructed this handy little chart so you could see which startups have achieved high valuations.
Is this space over-funded? Over-valued? I’m sure that’s the case for some of these companies, as frothy tech markets are a normal part of the startup scene. The difference between these startups and prior years is that they are generating revenue from every transaction. In fact, most startups take a 10 to 15% cut from every transaction in the marketplace. One danger of over-valuation means that acquisition becomes near impossible, with the most obvious exit being an IPO.
If the valuations are incorrect, kindly leave a comment below, and I’ll amend the database. We plan to eventually publish an updated version.
(And yes, we know the plural of Pegasus is Pegasi.)