Is life-as-a-service efficient or lazy? I say yes.
Life delivered, or rented, on-demand.
What does “life as a service” mean? It means one’s lifestyle needs are sent to you on-demand, or as a subscription, rather than me having to purchase or owning them through traditional commerce models. To best understand the collaborative economy market, I’m trying to live it within my personal life as well as my business life. This means that I can rent or borrow goods –rather than own them. It also means the things that I want can be delivered to me without me visiting traditional retail stores.
I keep a “purchase log”, to be mindful of consumption of goods
I’ve reduced my consumption of durable goods, in fact, I keep a “purchase log” of all the durable goods I’ve bought since June 2013. It’s less than 54 discrete transitions, and a few of the transactions had multiple items. It includes a few clothes, batteries, electronics, gifts for others. This list doesn’t include travel, food, or personal health products. What’s key is that I’m conscious about my consumption, and trying to use what I have, before obtaining in other ways. I have enough stuff, really.
Not for every region –yet
A few caveats. A great deal of these services are located in Silicon Valley, where most of these startups have originated from. Just as people were said “social media is just for early adopters in Silicon Valley, we learned it spread internationally wherever the internet is present. Also, some of these services are limited to areas with technology adoption, as I write this, I’m in rural South East Asia, where you won’t spot any Lyft mustaches. With that said, these new opportunities will open up first in tech laden cultures with high population density then spread, just as social media has done over the last decade.
Here’s some of the “Life as a Service” services that I already use:
- Clothes: Trunk Club sends me clothes every few months. I do not see these clothes in advance. They are selected by a wardrobe coordinator assigned specially to me. Once they understand my profile, I determine how often I would like to add to my wardrobe. A “trunk” of clothing is sent to me on a predetermined schedule. I get 10 days to try the clothes, keep what I want, and return the rest. I pay only for what I keep. It’s like having my own personal valet and stylist. The longer I do business with them, the better they understand my tastes are able to deliver exactly what I like.
- Assistants: Zirtual, billed as “the secret weapon of successful people,” is like my own personal administrator. My days and weeks are scheduled and coordinated by my own personal assistant, saving me time. Zirtual is a 24/7 go-to that will book travel, handle my emails, obtain event tickets, arrange transportation, pay my bills (with my money – not theirs), remind me of important dates, conduct research, and even order my lunch!
- Food: Eat24 delivers complete daily meals ordered from a mobile app. From sushi to sauerkraut, Eat24 literally delivers over a million different dishes from thousands of restaurants in the U.S. We use this get an entire family meal, on demand meals sent to your house, from local restaurants, all from a few clicks.
- Transportation: Uber gets me quickly to my locations. When I need to move about town, I simply contact Uber through the app on my smartphone and they deliver me to any place I desire and in a style to which I am accustomed, in their vehicle with their driver. Now, those of you who know me, also know that I am not that hung up on style (which is why it is so easy for Trunk Club to outfit me), so I usually choose the uberX option, which is a smaller car that gets you where you are going just as effectively as a luxury model. The beauty of Uber is that I can choose the luxury option or any of the other options in between. I take the Caltrain as well.
- Office space: at co-working locations. Impact HUB is cropping up all over the world with locations currently in over 40 major cities, including San Francisco and Berkeley. I don’t need to own an office, because I can work out of a local Impact HUB that is a shared workspace designed to promote the principles of the Collaborative Economy. It’s more than just shared space. I’m also experimenting with other co-working locations.
- Shopping: Google Shopping Express delivers nearly everything from staples to sparkling water and from shaving cream to salted nuts, within hours, from major retailers like Target, Walmart, or Office Depot. I’ve been using Google Shopping express for quickly needed items to durable goods, electronics, personal care, and even gallons of water that I didn’t want to lug around in my car. I question if this service to me is truly sustainable, as there’s no minimum on how small a good could be delivered.
- Toys: Pley is the service I wish we had when I was a kid. It’s a Lego rental service. You can rent a set, then return it when your children are done with it. You can even exchange it for a different set. The real beauty is that you don’t end up owning a Lego set stored in a box in your attic once your children have outgrown it. My child will be graduating from Duplos, and we really don’t want to own a product with such a short useful life span.
- Smart phone. Apple recently bought back my iPhone 4S when I purchased a new iPhone 5. So, in a way, I rented that phone, making the device usage nearly circular and helping to protect the environment so that my old phone doesn’t end up in a landfill – not to mention in the back of one of my desk drawers.
- Munchery deliveries our fresh, healthy dinners. Munchery is quite an amazing business model, you pre-program when you want your food delivered, and it’s at your doorstep before dinner in a cooler, ready to be heated. In this shared business model (thanks Shervin Pishevar for the intro) professional high-end chefs share supply chain, kitchen, delivery, marketing, photographers and more. Fresh, local, healthy food is shipping quickly for about $13 a meal.
- A purse (rental) for my wife via Bag, Borrow or Steal. In addition to buying her fantastic purses to own, I also, on a whim, purchased her a small gift certificate to this high end purse rentals. Want a $5000 Coach bag for a fraction of the time and fraction of the price? This is now possible. Certainly, this raises questions on what gifts of love can be, are they physical goods (a diamond is forever), or experiences on demand (a trip to Phi Phi island)?
- Many others… I’m sure I’m forgetting some and will add a few notable examples as I try new services.
Closing thoughts: some drawbacks, but an overall net gain.
You can live the good life in the Collaborative Economy. Life as a Service is possible. I’d guess that there’s a typical upcharge of about 10-15% on goods as they become services. But, if the time saved can be reclaimed to be more productive, or to enjoy quality time with the family, it should be regarded as a net gain if you’re living a busy lifestyle. With that said, there are always drawbacks one can be over-dependent on the network and ecosystem has drawbacks, interdependency increases and formerly self-sufficient individuals get focused into the few skills they are really good at. I hope that these learnings help me to better conduct research on this market, as well as help the Crowd Companies council members.
In a future post, I’ll do a rundown how we’ve tapped the crowd for our company, Crowd Companies, (naturally).
Edit: A discussion on my Facebook feed is brewing from this post.
(Creative Commons usage of image, “Fast Man” by Nikos Koutoulas)
Confused about how crowdfunding, maker movement and sharing fit into the larger Collaborative Economy? This diagram brings all of these trends together into one so you can see how the crowd is getting what they need from each other – rather than buying from traditional corporations. Find out why more than 40,000 people have viewed the full report “Sharing is the new buying” for the complete study.
Above Graphic: This image distills this large movement of over 9000 startups into a single diagram by five families, eleven classes, and a sample of district startups.
Working closely with Dr. Alexandra Samuel of Vision Critical, I’m pleased to present a working taxonomy, outlining the ecosystem of the Collaborative Economy. Our goal was to segment this market, then survey over 90,000 people in the general population across Canada, the UK, and the USA to find out their adoption rates. Here’s how the taxonomy breaks down:
- Working from left to right on the chart, there are five distinct families, categorized by goods, services, space, transportation, and money. People created, funded, or shared across these major families. For the most part, this accordantly represents the physical world. It’s assumed each of these five families are dependent on the first phase, social media.
- Eleven unique classes breakdown into more specific use cases. The second column indicates specific use cases of company types in this vast market. For example, within services, we broke out professional services and personal services, as we see two distinct phyla of company types.
- Next, thousands of individual species have emerged. Respected authority, Lisa Gansky is tracking a whopping 9000+ startups in this space around the globe. The startups we selected are just examples, ones that we felt would best be understood by the audience, but certainly cannot represent the full scope of the thousands in existence.
Matrix: Large companies are tapping this movement
To tie this back into how businesses can participate in this new economy, we’ve also created this matrix that features six examples: Patagonia, GE, Walgreens, BMW, W Hotels, and U-Haul. This is only a sample of six instances of companies. Our larger Timeline of the Collaborative Economy shows 80 distinct examples.
This fast moving space is difficult to document.
I’ll be the first disclaim this taxonomy will be valid for a short period of time only. New services, startups and technologies are emerging at a fast pace. Other industry experts have also tried to categorize this market. For example, the crowd has quickly funded their own 3D printer at a low price, showing the zero marginal cost economy coming to life. Furthermore, this taxonomy, while a strong overview, doesn’t include the heavily-discussed Bitcoin or other crypto-currencies. I’m being briefed on new and unique business models on a weekly basis. For example, Upshift cars is a new business model that can enable a co-ownership of a fleet of cars, something new that doesn’t quite cleanly fit into the other categories listed.
Respondents in the largest study in the new peer-to-peer economy reported that they plan to double usage in next 12 months. Brands must develop a strategy in this new market and avoid being bypassed from peer-to-peer economic models.
Above Graphic: Dark colored bars indicate adoption in last 12 months, light colored bars indicate adoption in next 12 months; this nascent market is quickly growing.
Read the full report which surveyed over 90,000 people: Sharing is the New Buying
This post is a section of a March 2013 report on the collaborative economy, in which I partnered with Vision Critical, titled, “Sharing is the new buying.” You can download the whole report and read the coverage by Fast Company: “The Collaborative Economy Is Exploding, and Brands That Ignore It Are Out of Luck.” We asked thousands of respondents about their past usage (the dark colored bars) and their intent to use over the next 12 months (the light colored bars), helping us to forecast growth. The purpose of this post is to drive deeper into one of the key findings, the forecast, here’s what we found:
- Even in new markets, adoption is doubling in most categories. For sharing of goods (sites like eBay and Craigslist), we found there’s significant growth in the sharing of used goods (up to 46%), but the overall growth rate is slowing. In nearly every category, at least as many people intend to try sharing in the next 12 months as have tried it in the past 12 months. There is no runaway category for prospective growth. Nearly every category of neo-sharing enjoys similar levels of interest from prospective users: 4% to 9% intend to try it in the next 12 months. With that said, there’s greater interest in custom products (the Maker Movement), personal services (PopExpert, TaskRabbit), places to stay (Airbnb, VRBO, HomeAway), and crowd-funding (Kickstarter and Indiegogo) indicate they may enjoy double-digit adoption rates.
- Anticipate that much of growth will be driven by Neo-Sharers. This persona type is an individual who shares much of their life across goods, services, transportation, space and money – I’m trying to incorporate much of it into my work and lifestyle to better understand it. Neo-sharing could double in the next 12 months. In all the neo-sharing categories, there are roughly equal numbers of recent and prospective users, and there are more of them every day. In most categories of sharing, 12 to 15% of neo-sharers who haven’t tried that type of sharing say they will in the next 12 months. (For custom products, it’s even higher: 17%. For office space, it’s a little lower: 10%.) This means that much of the growth of sharing will come from existing neo-sharers who are broadening the range of neo-sharing services they use.
- Maker Movement showing solid growth, via Crowd-funding and Custom Goods. I’ve watched with great interest at how the Kickstarter community was able to produce a digital watch (Touch Time and Pebble) before large consumer electronics companies could get to market. Custom products, which is also referred to as the Maker Movement, are the type of neo-sharing that interests the most prospective users. In the past 12 months, 9% of the population has shared custom products and another 9% intend to try it in the next 12. But that’s only a narrow advantage over other categories of neo-sharing. For corporations tapping co-innovation initiatives this is an excellent opportunity to partner with the crowd to co-fund, co-design, co-build, products alongside the crowd.
Peer to peer threaten traditional corporations as people share or build –rather than buy. This means that people want new business models to get goods that they seek by using an access model, rather than traditional ownership models. The logic suggests that they will tap crowd services like oDesk rather than traditional consulting firms, stay at Airbnbs as opposed to hotels, take Lyft rather than traditional taxis, and borrow and lend money in Lending Club instead of using traditional banks. It also means that people will their own Makers as they fund, build, and buy custom made goods from their fellow peers – rather than from traditional corporations.
New market opportunities for innovative companies that move now in the early phases of market. The Collaborative Economy is a generally new market where the majority of tech startups have been around less than five years. This provides unique opportunities for brands that want to leverage the movement to their benefit and that of those participating. Get ready, as the economy starts to shift to crowd-based business models. You can alter your business model to leverage this movement (see this storyboard on the business model shift required, see this timeline of brand examples, peruse the body of knowledge on this topic). If you’re a large company, contact me to discover how Crowd Companies council can help you to learn more, then move to action.
Large companies seek signals from market leaders on future trends –so they can align their plans in the right direction. One clear signal that rings loud and clear is the United States White House’s commitment to innovation in the Maker Movement.
The Maker Movement, which we consider part of the larger Collaborative Economy, empowers people to build their own goods in their community and offering it to others in a global marketplace. They use simple wood working tools, create new types of food, or tap advanced technologies like 3D printing.
Crowd Companies was honored to host the White House on a members concall to learn about their vision and commitment towards the Maker Movement.
Now the Maker Movement is gaining significantly more traction as it has been embraced by the executive branch of the federal government with the announcement that the White House will host a Maker Faire later in 2014. This Faire is intended to highlight the role that Making can play in (1) inspiring more young people to excel in science, technology, engineering and math (STEM) education; and (2) fostering innovation and entrepreneurship in the manufacturing sector.
Tom Kalil, Deputy Director for Technology and Innovation at the White House Office of Science and Technology Policy recently visited Crowd Companies Council to share the vision of the Maker Faire with our Council. He has described the Maker Faire as an “all-hands-on-deck effort to provide even more students and entrepreneurs access to the tools, spaces, and mentors needed to Make. There are many ways in which, in addition to the contributions of thousands of individual Makers, companies, universities, mayors and communities, and foundations, and philanthropists can get involved. For example:
- Companies could support Maker-spaces in schools and after-school programs, provide their employees with time off to serve as mentors, be “anchor tenants” for makerspaces like Ford’s partnership with TechShop, or, for multi-channel retailers, provide access to consumers for innovative Maker start-ups.
- Universities could add a “Maker Portfolio” option as part of their admissions process, create more Maker spaces on campus for students and the community, and support research in advancing the development of better hardware and software tools at national, regional, and local levels, such as the equipment in MIT’s FabLabs.
- Municipalities could pursue initiatives like design/ production districts that allow entrepreneurs to create more jobs or that expand access to Marker spaces, mentorship, and educational opportunities through their schools, libraries, museums and community organizations.
- Foundations and philanthropists could provide matching grants to communities that are interested in embracing Making, in the spirit of Andrew Carnegie’s support for public libraries. In particular, the Administration has called for special efforts to ensure that girls and under-represented minorities are included in such STEM opportunities.”
We are proud to be a small part of the White House initiatives for stimulating startups in the sharing economy. Many of those initiatives, including Startup America, Educate to Innovate and Change the Equation deserve more attention and private sector support.
If you would like more information about the White House Maker Faire and learn how you can be a participant alongside companies like GE, Ford, Autodesk, GM, Nordstrom, Intel, Nokia, Home Depot, Lowe’s and Radio Shack, visit the Maker Faire blog post or request a Maker Faire Interest form.
Crowds are on the rise, backed by powerful technology.
The collaborative economy is a powerful movement. People are sharing goods, services, space, and money with each other. Also, they are crowd funding and making their own products outside of traditional factories. They are using powerful technologies, including social networks, mobile devices, the internet of things and mobile payment systems. In all cases, they’re getting what they need from each other, rather than from inefficient corporations. This peer-to-peer commerce economy is enabling the crowd to become like a company, disrupting traditional business models. It’s also going to double in adoption, says our recent report.
Companies are joining the movement, partnering with the crowd.
Innovative and bold brands have already joined in the movement, leading the charge to integrate the strategies of crowd funding, sharing and making into their own business models. Some early adopters, like REI, share the company revenues and equity with the crowd in their coop models. Other companies, like West Elm, Nordstrom and GE are allowing the crowd to design their products alongside them. Companies like Ford partner with Uber to give drivers discounts. Walgreens tapped TaskRabbit to deliver goods to homes, extending the brand promise.
[Over 80 leading brands have joined this peer-to-peer Collaborative Economy, tapping the crowd as a partner.]
Lists are helpful in tracking industries. They help us to organize, analyze and predict where markets are headed. As such, I’ve been keeping a list of brands in the collaborative economy for about a year (along with help from submissions from the crowd, naturally). About ten years ago, we used to keep similar lists in the social media space. We used to track companies that started blogs, twitter accounts and more in the nascent “user generated content” movement.
Fast forward ten years, the next movement is among us. As companies were disrupted by social media, they adapted. Companies disrupted by this new peer economy are also adapting. We’re at the start of another ten year run, and I’m 100% committed to helping corporations through this movement, as I launched Crowd Companies, an association for big brands only, to help them get involved, learn, and lead.
Graphic: A Growing List of Crowd Companies:
The timeline graphic you see below isn’t complete. There are many other submission that are coming in, and more that I’ve missed. To help keep it updated, you can leave a comment on this post, or send me an email at firstname.lastname@example.org. To see this same graphic as a frequency chart, you can see the growth as companies quickly move in.
Thank you, Vladimir Mirkovic and Julie G., for your help in production and research. Thanks to Lisa Gansky, Fred Neil, Alexandra Samuel, Terry Young, Angus Nelson, and Vivian Wang for your insights.
Want to learn more? Collaborative Economy Resources:
140 character summary: Brands joining the collaborative economy at a rapid pace as a P2P economy rises. http://tinyurl.com/kuw3wzl
The above frequency chart (up till April 2nd, 2014) shows the instances of corporations who’ve deployed in the Collaborative Economy, based on this growing list.
The Collaborative Economy Empowers Peer 2 Peer Commerce.
I’ve written a fair amount about corporations in the Collaborative Economy, and have even started an association for large companies, called Crowd Companies. , so tracking this space is not just a passion, but core to my work. In a future post, I’ll list out the specific instances in a timeline, so you can further see how companies are moving into this space.
- Although much is still experimental, there was an increase in brands embracing the sharing economy in 2013. Just as they did with social media, companies will join, influence, and eventually participate in this movement. In 2012 there were a mere eight instances of corporations in the space, including Patagonia, partnering with eBay for used good resale, West Elm reselling maker goods from the Etsy community at retailers, and UK retailer B&Q launching a community to encourage sharing of goods at the local neighborhood level. In 2013 we saw much more adoption, with 44 instances of corporations moving forward with experiments, partnerships, sponsorships and more.
- Forecast: 2014 promises increased growth as the movement prospers. This P2P movement is growing. The graph below shows the Google Insights trends of people searching for this market, with a strong uptick to the right. Don’t expect corporations or their agencies and consulting partners to stand idly by. They’ll use the same tools and strategies this coming year and beyond. 2013 showed a 550% growth rate in some instances. If that rate continues, we could expect a whopping 242 new instances of corporate movement into this space in 2014. If current patterns repeat, we should see a bolstering in this space in the last quarter of 2014.
Above: Google Insights, which tracks how people are searching for terms, indicates a rapid rise in people searching for the terms sharing economy and maker movement, the two key trends in the collaborative economy movement which will trigger brands to follow the action. See the live graph.
Summary: Companies will increase partnerships with the empowered crowd
The first phase of sharing was social media. People created media and shared it, bypassing corporate-created content. In the second phase, the Collaborative Economy, people are creating products and sharing them without having to buy from companies. Read the full report on their behavior change. Companies must adjust their business model to partner with the empowered crowd.
Thank you, Vlad and Julie G., for your help in production and research. Thanks to Lisa Gansky, Fred Neil, Alexandra Samuel, Terry Young, Angus Nelson, and Vivian Wang for your insights.