Data shows collaboration in the new economy is accelerating.
People are crowdfunding, making, sharing, collaborating, all kinds of their things in life. Some are getting food on-demand, rather than going to traditional grocery stores or restaurants. The world is speeding up, and people are transacting between each other, or rapid-delivery services. We expect this to continue to accelerate as the funding from VCs dwarfs many markets, adoption rates are doubling, and the media has endless coverage over this collaborative movement. To help make sense of this dizzying environment, we attempted to take a snapshot of this world in motion, to try to find out what a single day comprises of.
Infographic: A Day in the Life of the Collaborative Economy (Ver 1.2)
Data Methodology and Sources
Data was aggregated from online sources, first, then in many cases, I asked for clarification from startups contacts that I know. All data was from 2013-2014 sources. Only four of the eighteen sources are from 2013. Some companies declined to provide data, or it wasn’t listed, therefore we did not include. In many cases, data was annual, or monthly, and we divided to find out an average daily rate. In many cases, companies would not provide a daily rate, so we had to conduct this exercise on our own.
- Adoption Data: (far right column)
- Lyft: From email discussion with company
- Uber: GQ, Mar 2014
- BlaBlaCar: From email discussion with company
- The Mesh Directory, by industry leader Lisa Gansky lists out over 9,000 companies in this market.
- The Collaborative Economy Honeycomb which shows many of the startup logos
- See VC funding of this market, on a Google Sheet I manage.
- An older collection of stats and figures in this market.
- Full body of work, research, data, reports, and slides.
Contact: If you’ve recent data on your startup growth, please send to me directly at jeremiah at crowd companies.com. You can read the designer, Vlad at TransartDesigns.
- Version 1.1: The Indiegogo data was incorrect, and now reads “$285,714 a day” Thanks Chelsea Rustrom for pointing that out. (Sep 30, 2014)
- Version 1.2: Includes updated info from Lyft, that was announced just days ago. (Oct 1, 2014)
(Above: Read the full article in the SF Chronicle, and, please, read the comments. There’s no mercy for the taxi industry from former customers. Here are my recommendations to the taxi industry to lead this movement –not fight it)
The Collaborative Economy is a crowd commerce revolution.
People are empowered to get what they need from each other, using now common, mobile technologies in their pockets. Several quarters ago, people told me it was a fad; it wouldn’t last; peer-to-peer commerce can’t happen at scale. Like social media was disbelieved in 2005 (I vividly remember the attack of the blogs), we’re seeing disruptions, but these impact real revenues, not just communications.
Above Graphic: A TNC (Transportation Network Company) is the designation for Sidecar, Uber, and Lyft. From SF Municipal Transportation Agency, SF Examiner.
Real revenues are being lost by incumbents.
Yesterday, at newsstands across the San Francisco Bay area and online (my pic, above), it was reported that taxis are suffering a 65% loss in rides – two thirds of their revenue lost in less than 3 years. It’s not limited to San Francisco. DC taxis are down 22% and a once dominant taxi cab company says they have less than 18 months of life left. A recent study by Boston University shows that, for every 1% growth of Airbnb, hotels are impacted half a percent – and Airbnb is growing at an incredible rate. How fast? Uber’s revenues are doubling every six months, and Lending Club, where people lend to each other instead of going to banks, is having hockey-stick like growth, having brokered $5 billion worth of loans in five years.
The startups are heavily funded in every industry.
Investors are funneling incredible amounts of money into this market: $2.7 billion in just under the last ten months (see spreadsheet), with Google being a leading investor in the market. It’s not limited to cars and homes and dollars. The Collaborative Economy is impacting many industries, including food, business services, retail, business space, and more. You can see the Honeycomb Framework to see how goods, food, services, transportation, space, and money are each impacted. The next version of the honeycomb infographic will include health, utilities, education, and more.
Progressive corporations augment their business model to partner with the crowd.
It’s important that you prepare your company for these changes now. People are empowered to get what they need from each other. The crowd is becoming like a company. The good news is that companies can use these same technologies and strategies. Ford has provided special cars to Lyft drivers, Hyatt has partnered with Uber for instant bookings using an API, Whole Foods has partnered with Instacart for crowd-based, home deliveries, and Verizon has enabled sharing of many objects using their vast network. (Disclosure: The above companies are members of my company, Crowd Companies)
If you work for or with large companies, access the Body of Work in the Collaborative Economy and discover how other companies are crowd-proofing by joining this movement.
Investors are doling out money by the fistful, $241 million deployed in less than three months.
See the Google Sheet that has all this data, broken down by industry, amount, and date. You can read part 1: Meet the investors, and part 2: The investors are in love with this market.
Since my last analysis on July 3rd, 2014, there’s been continued funding into the Collaborative Economy market –where the crowd gets what they need from each other. Investors are infatuated in this market as it provides new supply, disrupts incumbents, using faster technology powered by mobile, social, and internet of things, the Phoenix Business Journal did a recent write-up of my keynote at a business conference, highlighting the market changes.
In just 2.5 months there’s been even more money flooding the market. SMB FundingCircle raised a massive $65m round, followed by big rounds to Rockettaxi to aid the disrupted incumbents, and Fiverr raised a $30m found, as they enable crowd-based tasks to be completed on a two sided marketplace. In these past two months, there’s been $241k invested into this growing market.
Recent Funding in the Collaborative Economy
Analysis: The Last 9 Mos of Funding
Here’s a breakdown of the 2014 Funding from Jan 1st-Sept 20th:
- Total Funding Events: 39
- Deals per month: 4.3
- Average Funding Per Month $301,052,222
- Average per Funding Round $69,473,590
- Median $10,000,000
- Average funding amount without Uber (outlier) $42,084,857
- Average funding amount without Uber and Airbnb (outliers) $27,282,973
- 2014 Sum: $2,709,470,000
Bubble? I’m often asked are we in a bubble? My answer is yes and no. First of all, unlike the first web boom I experienced in late 90s or social media phase, there’s clear revenues being generated from peer to peer commerce. Unfortunately, you can’t sustain this many competitors in each arena –particularly in the transportation space. I recently told CNBC that there’s only room for three playersin each of these markets: “In the end, the market can’t sustain this many car-sharing or ridesharing start-ups—there’s typically going to be room for three—the most convenient, the cheapest experience and a unique experience,”
Photo used within creative commons licensing, by 401k
Photo :”Conversation” by Steve Bridger, used with Creative Commons license.
Buzzwords, buzzwords, buzzwords! Nothing is more fun than using buzzwords – except one thing: Reading all the buzzwords on a single page. Impress your colleagues at the co-working spot, your tatted Lyft drivers, and your hot Tinder dates with your immense knowledge on the latest hipster technology terms.
New terms and phrases emerge as new movements are born. The purpose of this post is to help clarify, from one single location, some of the jargon you may hear out in the industry. I plan to update it, along with your help, with submissions in the comments, to serve as a reference for our collective work.
At the bottom of this post, you can access links to existing glossaries that cover more well-known terms like Collaborative Economy, Sharing Economy, Maker Movement, crypto-currencies, P2P Lending, crowdfunding and more. The purpose of this post is to focus on emerging terms that are not so commonly known.
A Glossary of Emerging Terms of the Collaborative Economy:
- Access over Ownership: A transaction style where individuals have access to goods, products and services via on-demand models instead of ownership. Common business models include rental, delivery, subscription, membership and others. I first learned of this from Lisa Gansky, author of the Mesh.
- Air Squatters: A situation where Airbnb renters legally rent a location for over 30 days and are deemed official tenants –the host is unable to remove the “guests.” From multiple news sources, including NBC.
- Charity Jacking: A copycat campaign where non-profits slightly alter a popular cause and make it their own in order to generate awareness and donations. Example: The Livestrong bracelets resulted in thousands of permutations for other similar non-profits. Causes are hijacking campaigns made popular by other causes. Watch as the ALS Ice Bucket Challenge morphs into a Jell-O Bucket or Mud Bucket challenge for some other worthy cause. Charity Jacking coined by Beth Kanter.
- Fab Lab / Hacker Spaces / Maker Spaces: Physical locations where Makers design, create, prototype and develop new products and technologies in a collaborative setting. Notable examples include Noisebridge, NYC Resistor, A2 Mech Shop, Pumping Station: One, Artisan’s Asylum, and TechShop. Read more on Wikipedia.
- Internet of Things / Internet of Everything / Mesh: Refers to the interconnection of uniquely identifiable, embedded, computing-like devices within the existing Internet infrastructure. Mining this results in individuals being able to use technology to find idle resources (cars, homes, services) in local areas and quickly accessing, on-demand. Source: Wikipedia. Also see Mesh, by Lisa Gansky.
- On-Demand Economy: Championed by leading VC firm Sherpa Ventures, the On-Demand Economy (ODE) includes many business models that use technology to deliver goods, services, food, transportation and more to individuals, using mobile-based apps and the Internet of Things. Read the full investment thesis by Sherpa.
- Scampaign: A scenario in which a crowd-sourced campaign results in the project founders taking the money, but never delivering the product or perks. A recent scampaign involved a founder spotted driving a Ferrari, after raising $1.5 million and walking away from the project. Alternatively defined as “A concerted effort to achieve a goal which relies upon deceit to be successful.”
- Slogging / Share-Jacking: A scenario where sales teams from ride-sharing companies legally take paid rides from drivers – then proselytizes the drivers to join the other ride sharing company. Recently, an Uber playbook was published by The Verge, outlining the controversial and questionably ethical plans.
- Share Washing: A campaign led by either a large organization or startup that claims to be sharing, but is not living according to the values expected by the movement. Critics cite that commonly used monikers of “Sharing is the renting” and “working without benefits” are examples of large companies hoisting the sharing banner while taking advantage of smaller players. Read: Share washing is the new Green washing.
- Two-Sided Marketplace: A business model often powered by technology that enables providers and partakers to find goods, services and resources from each other. Early examples included Craigslist and eBay, but now these models have extended to Airbnb for home sharing, Lending Club for money sharing, and Sidecar for ride sharing.
- Leave a comment! Can you suggest a new term? Do you want me to amend an existing term? I’m open to respectful feedback. Leave a comment. I’ll review, edit, add and credit you.
This post is not intended to debate the X economy vs. Y economy lexicon as, in the end, I believe it will just be called The Economy. See similar efforts: GitHub and CoinDesk have a Bitcoin glossary, a glossary of Maker Movement terms. Denise Cheng from MIT has also created a “related-to-sharing” glossary, and Rachel Botsman clarifies the many terms in this broader movement.
Update: The good folks at Listly have added these terms to their site.
The Collaborative Economy continues to mainstream –with at least two of the key players launching APIs; this spells significant ecosystem change that will impact commerce, this post will attempt to answer what it means to the greater ecosystem.
[This is as significant as Facebook launching their API and Platform.
This will spur thousands of apps, APIs and new businesses models]
News: Uber has launched an API, with key launch partners, including traditional companies like Hyatt (Disclosure: Hyatt is a Crowd Companies member). Hailo also announced an API a few hours after
- Emerging startups will gravitate toward Uber: This also means that Collaborative Economy Startups that circle Uber’s orbit (there are over 9,000) are more likely to adopt Uber’s API as a way to quickly launch their service on the Uber Network. This fosters more gravitas regarding Uber, creating more pressure on Airbnb and Lyft to quickly follow suit.
- Established startups, like Airbnb and Lyft, pressured to launch own API: Expect Lyft and, potentially, Airbnb to signal their API platforms, in this winner-take-all scenario. Several years ago, Twitter, Facebook, Google, Open ID, Plaxo, BestBuy and a few other varieties launched their own APIs, but in the end, Facebook won the war and, therefore, our interest. Airbnb has an entire ecosystem of startups built around them, but must launch an API to keep them connected.
- Large Companies get in on the game, revealing mainstream integration. Several large corporations were part of the initial Uber API launch, including TripAdvisor, Hyatt, Starbucks and United Airlines, which signals that crowd-based, on-demand models can enhance local commerce. Uber’s new partners (Hyatt and United) mean that you get seamless travel without waiting in any taxi queues. This deal enhances their overall customer experience by extending to end-to-end travel and logistics, making it easier to do business with these big brands.
- Agency and consulting teams should evaluate on-demand business models for clients. Interactive agencies, digital agencies and consulting firms involved in online commerce should sign up for the Uber and Hailo API consideration form to evaluate tying their own clients into these new delivery models.
- Social Media Management Systems will seek to integrate. Over the last several years, I’ve closely covered the enterprise social media software players and witnessed the emergence of software companies that connect FB, Twitter, LinkedIn and other social networks to enterprise systems, CRM, and corporate websites. It’s – happening – again.
- Incumbent transportation and logistics companies displaced, again. While it’s obvious to most that this continues to threaten existing taxi companies, travel booking and courier systems, as Uber partners with other businesses that require logistics and transportation, the bigger threat is to traditional commerce.
- The biggest threat is to companies like Amazon. In the end, this is a significant threat to Amazon, as Uber can quickly partner with local retailers for push-button delivery, including harnessing the power of their largest investors to tie to Waze, Wallet, Google Delivery and more. Instead of three-day delivery, Uber + local retailers = instant delivery at the local level.
[Any startup, retailer, hotelier or restaurant can now integrate mobile savvy, affluent, Uber customers on their apps and websites.]
Potential Comparison: Facebook to Uber API
This comparison isn’t apples to oranges, but helps to bridge how we think of dominant Facebook connect with potential Uber API features. To be really clear, these Uber API features don’t yet exist, but are possibilities that could be launched in the future. This matrix was added about 24 hours after this initial post.
|Social Networking API
||Collaborative Economy API (again, some of these don’t exist today, but could in the future)
|FB Connect: Register new users in a few clicks. Access to over a billion users.
||Uber Connect: Instantly get Uber’s many customers on your physical doorstep.
|Graph Search: Find things my friends like.
||Uber Ride Search: Find locations my friends like to frequent.
|Find Friends: Isolate content that only my Facebook friends like.
||Vett Uber Customers: Isolate only five-star riders (the best customers).
|Facebook Commerce: Buy credits, gifts and more.
||Uber Commerce: Any website can now use Uber’s credit card system.
|NewsFeed: Share on Facebook my experiences from other website interactions.
||Social network connections: Share my Uber experience on on any social network.
The big takeaways: Quickly get customers to and from your doorstep, period. Uber and potentially Hailo’s API means that local commerce can now benefit from instant ecommerce –and extend end to end customer experience from transportation, hospitality, commerce and more transportation for customers. Any company that wants more customers in their physical location, or wants a delivery service, should evaluate this API for business model extension.
Update: Additional discussion is happening on my newsfeed, with the business community.
The Collaborative Economy is a complex ecosystem composed of many unique players.
These many players are jostling about, partnering, competing, and disrupting each other. It’s key to understand the many players in this movement before blindly stumbling into this market. This post took weeks to prepare, and it’s my attempt to catalogue a very complex market that has broad, global economic impacts being felt by many people. By no means is this market breakdown complete, so I seek your feedback in the comments.
This space is diverse.
There’s a wide range of political groups: from grandstanding politicians, to left-wing sharing communal hippies, to conservative incumbents resisting the movement, to libertarians seeking as little government regulation as possible as possible. There’s a wide range of social ideologies: There are environmentalists, to people’s rights activists, to technologists fascinated by the latest trends, to local neighborhood leaders, to federal regulators and government leaders. There’s also a wide range of economic classes: from billionaire investors, to bootstrapped entrepreneurs in their 20s, to the working class, to retirees forced to host strangers at their home to avoid foreclosure.
It looks complex to the outsider.
It’s impossible to analyze this market and expect to put each person into one single box. Life is complex, and nearly every person can fit into multiple categories. The sections below are categorized into four major groups: 1) The People, 2) The Technologists, 3) The Established and 4) The Influencers. Each specific group contains a breakdown of its constituents. Thanks to Robin Chase, who provided additional insight into the nonprofits in the space.
This guide will help distill a complex movement.
Ecosystem Guide: The 12 Players of the Collaborative Economy
||What they want
||What no one tells you
||Makers, Airbnb hosts, Uber drivers, Lyft friends, TaskRabbits and others who provide services, space or resources to others. Get more detail on Providers, Platforms, and Partakers.
||They seek to make a living, to have a lifestyle where they control their own destiny and have the rights and benefits that should accompany doing so.
||They’re potentially at risk of not being insured, protected or providing benefits similar jobs have. Expect them to move closer to organizations, like the Freelancers Union, which offer health and wellness services, retirement options and other resources.
||People who buy Etsy goods, Airbnb guests, Uber riders, Lyft passengers and others who purchase the services from Providers.
||Our research found that these folks seek ease of use and pricing above all, followed by unique experiences and achieving altruism by helping others or participating in a more sustainable lifestyle.
||Our research found that the rate of adoption will double this year alone, with more folks using these services sooner than previously thought.
||Taxi drivers, hotel workers, traditional manufacturers, and others who are losing their jobs as providers assume their positions.
||Want their jobs, rights, and lives back. In some cases they’ve taken to protests, violence or joining unions.
||Many taxi drivers have become Uber or Lyft drivers because of the opportunity to achieve a more flexible schedule, although their rights, wages and benefits are still up for discussion.
|Non Profits, NGOs
||The Freelancers Union, Shareable, Sustainable Economies Law Center, OuiShare, People who Share, and Peers.
||Focused on the empowerment of people or advancing sustainability, these offer education, resources, and more to this growing market.
||These groups are pro-movement, but many are partnered with the startups (Platforms) and large corporations to yield benefits, as well as work closely with regulators to drive action and change.
||What they want
||What no one tells you
||The startups. Airbnb, Lyft, Etsy, TaskRabbit, oDesk, Uber, Lending Club and more. There are over 9000 startups, many regionalized in specific countries or cities.
||They want to provide a scalable, two-sided marketplace of buyers and sellers offering value added services. They must protect their interests, those of the partakers and providers. Many are heavily VC funded and have goals for adoption and valuation.
||These startups are less altruistic than one may think. Advocates have criticized them for becoming the new lords of feudalism. There are over 9,000 startups, as indexed by the Mesh Directory, hosted by industry leader, Lisa Gansky.
||Angels who’re getting the platform going, traditional VCs, often from Sand Hill, and Corporate Venturing, like Google Ventures, who’s invested in Uber. In the last 8 months alone, there’s been over $2.5b of funding, with over $2B the years before.
||Maximum return on their investments. VCs are known to often want to achieve 5-10X return after 5-10 years of investment.
||The requirement for return on equity puts pressure on Platforms to monetize the marketplaces they manage, which, critics suggest, will minimize the abilities of both providers and partakers.
||Sharing advocates include both lobbyists hired by the Platforms and non-profits like Peers.
||To achieve market acceptance of the benefits of the maker movement, sharing and the impact it has on society, people and the global economy. They seek to educate, foster grassroots and lobbying support, and achieve change from the established.
||There’s been scrutiny about where funding actually comes from in this category. It’s quite clear that Uber has hired traditional DC lobbyists to advocate for their issues to regulators at the federal level.
||What they want
||What no one tells you
||Taxis, hotels, banks, retail, consumer goods and more.
||To protect and advance their business models.
||There have been over 90 instances of traditional corporations who’ve deployed in the collaborative economy (see timeline graphic). At the same time, a lobbying group for hoteliers has formed to battle Airbnb specifically.
||Hoteliers and taxi commissions have formed associations or hired lobbyists.
||To protect the interests and rights of the industries, owners or workers they represent and to ensure a level playing field so that startups do not gain an unfair advantage by avoiding regulations and taxes paid by incumbents.
||Multiple journalists have told me that advocates and lobbyists against the movement provide them with stories, data, and research, both for and against this movement.
||Municipal, state and federal governments and departments, like the California Public Utilities Commission or the European Union.
||To find the balance between supporting innovation and new business models, while, at the same time, protecting the vested interests of industries, current systems, safety and security and to yield taxable monies.
||Governments are not all reacting the alike. Some cities adopt quickly. To wit, Airbnb now pays 14% hotel tax to the city of SF. Some cities ban it all together, as Vegas has banned all ride sharing. Feds are also looking at the issues of crowd-based funding and of crowd-created currencies like Bitcoin.
||What they want
||What no one tells you
|Press and Media
||The New York Times, the Wall Street Journal, Fast Company, Salon, TechCrunch, INC, Wired and SFGate, have deployed journalists and columns dedicated to this topic.
||To be the leading coverage of this new market as it breaks, providing insight to the impacts and outcomes.
||This industry recognizes and distinguishes disruption from collaboration. It was disrupted from peer-to-peer social media over the past 15 years. Now it reports by having adapted to P2P.
||Lisa Gansky, Neal Gorenflo, Mark Hatch, Rachel Botsman, Chris Anderson, Dale Dougherty, Robin Chase, Arun Sundararajan, Jeremy Rifkin, and many, many others.
||To lead the discussion in the market about the benefits and risks of these global and economic changes. Their business models tend to inform and influence by means of writing, speaking, consulting, forming associations, and advancing their investment portfolios.
||This is just the start. Expect a wave of thousands of Collaborative experts to emerge, just as we saw the rise of ninjas, gurus, and samurai in the social media space.
Closing Thoughts and a Request for Feedback
In the future, we should expect new players to emerge as unions form for worker rights or new co-ops that enable a new type of startup that straddles both technology and people. Use this guide to help maneuver this ecosystem, rather than blindly charging in. Conducting this market breakdown isn’t easy and the results are not necessarily perfect. I look forward to your feedback in the below comments.
Creative Commons: Image by Divya, Image by Chicago Cell, Image by LukeW, Image by Mkeefe
Edits were made 12 hours later, added People who Share and tweaked language in other sections.