Many are excited about the new collaborative economy, where people use common technologies to get what they need from each other. This has created disruptions for some industries, but overall, holds much business opportunity for progressive companies.
Progressive companies can glean greater loyalty through crowdfunding, turn to the crowd for new co-innovation and launch their own sharing programmes to expand how they serve their customers new desires. Companies who ignore this trend are likely to suffer from disruption, but those that lean in can benefit from using the crowd to their advantage.
In the next section, I’ll share examples of what the crowd is doing, and how large companies are responding to integrate the crowd into their strategy.
Crowdfunding is at an all-time high, there’s been $16 Billion of investments made by the crowd, reports The Economist. Despite the growth, there’s been concerns that in the case of the crowdfunded Occulus Rift being acquired by Facebook, that the investors are making donations for perks, and not actually gaining equity.
To solve some of these woes, large companies are applying crowdfunding into their strategy, DIY brand U-Haul has launched a crowdfunding platform called U-Haul Investors Club, enabling the crowd to fund new trucks, and in return these investors would receive dividends from the performance of the specific vehicle.
The crowd is creating their own goods in the maker movement, which appears to be a disruption for large companies who create physical goods. However, savvy companies like Hasbro are enabling makers who use 3D printing services to alter and 3D print Hasbro approved toys, fostering deeper engagement, and even generating new revenues as each 3D Print of a toy provides Hasbro with new revenues, see the Hasbro and Shapeways partnership called SuperFanArt.
Ride sharing and rides as a service continue to dominate the media landscape as Uber, Lyft, Sidecar, and BlaBlaCar continue to grow in adoption, funding, and market attention. Executives at some of these start-ups are aiming to reach a point where car ownership ceases to exist. Innovation groups at BMW have launched a new program called BMW Drive Now, which offers a membership programme for customers to borrow Electric 1-Series vehicles at lots in Urban cities. This innovative program enables BMW to offer a single car to more customers, increasing utilization, reducing inefficiency and generating recurring revenues.
In each of the above examples, the crowd shows growth, and large companies are tapping this trend to harness this strategy for their own benefit. What can we learn from U-Haul, Hasbro and BMW? They enabled the crowd to help them with funding, which in turn increased loyalty, let the crowd co-create products like Hasbro, and let customers rent your products instead of own them, like BMW. In each of these cases, companies are altering their business model, to tap the crowd movement.
This post was originally posted on the Virgin blog, read it here.
I partnered with VentureBeat’s market intelligence arm (VB Profiles) to further develop data on the funding, valuation, and employment impacts to the growing Collaborative Economy, this post originally was posted on VentureBeat’s website written by John Koetsier of VB Insight, I’ve republished their content, to share the key findings and you can find a summary of the research here.
Sharing is big business. Big big business.
There are now 17 billion-dollar companies with 60,000 employees and $15 billion in funding in the sharing or collaborative economy, according to Jeremiah Owyang and VB Profiles, a market intelligence firm partly owned by VB. That includes the venerable eBay, founded in the dim mists of technological antiquity, and relative newcomers Etsy, Chegg, WeWork, Airbnb, and — of course — Uber.
Uber uber alles, right?
While most of the startups are relatively recent — many became billion-dollar companies in less than four years — they have their roots in tough times, Owyang says.
“Many of these startups birthed from the trough of the 2008 recession,” he told me via email. “The startups received unreported friends and family money, then got market traction with adoption, then were able to seek out traditional investors, resulting in the investment boom a few years later.”
Owyang classifies collaborative economy companies in a honeycomb rubric with 12 core verticals or categories, including transportation (where Uber and Lyft belong), space (where Airbnb sits), and goods (where he’s placed Etsy and eBay). Interestingly, the largest number of billion-dollar companies are in those three spaces, plus a fourth: money, which features LendingClub, FundingCircle, Prosper, and TransferWise.
Other spaces, such as utilities, municipal, health, food, and corporate, have yet to see any kind of billion-dollar players.
Interestingly, eight of the 17 are based in California, while 12 of the 17 are U.S.-based. That preponderance may not last, Owyang says.
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“While these startups are often based in the SF area, they often serve global national markets,” he says. “Ola is an India-based ride sharing company that is well-funded, and existing Chinese tech companies are building their own versions which means that publicly funded data is unlikely to be surfaced. France’s BlaBlaCar recently received $100 million of funding which they used to purchase a competitor, earning them the title of largest ride sharing company in Europe.”
Perhaps the most unusual thing about the space?
The collaborative or sharing economy has received $15 billion in funding — more than the entire social networking space that has spawned giants like Facebook, Twitter, Snapchat, and more. If that’s any indicator, the collaborative economy is still in its infancy, and many more billion-dollar companies (and unicorns) are coming soon.
One thing that these often counter-cultural startups won’t do is totally upend our capitalistic one-percenter economy.
“It’s worth noting that the early hope that this sharing market would foster altruism and a reduction of income inequality can now be refuted,” Owyang says. “The one percent clearly own the sharing startups, which means this is continued capitalism — not idealistic socialism.”
The 10 “unicorns” among the 17 billion-dollar sharing economy companies? Owyang defines those as the companies that are still private.
- Prosper: $1.7B
- Ola: $1B
- Uber: $40B
- Instacart: $2B
- Lyft: $2.5B
- WeWork: $5B
- TransferWise: $1B
- Airbnb: $10B
- FundingCircle: $1B
- Kuaidi Dache: $8.8B
The full Collaborative Economy ebook is available at VBprofiles.