The sharing economy is without doubt one of the most interesting concepts right now, and I am therefore always curious to understand the concept, and how I can convert it to business opportunities. You might feel the same way?
The sharing economy is driven by conditions like savings – where can you get things cheaper, sharing of available resources – which otherwise would gather dust, and for the altruistic it is both green and social. It is easy and user-friendly.
One of the principles of the internet is; ”if you don’t pay for the product, you are the product”. When Google free of charge make all their information available on the web – e.g. pictures of all roads in the world or the map service Google Maps, and now they are scanning all books in the world – the motivation is purely commercial.
In the sharing economy you earn money on the traffic and on the gathering of data. The same applies to Facebook where we all can share on a free platform. Behind this is a machine that gathers data about us which is sold for advertising, profiling, and many other purposes.
So no matter if you drive a private taxi, share your home, give a helping hand to your neighbor or sell your furniture on an internet portal, you are part of the sharing economy. It is very important to underline that the sharing economy is not a non-commercial peer-to-peer exchange between private persons. In many cases it is actually the contrary! The cases, where the sharing economy becomes successful is when the good sharing-idea is discovered by commercial companies with the strength to massively spread it out.
Another circumstance that strengthens the sharing economy is the fact that customers often participate in marketing. Today, Tripadvisor is the hotels’ most important marketing channel consisting of reviews written by the users. Furthermore, the tourist industry is using free hot spots in order to get the tourists to upload pictures from their vacation on social media.
And the same way as marketing can be outsourced and involve users, so can customer service. In the sharing economy, where the customers feel like “members”, they are more ready to help each other. This makes it much cheaper for the company, instead of the company establishing a large customer service function. If you have tried to review something for Tripadvisor, you have probably received mails with questions from other users about the place you reviewed. And you have most likely answered them, and thereby contributed to the community, and in reality provided free customer service for a hotel or a restaurant.
Innovation is also an area where the sharing economy can contribute. R&D is typically happening behind closed doors. However, instead of keeping innovation in-house, open innovation processes can be more effective. This is a model that many traditional companies should consider.
Only few relate management and HR with the sharing economy, however sharing a so-called ”professional service” or ”free-agents” – like Amino Freelancer or Nextt.dk - are actually very common.
Financing is also a way of attracting customers. Crowd funding or Crowd lending are just a couple of examples. Here the customers/investors are offered a product at a certain price, however the product will not be developed until there is enough money to start the production.
The greatest barrier for the established business world lies in the mindset behind the sharing economy. A mindset of opening up and making available for others. In short; to share. The simple thought that others can benefit from our resources, is further from the mind of most companies, when this is not just about their own product.
My appeal is therefore for companies to open up and view the limits and resources of the business differently than previous. Opening up the company’s ripple effect brings more growth opportunities, more business and not least better earnings. But is does require a significant different mindset.
Read the column in Danish here
Thomas Honoré is Chief Executive officer and President of Columbus.