The Next Big Thing You Missed: The Sharing Economy Goes Corporate
- 9:30 AM
Jeremiah Owyang has a co-working space, not an office. He has an executive assistant that he assigns tasks online, but has never met in person. He outsourced decisions involving his new company’s logo, its web design, and even its name to a world of strangers across the internet, or what he sometimes calls “the people formerly known as consumers.”
“We have to rethink the crowd as part of the company,” Owyang says. But he doesn’t believe this advice applies only to his own business. He believes it applies to all businesses. And his new venture, Crowd Companies, aims to help them realize the possibilities.
Over the past few years, Owyang has achieved a quintessentially early 21st-century kind of internet fame. As one of Silicon Valley’s best known social media gurus, he has expended countless posts, tweets, and talks urging companies to get wise to the new kinds of conversations made possible by Facebook, Twitter, et al.
But now, he has a new cause. Social media may have changed the conversation. But he thinks the emerging “sharing economy” is changing the entire business model. The “I sell you stuff, you buy it” premise of the consumer economy is being undermined, he says, and big companies that want to survive need to learn to share. Not because it’s the nice thing to do but because, like the internet itself, it’s becoming an unavoidable part of doing business.
“Just as we saw social networks emerge, now we’re going to see sharing networks emerge,” Owyang says. “The physical world is becoming socialized and democratized.”
Of all the big ideas to emerge out of Silicon Valley in the past decade, none seem to resonate with personal computing’s counterculture roots as much as the so-called sharing economy. In short: We all have stuff that often goes unused: our cars, our homes, our talent. So instead of buying more, let’s share. And let’s use our connected devices to make that sharing easier than ever. What better way to undermine the excesses of consumer capitalism?
As it turns out, however, sharing has also shown itself to have striking profit potential. Airbnb and Uber, the two companies most often tagged with the sharing economy label, are reportedly worth billions. And countless other startups are figuring out ways to take a cut when we the people use their software platforms to share. The subversion under way is much less “hippies versus the Man” and much more “Netflix versus Blockbuster.”
If you’re the CEO of a Fortune 100 company, such news should be making your shoulders sag. You’ve seen this movie at least twice before — first Google, Amazon, and the web, then Facebook, Twitter, and social media. You don’t want to sit through it again.
Crowd Companies is designed to make sure they don’t have to. He says he has signed up such corporate giants as Walmart, Home Depot, General Electric, Whole Foods, and Ford to send delegations to his “council.” The goal is to connect them with exemplary practitioners in what he describes the three main subdivisions of sharing: marketplaces, makers, and “co-innovation.” From sharing-themed startups, big brands get new ideas. If the connections are fruitful, the smaller companies get to see their ideas spread on a multinational scale under the logo of brands known by billions.
Owyang cites several examples of sharing-themed corporate initiatives already in play: BMW offering subscription-based car-sharing. GE opening up some of its patented technology to users of Quirky, a well-funded platform for crowdsourced inventions. Nordstrom partnering with TOMS to solicit shoe designs from shoppers themselves.
One of the most radical examples already under way is a collaboration between eBay and Patagonia to promote a marketplace for the outdoor clothing maker’s used jackets, fleeces, and other gear. In other words, Patagonia is actively encouraging one of the sharing economy’s primary values: access over ownership.
Such an approach might seem like business suicide. But Owyang collaborator Lisa Gansky says it’s an example of how the traditional ways of measuring value in the consumer economy are becoming stale. The U.S. measures GDP in terms of production and consumption, says Gansky, author of The Mesh: Why the Future of Business Is Sharing. By those metrics, Patagonia’s program isn’t contributing to economic growth. But what if the value Patagonia was creating was measured in “adventures per jacket”?
“We’re sort of playing soccer, but we’re out on the field with lacrosse sticks and the wrong gear,” Gansky says. “We keep score in the wrong way.”
Nevertheless, even by the old ways of measuring, the sharing economy isn’t doing too badly. In a November report, Piper Jaffray analyst Michael Olson compares the rise of Airbnb, Uber, and similar sharing startups to the industry-transforming effects of Amazon and eBay that began during the first dotcom bubble. And he sees their prospects for growth along a similar curve.
“Just like any other significant transition in an industry, there’s going to be those that embrace the change and those that push it away,” Olson says. “The smart will embrace the trend and find ways for it to positively impact their business.”
The language of corporate competition doesn’t always sit that comfortably with the rhetoric of sharing, which largely originated among grassroots internet communities and non-profits. Like so much else in the history of the web, which began as a more decentralized, bottom-up approach to publishing and communication, the corporate co-opting of sharing is already well under way.
That could mean the exact kind of centralized control the sharing economy’s democratizing effects were supposed to undermine. Or it could mean that sharing goes from a niche market of tech-savvy early adopters to a mainstream reimagining of consumer culture as commonplace in Sarasota as San Francisco. Or, as is the case with just about everything else online, it could mean a little of both.