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How the collaborative economy will change the way you do business

J. D. Sartain | April 25, 2014
The Internet puts the goods, services and expertise you need at your fingertips. Some call it a 'collaborative economy' focused less on transactions and more on trades. Others see a throwback to the early days of economic exchange. Either way, it's quickly changing the way we do business.

In the maker movement, people create goods using 3-D printers. Expand this idea to the collaborative economy and individuals share goods instead of buying and owning them from what they see as inefficient institutions.

Such movements will be a "powerful disruption" to businesses, says Jeremiah Owyang, chief catalyst at Crowd Companies and an advisor (and former analyst) at Altimeter Group. "If you thought social media was disruptive, you haven't seen anything yet. Social media only disrupted communications, customer care and employee relations. This next movement disrupts business models to its core."

Collaborative, 'Sharing' Economy Has 5 Key Elements

Owyang identifies five keys areas of the collaborative economy:

1. Goods. Women in particular share clothes and jewelry in order to access an unlimited closet without buying so many "things." Startups such as 99 Dresses, Poshmark and Threadflip serve as buy/sell/trade sites that provide name-brand products that customers can continually recycle.

2. Services. A variety of sites, such as eLance, Freelancer, oDesk and TaskRabbit, let people share their time and/or expertise.

3. Transportation. When people share rides through companies such as Uber and Lyft, they may not need to buy a car at all.

4. Space. Websites such as DesksNearMe, Liquid Space, ShareDesk and PivotDesk provide an alternative to signing a long-term lease by letting individuals rent desks, offices or meeting rooms in somebody else's space. Homeowners are getting in on the act, too, thanks to Airbnb, which Owyang says now has more listings than IHG, the largest hotel chain in the world.

5. Money. Crowdfunding and peer-to-peer lending sites such as Kickstarter and LendingClub are taking off. LendingClub, for example, lets individuals loan money and earn interest or borrow from individuals or investors at 5 percent APR, Owyang says — all while sticking it to the wealthiest "1 percent" that owns the banks.

Collaborative Economy New Term for Old Concept, Some Say

Not everyone sees this emerging trend as a collaborative economy, though. Brian Solis, principal analyst at Altimeter Group, views it as a sharing or cooperative economy — "one where people commercialize their possessions or time to those who choose to use, not buy, in exchange for something of stated value."

In that sense, Solis says, it's not necessarily as collaborative as one might think: "It's actually facilitated and optimized through smart, mobile-first software platforms that connect people, goods and services, shared experiences and commerce."

Evan Quinn, research director at Enterprise Management Associates, agrees, saying the notion is nothing new: "Perhaps some 'thought leaders' have forgotten that barter was humanity's first means of economic exchange, and there are still plenty of physical markets all over the world where goods are exchanged for goods."

 

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