What Sharing Economy Means For My Business?

The greater access to digital technology is creating new business models that are shaking up the traditional businesses. Not a single day goes by without hearing about a new start-up that is disrupting established businesses or threatening a whole industry.

Sharing economy is one of these innovative ways of doing business. According to Investopedia.com, sharing economy is “an economic model in which individuals are able to borrow or rent assets owned by someone else. The sharing economy model is most likely to be used when the price of a particular asset is high and the asset is not fully utilised all the time.”

Although this form of economy has always existed in some forms, it’s the democratisation of digital technology that has enabled it to boom with easy access to online platforms.

A PwC report revealed that the sharing economy sectors could generate £9 billion of UK revenues by 2025 while revenues across the globe could rise from $15 billion to $335 billion in the same time frame.

So what are the opportunities and how can anyone get involved?

Almost everything can be shared including assets, resources, time and skills and many sectors of economy are concerned by this revolution.

Various types of businesses from B2B, B2C to C2C, and individuals from all generations, not just the millennial, can take advantage of this economy. People often share to reduce cost but there is a growing demand for luxury items too.

In his presentation at the ‘Fast Forward Your Business’ last weekend, Roger Hamilton, Entrepreneur and Futurist, outlined the 10 key trends that are shaping the new economy and how the sharing economy is transforming businesses.

Let’s explore the 5 S of the sharing economy and how savvy entrepreneurs and change makers can take advantage of them:

#1. Shared Knowledge

It’s impossible to know everything today with the fast pace of change and the amount of information available. To get access to the latest information, sharing knowledge via a platform is becoming common.

Many online platforms facilitate this. Examples in the technology world are abundant with places like GitHub, the largest open source community where people build software, share their projects with the world, get feedback, and contribute to millions of repositories.

Big companies like Google, Youtube, Twitter, and Facebook share their APIs, which specify how software components should interact with each other, with developers who used them to build all kind of apps and products. Using the Amazon API, a third party Web site can post direct links to Amazon products with updated prices and an option to “buy now.”

YouTube is one of the popular places people go to learn anything today. You can share your knowledge and access other’s people knowledge for free. Another option is Lynda.com to access a more professional offering in exchange of paid subscription.

#2. Shared Media

There is a shift in the way individuals consume music. People feel less the need to own a track of music hence the arrival of the likes of Spotify in the marketplace.

By seeing the public feed, music lovers are able to see what their friends are listening to—which just feels like a more authentic way to “sell” music.

Smule Sing, the app that connects the world through music let people sing with other people their favourite karaoke songs and create their own music by collaborating with other singers.

The social participation and interaction of consumers with brands on social media sites like Facebook, Twitter and YouTube results in content that is shared in a way that wasn’t possible before.

#3. Shared Talents

For people who like variety, independence and flexibility in their working life working nine-to-five in the same place every day just doesn’t cut it. They’d rather freelance or have a portfolio career and work part time for different organisations, which they find far more lucrative and fulfilling.

This trend has been growing fuelled by desire and also necessity post credit crunch.

Employers on the other hand can share talents based on their real needs and have a greater flexibility with their overheads. It’s a win-win. They get the best talents, greater retention (if they treated them right!) and greater productivity, as they won’t have underemployed people who risk to become demotivated if they aren’t doing much (talented people hate to be unchallenged!)

Platforms that create a marketplace to trade talent such as PeopleperHour, Elance, Fiverr or Guru.com are booming with new entrants offering specialised skills such as design, digital marketing, etc.

#4. Shared Assets

What do you currently own that you use less than 50% of the time? Do you have your own manufacturing? Equipment? Facilities? Logistics?

You can find specialised partners to outsource, lease or share the assets you need to achieve your goals better and faster.

Want a car? No problem, there is Uber, Liftshare, BlaBlaCar to get you were you want to go. You can even put your underutilised car on the road to make extra money.

Need a place to stay? Airbnb, Spareroom, Houseshare offer the choice from a simple room to a mansion in a paradise island. And you can share yours too.

Need a new designer bag to get to a top-class function? Bagborroworsteal got you cover.

Looking for an office at an affordable price with a minimum of hassle? Sharedesk, Office Genie and a multitude of dedicated co-sharing spaces are sprouting. In London alone there is a multitude of co-working spaces for start-ups like TechHub, Impact hub, Central Working, The Clubhouse, etc.

#5. Shared Experiences

Experts claim that sharing experience with someone make them more intense both in good and bad ways.

Events for example are a powerful way to facilitate these sharing experiences and all kind of businesses facilitate this, whether it’s business events, sporting events, holidays, etc.

Social dinning website BonAppetour enables people to ‘dine at home’ around the world.

Prynt, which turns your smartphone into a mobile printer, saw its Kickstarter crowdfunding campaign exploded due to the appealing promise to provide a memory of privilege moments shared with friends.

Right now people across the UK are opening their doors to fans for the Rugby World Cup to be held over the next few weeks. Mareli Pelzer, 39, originally from South Africa, is opening her home with husband Adriaan to fellow countrymen at her two-bedroom home in London opposite the Olympic Stadium.

The reason? “It’s as much about having rugby fans come in so we can enjoy the experience and be in the thick of it together,” she said, in the Evening Standard.

With all opportunities also come challenges and the sharing economy is no exception.

Some of these new businesses like Uber are so disruptive that they are encountering a huge opposition from established cab drivers and governments.

The challenges of this economy are around trust, identity checks, safety, risks of not getting the property back in a correct state, insurance, regulations, etc. But these challenges can in turn represent opportunities for the most entrepreneurial minded to provide a solution for them.

To avoid being ‘Uberised’ and position your company to take advantage of these opportunities you need to stay open, monitor the marketplace, focus on customer’s experience, and be prepared!

As a business owner or business executive you need to think of ways to create a platform or leverage one or multiple aspects of the new economy to stay in the game.