The collaborative economy promises to disrupt the conventional marketplace
A great quote from a recent article on Harvard Business Review called “Established Companies, Get Ready for the Collaborative Economy”. The question is are you ready for the disruption?
The HBR article offers some insight into what they believe are the core drivers for the collaborative economy. Below are a summary of the four key drivers together with my views on how the property industry can respond.
“1. Less buying, more sharing.
Big brands need to stop measuring success in terms of units sold, and think in terms of units used. The collaborative economy is shifting us from a consumerist economy to one in which people buy less because they’re sharing more. Companies that have traditionally relied on selling goods need to think about offering those goods on an access model, too.
For example, as Daimler AG has done by providing by-the-minute car sharing through Car2Go. And those that offer services need to think about further offering their customers access to products well outside their traditional spheres, as with Westin’s partnership with New Balance to offer fitness gear rental for their guests.”
For property this could be as simple as a building owner providing shared IT resource or back of house service for tenants to reduce their purchasing requirements.
“2. Less consuming, more producing.
The emergence of the collaborative economy is closely tied to the growth of the maker movement, in which individuals can become producers and sellers thanks to technologies that support small-scale production (like 3D printing) as well as those that facilitate peer-to-peer distribution (like online marketplaces).
To succeed in the collaborative economy, companies will need to integrate crowd-produced goods into their supply chain, as West Elm has done with Etsy.”
In construction this could be larger contractors working with individual producers or sellers. We could see the return of low cost bespoke items like door handles or light fittings.
3. Less working, more freelancing.
As a number of observers have pointed out, one effect of the collaborative economy may be to increase self-employment in place of full-time employment.
Rather than engaging in a race to the bottom (on wages) or a fight to the top (competing for skilled labor), these companies would do well to focus on offering new value-added services enabled by the collaborative economy, as Home Depot did by partnering with Uber for Christmas Tree delivery.
There are so many opportunities to collaborate within the complex supply chains of the property industry. The only question is – which one will you collaborate with?
“4. Less regulation, more risk.
One challenge that has bedeviled sharing startups is the emergence of regulatory efforts aimed at limiting sharing activity — or tapping it for tax revenue. Partly in response to pleas from established players like taxi and hotel companies, municipal governments have tried to corral the Wild West of sharing.
Yet the involvement of bigger companies in the sharing economy itself could instead strengthen the hand of those who would preserve currently low levels of regulation. Either way, unless big companies want to see their breakfast eaten by collaborative startups that profit by flying under the regulatory radar, they will need to tune into their customers with co-innovation initiatives that help them understand how they can play in this space, too.”
There could be a lot of resistance to the emergence of the collaborative economy by established players in the property industry. There is potentially a lot to lose. But there is a lot of opportunities for those who embrace the change.
HBR sums it up well “It’s a disruption that big companies must not only address, but accelerate, unless they want to stand by and watch while their own business models and revenue streams are disrupted instead.”