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Jeremiah Owyang Keynote on the Collaborative Economy

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From Jeremiah's blog post: http://www.web-strategist.com/blog/2013/06/27/keynote-slides-the-collaborative-economy-corporate-opportunity/ …

From Jeremiah's blog post: http://www.web-strategist.com/blog/2013/06/27/keynote-slides-the-collaborative-economy-corporate-opportunity/

This particular speech weaves in a story about Danish King Frederick the 7th, who I got to learn about on last month’s trip to Copenhagen. I was intrigued by his unique conundrum as he saw a revolution coming to his gates, giving him one of two choices: 1) Fight them and potentially lose his head, or 2) collaborate with the crowd. We dip in and out of his experience throughout the presentation, as we cover key steps in the presentation: a definition of the trend, real world examples from many verticals B2B and B2c, numbers showing the disruption in terms of dollars, a look at the causes of this sharing movement. In the meat of the presentation, we focus on the solution, which we call the Collaborative Economy Value Chain, and provide real world examples of what corporations are doing now. To top things off, we’re honest about the many challenges, but also list out the benefits of why a company should join the collaborative economy. The appendix has additional data from our research, a glossary, and credits from whom we interviewed.

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  • My story (tie it today’s revoluiton and choices)Meet Frederick the 7th.Last month, I visited DenmarkAnd I learned about a Danish King, He saw revolutions sweeping across Europe and many kings were losing their headsHe saw the revolution coming to his gilded gates and had an optionFight them and potentially lose his head.orCollaborate with the revolutionaries
  • http://www.economist.com/printedition/covers/2013-03-07/na
  • But we found out in this research was intriguing, that in order for companies to be succeed in the collaborative economy,They actually had to let go ,in order to gain more.
  • We’ve all heard how the collaborative economy startups and people are succeeding in the sharing economy.But we posed a question: What role do large companies play if their relationship has been disrupted?After interviewing experts corporations and startups that are here todayIn fact for those of you are here,the report is on your chair, or those following online can find it from my Twitter profileI’m excited to share with you today, we found a way for eeryone to win together:“An economic model of shared ownesrhip and access beteen corps, startups, and people”The Collaborative Economy
  • But we found out in this research was intriguing, that in order for companies to be succeed in the collaborative economy,They actually had to let go ,in order to gain more.
  • Sharing is not new, parents have taught us how.
  • JKO to tell a story of how we’re going on a business trip.I’m taking a person’s car, instead of using a taxi corporationThis will be in first person narrative to connect with audience. (this is why person is same)
  • We need a place to stay, I stay at Airbnb –rather than Marriott
  • The business meetings went so well, I was able to get funding without the banks.But I use LendingClub to get money from peers –rather than using HSBC
  • Rather than hire through traditional workforce solutionsI use odessk to find workers ready to go –rather than Manpower.
  • Rather than hire through traditional workforce solutionsI use odessk to find workers ready to go –rather than Manpower.
  • I find office space from other startups that have extra space –rather than work with a tranditional property manager.In these examples (and we have a bigger list), which span many industries and b2b and b2c, we can see how this movement impacted many parts of society.
  • We need a place to stay, I stay at Airbnb –rather than Marriott
  • But what’s the impact?It’s quite severe. It means that customers can buy once –and share many times among each other –reducing the need to buy againHere’s some stats9 cars270kBut also loansInsuranceGasI’m sure some economists could show this could be over a million dollars of ecosystem impactThat’s just 1 carWhat about 100What about 100million?
  • To get to the bottom of this, In our interviews, we asked just that.we found that there were over 13 individual elements which are easily grouped into three major factors.
  • People are more social –whther they’re saddled by debt, a younger generation, or just realizing that owning products isn’t as efficient.As a result, there’s a movement towards conscious consumers to get what they need beyond owning it.It means that: Access is more important than ownership>Photo credit required to: Thomas La MelaShutterstock.com
  • In my life, population start at about 4billion, and when Im’ an old man, it’ll be around 9 billionAs population doubles in my life, earth’s resources stay fixed. It means every pound, euro or dollar counts.SO when people DO buy, they want it to count. They want this product to sustain. It means that:” it pays to buy quality, esp when we can re-use or resell to others”Source is UN: world-crises.net
  • Lastly, we’ve found that technology enablement has spurred this movement on, with mobile devices, smart phones, payment systems and also social media.We looked closely at 30 of the top discussed sharing startups and found that 54% of them had facebook connect, and 74% had social profiles and reputation features, showing how closely tied to the social networking movement.It means this movement is bolstered by the technology and social media –which is growing faster than ever.
  • The startups aren’t going awayOut of 200 they’ve been funded 200b --not to mention the 60m from LyftIt means on average, those you were funded received 28mIn culmination of these societal, economic and technology drivers that this young movement isn’t going to dissipate soon, and in fact will only pick up in momentumData: Altimeter Data
  • So how do we deal with a revolution that’s REDUCING REVENUES and IS PICKING UP IN MOMENTUMRemember Frederick? He had a choice: Either fight the revolution with his guards, or collaborate with the revolutionaries on his own terms.He chose to leave his gilded gates, and offered to work with them to build a people’s government, and draft up a new constitution.
  • Now back to our revolution, the sharing revolution.What can companies do when they’ve lost power to the crowd?The good news is, there’s a solution…
  • Welcome to the Collaborative Economy! This is for startups too and people Everyone works together in one economy.See these Products, and services, and marketplaces
  • The key is to convert products into services, services into marketplaces, and marketplaces build productsThey start off simple, but as we progress around the value chain, the investment and risk increases, but as well as the potential payoff. Let me walk through each one in detail and show you how.
  • First, let’s focus on products becoming services. We call this “Company as a service”Now that customers want access to products –and may not necessarily want to own them, it means that companiesMust change the relationship and offer it a new form through renting, subscribing or event lending –beyond just selling.
  • For companies that have high durable goods, unattainable luxuries, idle invetories, or high consideration purhcaseds, allow them to now be a serviceFor example Toyota and BMW now rent cars from their dealership in SF bay area. To get ahead of changing consumer needs, Toyota and BMW are now services.Acknowledgment required by Shutterstock for the Toyota image: Kosarev Alexander - Shutterstock.com
  • http://www.mu.peugeot.co.uk/discover-mu-by-peugeot/
  • Next, let’s talk about shifting services to now becoming marketplaces.We call this ‘Motivating a marketplace”. The naming is specific, you can’t own the marketplace, you can’t manage it, you simply must help usher them along, in this use case, the goal is to get the people to do these actions among themselves.If your company offers services, like a hospitality company serves guests, then learn how to tap into the marketplaces that are already forming in the sharing economy.There’s a number of new activities that people can perform, including to resell, co-owning, swapping goods, lending to each other, or gifting.
  • An example: Right now, people are bypassing hotels to stay at unique experiences using websites like Airbnb.Rather than stand by the wayside, we discovered a new market opportunity for Loic’s guest room to be certified as Marriott certified. A large brand brings TRUSTMarriot would then funnel trusted guests, perhaps from a loyalty program, and even offer maid, food, or concierge services.Everyone wins: Loic gets a trusted guest, the guest gets a local experience at a certified home, and Marriot gets a cut of the transactions –that they wouldn’t have missed out on completely.
  • http://campaigns.ebay.com/patagonia/
  • In this third phase. Companies who have marketplaces, must activate them to build their future products.We call this “provide a platform”And it means that companies must empower their crowds to build future products and services.This is the hardest level –but yields the most benefits.Lots of of “co” words that are part of the collaboration mindsetIt doesn’t exist, but we see parts of itWe see many startups already doing this:-Ideation sites like uservoice co-ideate new products-Kickstsarter co-funds new ideas-Quickly co-builds new productsBut imagine if this was extended to co distribution, co marketing, co selling, and even co revenue sharing?In this case, it may be Hard to tell the diference between employees and customers as new products are built from the crowd.But the costs of buidling are leveraged by the crowd, reducing the costs of the company In this radical state, the non essential parts of the company reduce, and perhaps the most important remaining parts are the brand, and perhaps an ecommerce engine.In this future state: “The CROWD BECOMES THE COMPANY.“
  • Image from http://productnation.in/5-key-considerations-for-platform-approach/
  • While we’ve seen examples of software companies allowing for developers to build on top of their platforms, we can also examine this physical bike that was built from an open communityThis bike the Chrisitana bike was designed by crowd efforts in Freetown, Copenhagen, an anarchist community that set their own rules who didn’t allow cars, so they built their own product, this transport bike that’s now sold around the world.This example illustrates how a crowd was able to come together for a single problem to solve and take a product to market around a common brand, their anarchist city, Christiana.http://www.christianiabikes.com/english/uk_main.htm
  • To complete this cycle, those newly created crowd products flow back into the process, starting over again.This means that the startups who participate in this, will have an advantage over those that don’t.Savvy companies will do one.But superior companies will do all.
  • You must let go of your company to gain the market
  • So what are the benefits?
  • Read it
  • The goal is to activate the market around you, and these circles represent all the transactions that the brand can now extract value from.Our cursory look at the startups show that they often take 20-25% of every transaction, the opportunity here is for the company to add new value –but to also extract value, perhaps 25% from each of these new market transactions! Now to get all this –you’ve got to make a leap. To let go of products, services, and your brand.
  • So what happened to fred who met the revolutionaries at the gate?Fred is a hero, he saved bloodshed, gave them people what they wanted –yet stayed in the palaceI’m pleased to share, that his lineage is the second oldest monarchy in the worldNot only is denmark the second happiest country in the world, He’s revered as a national icon, and his family is taken care of by the nation, and they’re still in the palace. Fred let go of his throne -- to gain the kingdomAnd if you want to collaborate in the economy. , then you must….
  • You must let go of your company to gain the market
  • What side of history --will you be on.
  • Leave this blank.
  • This will get updated.


  • 1. What role do corporations play if people don’t need them?
  • 2. The Collaborative Economy @jowyang An economic model where ownership and access are shared between people, startups, and corporations.
  • 3. The only way, is to let go to gain more.
  • 4. Is this a business disruption?
  • 5. Sharing Is Not New
  • 6. Lyft People Can Tap into Each Other Need to travel…
  • 7. Lyft enables crowd to be transportation
  • 8. AirBnb People Can Tap into Each Other Need a place to stay…
  • 9. AirBnb Enables Crowd to be a Hotel
  • 10. People Can Tap into Each Other Need to get funded... LendingClub
  • 11. LendingClub enables crowd to be a bank
  • 12. oDesk People Can Tap into Each Other Need staff…
  • 13. oDesk enables crowd to be a workforce
  • 14. Feastly People Can Tap into Each Other Need to feed team
  • 15. Feastly enables restaurants in your neighborhood home
  • 16. People Can Tap into Each Other Need a place for staff… LiquidSpace
  • 17. Liquidspace enables companies to rent from each other
  • 18. Yerdle People Can Tap into Each Other Need consumer products…
  • 19. Yerdle enables neighbors to gift goods rather than buy
  • 20. A properly shared car is $270,000 Lost Revenue Of auto sales (1 shared car = 9 cars at average of $30k each.) 23
  • 21. Is this a passing fad?
  • 22. Societal Factors 75% said they predicted sharing of physical objects and spaces will increase in next 5 years –Shareable Magazine Study
  • 23. Population Economic Factors 1975: 4 Billion 2050: 9 Billion
  • 24. Technology Factors • 87 phones per 100 people on planet • Three quarters of startups use social tech like Facebook
  • 25. A movement that’s only increasing Out of 200 collaborative economy startups, total funding was over $2 billion Of those funded, the average was $28 million (May 2013, Lyft raised $60m)
  • 26. Eras of the internet
  • 27. To stop the sharing revolution you must stop the internet.
  • 28. Collaborated with the Revolutionaries 32
  • 29. What can you do?
  • 30. Collaborative Economy: Value Chain
  • 31. Collaborative Economy: Value Chain
  • 32. Collaborative Economy: Value Chain
  • 33. 1. Company as a Service
  • 34. Toyota as a Service
  • 35. Razors as a service
  • 36. Mobility as a Service
  • 37. Collaborative Economy: Value Chain
  • 38. 2. Motivate a Market
  • 39. ScotteVest enables second market
  • 40. Patagonia enabling second market and altruism
  • 41. Collaborative Economy: Value Chain
  • 42. 3: Provide a Platform
  • 43. Collaboration
  • 44. Fund Design Develop Co
  • 45. Co-Fund new products
  • 46. Co-Design products like Nike
  • 47. Co-Develop like Quirkly
  • 48. Co-Customize Like Etsy
  • 49. Co-Production with 3D Printers
  • 50. Co-Storage of Products with Lockitron
  • 51. Co-Deliver with Deliv
  • 52. Co-Market: Christina Bike Enable others to build a product
  • 53. Collaborative Economy: Value Chain
  • 54. What will challenge us as we move forward?
  • 55. Opposing Market Forces Abound 1. Governments and institutions oppose. 2. Buyers and sellers lack complete trust. 3. Lack of industry-wide reputation systems 4. Uncertainty about which startups will stand the test of time.
  • 56. What are your benefits for letting go to the collaborative economy?
  • 57. More efficient, as the crowd helps.1 2 Long term relationship with vested customers. 3 New value created between people 4 If you act now, you will have first mover advantage
  • 58. Collaborative Economy: Value Chain 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
  • 59. Collaborative Economy Take-Aways • A sharing revolution is increasing in velocity and scale • People turn to each other to get what they want—bypassing corporations • Activate the Collaborative Economy Value Chain • Company as a service • Motivate a marketplace • Provide a platform
  • 60. Let go of your company to gain the market.
  • 61. What side of history will you be on?
  • 62. Download the Open Research report: bitly. Jeremiah Owyang Partner and Industry Analyst Altimeter Group @jowyang web-strategist.com jeremiah@altimetergroup.com
  • 63. Collaborative Economy Glossary Collaborative Economy (Model): An Economic model where ownership and access is shared between people, startups, and corporations. Two sided Marketplace (Category): An online website where buyers and sellers of goods or services are sharing inventory, need, and transacting. Example: Ebay, Craigslist, AirBnb, 99 dresses. Transactions (Verbs): There are many types of verbs that can be used in facilitation including: Buy, Sell, Swap, Lend, Gift, Co-own, co-fund , buy and more. Maker Movement (Trend): An emerging trend where customers can self-design, create, produce, and distribute products and goods on their own. Company as a Service (Strategy): Rather than sell goods in the traditional sense, offer products or services to customers on- demand or through a subscription model. Rent, Subscribe, or Gift. Motivate a Marketplace (Strategy): A community around a brand enabling customers and partners to resell or co-purchase products, swap goods related to the brand, or even enable lending or gifting for no monetary exchange. Provide a Platform (Strategy): Corporations that enable an ecosystem customers to build products and new services as partners — not just consumers. Online Reputation (Feature): Any number of online features that store historical and current information about social profiles, individuals network connections, credibility, or reviews of previous and predictable behavior. Social Sign On (Feature): A technology feature that connects websites with profile systems from social networks like Facebook, LinkedIn or Twitter connect enabling existing reputation, social contacts, and social graph information
  • 64. Altimeter looked at over 200 collaborative economy startups
  • 65. Over 1/3 of these startups have received venture capital funding 37% $
  • 66. The average funding per startup is $29M $130M $83M $50M $29M Average Startup
  • 67. The total funding across these 200 startups is $2B, showing broad investor commitment $2B
  • 68. 2/3 of these startups focus on peer-to-peer sharing 63% Peer-driven sharing, like Airbnb or 99Dresses 35% Business/brand-driven sharing, like co-working or BMW Drive NOW
  • 69. 2/3 of these startups charge on a per usage (pro rata) 67% 21% 10% 6% Pro Rata Membership/One Time Fee Free Exchange
  • 70. Of the Top 30 Startups, Most Have Social Networking Features 75 Have social networking features, e.g. social profiles and reputation systems 73% Integrate Facebook Connect 53%
  • 71. Collaborative Economy Value Chain: Exploded Visualization
  • 72. Credits: Research Interviews Airbnb, Molly Turner, Public Policy Arbor Advisors, Dean Callas, Investment Banker Ariba, An SAP Company, Joseph Fox, VP of Strategy August Capital, David Hornik, Investor Bazaarvoice, Stephen Collins, CEO carpooling .com, Markus Barnikel, CEO Cisco, Carlos Dominguez, SVP, Office of the COB and CEO ConnectMe 360, Brian Hayashi, Founder Decide.com, Shauna Causey, VP, Marketing Enterprise Holdings, Ryan Johnson, WeCar AVPeToro, Yoni Assia, CEO and Founder eToro, Nadav Avidan, PR and Communications Manager eToro, Adi Yagil, Head of Social Media Gazelle, Israel Ganot, CEO HomeExchange, Ed Kushins, Founder Jive Software, Christopher Morace, Chief Strategy Officer LiquidSpace, Mark Gilbreath, CEO/Founder/Skipper Lithium, Rob Tarkoff, President and CEO Lyft, Kristin Sverchek, General Counsel MuckerLab, William Hsu, Co- Founder, Partner Sasson Capital, Vivian Wang, Venture Capitalist oDesk, Gary Swart, CEO oDesk, Shoshana Deutschkron, Director, Communications OuiShare, Antonin Léonard, Co-Founder Oversee.net, Gene Chuang, CTO PivotDesk, Alex Newman, Director, Customer Development Sass.me and Oversee.net, Min Chan, GM of Mobile SCOTTEVEST, Scott Jordan, CEO and Founder Shareable Magazine, Neal Gorenflo, Founder Shasta Ventures, Rob Coneybeer, Managing Director Collaborative Lab, April Rinne, Chief Strategy Officer Collaborative Lab, Lauren Anderson, Chief Knowledge Officer The Mesh, Lisa Gansky, Author, The Mesh: Why the Future of Business is Sharing Zuora, Tien Tzuo, CEO Zuora, Brian Bell, CMO Deborah Schultz, Innovation Strategist
  • 73. The following people provided guidance, reviewed content, tested ideas, or most importantly, challenged the thesis during the project: David Armano, David Berkowitz, Richard Binhammer, Mel Blake, Erik Boles, Michael Brito, Noelle Chun, Steve Farnsworth, Lyle Fong, Ian Greenleigh, Shel Holtz, Noah Karesh, Kevin Kelley, Matt Krebsbach, Wendy Lea, Evelyn Lee, Geoff Livingston, Jacob Miller, Marcus Nelson, Ben Parr, Jeff Richards, Andy Ruben, Jim Rudden, Ben Smith, Aaron Strout, Carmen Taran, Rob Tarkoff, Ed Van Siclen, Mike Walsh, Sharon Weinbar, Adam Werbach, Susan Williams, Vladimir Mirkovic, Anita Wong, and the entire Altimeter Group research and consulting team. We extend special appreciation to LeWeb founder Loic Le Meur who inspired Altimeter Group to research this topic. Credits: Research Input