Keynote: The Collaborative Economy with Jeremiah Owyang


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Corporations must join the collaborative economy

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  • 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
  • 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
  • But what about corporations?.
  • 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
  • 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:
  • 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…
  • 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 -
  • 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.
  • 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
  • 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.
  • 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?
  • 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.
  • Do a big 
  • Appendix
  • Keynote: The Collaborative Economy with Jeremiah Owyang

    1. The Collaborative EconomyJeremiah OwyangAn economic model where ownership andaccess are shared between people, startups,and corporations.
    2. Eras of the Internet
    3. What role do corporations playif people don’t need them?
    4. The Collaborative EconomyAn economic model where ownership and access are sharedbetween people, startups, and corporations.
    5. The only way, is to let goto gain more.
    6. Is this a businessdisruption?
    7. Sharing Is Not New
    8. LyftPeople Can Tap into Each OtherNeed to travel…
    9. Lyft enables crowd to betransportation –avoiding taxis
    10. AirBnbPeople Can Tap into Each OtherNeed a place to stay…
    11. AirBnb Enables Crowd to be a Hotel
    12. People Can Tap into Each OtherNeed to get funded...LendingClub
    13. LendingClub enables crowd to be abank
    14. oDeskPeople Can Tap into Each OtherNeed staff…
    15. oDesk enables crowd to be aworkforce
    16. FeastlyPeople Can Tap into Each OtherNeed to dine…
    17. Feastly enables your neighborskitchens to be a restaurant
    18. People Can Tap into Each OtherNeed a place for staff…LiquidSpace
    19. Liquidspace enables companies torent from each other
    20. YerdlePeople Can Tap into Each OtherNeed products andgoods…
    21. Yerdle enables neighbors to gift goods--rather than buy
    22. A properly shared car is$270,000Lost RevenueOf auto sales(1 shared car = 9 carsat average of $30keach.)24
    23. Is this a passing fad?
    24. Societal Factors75% said they predictedsharing of physicalobjects and spaces willincrease in next 5 years–Shareable Magazine Study
    25. PopulationEconomic Factors1975:4 Billion2050:9 Billion
    26. Technology Factors• 87 phones per 100people on planet• Three quarters ofstartups use socialtech like Facebook
    27. A movement that’s only increasingOut of 200 collaborativeeconomy startups, totalfunding was over $2 billionOf those funded, theaverage was $28 million(May 2013, Lyft raised $60m)
    28. The sharing revolution is anunstoppable movement
    29. Collaborated with the Revolutionaries32
    30. What can you do?
    31. CollaborativeEconomy:Value Chain
    32. CollaborativeEconomy:Value Chain
    33. 1. Company as a Service
    34. Toyota as a Service
    35. Razors as a service
    36. Mobility as a Service
    37. CollaborativeEconomy:Value Chain
    38. 2. Motivate a Market
    39. ScotteVest enables second market
    40. Patagonia enabling second marketand altruism
    41. Value add: sell 1000 cars to everyone
    42. CollaborativeEconomy:Value Chain
    43. 3: Provide a Platform
    44. Collaboration
    45. FundDesignDevelopCo
    46. Co-Fund new products like Kickstarter
    47. Co-Design products like Nike
    48. Co-Develop like Quirkly
    49. Co-Customize Like Etsy
    50. Co-Production with 3D Printers
    51. Co-Storage of Products with Lockitron
    52. Co-Deliver with Deliv
    53. Co-Market: Christiana BikeEnable othersto build a product
    54. CollaborativeEconomy:Value Chain
    55. What will challenge us aswe move forward?
    56. Opposing Market Forces Abound1. Governments, lobbyists,and institutions oppose2. Buyers and sellers lackcomplete trust3. Fragmented startups inevery category4. Uncertainty about whichstartups will stand the testof time
    57. What are your benefits forletting go to thecollaborative economy?
    58. More efficient, as the crowd helpsyou12 A long-term relationship withyour vested customers3New value created betweenpeople, means new revenues4 If you act now, you will have firstmover advantage
    59. CollaborativeEconomy: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%
    60. Let go of your company togain the market.
    61. What side of historywill you be on?
    62. Download Report: OwyangPartner and Industry AnalystAltimeter
    63. Collaborative Economy Take-Aways• The crowd turns to each other to get goodsand services –bypassing corporations• The sharing revolution is an unstoppablemovement• Solution: embrace the CollaborativeEconomy Value Chain:1. Company as a Service2. Motivate a Marketplace3. Provide a Platform
    64. Collaborative Economy GlossaryCollaborative Economy(Model): AnEconomic model where ownership and access isshared between people, startups, and corporations.Two sided Marketplace (Category): Anonline website where buyers and sellers of goods orservices are sharing inventory, need, and transacting.Example: Ebay, Craigslist, AirBnb, 99 dresses.Transactions (Verbs): There are many types ofverbs that can be used in facilitation including: Buy,Sell, Swap, Lend, Gift, Co-own, co-fund , buy and more.Maker Movement (Trend): An emerging trendwhere customers can self-design, create, produce, anddistribute products and goods on their own.Company as a Service (Strategy):Rather thansell goods in the traditional sense, offer products orservices to customers on- demand or through asubscription model. Rent, Subscribe, or Gift.Motivate a Marketplace (Strategy):Acommunity around abrand enabling customers andpartners to resell or co-purchase products, swap goodsrelated to the brand, or even enable lending or giftingfor no monetary exchange.Provide a Platform (Strategy):Corporationsthat enable an ecosystem customers to build productsand new services as partners — not just consumers.Online Reputation (Feature):Any number ofonline features that store historical and currentinformation about social profiles, individuals networkconnections, credibility, or reviews of previous andpredictable behavior.Social Sign On (Feature):A technology featurethat connects websites with profile systems from socialnetworks like Facebook, LinkedIn or Twitter connectenabling existing reputation, social contacts, and socialgraph information
    65. Altimeter looked at over 200collaborative economy startups
    66. Over 1/3 of these startups havereceived venture capital funding37% $
    67. The average funding per startupis $29M$130M$83M$50M$29MAverageStartup
    68. The total funding across these 200 startups is$2B, showing broad investor commitment$2B
    69. 2/3 of these startups focus onpeer-to-peer sharing63%Peer-driven sharing, like Airbnb or 99Dresses35%Business/brand-driven sharing, like co-working orBMW Drive NOW
    70. 2/3 of these startups charge on a perusage (pro rata)67%21%10%6%Pro RataMembership/One Time FeeFreeExchange
    71. Of the Top 30 Startups, Most HaveSocial Networking Features75Have social networkingfeatures, e.g. social profilesand reputation systems73%Integrate Facebook Connect53%
    72. Collaborative Economy Value Chain:Exploded Visualization
    73. Credits: Research InterviewsAirbnb, Molly Turner, PublicPolicyArbor Advisors, Dean Callas,Investment BankerAriba, An SAP Company,Joseph Fox, VP of StrategyAugust Capital, David Hornik,InvestorBazaarvoice, Stephen Collins,CEOcarpooling .com, MarkusBarnikel, CEOCisco, Carlos Dominguez, SVP,Office of the COB and CEOConnectMe 360, BrianHayashi,, Shauna Causey,VP, MarketingEnterprise Holdings, RyanJohnson,WeCarAVPeToro, Yoni Assia,CEO and FoundereToro, NadavAvidan, PR andCommunications ManagereToro, AdiYagil, Head of SocialMediaGazelle, Israel Ganot, CEOHomeExchange, Ed Kushins,FounderJive Software, ChristopherMorace, Chief Strategy OfficerLiquidSpace, Mark Gilbreath,CEO/Founder/SkipperLithium, Rob Tarkoff, Presidentand CEOLyft, Kristin Sverchek, GeneralCounselMuckerLab, William Hsu, Co-Founder, PartnerSasson Capital, Vivian Wang,Venture CapitalistoDesk, Gary Swart, CEOoDesk, ShoshanaDeutschkron,Director, CommunicationsOuiShare, AntoninLéonard,, Gene Chuang,CTOPivotDesk, Alex Newman,Director, and, MinChan, GM of MobileSCOTTEVEST, Scott Jordan, CEOand FounderShareable Magazine, NealGorenflo, FounderShasta Ventures, RobConeybeer, Managing DirectorCollaborative Lab, April Rinne,Chief Strategy OfficerCollaborative Lab, LaurenAnderson, Chief KnowledgeOfficerThe Mesh, Lisa Gansky, Author,The Mesh: Why the Future ofBusiness is SharingZuora, TienTzuo, CEOZuora, Brian Bell, CMODeborah Schultz, InnovationStrategist
    74. The following people provided guidance, reviewed content, tested ideas, or mostimportantly, 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, KevinKelley, Matt Krebsbach, Wendy Lea, Evelyn Lee, Geoff Livingston, Jacob Miller, MarcusNelson, 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 andconsulting team.We extend special appreciation to LeWeb founder LoicLe Meurwho inspired Altimeter Groupto research this topic.Credits: Research Input