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The emergence of the collaborative economy


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The Emergence of the Collaborative Economy: Practices for Succeeding when Building a Community in a P2P Environment

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The emergence of the collaborative economy

  1. 1. 1       Escola Universitària d’Enginyeria Tècnica de Telecomunicació La Salle Final Thesis                                                                                                                        THE  EMERGENCE  OF  THE  COLLABORATIVE  ECONOMY:                                              PRACTICES  FOR  SUCCEEDING  WHEN  BUILDING  A                                              COMMUNITY  IN  A  P2P  ENVIRONMENT   Student Promoter BRUNO  BORRÁS  INSA                                              RICARDO  TORRES  KOMPEN              
  2. 2. 2   ACTA DE L'EXAMEN DEL TREBALL FI DE GRAU         Meeting of the evaluating panel on this day, the student: D. BRUNO  BORRÁS  INSA   Presented their final thesis on the following subject: THE  EMERGENCE  OF  THE  COLLABORATIVE  ECONOMY:  PRACTICES   FOR  SUCCEEDING  WHEN  BUILDING  A  COMMUNITY  IN  A  P2P   ENVIRONMENT   At the end of the presentation and upon answering the questions of the members of the panel, this thesis was awarded the following grade: Barcelona, MEMBER OF THE PANEL MEMBER OF THE PANEL PRESIDENT OF THE PANEL  
  3. 3. 3   Abstract       In the 21st century, one of the ten ideas that will change the world is the philosophy of sharing instead of owning (Time, 2011). Under this premise, society is welcoming the emergence of the Collaborative Economy (CE) as a disruptive economic model by unleashing a movement  eager  to  collaborate  and  benefit  from  the  disintermediation   of   third   parties.   This   thesis   brings   together   success   factors   to   take   into   account   when  building  a  community  for  companies  that  work  within  a  Peer-­‐to-­‐Peer  (P2P)   environment.          
  4. 4. 4   Contents  page  and  work  count         Abstract  ....................................................................................................................................  3   Contents  page  and  work  count  ..........................................................................................  4   List  of  Tables  and  Abbreviations  ......................................................................................  5   Acknowledgements  ...............................................................................................................  6   Executive  Summary  ..............................................................................................................  7   Introduction  ............................................................................................................................  8   Literature  Review  ..................................................................................................................  9   Technological  Perspective  ............................................................................................................  9   Internet  and  Empowerment  of  Sharing  among  Individuals  .........................................................  9   Heading  to  Collaborative  Digital  Marketplaces  .............................................................................  11   Social  Perspective  .........................................................................................................................  13   Communities  as  Result  of  ICT  ................................................................................................................  13   Trust  and  Reputation  in  the  Collaborative  Model  .........................................................................  15   Economic  Perspective  ..................................................................................................................  17   Moving  towards  a  Collaborative  Economy  .......................................................................................  17   Traditional  Companies  in  the  Forthcoming  Economy  .................................................................  21   Background  ...........................................................................................................................  23   Segments  in  the  Collaborative  Economy  .....................................................................................  23   P2P  Business  Model  and  Verticals  ................................................................................................  25   Legal  Framework  in  the  P2P  Disruption  .....................................................................................  26   Future  and  Sustainability  ..............................................................................................................  28   Methodology  .........................................................................................................................  30   Research  findings  &  Analysis  ...........................................................................................  32   Field  Research  .................................................................................................................................  32   Results  ...............................................................................................................................................  39   Discussion  .........................................................................................................................................  41   Conclusions  ...........................................................................................................................  45   References  .............................................................................................................................  46   Appendix  ................................................................................................................................  50            
  5. 5. 5   List  of  Tables  and  Abbreviations       List of Tables     Figure 1: Collaborative Economy Drivers   Figure 2: Trustman 1   Figure 3: Trustman 2   Figure 4: Startups Investment 2014   Figure 5: Havas Worldwide   Figure 6: Nielsen   Figure 7: HoneyComb   Figure 8: Content of Tweets   Figure 9: Airbnb Regulation Request     List of Abbreviations     P2P Peer to Peer   B2C Business to Consumer   CE                    Collaborative  Economy   ICT                  Information  and  Communication  Technologies   DIY Do It Yourself   SEO Search Engine Optimization        
  6. 6. 6   Acknowledgements     First of all I would like to thank my supervisor Ricardo Torres, I highly appreciate all the help and support he has given throughout the thesis process. He opened the door of his office from day one giving advice on the research question and the value proposition of the paper. From there he guided me providing regular feedback that made my work change for better when there was room for improvements. It has been a pleasure to have him as an advisor and I hope we meet again in the future.   I would also like to thank those who have took their time to read the work and give me their opinions, especially to professor Kerem Gurses and Cristobal Gracia from Ouishare, whose points of view were key for the correct structure of the project.   I also express gratitude to my interview partners: Alexandra, Juanjo, Claudia, Andrea, Nono and Enric, who willingly took time to answer the questions that triggered the research findings and results.   Last but not least, I wholeheartedly want to thank my parents for giving me the opportunity to study at La Salle. They are also responsible for all this work through their support and constant motivation.       Thank  you!   Bruno  Borrás      
  7. 7. 7   Executive  Summary     The democratization of the access to Internet together with the advent of mobile technologies have empowered individuals with cheaper and more efficient options at the time to communicate, learn and consume. These improvements are responsible for the boost of a social promotion of trust and a consequent economic development where people interact without intermediaries and take advantage of the collaborative benefits that technology brings. The result is a powerful P2P movement in which individuals are sharing underutilized skills and stuff while getting goods and services from each other; a more sustainable movement evolving at a speed and scale never seen before.   In this new economy, the main role for companies is to provide a place that enable Internet users to act as on/offline resource providers/consumers when it suits them, giving to everyone the option to become a taxi driver, to sleep in endless private places around the world, or to teach virtually others through the net for example. So the diversity of businesses within the CE is huge but all of them have 2 main points in common: they are supported by a technical platform and need from a community of members that participate in the initiative.   Internet’s collaborative value to consumers is affecting traditional players that are experiencing how new ways of doing things in established sectors have not displaced entirely the old ways but often changed them. The emerging model is now big and disruptive enough for regulators and companies to have woken up to it while claiming that collaborative companies blur the boundaries between doing things for personal reasons and professionally, resulting in a legal gray area. Either way, the trend is increasing its figures year after year demonstrating it is not a passing fad but has come to stay, and old players will have to adapt themselves to the current situation rather than relying on public institutions to regulate against the interests of society.      
  8. 8. 8   Introduction     This paper presents and analyzes the strategies that have led to six featured companies who work collaboratively to create a community of members that benefits from sharing, swapping, renting, bartering or even giving away their idle goods, services and knowledge. To do so, qualitative research in form of interviews is used as a source to highlight the main topics and categories formulated. The objective of these interviews was to identify commonalities among their practices even though they operate in different sectors, and come up with a roadmap supported by some recommendations about how to build successfully a community in a P2P environment.  The research will help to better understand how these companies incorporate their collaborative approach in a world dominated by the traditional B2C and B2B economic models.     Previous to that, the emergence of the collaborative system is explained through the breakdown of the three main drivers that have transformed the economy:   - The Technological driver approaches how Internet has empowered sharing among individuals and has led people to collaborative marketplaces.   - The Social driver gives a point about how communities emerge as result of the technological improvements, emphasizing the importance of trust and reputation in this model.   - The Economic driver explains how society is moving towards a collaborative economy due to the other drivers, and gives a sneak peak about how traditional companies must behave in order to survive.   This paper also provides a background in order to clarify the meaning and scope of the collaborative economy, going from the segments, business models and verticals that conform it to the legal issues and sustainable benefits that brings with it.      
  9. 9. 9   Literature  Review     A new system enabled by the convergence of technological, social and economic drivers is promoting collaboration in ways and on a scale never possible before. These drivers are moving people away from centralized and individual forms of life toward one of cooperation in which the sharing and exchange of assets, knowledge and skills result in market efficiencies and business growth. Sometimes called sharing economy, the Collaborative Economy (CE) is an economic model where ownership and access are shared between corporations, startups and people (Owyang, 2013).   In the following pages, the literature review will be approached from three perspectives listed as the main change drivers:         Technological  Perspective   Internet  and  Empowerment  of  Sharing  among  Individuals   The Internet started out as nothing more than a giant Bulletin Board System (BBS) that allowed expert users to exchange software, data, messages, and news with each other (Kaplan and Haenlein, 2010). Before 1995 individuals had no access to it, belonging only to laboratories or research centers in military order. From that year onwards, corporate web pages started giving the option to companies to create sites where individuals could consult and make use of the content posted by the professionals of the correspondent informatic departments. At that time the net was seen as “the archetype
  10. 10. 10   displayed to represent all intelligence and interdependence” (Kelly, 2003) where individuals may come across with all the information they found interesting and important. By 2004, the advances in technology transformed the way to interact on the net by democratising the communication and encouraging users to create, post and share their own content transforming the way to relate with companies, states and other people therefore welcoming the known by all Web 2.0 (O’Reilly, 2005). It was the first time in history that the emergence of a new technology affected both the production system and the way people transmit their knowledge (Roca, 2012) modifying so how people learn, produce and organise as a society. Becoming a society where people had some kind of access to the public sphere, in contrast with the other where citizens approached media as mere consumers (Shirky, 2010), represented a revolution that made possible for almost everybody to own, develop and disseminate real-time content without having to rely on intermediaries (Cohen and Schmidt, 2013) and resulted in a hyperlinked world where solving problems anywhere, solved problems everywhere (Diamandis and Kotler, 2012).   In the first decade of the twenty-first century the number of people connected to the Internet worldwide increased from 350 million to more than 2 billion. At the end of this second decade, the number of people connected will reach the 7 billion (Cohen and Schmidt, 2013) and this is in large part due to the rise and establishment of a new media technology powered by the growing availability of high-speed Internet access: Social Media stands for a group of Internet-based applications build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user- generated content (Kaplan and Haenlein, 2010). It facilitates the social interaction among people that create, share or exchange information and ideas in virtual communities and networks (Ahlqvist; Bäck; Halonen and Heinonen, 2008). Social Media has turned around the World Wide Web to what it was initially created for: a platform to facilitate information exchange among users (Kaplan and Haenlein, 2010) and because people have been using these sharing networks for over a decade, they are used to the idea that someone on the other end of the Internet have something of value that are willing to share and that makes people get comfortable transacting throughout digital interfaces (Sundararajan, 2013).   Thanks to the several improvements that mobile technologies have experimented in terms of hardware and software, another factor that has changed the way people interact is the emergence of Smartphones. In the first decade of the 21st century the number of
  11. 11. 11   mobile-phone subscribers rose from 750 million to well over 5 billion (Cohen and Schmidt, 2013) which means the effects of the mass adoption are fully global and never before in history have so many people, from so many places, had so much information and communication available at their fingertips. The rise of the Smartphones and such hyperconnectivity have boosted the emergence of location-based technology where GPS-mapping in real time gives users the possibility to locate the closest match of goods/services at any place wanted at any time needed. At the same time, intelligent Internet account and payment systems have facilitated the establishment of trust and assurance for payment between strangers by providing easy invoicing and quick transactions. The settlement of the above factors have empowered sharing between individuals by transforming the way to collaborate, along with the way to build businesses and use assets. Pretty much all the information in the world is available digitally (Harris, 2011), making every scrap of knowledge that humans possess and every thought considered worth preserving accessible, and that is why people begin to imagine themselves as commoners asserting the human right and capacity to participate in managing resources critical to their lives (Bollier, 2014).     Heading  to  Collaborative  Digital  Marketplaces   With the establishment of the Internet, society has started to look for new ways to produce and exchange value, ways that are more open and efficient. Technology is a resource-liberating mechanism that can make the once scarce the now abundant (Diamandis and Kotler, 2012) and in consequence, people now live in a global village where they can mimic the exchanges that used to take place face-to-face but on a scale and in ways that had never been possible before (Bostman and Rogers, 2010B).   In any digital business all starts with a piece of software based on computer code (Evans; Hagiu and Schmalensee, 2006) named ‘Platform’ that can be programmed and customized by outside developers or users adapting it to countless needs and niches. It mediates in the management of supply and demand by encapsulating and embedding all kind of sophistications, but the platform itself does not have value since is a place that fundamentally connects individuals who have assets or capabilities with people who need these assets or capabilities (Sundararajan, 2013), so the value relies on the community around it. The lower the friction in connecting the various sides, the greater the value to the platform provider (Evans; Hagiu and Schmalensee, 2006).  
  12. 12. 12   As mentioned in the last topic, during the early adoption of the Internet all the content generated came from developers and professionals in charge of the platforms, resulting in a unidirectional transfer of value where users were seen as mere consumers of that content. Nowadays things have changed and users can either adapt to the role of consuming content or producing it becoming ‘Prosumers’ (Toffler, 1980) that establish bidirectional communication (O’Reilly, 2005) with others and where the ones who take the role of producers transfer units of value in multiple ways such as uploading videos, generating tweets, writing posts in blogs or helping to fulfill pages on the Wikipedia.   The idea of sharing and collaborating has been around for a long time, and in the same way Social Media has managed to connect worldwide people creating virtual networks, these platforms intend to do so in the real world by building communities that exchange value not only through the online but also crossing the borders of the offline in order to share their assets, skills and knowledge. Online P2P platforms are making it cheaper and easier to meet supply and demand when needed, empowering two-sided trading platforms called ‘Marketplaces’ for efficient exchanges between producers and consumers (Bostman and Rogers, 2010B) that can take both collaborative positions: buyers & sellers, lenders & renters, teachers & students... (Owyang, 2013). This is creating an ecosystem of disruption that is affecting many industries that claim for regulations. Generally,   when   governments   step   in   a   marketplace   and   need   to   intervene  is  because  the  market  can  not  manage  itself,  what  is  happening  now  is   that  platforms,  due  to  trust  mechanisms  such  as  online  review  systems,  are  taking   over   some   of   the   rules   to   prevent   market   failure   that   historically   needed   governments  for  (Sundararajan,  2014). Every advancement of technology promotes social trust, pushing trustworthy strangers to create all kinds of people powered marketplaces in an ecosystem of fair payments that ensure the safety of its community. This safety provided is helping to blow up the industrial model of companies owning and people consuming (Forbes, 2013) and now the way production is organized starts to move from within corporations that employ thousands of people to P2P platforms that employ a handful (Sundararajan, 2013).    
  13. 13. 13   Social  Perspective   Communities  as  Result  of  ICT   Individuals always had the desire to communicate and socialize with others in their surroundings, and with the arrival of the Information and Communication Technologies they got the option to reach it in real-time at a global scale. One of the main reasons why people talk is because they want to belong to a group (Sernovitz, 2008) and this necessity of belonging makes them to get organized in networks and take part in communities across the Internet. In this digital world where everybody can be a value producer and shared experiences are forms of social currency (Solis, 2011) members of communities are increasingly defining themselves by their social profiles and what they share rather than what they own (Cañigueral, 2013) which position the effects of technologize the communication beyond the scale of a mere industrial-sector cycle (Kelly, 2003).   Historically, brands were created to convey information about products at a time when it was hard for consumers to get information, and companies were able to control the information available through strategically placed press announcements and good public relations managers. People chose what they wanted influenced in part by advertising that had them “chasing cars and clothes, working in jobs they hate so they can buy shit that don’t need” (Bostman and Rogers, 2010A). Today fewer intermediaries and constraints are a reality due to the ease of communication among individuals, resulting in direct P2P relationships that in most cases lead  to  a  humanization  of  the  exchanges   beyond   solely   commercial   purposes. In this context, companies can only influence destiny instead of controlling it (Lowitt, 2013) while they have been increasingly relegated to the sidelines as mere observers, having neither the knowledge nor the chance to alter publicly posted comments provided by their users (Kaplan and Haenlein, 2010); Comments that could lead to both good or bad image. This hyper-networked and data-engorged era is challenging the very reason for mass-market branding, because what people want is governed not by advertising but what they hear about from their communities (Sundararajan, 2013) and not necessarily their specific neighborhood but their Internet enabled communities.  
  14. 14. 14   So a key factor for any business lies in creating a community around the brand. Users interact in sites where there are already other users interacting, and in case nobody takes profit of the platform it becomes useless.   In the case of the CE the inventory is brought by users, which means it is necessary for companies to persuade an initial amount of them in order to have products to supply. These early adopters are the ones that initially add value to let the companies keep increasing their communities. The bigger the community, the bigger the value that each member can extract from it. For instance Airbnb, a service that lets homeowners rent space to a temporary renter, scales not by scaling inventory but by increasing the hosts and travellers and matching them with each other. When the website launched in 2008 it had only a few users in the major US cities that were producing value only to people that looked for a place there. Today however the community has expanded to more than 34.000 cities from 194 countries benefiting from a place to sleep in almost every corner of the world.   In the traditional economy, the users of a platform do not necessarily need to have commonalities apart from being interested in the same product or service offered, so they are not motivated to talk to each other beyond sharing a good advertising practice through their communication channels. In the case of CE, being a member of a P2P platform implies having to interact with the community in order to establish some agreement that benefits both supply and demand. P2P platforms are the place where in most cases the community interact without having direct contact with the brand, which creates a marketplace that belongs to its users and the brand acts as a regulator agent. Ultimately the experience that people value in the collaborative economy is the genuine interaction with others which is most likely the most important benefit next to the monetary rewards (Böckmann, 2013). This creates an environment where companies can no longer think of its users as prospect clients but as a powerful community (Cañigueral, 2013), businesses are the sum total of what people do and think when interacting with their stuff (Sernovitz, 2008) so their job is to provide a place that empowers the community to share their resources and capabilities.  
  15. 15. 15   Trust  and  Reputation  in  the  Collaborative  Model   ‘Do not talk to strangers’ is an advice that is becoming outdated over time, thanks to technology nobody is a stranger in the broadest sense of the word anymore. The Internet stores a tremendous amount of information about users, ranging from the things they buy, the places they visit or what they may be interested in based upon their browsing activity. All this online activity is creating a digital footprint that coupled with the profiles in the Social Networks makes the Internet a place where there is barely space for anonymity. What Facebook has done, is that it has taken all of the real world social capital that we have, digitizing and making it available for people to use and trust others (Sundararajan, 2013) and this opens the door for the CE. The   ease   of  sharing   through  online  sites  has  come  to  make  it  simple  and  sensible  to  share  ownership  of   items  (Cañigueral,  2013)  and  so  offering  the  infinite possibility of cooperation to the benefit of all.   Trust between strangers is the most important ingredient to get right, without this as a stable building block, it is very difficult to achieve the right level of critical mass at any given platform (Anderson, 2011) and through building this trust, systems scale rapidly to support users who all have an inherent belief in the value and success of the system (Lapsley, 2011). The most successful systems have built-in mechanisms for effectively establishing that trust, such as CouchSurfing’s reference system and eBay’s buyer feedback process (Anderson, 2011).   Once users become producers of value, the key for them to create trust is by taking care of their online member profile, in late 2012 the ride-sharing company BlaBlaCar released a study after collecting 631 responses among the members of its community on how to assess trust. The report first asked participants to range from 0 to 5 how much they trust friends, family, neighbors and strangers:            
  16. 16. 16   The study then took five ‘profile types’ in its online community: members with empty profiles, just a photo, just a verified phone number, just positive ratings, and someone with a complete member profile (photo, verified number, ratings, etc.):         Results show that members of an online community with a complete online profile are almost on the same level of trust as a Friend or a Family member (Chronos and BlaBlaCar, 2012).   The most important part in this process is to gain and maintain an acceptable reputation, which basically represents the measurement of how much the community is trusting a member so far depicted through online review systems (numeric rankings, stars, etc). In the individual model, the invention of traditional credit transformed the consumer system and the access to stuff was governed by how much money people have or how much credit they can get. In the collaborative model, the new trust networks and the reputation they generate are reinventing the way to think about the wealth, markets, power and personal identity. All this is creating an ecosystem where the access is governed not by the credit but by how well a member has used the shared asset (Bostman, 2012A; Sundararajan, 2013).   The value of reputation is not a new concept to the online world, ratings and comments have lead to incentives and recognition for many years, the difference today is the ability to capture data from across an array of digital services such as Ebay, Amazon or Etsy where members leave a trail of how well they can or cannot be trusted with every trade made, comment left, spammer flagged or badge earned (Bostman, 2012A) and ultimately with every connection they have built.  
  17. 17. 17   Economic  Perspective   Moving  towards  a  Collaborative  Economy   Once society feels comfortable with the idea that its real world identity is represented online by social networks or system reviews, a much greater level of trust is facilitated, and when there is a change in society’s trust mechanisms then a shift starts of what is possible in the economy (Sundararajan, 2014). As pointed out in previous review, the Internet has promoted the transfer of value for free, and the difference now is that this idea is overstepping the boundaries of the virtual heading into the physical space to the extent that the cost of transferring value through platforms that impact the real world will be 0 (Rifkin, 2014) challenging thereby many market forces like the way to produce, consume and distribute goods and services. While the past decade was about finding new collaboration and innovation models on the web, this decade is about applying them to the real world so that now is not only about the digital world where people can be value producers (Anderson, 2012).   Revenue flowing through the CE directly into people’s wallets surpassed $3.5 billion in 2013 with a growth exceeding 25%. At that rate P2P sharing is moving from an income boost in a stagnant wage market into a disruptive economic force (Forbes, 2013). An increase in the interest of companies related with the CE can be recognized by the amount of capital invested by business angels and venture capital societies in 2014 so far, summing up a quantity that surpasses the $2.5 Billions (Owyang, 2014B):                    
  18. 18. 18   Those who see the current entrepreneurial explosion as merely another dotcom bubble (Kraay and Ventura, 2007) should think again since today’s digital primordial soup contains the makings of the economy and perhaps even the government of tomorrow (The Economist, 2014). “First, the people running the old economy don’t notice the change. When they do, they assume it’s minor. Then that it’s a niche. Then a fad. And by the time they understand that the world has actually changed, they’ve squandered most of the time they had to adapt” (Shirky, 2012). It is time to witness the emergence of a hybrid economy, part capitalist market and part collaborative (Rifkin, 2014) standing on some fundamental changes:     1) Access to assets triumphs over ownership: For the last 50 years the model of consumption has been individual, if people wanted something they had to buy it and own it in order to use it (Sundararajan, 2013) but what digitalization of media assets such as photos, music or books has done is to allow people to experience that in most of the cases what they wanted was not to own the physical product but to have access to the service that it provides (Cañigueral, 2013). Companies like Spotify have disrupted their industries by providing digital services that allow users to access to all the music they want without having to buy physical CD’s that may only listen a few times. These practices have changed the way to consume and while the 20th century was about hyper- consumption based on ownership of assets, consumption and simple disposal, the 21st century is about collaborative consumption based on shared access (Bostman and Rogers, 2010A). In early 2014, a total of 10,574 people from around the globe were surveyed to develop a better understanding of people’s feelings about consumerism in relation to economic growth and their own personal happiness. Results showed that more than a half of respondents agreed that their country’s current economic model is not working and claimed they could happily live without most of the items they own. (Havas Worldwide, 2014):            
  19. 19. 19   In another study to measure the appetite for participation in share communities around the world, Nielsen polled more than 30,000 Internet respondents in 60 countries to identify who is joining. Results showed that more than two-thirds of global respondents are willing to share their personal assets for financial gain and they are likely to use or rent products and services from others. (Nielsen, 2014):                               This collaborative boost is quietly turning millions of people into part-time entrepreneurs and disrupting old notions about consumption (Forbes, 2013).   Once people have access to shared assets they increase the scope and variety of consumption dramatically, and increases in variety lead to increases in the economic activity (Sundararajan, 2014) driving the emerging intangible economy (Kelly, 2009)     2) Efficiency triumphs over scarcity: Nowadays thanks to the digital revolution every sector of the global economy is being affected by the relentless drive for efficiency, the world is basically moving to a new extremely efficient economy with a new mindset and a new speed (Rifkin, 2014). This phenomenon essentially goes from an economy of production where scarcity of resources makes impossible to satisfy all needs and desires, to an economy of efficiency where resources are being used as effectively as possible to satisfy people's needs and desires.  
  20. 20. 20   Even though people are buying less stuff from companies it is not slowing down the economy because economic value is fundamentally created from economic inefficiencies. When people use their assets more efficiently the productivity increases, and productivity gains tend to lead to economic growth (Sundararajan, 2014) which creates new value and replaces existing businesses. There may be a short-term negative for the economy but long-term economic efficiencies result, and that’s ultimately good for everyone (Forbes, 2013).     3) Distribution of value triumphs over concentration of value: Instead of thinking of traditional employees and outsourcing the tasks that are not core to the business, companies in the CE think about empowering their communities (Cañigueral, 2013) to the extent that in lieu of working only in their jobs, its users start to become suppliers to the platforms. At this point is clear that technology has empowered users by giving them tools to decentralize the pyramid structure in which value is concentrated by a few, bringing transparency to the information about the products, services and companies. The dynamic of the society increasingly obey the logic of networks. Understanding how horizontal networks work is the key to understanding how economy works (Kelly, 2003) and the future belongs to enterprises that distribute control and wealth with their community rather than concentrating it (Gorenflo, 2012). Companies in the CE have no need to own a central infrastructure where to manage the assets, since the inventory are the assets that belong to the users of the community.   In the traditional economy was each company’s job to have a full control of the quality by means of employees checking that everything was working correctly as well as the R&D projects are internal and secret. In the CE part of the workforce is the own community, that takes control of the quality adding value through reviews and uploading information about the inventory while the R&D projects are open and co- created (Cañigueral, 2013) offering a greater feeling of connection and trustworthy (Gansky, 2010). This might result in a reinvention of work where in a short time people might not be working for one corporation but might be suppliers of assets and skills on a variety of different platforms (Sundararajan, 2013).        
  21. 21. 21   Traditional  Companies  in  the  Forthcoming  Economy   In the 20th century technological progress and development in companies was driven by the needs of businesses. The 21st century has experimented a change and the focus has shifted to consumers, and now the big technologies are being developed not for businesses and adapted to consumers but for consumers and then adapted to businesses (Sundararajan, 2013). That results in sites where individuals want to take part and the best example are Social Networks like Facebook or Twitter that have been able to gather 1.23 billion and 232 million active users respectively (Tapin, 2014).   For traditional companies it is time to understand that their mission should not be to waste time explaining how important they are, but do things that matter to people (Stalman, 2014) because this is not an era of change, but rather a change of era in which brands are defined by those who experience it (Solis, 2013) thanks to the powerful speaker that Social Media has provided to society. At the same time, companies can no longer act as monolithic, centralized, short-term revenue generation machines, instead they must become inclusive, create shared value, and thrive amidst radical change (Cicero, 2012). The focus should switch from protection to creation and from enclosure to inclusion having in mind that companies are no longer the sole creator of a brand, it must be co-created by consumers through shared experiences and defined by the results of conversations with them (Solis, 2011).     The forthcoming economy is not just about new forms of retail transactions, it is about an entirely new way of thinking about consumption, one that involves individuals not as passive consumers but as active participants. Companies should be facilitators of meaningful change whose inspiration comes directly from society at large, an entity for which the future-proof enterprise shall necessarily provide more roles to contribute than being just consumers (Cicero, 2012). In this case the discussion is not only about the P2P movement but about a system and way of thinking that benefit both corporation and individuals (Chase, 2012).   It is true that new collaborative startups enable people to get what they need from each other instead of from big corporations, which opens the challenge for traditional companies that should aim for the mission to become unique, inimitable and essential. This can be achieved by leveraging a community, by creating a tribe of supporters and fans around its services and products (Cicero, 2012). The way to do so is by providing
  22. 22. 22   an essential corporate framework with its standards and brand promises, but it is not as simple as building a platform and expecting people to show up, since platform users need to be empowered by businesses who manage the resources and co-production mechanisms in order to encourage the community to create and exchange value (Chase, 2012), but in any case companies can manage the community itself. Community organizing is all about building grassroots support, it is about identifying the people around with whom they can create a common, passionate cause. And it is about ignoring the conventional wisdom of company politics and instead playing the game by very different rules (Peters, 1999) leveraging the innovative capacity of users and transforming it into business growth.      
  23. 23. 23   Background       In order to better comprehend the distinct factors that affect the CE and the current situation of the movement, the following pages seek to explain which are the segments, P2P business models and verticals that are nowadays transforming the traditional economy. Following, it gives a fast vision of how collaborative disruption is struggling with the legal framework and impacting sustainability.   Segments  in  the  Collaborative  Economy   According to the collaborative and non-profit organization ‘Ouishare’, the CE is defined as practices and business models based on horizontal networks and participation of a community. It is built on distributed power and trust within communities as opposed to centralized institutions blurring the lines between producer and consumer. These communities meet and interact on online networks as well as in offline shared spaces. The phenomena leverages technology to empower individuals or organisations to distribute, share and re-use excess capacity in goods/services resulting in an ecosystem where to take profit of each others stuff, abilities, money and knowledges. It is seen as the sum of the following segments:     Consumption   Collaborative consumption gives its name to the seamless circulation of products and services among individuals fostering access over ownership and reducing waste. It describes the rapid explosion in swapping, sharing, bartering, trading and renting being reinvented through the latest technologies and P2P marketplaces in ways and on a scale never possible before (Bostman and Rogers, 2010A).   Companies in the collaborative consumption compete in established industries in a different way. They have noticed that people are surrounded by underutilized assets like housing space, idle cars or even untapped skills, so what companies essentially do is to leverage technology to build P2P marketplaces and bring down the price point for consumers while improving the take-rate of suppliers, that are the own community.  
  24. 24. 24   Production   Because of the expertise, equipment, and costs of producing things on a large scale, manufacturing has been mostly the provenance of big companies and trained professionals (Anderson, 2012) but all these years of web development have served to reach the point of maturity for bits to open a new dimension to the atoms by using digital tools to create new product designs and prototyping.   Open design and manufacturing democratize the process of designing, producing and distributing physical goods by combining open knowledge with distributed infrastructures. They rely on tools such as 3D printers or laser cutters, spaces such as co-workings or fablabs, communities and marketplaces that are fueled by the maker movement and the DIY culture.     Knowledge   Over the next years, three billion new individuals will be coming online joining the global conversation and contributing to the global economy with ideas that will result in new discoveries, products and inventions that benefit society (Diamandis and Kotler, 2012). Such ecosystem will be possible because knowledge no longer comes from a few individuals certified as professors or researchers, but from anyone around that has access to the internet.   Open knowledge enables everyone to freely use, reuse, and redistribute knowledge such as content, data, code or designs. This principle is the foundation of commons-based peer production (such as free software, the creative commons or open science) as well as open education, open data and open governance. “The illiterate of the 21st century are not those who cannot read and write but those who cannot learn, unlearn and relearn” (Toffler, 1993).     Finance   In the last century, financial innovations such as mortgages, insurance, venture finding, stocks, checks, credit cards or mutual funds have completely reshaped the economy. As tremendous as the influence of these financial inventions has been, the influence of network inventions will be greater (Kelly, 2003). Actual consequences of the CE are crowdfunding platforms such as Kickstarter, P2P money lending platforms such as Kiva or even cryptocurrencies such as Bitcoin that enable new forms of circulation of the
  25. 25. 25   capital between individuals. That means funding no longer depends on banks but may also depend on a community that offer credits with better conditions, challenging so older institutions that are witnessing the emergence of strong financial alternatives.     P2P  Business  Model  and  Verticals   The first wave of collaborative companies pursued business-to-consumer (B2C) go-to- market strategies. In this model companies acquire, maintain and rent products acting as upgrades of the old rental businesses providing more convenience for the end users but not much innovation in terms of business model. For instance the car-sharing company Zipcar acquired a fleet of cars in order to rent them to their members who shared the assets without having any personal contact, but costs of managing car fleets were substantial and the company spent 71% of 2010 revenues acquiring and servicing cars (MIT, 2011).   In the 21st century the emergence of new web technologies and an increase in the Internet bandwidth and availability combined with an increase in the accessibility of Smartphones and other mobile devices have enabled the community-based business model, a P2P model in which the community is the main resource for the delivery of value proposition.   On one hand this model is much more capital-efficient than their B2C counterparts because it does not require any capital investment to acquire assets, it relies on a community to supply the assets typically in exchange for a revenue share of the transaction. Companies play as a matchmaker bringing supply and demand together in a P2P marketplace that costs very little to set up. Companies take a cut of the transaction for the cost of developing and maintaining the technology as well as for profits. On the other hand, due to its P2P nature, in many cases the acquisition of new users comes from the community itself so that enables companies to scale in a fast pace and hence helping the business with economic viability and growth capacity. As an example, some articles (Watt, 2014) show that Airbnb has amassed the same number of rooms for rent in just four years that it took 65 years for the Intercontinental Hotels Group, the largest hotel chain in the world.   In the following representation (Owyang, 2014A) the CE outlook is organized in P2P verticals that englobe the six sectors disrupted so far: goods, services, food, transportation, space and money. For a clearer understanding, each sector is broken
  26. 26. 26   down into 2 or 3 sub-classes that include different examples of companies such as Ebay, Kickstarter or Uber:         Legal  Framework  in  the  P2P  Disruption   In the economy that has ruled the physical world for many years, mechanisms of democratic politics and constitutional law have worked to protect citizens rights drawing the lines between doing things for personal reasons and doing things professionally. What is happening now is a blending of both personal and commercial profiles since people’s physical lives depend on what they can or cannot do in the new digital spaces (MacKinnon, 2012; Sundararajan, 2014). This is triggering an innovative disruption that turns non-professional individuals in occasional taxi drivers, hotel room providers or restaurant owners among others. In the words of Clay Shirky, writer and professor of the New York University, any innovative disruption goes through 5 stages of adoption: technical possibility, social adoption, regulatory reaction, civil
  27. 27. 27   disobedience and negotiated settlement (Scola, 2014). In the case of the P2P disruption, the process is now at least on stage two witnessing how the innovation is requested by the society and therefore becoming unstoppable. Once it arrives to the third stage, the situation represents a lot of regulatory challenges in a lawless environment that is ahead of the current laws, depicting a market in which new services are being used before legality can even catch up.   Traditional players are seeing how new companies with a P2P business model are progressively taking over part of their market share. As an example, a recent study released by the Boston University concludes that a 1% increase in Airbnb site’s listings in a given market would result in a 0.05% decrease in quarterly hotel revenues (Zervas, Proserpio and Byers, 2014). As result, corporate lobbies are now pushing governments to take action against these companies as they claim are unfair competition to them, but institutions need to reflect the will of the people as a whole, as distinct from representing mainly special interest groups (MacKinnon, 2012). Neelie Kroes, Vice president of the EU Commission, declared that “We cannot criminalise a whole class of citizens, or drive tourists away from places that need money, in order to protect a few industries that think they can be exempt from the digital revolution. It’s not fair on everyone else, and it’s not realistic” (Kroes, 2014). She also posted the following tweet:             If political rights are necessary to set social rights in place, social rights are indispensable to make political rights real and keep them in operation (Bauman, 2011). In the CE when a company faces regulatory tensions, instead of lobbing it can delegate their users to campaign on its behalf. Individuals within a community band together to come up with a solution that will work for them, and so unleashing the fourth stage of civil disobedience. For instance, after a Catalan government’s decision to fine Airbnb with 30.000€ in 2014, more than 600 hosts and supporters from Barcelona’s small business community gathered offline to show their support for home sharing. Also an Airbnb host started a petition in the platform that gathered more than 8.000 signatures, in which asks the Mayor to work with the Catalan government to adopt new fair rules for home sharing (Change, 2014):  
  28. 28. 28         Future  and  Sustainability   Today capitalism ignores the environmental and social impacts of business activities while the public sector allows to prioritize the interests of the few at the expense of the many (Lewitt, 2013). Humanity is using thirty percent more of the planet’s natural resources than it can replace and if everyone on this planet wanted to live with the lifestyle of the average European or North American, it would need from three to five planets worth of resources to pull it off (Diamandis and Kotler, 2012). In a recent study that surveyed 10.574 people around the globe, seven in 10 respondents agreed that
  29. 29. 29   overconsumption is actually putting both the planet and society at risk (Havas Worldwide, 2014) evidencing that society has the responsibility to react in the interests of the common and future good by empowering a new economic model to secure the future (Lewitt, 2013). By mid-century roughly three billion more people will be joining the planet, and businesses that figure out more efficient ways to use the earth’s resources will be the ones that thrive (Gansky, 2010). In this context, the CE opens the door to a far more efficient way of using what people already have by proposing a P2P model that optimizes resources to the benefit of other consumers and the environment.   Through reusing, sharing, repairing and redistributing goods society can significantly reduce the inefficient consumption and therefore their residual footprint on earth. In a sense, the model also gives a solution to fight the planned obsolescence in which manufacturers shorten the life of the products to increase sales, because it allows users to have access to someone else’s goods without having to buy new ones, resulting in a more sustainable way to behave in the long-term.        
  30. 30. 30   Methodology     The reading of featured articles and bestselling books together with the use of other academic tools such as Google Scholar has helped me to make use of secondary data mainly summarized in the Literature Review and the Background.   Since the objective of this paper is to identify successful practices when building a community in a P2P environment, primary research was also needed in order to seek answers to that question. In this context, I decided to use a qualitative method looking for a more specific way to approach the narrative and inquire into recommendations, so decided to conduct interviews via email, face to face and skype to 6 professionals representing companies that hog the verticals where the CE is present so far (Goods, Services, Money, Space, Transport and Food).   According to the website ‘’ there are over 9.000 companies that foster the P2P movement as the main asset of their value proposition, but only a few have managed to attract the attention of a community of users engaged as an active part in their platforms. I have taken as a sample 6 companies recently established (less than 5 years of life) that have succeeded in building a community of more than 10.000 members and in turn have managed to raise at least 350K€ of financing from investment funds and business angels (Except Goteo which is a non-profit company). The interviewees were:     - Alexandra Ramio, Marketing & Communications Manager at SocialCar   - Andrea Ruani, Community Manager at Eatwith   - Enric Senabre, Projects Coordinator & Community Manager at Goteo   - Juanjo Rodriguez, Co-Founder & CEO of Knok   - Claudia Peyri, Marketing Manager at Trip4Real   - Nono Ruiz, Co-Founder & CEO of Chicfy     I used the same questionnaire in all the interviews conducted as a way to find company’s best practices and detect common phenomena on why their strategies have stood out from the rest. To do so, I developed a questionnaire containing questions focused in 5 marketing topics: Branding & Awareness, Trust & Security, New Members Acquisition, Reach & Visibility and Loyalty & Engagement.  
  31. 31. 31   After translating the original version in English, Interviews are analyzed using the Coding method (Glaser and Strauss, 1967), in which a qualitative analysis of data is processed in order to highlight relevant pieces that will be called ‘codes’. Pieces are labeled as codes when are repeated in several interviews, when the interviewee explicitly states that something is important, when I have read about something similar in previously published academic articles, when pieces match with concepts and theories explained in the literature review or when the I consider them surprising and worth to remark. After applying the coding method to all the interviews, ‘categories’ are created by bringing codes of different respondents together in order to conceptualize and make sense of unstructured data. A hierarchy among categories is established based on the number of times a similar code is endorsed throughout interviews. In a further step, connections among categories are drawn allowing a discussion of the results coming up with interpretations formulated.            
  32. 32. 32   Research  findings  &  Analysis     As a way to structure the fluency of the research within the paper, a DIKW Pyramid model (Ackoff, 1989) is adapted going through the layers of data, information and knowledge.   First of all, qualitative data is collected from 6 interviews conducted to companies related with the different verticals previously shown in the Background. After answering the research questions, each interviewee brings statements (codes) that not necessarily need to have relation with the views and opinions of the other interviewees, so the heading Field Research announces the impressions of all respondents without any correlation sought. In the next step, the qualitative data provided by the 6 respondents is used to identify relationships in answers in order to obtain information bodies (categories). The heading Results aims to extract meanings of the various points of view by detecting commonalities among respondents while understanding the different practices carried out regardless of the diverse sectors that form the sample. Ultimately, knowledge occurs when the data from interviews is represented in a collection of information bodies that connect in order to convey useful messages. These inputs will be formulated under the heading Discussion as recommendations about practices for succeeding when building a community in a P2P environment.     Field  Research   This section summarizes the interviews taken to the 6 partners that agreed to collaborate in the research of how to succeed when building a community in the CE:     SocialCar’s Interview   Alexandra Ramio is Marketing & Communications Manager at SocialCar, a P2P car- sharing company founded in 2011 that has a community of more than 35.000 members and managed to raise 1M€ from investors. Taking into account it is an innovative alternative of mobility, Alexandra explains the most important matter when starting the company was to put all the efforts in making people understand the benefits of using the business and the value they can extract from it. ‘The challenge for any marketplace in
  33. 33. 33   the CE is to transmit correctly the message either to supply and demand, all having in mind that the platform will be the same for both sides’. To do so, is required to set the initial resources into providing a great customer service, offering clear ways to contact and resolve queries as well as being active in Social Networks looking out doubts that the community may have. ‘Being transparent all the time is the best way to create trust and come up with a service with all the necessary safeguards’. She states that the subsequent step is to invest in communication in order to position the brand as a referent in the top of mind helping to increase the awareness among potential members. In any case, even though channels like Google Adwords work fine, she proclaims as the best acquisition channel the word of mouth due to the following three reasons: 1) It is free 2) Is viral, so acquires new members exponentially 3) Creates more loyalty than any other channel since a recommendation from a person you know is the best marketing campaign possible. It is remarkable that suppliers act like micro- entrepreneurs that promote their assets through all the communication channels they find available, which boosts the reach of the business. Another way to tackle the reach strategy is by promoting partnerships with other companies as long as the alliance makes sense when thinking about benefits for members and as long as exists synergies between the two communities, otherwise might be perceived as intrusive advertisement. Once talking about developing loyalty among members, Alexandra stands that is important to have presence in physical meetings such as conferences, fairs and congresses to demonstrate that there is a team of people behind the platform eager to tackle the problems of their community. ‘The online world always needs of an offline relationship with users’. This match of both worlds brings back a main advice that she gives to all the companies that do not experiment an increase in their communities, which is to attend to featured events in order to boost their visibility and foster networking with people that may become users or may have an impact in reaching other users.     Eatwith’s Interview   Andrea Ruani is Community Manager at Eatwith, a P2P meal-sharing company founded in 2012 that has a community of more than 30.000 members and managed to raise 900K€ from investors. Andrea explains they set out their promotion strategy by frequenting physical places where it was already a collaborative environment
  34. 34. 34   established such as co-working spaces. ‘That was our touchpoint with the real world, wherein we leveraged as well to arrange meetings with the first early adopters with the purpose of helping us grow with their opinions and concerns. In an early stage is crucial to take off the role of employee and put yourself as a member, that is when you understand that the same experience might have several points of view’. Since Eatwith represents a disruptive way of consuming, in order to provide security to visitors they realized it was essential to create a high-quality platform with a clear identity and a defined interface. ‘The intention was to first ignite curiosity in the ‘techie’ users, which is a profile of user eager to discover new services and experiences, so through their interest end up approaching other profiles that are not that internet-oriented’. From there the company based its itinerary in pushing the use of the word of mouth among the members of its community seeking to create trust around the business. To do so, they made available to members a bunch of tools ranging from business cards, customized URL’s (to share through Social Networks) or Facebook Ads promotions on the supply side, to providing rewards or discount codes for members that write reviews about their experience on the demand side. Nevertheless, he gives the advice of constantly overseeing the progress of the community because in his opinion, the website should not lose the value of showing empathic connections among members rather than lucrative purposes. When asked about another reach techniques, he claims that working with bloggers or influencers is good to a certain level, and companies must opt for the ones that have a small community of active followers over the ones that have a huge volume of them. In the last matter discussed, Andrea stands that the importance of the offline events lies in the generation of a context wherewith have the option to brainstorm with the community while is also an opportunity to inspire the members that are suppliers. He also highlights that ‘The main goal when supporting campaigns is to let the community create loyalty by themselves in a natural way, so that every action conducted is not perceived as an effort but as a pleasure’.     Goteo’s Interview   Enric Senabre is Projects Coordinator & Community Manager at Goteo, a Crowdfunding company founded in 2011 that has a community of more than 50.000 members. He started the interview pointing about the importance of spending time and conversations, rather than money, when building the brand. ‘We tried to get into
  35. 35. 35   discussions and reflections about our field even before having the platform completed, so by the time we launched a bunch of people were promoting us for free’. These early adopters are also crucial in the confidence and security campaigns because infect other people to check the service and encourage potential members to trust in the platform. There are other basic mechanisms to promote trust as well for example by refunding the money quickly in case of failure, permit members unsubscribe easily, keep an updated back office or taking seriously the customer service. The latter also affects in the fight of being perceived as a transparent business but requires time and constancy, the same happens in the promotion of awareness through own communication channels, which is a constant job of thinking out loud in Social Networks and updating frequently the blog. When asked about the acquisition methods his response is unequivocal, Goteo only acquires new members through the word of mouth and do not spend money in paid channels. At the same time, they rely on fostering partnerships with public and private institutions as well as with influencers with a high reputation on the field. ‘This strategy has produced a boost of visibility and prestige of the business while cross-diffusion dynamics have helped us validate new developments for the website’. In a more advanced point of the interview, to work conditioned on the feedback provided by the community and come up with a minimum viable product are his main advises. He recommends giving voice to members as soon as possible co-designing the service with them and work under a beta stage as long as possible progressing slowly but surely. In his opinion events are essential not for creating loyalty but as an opportunity to interact with the community in a closer way. ‘Events are an excellent choice for sharing progress and open participatory dynamics with members, this kind of interactions result in learning and a consequent improvement of the platform’.     Knok’s Interview   Juanjo Rodriguez is the Co-Founder & CEO of Knok, a P2P space-swapping company founded in 2011 that has a community of more than 60.000 members and managed to raise 500K€ from investors. When asked about how to proceed in the initial steps of a collaborative business, he refuses the option of investing in Branding since is very difficult to get the minimum amount of money that might let a small company stand out from the other competitors that are fighting to gain the attention of users. ‘Companies that manage to create a correct Branding are those who deal first with offering
  36. 36. 36   something that people may be looking for, so get a significant amount of members before moving to invest in the brand’. Following, he explains how the difficulty of creating trust in the community depends on the service provided, since user’s confidence demands vary based on how risky or innovative the service is. Creating trust should be a priority for any company, and these are three critical points based on his experience: 1) Provide a good technology, the platform must be attractive and user- friendly 2) Make easy for users to contact in case of necessity, customer service is key 3) Oversee that the general behavior and conduct among the members of the community meet with the values the company wants to transmit, because brand’s image and trust also depends on the current users. Later on, Juanjo illustrates the importance of the word of mouth claiming that at least 50% of the acquisition of new members should come from this organic method. That figure depends on how viral is the service and whether it is free or requires the user to pay, free services are more likely for the word of mouth. ‘It is true that other paid channels such as Facebook ads or Google Adwords are very useful in many phases of the business but is complicated to keep the sustainability when depending on them’. He advises that companies in the CE should focus on getting a core of members that begin to experiment with the platform and rely on them to spread the word, ‘In practice is a much better reach strategy than promoting partnerships with other companies or working along with influencers or bloggers’. At the same time, is indispensable to listen the opinions and suggestions of the early users since almost all the businesses see how their initial idea gets modified and end up doing something different depending on the feedback they receive from their communities. In his opinion, the best way to retain members is by making sure they like what they see on the platform, all other marketing actions such as events or contests are secondary. ‘I rather invest in product development because having the best website is the easiest form to achieve loyalty actions’.     Trip4Real’s Interview   Claudia Peyri is Marketing Manager at Trip4Real, a P2P experiences-sharing company founded in 2013 that has a community of more than 15.000 members and managed to raise 1M€ from investors. In her opinion, is interesting to run a branding campaign during the initial months of life in case the company is related with an innovative concept of doing things that requires of an explanation from scratch. ‘In our case it was
  37. 37. 37   very important to be disclosed through media communication campaigns in order to let the local users know about the existence of our service’. From there it is extremely important to count with a customized customer service that provides immediate responses to the questions and problems that either the actual community or the potential members may have. A close contact is necessary to generate engagement and open the door for people to spread the word about the business. ‘Members that get to us because of the word of mouth become more involved with the brand, since it means they have been told our service is worth it’. In addition, Claudia explains they are likely to work with bloggers after making sure which ones are appropriate for communicating to the audience they want to arrive. ‘The best case scenario is when bloggers generate quality content about us and include links to our website producing an impact in SEO as well’. On the other hand, influencers and partnerships represent a remarkable strategy as long as there is a shared philosophy and values between both sides, Trip4Real has experimented this phenomena by joining forces with the worldwide known Ferran Adria. As a main advice, she recommends to never stop generating contexts wherein make some noise whether it is through breaking content or creative campaigns in order to stretch the line between being a member and become a brand’s fan. ‘It is all about learning-by-doing, testing with the trial and error method until get it right and approach virality’. In the last question, she claims that apart from developing a detailed email- marketing strategy, the most important thing when dealing with member’s loyalty is to have in mind they like to feel identified and be protagonists, so beyond seeking auto- promotion, physical events are great to make the community participate and that is when the brand gets positioned in the top of mind. ‘Besides all this, Trip4Real has a quality control department to emphasize our philosophy is applied to any of the activities offered’.     Chicfy’s Interview   Nono Ruiz is the Co-Founder & CEO of Chicfy: a P2P goods-trading company founded in 2013 that has a community of more than 20.000 members and managed to raise 360K€ from investors. Under his experience, when a collaborative company is in its beginnings should not invest much money in Marketing but rather invest in time to investigate in product development. ‘The most important Marketing strategy is to recruit a small group of people (Type A) and convince them to be the first members of
  38. 38. 38   your community, these users should be able to naturally inspire and provoke others to check the platform as well’. He insists about the importance of selecting accurately these 5 to 10 early adopters since they will be in charge of creating trust around the business. He advises the minimum effective dose (MED) as a work measure to adopt, which means asking what is the minimum number of type A members that will lead to a rapid product growth and who are this members. The bigger the time spent analyzing them, the higher the guarantees than other similar users (Type B) might use the service addictively and beneficially to the community. ‘Once usage addiction and product traction are achieved it is time to go for the rest of the users (Type C)’. He defends this strategy by claiming that members obtained through the word of mouth present better metrics and conversion rates than members obtained through paid channels. This occurs because the firsts browse the website by their own choice exploring and asking about how to get the most out of the service while the seconds leave if do not like what they see at first sight. Ultimately, he summarizes the interview with the following tips: 1) It gives very good results working with profiles able to promote the use of products by imitation 2) The adoption of type A members must be associated with an excellent customer service and an extreme fixation in improving the product development 3) In a community-based model members are king and companies should facilitate the most their interaction with the platform.            
  39. 39. 39   Results   This section summarizes all the interviews into a large table in which columns are broken down in marketing topics, codes, categories and endorsements. Marketing topics are subsequently explained: Branding seeks giving the business a recognizable identity that differentiates it from other companies that offer similar services. Awareness stands for making people aware about the business and position the brand in the top of mind.   Trust and Security are necessary for the development of the business. User’s confidence has been a main aspect of the digital space since the arrival of the Internet.   Acquisition of New Members is key in order to enlarge the supply and demand sides of any collaborative business.   Reach Strategy & Visibility refers to alternative ways of getting to a target of users who may become members of the community.   Member’s loyalty & Engagement focus on the process of retaining existing members through incentives and other programs.        
  40. 40. 40    
  41. 41. 41   Discussion   In order to clarify the results obtained in the previous section, the following scheme indicates the connections established in the the process of building a community in a P2P environment. These connections are drawn with thick and thin arrows depending on whether they point out particular categories or the whole marketing topic:        
  42. 42. 42   After conducting the interviews and disclosed the consequent results, this scheme makes clear that despite the fact that the six companies work in diverse sectors, nevertheless have similar advices and strategies regarding how to approach communities. I have come up with some guidelines based upon the previous scheme:     I) As any collaborative business implies a new innovative alternative of doing things (swap your house with foreigners, share your car with strangers, invest in other people projects...), the first step lies in building a minimum viable product to corroborate whether the service you are developing is moving towards the right direction and meets the needs of the audience targeted. To do so have in mind that P2P platforms aim to provide a place wherein members can connect without the direct intermediation of the company, being a marketplace that belongs to the community. It is vital to plainly transmit the value proposition of the brand in order to make people understand the benefits of using the website, and a good way to tackle the matter is through owned media. By adopting a corporative blog and having presence in the appropriate social networks, you can start creating distinctive content for the sector while promoting awareness and receiving helpful inputs about your project even before launching the beta process.   II) Once value proposition is clearly defined, the question of how to start building the brand arises. The interviewees have clearly emphasized their bet on bootstrapping at an early stage, which means spending time and conversations with users that may lead to improvements rather than employ the initial resources investing in marketing actions. Such conversations, along with the creation of a high-quality platform and the demonstration of an attentive customer service, are key factors to persuade an initial amount of people to become the first members of your community and begin to experiment with the platform. These early adopters are essential to spread security around the website and ignite interest in other potential members that will end up trusting as well, welcoming so the emergence of the word of mouth as an acquisition channel. In a more advanced stage of the business, after gaining scale with a significant amount of loyal members and maybe raise some funding from investors, it is a good strategy to invest in media in order to promote branding of the collaborative business and position the brand as a referent in the top of mind.  
  43. 43. 43   III) As mentioned in the Results, creation of trust and security is indispensable in any digital company and even more so in the ones that disrupt sectors operating in the same manner for a long time. The level of trust required really depends on how risky or innovative is the service, considering that is not the same to get into the car of an stranger than swapping clothes with other people without having direct contact. Interviewees point out three significant aspects to inspire confidence in potential and current members: The most important one in order to be perceived as a transparent business is the configuration of a relentless customer service. It has to offer clear ways to contact with the company, be available at any time in case of necessity, provide immediate customized responses and be active in social networks. The combination of these variables will open the door for members to spread the word about the excellent treatment they have received while it also can be used as a tool for getting feedback. The second aspect relies on the technology behind the platform; the interface must be attractive, user-friendly and defined with the identity and values you want to transmit. Product development functionalities like permitting members unsubscribe easily and refunding the money quickly in case of failure enhance security with the company. The last aspect has to do with the behaviour of the community; companies in the CE never have to try to manage the progress of the community but rather oversee that the general conduct meets with the values desired to transmit and get feedback about their connections and purposes.   IV) The acquisition strategy always needs to be depicted around empowering the word of mouth. Members acquired through this channel are the most valuable since they have been told by other users that the service is worth it, and such recommendation is the best marketing campaign possible. It is why word of mouth creates trust and security beforehand, which makes new members become more engaged with the brand and willing to browse the website by their own choice exploring and asking about how to get the most out of the service. Since the supply side of a collaborative business act like micro-entrepreneurs eager to promote their assets, interviewees recommend to provide them tools like business cards (to remain in the top of mind) or customized URL’s (to reach a higher audience through social networks). Moreover, paid channels such as Google Adwords or Facebook Ads aid to acquire new members in many phases of the business but companies should not depend drastically on them to build the community.  
  44. 44. 44   V) An additional way to boost the acquisition of new members is through exploiting other channels that do not belong to the company itself, so represent an opportunity to get visibility and raise awareness within a target of users that are more difficult to reach at first. Interviewees highlight three channels to communicate through: The option more endorsed is to partner with bloggers and influencers because it gives good results working with profiles able to promote the use of products by imitation, but at the same time is necessary to make sure which ones are appropriate for communicating to the audience you want to arrive. Look for professionals with a high reputation on the field and take into account that is better to opt for the ones that have a small community of active followers over the ones that have a huge volume perhaps plenty of fake followers. Another option to partner is with other companies as long as the alliance benefits your members and exists a shared philosophy of values between the two communities. This kind of synergies might bring prestige to the business but might also be perceived as intrusive advertisement in case of abuse. Finally, is interesting to communicate in mass media when your company is pushing a new way of doing things that requires of an explanation from scratch as well as for promoting your brand to a biggest audience.   VI) The last recommendation has to do with the management of the loyalty of your community, this topic aims to retain the actual members by learning from them and come up with improvements to increase their engagement. Under this premise, interviewees point out physical events as a great choice for making members feel protagonist and strengthen the relationship with the supplier side of the community by creating participatory dynamics. Events are also the perfect moment to share the business progress and connect with the channels mentioned in the point V because they facilitate a context plenty of interesting content and networking. At the same time, are favorable to open a relation towards receiving personal feedback shaped like concerns, suggestions or even brainstorming with active members. It is necessary to work always conditioned on the feedback provided, and other ways to get such opinions are through learning from the customer service and the community behaviour. Once you know the areas for improvement, invest in product development to implement them and thereafter loyalty actions are achieved via your platform is better than the rest. Reinforce your messages with a detailed email-marketing strategy and establish a fair incentive program as an acknowledgement to the heavier members within the community.  
  45. 45. 45   Conclusions     This   thesis   sought   to   address   the   emergence   of   the   CE   and   looked   for   good   practices   about   how   to   build   a   community   in   a   P2P   environment.   It   first   has   provided  the  reader  with  an  overview  of  literature  helping  to  understand  the  key   concepts  related  to  the  topic  and  its  prevailing  issues.  Then,  thanks  to  interviews   conducted  to  six  professionals  related  with  the  sectors  affected  so  far,  one  can  see   how   these   successful   companies   bring   similar   advises   that   have   been   depicted   through  marketing  topics  and  categories  in  order  to  facilitate  the  understanding  of   their  business  strategies.  This  paper  has,  thus,  provided  recommendations  to  those   who   are   stucked   in   the   process   of   creating   a   P2P   community   or   those   who   are   about  to  start  a  company  related  with  the  field.   The  main  limitation  to  this  thesis  was  the  fact  that  the  collaborative  economy  is  a   relatively   new   topic   and   brands   have   only   recently   acquired   visibility   and   recognition,   so   despite   its   growing   in   practical   importance,   there   is   a   dearth   of   empirical  studies  and  a  lack  of  academic  research  on  how  to  create  a  community.   Companies  selected  as  part  of  the  sample  share  information  about  how  big  is  their   users  database,  but  another  limitation  is  I  really  do  not  know  the  number  of  active   members   within   their   communities.   When   talking   about   the   interviews,   it   is   necessary  to  mention  that  each  company  interviewed  belongs  to  a  different  sector   so   they   might   present   particular   cases   for   the   market   they   operate   to.   It   is   also   remarkable  that  even  though  each  one  of  the  interviewees  was  asked  in  the  same   way,   questions   were   open   so   they   might   come   with   different   interpretations,   which  means  that  interviewees  may  perfectly  support  categories  that  they  haven’t   mention  explicitly.     For  further  research,  it  would  be  interesting  to  analyze  the  factors  that  encourage   people  to  belong  to  a  certain  community  from  the  member’s  point  of  view.  This   would  give  a  broader  and  more  complete  perspective  of  the  best  practices  to  carry   out  when  building  a  community  in  a  P2P  environment.      
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  50. 50. 50   Appendix       The research interviews were based on the following questions:     1) Do you recommend to invest money in building the brand in order to make people know the value your company is providing? 2) How do you get to transmit trust and security when you are starting to build the community? 3) How important is the word of mouth in comparison with other paid acquisition channels? 4) Is it a good strategy to work with influencers, bloggers and partner with other companies with the purpose of increasing in the community? 5) What is the main advice you would give to someone that does not know how to create the community? 6) What kind of marketing actions would you recommend to fidelize members? Why is it important to arrange meetings with the community? 7) What is the main value offered by your company that lets you differentiate from competitors?