Story Board: The Collaborative Economy for Corporations (Official Slideshare Version)

Jeremiah Owyang
Jeremiah OwyangFounding Partner at Kaleido Insights & Founder of Crowd Companies, Innovation Council.
Jeremiah Owyang
What Companies Must Do When
Customers Share –Rather Than Buy
The Official SlideShare on the Collaborative Economy
Jeremiah Owyang
Industry Analyst
Jeremiah Owyang
Why is the crowd becoming more
powerful than companies?
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How much will it hurt when the crowd
doesn’t need to buy from companies?
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What should a company do to respond
and stay profitable?
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Why embrace a Collaborative Economy?
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Let’s look at the past to see where we’re going
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The First Era: A few people could
publish on the internet
Source: Altimeter Group, the Collaborative Economy Report, 2013
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Few of us
can publish,
I talk, and you
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The Second Era: Anyone can publish
using social tools
Source: Altimeter Group, the Collaborative Economy Report, 2013
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I’ve lost
media power.
We can
speak our minds,
and hear
trusted opinions.
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The Third Era: Using same social tools
people share products
Source: Altimeter Group, the Collaborative Economy Report, 2013
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Using these social
sharing sites, I can easily
get products and services
I can get goods at no
cost from friends. I
don’t need to shop
at companies.
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They stole
my cheese.
What role do corporations play if people
don’t need them?
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The first instinct is for companies to fight it
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But they don’t have to fight –they can join
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Ownership and access is shared
between corporations, startups and
people. The Collaborative Economy.
An Opportunity: A New Economic Model
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The only way,
is to let go
to gain more.
For companies to succeed in the
collaborative economy
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Question: Is this a business disruption?
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Sharing is not new, our Moms taught us
to do it!
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But now, people can use technology
to do it at a scale without boundaries
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Imagine you’re going on a business trip
And you can tap the crowd to get what you
need—without buying from companies
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Use another person’s car
–instead of a taxi corporation.
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Lyft enables crowd to be transportation
–avoiding taxis
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…use AirBnb and stay
at someone’s house
–rather than a hotel.
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AirBnb enables crowd to be a hotel
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…use peer lending websites to
borrow money from the crowd
–rather than go to a bank.
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LendingClub enables crowd to be a bank
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…hire people from the crowd
–rather than working with traditional
staffing agencies or HR.
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oDesk enables crowd to be a workforce
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…rent office space from other companies
that have extra space–rather than work
with a traditional property manager.
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LiquidSpace enables companies to
rent from each other
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Food and beverage
…enjoy a home cooked meal from
someone’s home kitchen—rather
than eat at a restaurant.
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Feastly enables your neighbors’ kitchens
to be a restaurant
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Goods and products
…get goods and products from the
crowd at no cost for our office and home
–rather than buying at a store.
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Yerdle enables neighbors to gift goods
–rather than buy
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The impact of sharing can be quite severe
Customers can buy once –and share
many times amongst each other
–reducing the need to buy again.
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A properly shared car is…
Lost Revenue
of Auto Sales
(1 shared car = 9 cars at
average of $30k each.)
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What’s causing this? Three major factors.
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Societal factors: Access is more
important than ownership
• Younger generation, or saddled by debt, are
realizing access to goods is better than
owning them.
• Population density and many global cultures
are accustomed to sharing.
• It means, people don’t need to buy and own
things to get what they need.
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Economic factors: Activate idle
• As population
grows, earth’s
resources stay
• It means that: “it
pays to buy
especially when
we can re-use or
resell to others.”
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Technology enables easy sharing globally
and locally
• 87 phones per 100
people on planet
• Three quarters of
startups use social
tech like Facebook
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Venture Investors fuel this movement –
these startups won’t go away in near time.
Out of 200 collaborative
economy startups, total
funding was over $2 billion
Of those funded, the average
was $28 million
(May 2013, Lyft raised $60m)
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The sharing
revolution is
an unstoppable
*Caveat: The only way to stop
this movement, is to stop the
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What can companies do when they’ve lost
power to the crowd?
There is a solution
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Collaborative Economy: Value Chain
The key is to change the
way we think:
• Products become services
• Services become
• Marketplaces build your
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1) Company as a Service
• Products become services
• Customers want access to
products, but may not want
to own them
• Companies must change
the relationship and offer
• Renting
• subscribing
• or event lending.
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Company as a service isn’t new!
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Reality: Toyota and BMW rent cars,
as a service
• For companies that have high
durable goods, unattainable
luxuries, idle inventories, or
high consideration purchases,
allow them to now be a
• 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.
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Dollar Shave Club offers razors as a service
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Peugeot offers Mobility as a service
–even renting vans, cars, buses, and bikes
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2) Motivate a Markeplace
• Shift services to become a
• Motivating a marketplace 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.
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Shifting services to become a marketplace
• 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 are a number of new
activities that people can
perform, including resell,
co-own, swap goods, lend to
each other, or gifting.
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Motivate a Market
• People are bypassing hotels
to stay at unique
experiences, using websites
like Airbnb.
• Example: Rather than stand
by the wayside, Lewis
discovered a new market
opportunity for his guest
room to be certified as
Marriott certified.
• A large brand brings
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Motivate a Market
• Marriot would then funnel
trusted guests, perhaps
from a loyalty program, and
even offer maid, food, or
concierge services.
• Everyone wins: Lewis gets
a trusted guest, the guest
gets a local experience at a
certified home, and Marriot
gets a cut of the
transactions –that they
would have missed out on
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ScotteVest enables second market
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Patagonia enables second market and
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3) Collaborative Economy: Value Chain
• In this third phase,
companies who have
marketplaces, must activate
them to build their future
• We call this “provide a
platform.” It means that
companies must empower
their crowds to build future
products and services.
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Provide a Platform
This is the hardest
level –but yields the
most benefits.
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Many startups are already
collaborating with users:
-Ideation sites like
UserVoice co-ideate
new products
-Kickststarter co-funds
new ideas
-Quickly co-builds new
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Imagine if collaboration was extended to:
• Co Funding
• Co Ideation
• Co Creation
• Co Distribution
• Co Marketing
• Co Selling
• Co Revenue
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Co-Fund new products like Kickstarter
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Co-Design products like Nike
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Co-Develop like Quirkly
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Co-Customize like Etsy
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Co-Produce with 3D Printers
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Co-Storage of Products with Lockitron
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Co-Deliver with Deliv
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A crowd built a car: Wikispeed
Community led project that:
Is crowd co-funded, co-
designed, and co-built a
working 100MPG car.
The crowd designs
components, 3D prints
them, and mails them to
central location for
Car is being sold at $25K
per auto.
Jeremiah Owyang
It may be hard to tell the
difference between
employees and customers
as new products are built
from the crowd.
But the costs of building
are leveraged by the
crowd, reducing the costs
of the company.
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Radical –but Efficient: The Crowd
Becomes the Company
In this future state, the crowd will efficiently fulfill
nearly all corporate functions.
The only thing remaining,could be ecommerce
software and a logo!
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Collaborative Economy: Value Chain
• The advanced company
will deploy all three
• Startups that partner
with corporations have
opportunities that others
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What will challenge us as we
move forward?
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Opposing Market Forces Abound
1. Corporate mindset wants to
hold onto control –and
revenue models
2. Many governments,
lobbyists, and institutions
3. Fragmented startup scene
creates confusion
4. Excess of startups creates
uncertainty on which will last
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What are your benefits for letting go to
the collaborative economy?
Jeremiah Owyang
More efficient, as the crowd
helps you
2 A long-term relationship
with your vested customers
3 New value created between
people, means new revenues
4 If you act now, you will have
first mover advantage
Benefits to letting go
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Collaborative Goal: Activate the market
around you
Opportunity – Harness
new business
transactions that you
were missing out on.
Take 20% cut from every
market transaction.
Sell new value-added
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To gain this new economy
and market, you must leap
across, leaving behind old
business models
Jeremiah Owyang
The Collaborative Economy
Jeremiah Owyang
Industry Analyst
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Story Board: The Collaborative Economy for Corporations (Official Slideshare Version)