The Future of Business Models #FutureOf

The Future of the Business Model By Jeremiah Owyang, Chief Catalyst

Question: How can brands be resilient during times of great change?

QUESTIONS WE’LL ASK AND ANSWER 1. How have business models been disrupted? 2. What are the changes companies must make? 3. Which brands are leading with new business models?

BUSINESS IS CHANGING

DISRUPTION HAS BEGUN Do you remember when Social Media meant that sharing ideas disrupted the media and communications industry?

DISRUPTION CONTINUES The next phase of sharing is taking place in the physical realm. People are sharing goods, services, time, space and money.

ECONOMIC UNCERTAINTY GIVES US PAUSE Governments and businesses struggle to find a clear economic path, while people are learning to depend on each other to be self-sufficient.

TECHNOLOGY POWERS PEOPLE TO BE SELF-EMPOWERED New startups are using powerful social data, mobile apps, and smart phones to enable people to connect to each other.

PEOPLE ARE BECOMING LIKE COMPANIES – BYPASSING TRADITIONAL CORPORATE MODELS Hotels Taxis Restaurants vs. vs. vs.

EVEN “OCCUPY” HAS A BUSINESS MODEL These new sharing startups enable people to get what they need from each other instead of from big corporations. Source: Digital Trends

BIG COMPANIES ARE SLOW TO CHANGE, LEAVING THEM VULNERABLE

NEW MARKET DESIRES CHANGE BUSINESS METHODS

THE OLD WAY THE NEW WAY 1. Maximize profit 1. Purposeful brands 2. Global Marketplaces 2. Local (and Global) 3. Standardize Offerings 3. Personalize 4. Slow delivery of goods 4. On-demand 5. Consumerism 5. People make & share 6. Passive customers 6. Empowered people

1) PEOPLE WANT A PURPOSE Deloitte studies show that “Millennials” seek companies that have a purpose and social mission beyond just profit. They are about one-third of the American workforce. Boomers seek to retire soon. They want companies with a purpose. They seek sustainability.

2) LOCAL MARKET DELIVERY TRUMPS GLOBAL Sharing startups, like Airbnb, Uber (funding over $260m by Google), Google Shopping Express and Postmates, deliver goods and services at the local level. Uber moves idle goods at local levels to be delivered to others on demand. Uber can start to compete with Amazon. Local merchants and homes win.

3) PERSONALIZED GOODS AND SERVICES People can now make and customize their own goods using Shapeways 3D-Printing service. CustomMade is a network of “Makers” that are ready to produce to scale. More products will soon be customized to your needs and preferences, printed on demand. Online marketplaces like Etsy and CustomMade scale. One size no longer needs to fit all.

4) ON-DEMAND MEANS THAT REAL TIME MATTERS Location-based apps and mobile devices empower local delivery ondemand. Uber, Google, eBay, Walmart, PostMates, Instacartand Deliv power instant to hourly delivery. A battle over same day delivery is Amazon’s fulfillment happening between Google, centers must compete Walmart, eBay and others. with local. The crowd speeds delivery, enhancing service.

5) DON’T CALL THEM CONSUMERS. THEY MAKE AND SHARE. People are consuming less. Instead, they are using marketplaces to re-use and recycle. Those that can make, will buildand share. People can now re-use goods using Nextdoor.com and Yerdle.com to gift to friends. Techshop enables people The crowd to become Makersof their functions like a own products. company.

6) THE CROWD IS EMPOWERED The people have become like a company, getting what they need from each other and bypassing inefficient institutions. Using social networks, they connect with each other instantly. They are becoming like a powerful company. The crowd functions like a company.

WHAT COMPANIES ARE LEADING THE CHARGE?

THESE BRANDS THAT ENABLE SHARED VALUE:

PURPOSEFUL BRANDS PROVIDE SHARED VALUE Millennials (and beyond) want companies to have a purpose. Corporations must think more about community and environment.

GIVE PEOPLE PURPOSE Toyota 100 Cars for Good Program – The program awards 100 vehicles to 100 deserving nonprofit organizations over the course of 100 days based on votes from the public.

MISSION-DRIVEN FUELS SOCIAL ADVOCACY Pepsi Good is a community of people who have a purpose.

ENABLE THE CROWD TO CONTRIBUTE The crowd chooses how funds are distributed to non-profits in this example of Barclays.

ENABLE THE CROWD TO CONTRIBUTE GE partners with Quirky for crowd innovation.

CROWD FUNDING MEANS SHARED RESULTS – THE HIGHEST STATE OF LOYALTY U-Notes are sold in increments of $100 over the Internet with an asset-backed feature and make quarterly payments (interest and principal).

RECYCLING HARNESSES NEW BRAND LOYALTY H&M encourages recycling of old clothes to reduce the environmental impact of the fashion industry.

PRODUCTS FOR RENT – NOT JUST FOR SALE People can rent cars from BMW with the DriveNow program, instead of buying a car.

EXPERIENCES ON-DEMAND FUEL NEW BUSINESS MODELS W Hotel and DesksNearMe partner for on-demand workspaces.

GENTLY WORN MARKETPLACES TAP MOVEMENT Patagonia partners with eBay to encourage second-hand usage of goods – beyond selling new.

LOCATION-BASED TECHNOLOGY ENABLES SHARING RelayRide enables people to share privately owned cars, using OnStar.

NBC SPONSORS GIFT ECONOMY Yerdle.com is a place where thousands of people give and obtain things for free from neighbors – avoiding retailers.

REAL TIME DELIVERY FROM LOCAL MERCHANTS Google Shopping Express provides local delivery from merchants, challenging Amazon. Rapid delivery, right to your home.

RETAILERS PARTNER WITH ETSY “MAKERS” Etsy and West Elm have partnered to discover emerging artists.

MAKERS EXPAND PRODUCT EXPERIENCE A community of Makers from CustomMade has partnered with Lincoln Motors to build matching jewelry for new car owners.

CROWDS ARE BECOMING LIKE COMPANIES Co-funding new products like Kickstarter.

NIKE CO-OPS PRODUCT DESIGN WITH CROWD Nike offers co-design products, allowing you to customize the shape, color, style, and fit, with thousands of options available, personalizing at scale.

BRANDS ENABLE 3D PRINTING FOR MASS PERSONALIZATION Nokia offers 3D files, enabling custom cases to be printed at Shapeways

ONCE AGAIN…. THE OLD WAY THE NEW WAY 1. Maximize profit 1. Purposeful brands 2. Global Marketplaces 2. Local (and Global) 3. Standardize Offerings 3. Personalize 4. Slow delivery of goods 4. On demand 5. Consumerism 5. People share/make 6. Passive customers 6. Empowered people

Companies that meet these new market needs, become Resilient Brands They are: innovative, agile, empowering, built to last, and profitable.

FINAL TAKEAWAYS • The market seeks purposeful brands, local, personalized, on-demand models. • The crowd is becoming like a company – bypassing inefficient corporations. • Corporations must use these same strategies and tools to regain relevancy. • To do this, companies must embrace a business model change. • Corporations that partner with the empowered people become resilient.

Takeaway: Brands achieve Resiliency by collaborating with the empowered people for shared value.

Crowd Companies Empowered People & Resilient Brands for Shared Value Jeremiah Owyang Chief Catalyst, Founder @jowyang Jeremiah@crowdcompanies.com