final le web london (june 2013)
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The Sharing Economy
Mark Suster
@msuster
LeWeb London, June 2013
What new can a VC really tell you? 2
After 2 days of the sharing economy
3
I thought I’d give some context to
Why sharing / collaborative consumption?
Why now? What next?
Prices
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Network
Drivers of our Future World
Economics Un / under-
employment Debt Globalization Scarce
Resources Transparency Demographic
Shifts
1. Prices
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The common theme of the
biggest Internet successes has
been “deflation”
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Biggest Internet players “disrupted” incumbents on price
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Disruptive Technologies are
2Less
Functionality /
Performance
3Lower
Margins
See “Innovator’s Dilemma - Clayton Christensen
1Significantl
y Lower Prices
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Disruptive companies offer LESS functionality & compete
with “non consumption”
See: http://www.bothsidesofthetable.com/2011/12/22/the-amazing-power-of-deflationary-economics-for-startups/
It’s why the TV industry still can’t get its head around
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1 billion monthly uniques 4 billion hours > 150 videos watched / year for every human
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3.4 billion video views / month
> 25,000 video creators
250 million subscribers
80% audience 13-34
40% mobile
2. Network
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Of course we now know that 1/3rd of world is now online
13Sources: U.S. Bureau of the Census, World Bank
1995 2000 2005 2010 2012
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411
1,019
2,019
2,291 World Internet users (M)
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And per Mary Meeker’s slides we know the audience (& opportunity) is now global
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In just 4 years 71% of the world’s literate population will have a smart phone
Source: Benedict Evans (http://www.slideshare.net/bge20/2013-05-bea)
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Incumbents simply find it too hard give up juicy margins
NetworkPrices /Margin
Startups should focus on non-consumption & they will find it hard to compete
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3. Economics
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Student debt in US along = $1 trillion. $100 million new / year. 2x rate of 10 years ago.
19Source: the Atlantic: http://www.theatlantic.com/business/archive/2012/10/europes-most-tragic-graph-greek-youth-unemployment-hits-55/263118/
We are risking an entire generation who don’t get on the career ladder
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The sharing economy isn’t new. It’s just more urgent
Un / under-employment Debt Globalization Scarce Resources Transparency Demographics
And it’s not going away
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Trade Guilds
Wage Protectio
n / Limited Supply
Top down organization struggling to keep up with innovation or needs of
the people
Universities
High-Paid Jobs
Government
Taxation, Currency
When governments can no longer properly look after their people, people will look for themselves
Capitalism.
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In the past forced migrations were the only answer *
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Increasingly IT-enabled people can tap into global demand networks
* We are of course seeing a world of digital have’s and have-not’s. Mobile phones bridge this gap. Who will develop services for the worlds poorest?
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Thomas Friedman
said it best
some of world’s most talented people live in economies that can’t pay them a “global market price”
The sharing economy will have new “market-makers”
Will they all be benevolent in the future?
Market forces, transparency & new disruptions must keep them in check
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Radio. Television. Telephony. Twitter. It’s the natural extension to a global, transparent world.
Open = empowered. But also aware. And disenfranchised.
Of course all of this open data can be mined in real time. For business. And government.
For marketplaces this can help with trust, authority, safety, marketing, & planning.Note: I’m a proud investor in DataSift
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1. THE ECONOMICS OF “GLOBAL”
Comparatively richer countries want to tap into enormous pool of intelligent resources in countries with lower wages
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Some of the world’s most talented film maker’s can’t just relocate to Los Angeles
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Artists struggling to earn a global wage suddenly find demand at higher prices
30 million registered users
65 million month uniques
2.5 billion monthly page views
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2. EMPOWERING THE
UNDER-EMPLOYED
With large underemployment people can earn extra $$ staying at home, while satisfying demand to avoid kennels.
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And this is true of many of the peer-to-peer marketplaces.
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3. MOVE FROM HIERARCHIC TO
FLAT STRUCTURES
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Lending Club now so widely accepted even used by hedge funds to invest
directly in consumer loans
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And of course startups can now more easily tap into pools of angel investors directly
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3. REMOVING PHYSICAL
BOUNDARIES
By removing physical boundaries you create win-win opportunities for both instructors & students
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Example Industries: Education Music Lessons Personal Trainers Psychologists
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4. EFFICIENCY GAINS IN EXISTING
MARKETS
Many of these markets exist, the Internet is just making them much more efficient
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So What’s Next?
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HELPING BUSINESSES TAP
INTO PEER NETWORKS
Entrepreneurs often start with consumer ideas. Helping enterprise tap into peer networks may prove even larger
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Recap – in a world of economic challenges & large
networks … the “sharing economy” will thrive.
Will you find your place in it?
The Sharing Economy
Thank you!
Mark Suster - @msusterLeWeb, June 2013