The Collaborative Economy

Jeremiah Owyang

An economic model where ownership and access are shared between people, startups, and corporations.

Eras of the Internet

What role do corporations playif people don’t need them?

The Collaborative EconomyAn economic model where ownership and access are shared between people, startups, and corporations.

The only way, is to let go to gain more.

Is this a business disruption?

Sharing Is Not New

Lyft

People Can Tap into Each Other

Need to travel…

Lyft enables crowd to be transportation –avoiding taxis

AirBnb

People Can Tap into Each Other

Need a place to stay…

AirBnb Enables Crowd to be a Hotel

People Can Tap into Each Other

Need to get funded...

LendingClub

LendingClub enables crowd to be a bank

oDesk

People Can Tap into Each Other

Need staff…

oDesk enables crowd to be a workforce

Feastly

People Can Tap into Each Other

Need to dine…

Feastly enables your neighbors kitchens to be a restaurant

People Can Tap into Each Other

Need a place for staff…

LiquidSpace

Liquidspace enables companies to rent from each other

Yerdle

People Can Tap into Each Other

Need products and goods…

Yerdle enables neighbors to gift goods --rather than buy

A properly shared car is$270,000Lost RevenueOf auto sales

(1 shared car = 9 cars at average of $30k each.)

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Is this a passing fad?

Societal Factors

75% said they predicted sharing of physical objects and spaces will increase in next 5 years

–Shareable Magazine Study

Population

Economic Factors

1975: 4 Billion

2050: 9 Billion

Technology Factors

• 87 phones per 100 people on planet

• Three quarters of startups use social tech like Facebook

A movement that’s only increasing

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)

The sharing revolution is an unstoppable movement

Collaborated with the Revolutionaries

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What can you do?

Collaborative Economy: Value Chain

Collaborative Economy: Value Chain

1. Company as a Service

Toyota as a Service

Razors as a service

Mobility as a Service

Collaborative Economy: Value Chain

2. Motivate a Market

ScotteVest enables second market

Patagonia enabling second market and altruism

Value add: sell 1000 cars to everyone

Collaborative Economy: Value Chain

3: Provide a Platform

Collaboration

FundDesignDevelopProduceDeliverStoreMarket

Co

Co-Fund new products like Kickstarter

Co-Design products like Nike

Co-Develop like Quirkly

Co-Customize Like Etsy

Co-Production with 3D Printers

Co-Storage of Products with Lockitron

Co-Deliver with Deliv

Co-Market: Christiana Bike

Enable othersto build a product

Collaborative Economy: Value Chain

What will challenge us as we move forward?

Opposing Market Forces Abound

1. Governments, lobbyists, and institutions oppose

2. Buyers and sellers lack complete trust

3. Fragmented startups in every category

4. Uncertainty about which startups will stand the test of time

What are your benefits for letting go to the collaborative economy?

More efficient, as the crowd helps you

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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

Collaborative Economy: Value Chain 20%

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Let go of your company to gain the market.

What side of history will you be on?

Download Report: http://bit.ly/collabeco

Jeremiah OwyangPartner and Industry AnalystAltimeter Group@jowyang

web-strategist.comjeremiah@altimetergroup.com

Collaborative Economy Take-Aways

• The crowd turns to each other to get goods and services –bypassing corporations

• The sharing revolution is an unstoppable movement

• Solution: embrace the Collaborative Economy Value Chain:

1. Company as a Service2. Motivate a Marketplace3. Provide a Platform

Collaborative Economy GlossaryCollaborative Economy (Model): An Economic model where ownership and access is shared between people, startups, and corporations. Two sided Marketplace (Category): An online website where buyers and sellers of goods or services are sharing inventory, need, and transacting. Example: Ebay, Craigslist, AirBnb, 99 dresses.

Transactions (Verbs): There are many types of verbs that can be used in facilitation including: Buy, Sell, Swap, Lend, Gift, Co-own, co-fund , buy and more.

Maker Movement (Trend): An emerging trend where customers can self-design, create, produce, and distribute products and goods on their own.

Company as a Service (Strategy): Rather than sell goods in the traditional sense, offer products or services to customers on- demand or through a subscription model. Rent, Subscribe, or Gift.

Motivate a Marketplace (Strategy): A community around a brand enabling customers and partners to resell or co-purchase products, swap goods related to the brand, or even enable lending or gifting for no monetary exchange.

Provide a Platform (Strategy): Corporations that enable an ecosystem customers to build products and new services as partners — not just consumers.

Online Reputation (Feature): Any number of online features that store historical and current information about social profiles, individuals network connections, credibility, or reviews of previous and predictable behavior.

Social Sign On (Feature): A technology feature that connects websites with profile systems from social networks like Facebook, LinkedIn or Twitter connect enabling existing reputation, social contacts, and social graph information

Altimeter looked at over 200 collaborative economy startups

Over 1/3 of these startups have received venture capital funding

37%

$

The average funding per startupis $29M

$130M

$83M$50

M$29M

AverageStartup

The total funding across these 200 startups is $2B, showing broad investor commitment

$2B

2/3 of these startups focus on peer-to-peer sharing

63%

Peer-driven sharing, like Airbnb or 99Dresses

35%

Business/brand-driven sharing, like co-working or BMW Drive NOW

2/3 of these startups charge on a per usage (pro rata)

67%

21%

10%

6%

Pro Rata

Membership/One Time

Fee

Free

Exchange

Of the Top 30 Startups, Most Have Social Networking Features

75

Have social networking features, e.g. social profiles and reputation systems

73%

Integrate Facebook Connect

53%

Collaborative Economy Value Chain: Exploded Visualization

Credits: Research InterviewsAirbnb, Molly Turner, Public Policy

Arbor Advisors, Dean Callas, Investment Banker

Ariba, An SAP Company, Joseph Fox, VP of Strategy

August Capital, David Hornik, Investor

Bazaarvoice, Stephen Collins, CEO

carpooling .com, Markus Barnikel, CEO

Cisco, Carlos Dominguez, SVP, Office of the COB and CEO

ConnectMe 360, Brian Hayashi, Founder

Decide.com, Shauna Causey, VP, Marketing

Enterprise Holdings, Ryan Johnson,

WeCar AVPeToro, Yoni Assia, CEO and Founder

eToro, Nadav Avidan, PR and Communications Manager

eToro, Adi Yagil, Head of Social Media

Gazelle, Israel Ganot, CEO

HomeExchange, Ed Kushins, Founder

Jive Software, Christopher Morace, Chief Strategy Officer

LiquidSpace, Mark Gilbreath, CEO/Founder/Skipper

Lithium, Rob Tarkoff, President and CEO

Lyft, Kristin Sverchek, General Counsel

MuckerLab, William Hsu, Co-Founder, Partner

Sasson Capital, Vivian Wang, Venture Capitalist

oDesk, Gary Swart, CEO

oDesk, Shoshana Deutschkron, Director, Communications

OuiShare, Antonin Léonard, Co-Founder

Oversee.net, Gene Chuang, CTO

PivotDesk, Alex Newman, Director, Customer Development

Sass.me and Oversee.net, Min Chan, GM of Mobile

SCOTTEVEST, Scott Jordan, CEO and Founder

Shareable Magazine, Neal Gorenflo, Founder

Shasta Ventures, Rob Coneybeer, Managing Director

Collaborative Lab, April Rinne, Chief Strategy Officer

Collaborative Lab, Lauren Anderson, Chief Knowledge Officer

The Mesh, Lisa Gansky, Author, The Mesh: Why the Future of Business is Sharing

Zuora, Tien Tzuo, CEO

Zuora, Brian Bell, CMO

Deborah Schultz, Innovation Strategist

The following people provided guidance, reviewed content, tested ideas, or

most importantly, challenged the thesis during the project:

David Armano, David Berkowitz, Richard Binhammer, Mel Blake, Erik Boles,

Michael Brito, Noelle Chun, Steve Farnsworth, Lyle Fong, Ian Greenleigh, Shel

Holtz, Noah Karesh, Kevin Kelley, Matt Krebsbach, Wendy Lea, Evelyn Lee,

Geoff Livingston, Jacob Miller, Marcus Nelson, Ben Parr, Jeff Richards, Andy

Ruben, Jim Rudden, Ben Smith, Aaron Strout, Carmen Taran, Rob Tarkoff, Ed

Van Siclen, Mike Walsh, Sharon Weinbar, Adam Werbach, Susan Williams,

Vladimir Mirkovic, Anita Wong, and the entire Altimeter Group research and

consulting team.

We extend special appreciation to LeWeb founder Loic Le Meur who inspired

Altimeter Group to research this topic.

Credits: Research Input