We can do it better as a collective… screw ‘the man!’ That’s the message from Silicon Valley entrepreneurs and tech startup founders for the last five years. And the gargantuan sharing economy (led by Uber, Lyft, Airbnb and many more) has awoken the populous, which is freaking the shit out of big, sleepy corporations. This is fantastic news for entrepreneurs looking to build platforms to be sold. Fear is the greatest motivator after all, and when giant corporations fear loss of market share, they pull out their cheque books.
Go where the money is, and it’s in collaborative consumption and sharing. There is a huge opportunity in this space for entrepreneurs and investors alike, but the era when the colossal gains are made is nearing a close. The sharing economy is starting to mature, with sub-niches emerging and massive corporations entering the fold.
Case in Point:
Facebook Creating a Sharing Economy World
My wife is a shopaholic, there’s no other way to describe it. I think she gets a buzz from finding a deal. If she comes home with a new dress, she avoids telling me how much she paid and instead opts to brag about how much of a ‘deal’ she got - 20%, 30% or whatever the ‘sale’ was, she knows I can tolerate a bargain. But recently I witnessed something very cool: Thanks to Facebook, she is becoming more of a merchant than a consumer. She has found a marketplace to sell old things…
We have growing boys, and any parent knows with time it’s easy to accumulate a garage full of toys they no longer use. Thanks to a platform within Facebook, enabled by Zuckerberg’s programmers, there is a neighborhood group, led largely by women, buying and selling their stuff to each other. And you can only enter the group by applying, which creates its own self-regulating environment because no one wants to tarnish their reputation by selling crappy things. Your profile is readily accessed by others in the buy & sell community, and you are selling to, quite literally, your neighbors. It’s pretty cool. The system and people involved are so efficient and trusting that my wife will leave items on our front porch and the buyer will come by and leave the money for it under the doormat. Moreover, my wife has sold a garage worth of our kids’ toys they no longer use, which saves other families in the neighborhood the hassle of going to the store and paying full price for stuff their kids will probably only use for six months. Simply put, it’s an incredibly efficient platform created by one of the biggest tech companies in the world that enables communal commerce - it’s literally an online garage sale.
What’s more, my wife showed me some of the stuff people were selling on this Facebook community platform and it wasn’t just your typical garage sale items. Some of the members were selling $1,000 purses for half price, barely worn shoes, jewelry, coffee tables, you name it. This gave me pause. Growing up there was a negative stigma with buying used clothes and such things. But apparently that’s not an issue for many consumers anymore. Collaborative consumption is cool. This is a phenomenon in consumer sentiment. This is a huge opportunity…
So, if you’re looking to start a business, now is perhaps the last great moment to do so in the sharing economy, but you are going to have to be niche in order to stand out.
The key is to create the platform for people to come to and engage in bartering of sorts. You’re the conduit, the consumer grows the service - open platform at its finest. The first of its kind for this was Craigslist; how far things have come with the rise of social media. But now, with the huge players getting involved, time is running out. The space will soon be crowded.
Entrepreneurs and investors should seek out the opportunity in collaborative consumption and the sharing economy with a unique platform… quickly.
Stay hungry,
Aaron
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