On unicorns, alliances and using intuition.
Lieke van Kerkhoven, Co-founder and director of FLOOW2
The sharing economy is gaining ground: PwC projected the C2C sharing economy to value $335 billion in 2025 and 75% of people now believe they will increase their sharing of physical products and spaces. The B2B sharing economy is projected to unleash trillions of dollars in economic value. Unicorns like Airbnb, Lyft and Uber speak to the imagination of every aspiring entrepreneur. With the digital revolution shifting power from capital to individuals, everyone with a good idea is now capable to completely disrupt a market with a smart digital platform. Indeed, the co-working spaces are filled with start-ups launching one digital platform after another into the world; all hoping to be the next disruptor on a quick road to richness…
Despite some extraordinary success stories, the sharing economy is still in its infancy. I have been involved as an entrepreneur in the sharing economy since 2012, and I have witnessed the concept gain fame and momentum. I have also seen many good and not-so-good initiatives come and go and I figured it was about time to share some lessons learned that can make the difference for aspiring entrepreneurs between becoming successful or launching random platforms for eternity.
1 – Be realistic about your earning model.
This is number 1 for a reason: many platforms are launched without a proper earning model in place, because ‘once we are successful our user-data will be our goldmine.’ And this may indeed actually work if you become big like Facebook. However, while you are not yet Facebook and user-numbers are lagging behind on projections, your software development requires more time and resources than anticipated, and you want to eat something else than bread with peanut butter, it is very comfortable to have at least a minimal revenue stream. So, be conscious and realistic when deciding on your earning model (also - very hard to make people pay for your service after they are used to it being free...).
2 – Line up your alliance and… share!
The ‘sharing’ in sharing economy does not just apply to your users. You are trying to disrupt a market and create a change in the mindset of your targeted clients – after all, you want them to start valuing access over ownership. If you will take on this challenge all by yourself, whilst at the same time maintaining a strong competitive attitude towards other sharing platforms, it’ll be a lonely and frustrating journey. Choose strategic partners and look for win-win situations. If the projections are anywhere near the truth, there will be more than enough for everyone. So, share.
3 – Winter, spring, summer or fall – which is the fairest of them all?
Be aware of seasonal influences on the goods or services you want to facilitate sharing for: motorcycles, boats, surf gear… All great and very eligible for sharing, but (at least where I live) only in use a couple of months a year. This means that, unless you have a smart solution, there is no activity on your platform in the remaining months which is disastrous for your traffic and continuity.
4 – Stay away from angels, incubators and other advisors who don’t have a deep understanding of what sharing economy really is.
Money is money right, so why be picky? Because these advisors may cause you more harm than good. Some of these people may actually be considered ‘successful’ because they have had well running businesses in the past (i.e. linear economy). Be aware though that you are embarking on a journey that is about much more than a platform: the systems change towards a circular economy. Surround yourself with people who truly understand the bigger picture, the values that come with a circular economy and the consequences this has on business models and leadership. Especially if you are considering taking on shareholders, see point 6.
5 – Your platform is just a tool, nothing more nothing less. And it is never finished.
Technique is always a means to an end, it’s the people that drive the change. Just throwing platforms at people will not result in the desired mind shift. Even Airbnb struggled for years until they found out what it really was people were looking for… and that was not a platform, but an experience. So, find out what your targeted clients need and what problem you are solving for them. Then, when people start using your tool the real work begins with constantly updating and upgrading your platform. You may even come to the point (like we did) you realize the platform you started off with is no longer suitable for your current activities and you have to build it all over again (like we did..). Emerging technologies like blockchain, IoT and AI will influence your service as well. Once a disruptor, stay on top of developments or you’ll be disrupted yourself!
6 – Listen to your intuition, gut, heart.. whichever resonates with you, as long as it is not that monkey in your head.
Probably one of the most undervalued, yet essential skills that makes the difference between in or out. The point is, though, to get OUT of you head. Temporarily quiet your rational mind, you know, that monkey in your head that always has an opinion and judgement on everything including your own actions. That monkey is perfect for analyzing and interpreting straightforward data, but most definitely it is NOT your best advisor when it comes to navigating the disruptive territory of the sharing economy. Practice sports, meditate, cook, walk your dog, knit, whatever works for you. Just shut up the monkey so you can hear your intuition.
The sharing economy is a dynamic, fast changing, exciting development that offers limitless opportunities. The cool thing is that it is literally possible for everyone with a brilliant idea to completely disrupt a market, or even multiple markets. Ready to make the leap? Then buckle up and enjoy the bumpy ride, for one thing is clear: the sharing economy is business as UNusual.