Airbnb, Uber, Netflix, Zopa, Zipcar, Spotify and Lending Club. These companies, and many others like them, are a part of what is known as the ‘sharing economy’. This has become an extremely widely used term, but nevertheless, it’s important to understand exactly how this phenomenon came about. Celine Herweijer of PWC manages to summarise its meaning in a concise way saying “The sharing economy is an interesting collision between megatrends. How I like to describe it is – ownership is old school. In other words, it’s around sharing or renting rather than buying and owning things long term.”
The most simplistic way of grasping the meaning of the sharing economy is by looking its title ‘Sharing’. It is sharing of resources monetised rather than traditional outright ownership of a product – which only serves to benefit one person. This idea is reinforced further by former business minister Matthew Hancock MP in the Unlocking the sharing economy report. He uses an example of car ownership and how this might not be the symbol it once was and instead having “Membership of a car club means they can still drive when they need to, but don’t have to worry about MOTs or finding a parking space.”
In many ways the sharing economy has totally changed consumer habits and buying patterns. When you look at the latest Cool Brands index, companies whose roots stem from the sharing economy – such as Instagram and Netflix – are ranked very highly ahead of luxury brands like Chanel and Aston Martin. Whilst this is not conclusive evidence of a total consumer mind shift it does demonstrate that, slowly but surely, the type of brands that resonate most potently today are ones that embrace the power of sharing.
As a startup it’s important to be aware of cultural trends and find the best and most cost effective way to gain market share in your industry.
Whether your business embraces sharing tools, or simply uses the platform, there are so many ways in which a startup can benefit from the sharing economy. Here is how you can benefit too:
Encourage your customers to share their experiences
You don’t need to be Netflix or Uber to encourage sharing. Why not ask your customers what they think of your product and ask them to share this with you. Whether this is through the typical social media platforms or through video posts – asking your customers directly what they think of your product is a powerful message that will strongly cement your brand. You need only look at the overwhelming success of The Cambridge Satchel Company and how founder Julie Deane created a loyal customer base by the way she used YouTube videos from customers sharing videos of what they thought of their latest bag.
Shared Office Space
Another fantastic benefit to be had from the sharing economy – particularly if you are are a startup – is that you now do not need to buy permanent office space. Shared office space with flexible memberships are very commonplace today. Companies such as Wework have locations all over the world to cater to the needs of busy startups who can’t afford permanent office space. This is another fantastic example of how the sharing economy is creating a conducive environment for startup businesses.
Receive quick funding using various online tools
With a plethora of online sharing platforms available receiving funding for your business is now easier than ever before. You want a quick loan with fair rates then popular peer-to-peer platform Zopa is a prime example of the sharing economy unlocking quick capital for startups. Alternatively you might be someone who works in the arts and you’re looking for funding for a particular project or initiative – well crowdfunding sites such as Kickstarter cater to this type of endeavour.
For more information on crowdfunding and its benefits see our recent blog post for more details.
Offers a platform to sell your freelance services
It’s not just small and medium-sized businesses who can benefit from all that the sharing economy can offer. Freelancers and consultants can also share their expertise in an online community and offer their services to interested parties. A great example of such a site is Freelancer.co.uk which connects freelancers with the wider world and allows users to get free quotes for a job or project that they are looking to get done. Another great sharing system is PeoplePerHour where freelancers sell their services to prospective contractors. This but a sample of the variety of great options that the sharing economy can offer any freelancer.
Adopt online payment systems
In today’s age of information sharing – and concerns surrounding security – a wise thing to consider implementing is using a secure online payment system. If customers are sharing their payment details you should ensure that this is done in the most secure way possible. Consider using companies such as PayPal and WorldPay as possible platforms to use – this will make your customers feel comfortable about purchasing from your site.
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