Home > trends > How will the “sharing economy” affect product strategy?

How will the “sharing economy” affect product strategy?

Fast Company has well written and interesting article on the “Sharing Economy“.  The key idea is as follows: Instead of buying goods outright (cars, lawn mowers, electric drills), one can “rent” them. The benefits to the consumer are clear to see: lower costs, lower waste, more green. The benefits (or dangers?) to companies producing/pushing goods on consumers is less well understood.

Definitely worth a read; it has some good data points:

  • Car owners use their cars ~8% of the time. i.e. 90% of the time the car lies unused. Wow.
  • By one estimate, this sharing economy is a $110B market size. Predictably, the VCs are all over it (although they call it “underused asset utilization”) and have invested heavily in this space.
  • The average person sharing a car makes ~$250 a month, enough to offset a chunk of their car payment

So where can one apply this to? Sharing homes, yes. Sharing cars, yes. Sharing office space, yes. Some of this makes me uneasy. Sharing a lawn mower should be fine; sharing a couch would be a no no for me (I have young kids in the house).

What interests me is the impact this could have on large companies. Why buy a car when you can rent one? Why buy that bike, when you can share it? Why go through a bank when you can do peer to peer lending? It seems like some leading car companies are already getting their act together on this (e.g. Daimler has a prototype service for renting cars). But I think more is needed. Companies need to think through whether their products/services would be disrupted by this idea and see how their product strategies / revenue models need to be rethought.

p.s.:Two related books that may be worth checking out: One if What’s Mine Is Yours: The Rise of Collaborative Consumption by Rachel Botsman; the second is The Mesh by Lisa Gansky.

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