Google has announced the completion of its acquisition of wearable company Fitbit. The announcement was made by Google Senior Vice President, Devices & Services…
The idea of a business utilising its idle capacity is nothing new but it’s fast emerging as the poster boy for the sharing economy — at least among new, emerging players ready to take risk and explore new horizons. But what about the old guys? The guys being disrupted? Jeremiah Owyang, an analyst and partner at research company Altimeter Group just gave them three opportunities to find a way in and a bleak picture if they don’t adapt.
Let’s start with the bleak picture for who else but the car industry — Owyang and co have calculated that, properly shared, a car is worth about US$270 000 in auto sales. Put another way, that’s nine cars. It’s a lot of waste for sure but it goes beyond that when you think about the lost money from tax, gas, tolls, insurance, loans… the list goes on. Owyang closes this section by saying that there is “…potentially over a million dollars of ecosystem impact… for every car” that rolls off the factory floor.
There were a lot of lists during the presentation, a lot of common sense too but also some interesting ideas. Everywhere you look, a little guy is taking pie from the big guys. Owyang reckons that the big guys have some tricks left if they find opportunities in the new model.
The model has three elements (or opportunities):
- Products to service: Or where companies become a service – BMW and Toyota were given as an example – instead of selling you can now rent cars directly from forecourts. The potential for disruption here is high as all durable goods will be affected however the long-term relationship potential cannot be ignored.
- Motivate a marketplace: Where companies leverage something they don’t own — an example used in the report is Patagonia urging customers to buy used clothes and to sell what they don’t use on eBay. Another example is Marriott creating approved Airbnb sites only for its customers.
- Provide a platform: This is where you get your marketplace to build your products or the next generation of products. An example would be utilizing Kickstarter to create something new or the newly formed Yerdle, which encourages people to find and give free stuff to friends. This element utilises all the “co” words you have heard; co-fund, co-create, co-sell etc.
It’s hard to see any of this coming easy or like a big slap in the face to most large businesses; often hard to make big changes, alter direction or think in a new way. They are used to making the markets and I suspect moving into action, while not fully addressed here, will be the focus of many calls to Altimeter in the future.
One thing is true though, they can fight or collaborate and the prize is big. For some it’ll mean the difference between life and death, others will simply see greater inefficiencies, but most will benefit from a longer-term relationship with their customers.
The time is now — scale and velocity are both growing.