Facebook, AirBnB, Zipcar, Ebay and Wikipedia. The biggest new services have transformed the ways we eat, sleep, move, communicate and consume. And more often than not, they are also good business. Robin Chase, the co-founder of Zipcar and the author of Peers Inc., visited Demos Helsinki to share her thinking on the new emerging collaborative economy and tell us why it is a terribly frightening or exhilarating future for established legacy companies.
Chase is not only a thought-provoking thinker and activist – she is the co-founder of a ride-sharing platform that was acquired in 2013 for $500 million, Zipcar. Her argument for the Finnish business community was simple: We are now experiencing a shift from the industrial economy towards a collaborative platform economy, and this reshuffling will ultimately determine the triumphs and demises of 21st century business.
Fundamentally, Chase’s Peers Inc. thesis is simple. As a society, we have a lot of excess capacity that we have not been able to use fully. Think of our office spaces that are empty on nights and weekends, our cars that sit on the sidewalk, and our tools that gather dust in the garage. In her own words, ”we were required to buy more than we wanted”.
But this has now been altered by the possibility of building sharing platforms. As Zipcar, platforms simply ”leverage the excess capacity of the society”, and distribute it to its community of users. Peers Inc. is about combining peer communities that share excess capacity, and companies that distribute and scale these activities.
Take the example of Duolingo. Duolingo is a language-learning platform, and the app has over 100 million users worldwide. The platform is free of charge for anyone wanting to hone their language skills, and this is due to its collaborative nature: Duolingo gives its user-community the power to develop the app for new languages, and uses the community as a crowd-sourced translation service. This translation service is then sold to the likes of CNN and BuzzFeed.
So what does this mean for corporations? In Robin Chase’s words, ”finding excess capacity is like finding money”. But traditional companies have been inherently slow in adopting new collaborative business models, or even answer the new competition coming from platforms. Chase continues: ”legacy companies should be having heart attacks – which they are!”
Clearly the big question is, how can legacy companies tackle their own sluggishness and be change agents in the platform economy? Demos Helsinki’s management consulting arm Demos Effect listed three general guidelines for corporations wishing to grasp collaborative platforms:
1. Finding the community, not building it. As a corporation, building an active community is hard. It is often more fruitful to identify already active communities and access them through gatekeepers rather than trying to build the community from nothing.
2. Identifying the radical business models. In a platform economy, the business models required are not always the traditional business models of the legacy corporation. Finding these new models requires executive commitment in the platform, since often the business model can be proven only after the platform/community has been built.
3. Opening up the culture. Building collaborative platforms requires a fundamental change in the way corporations build their products. In a collaborative economy, products are built, tested and evaluated with people to ensure that they answer the community’s needs.
So in essence, making a shift towards platforms is not hard, but it requires commitment. As Robin Chase noted, ”everything that can be a platform, will be transformed into a platform”. And from a business perspective, it is always better to be among the first than the last adopters.