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Product, Service & Design Innovation
Dear SB Vanguard:
What Does the Rise of Unconventional Business Models Mean for Established Brands?

This is the latest in a series of posts in which we will poll our global community of business leaders and practitioners — the “SB Vanguard” — on a variety of issues pertinent to the evolving sustainable business landscape.

Despite the continued growing pains of the “sharing economy” - unintended consequences (ex: Airbnb disrupting local home rental/sales markets), ambiguity around naming (sharing economy? peer-to-peer economy? collaborative economy?), regulatory snafus (hello, Uber!), etc - the proliferation of such business models points to a paradigm shift comparable to sustainability. What do you see as the future/potential of this trend, and of the opportunity for established brands within it?

Here are a few of the responses ...

It’s a truly exciting opportunity for brands to engage with their customers and to explore new business models. On the other hand it’s also a threat, because if your brand is not showing care to deliver meaningful products or services, some guy or girl armed with a computer and a good idea can shake the ground underneath your business. We are a collaborative species and when sharing is smarter than existing business models it can be disruptive.

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Thomas Kolster
Author, Goodvertising

“Thousands of candles can be lighted from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared."
– Buddha

To us, the sharing economy really comes down to total transparency and collaboration - realizing that the best way to grow a business is finding shared value between all partners. There is so much 'success' to be had in just connecting the dots and there's no sense "hiding" things anymore, given how flat and accessible information is these days (from pricing, to ingredients, etc). We've seen the power of collaboration firsthand by using coffee grounds from Peet's to grow our mushrooms, repurposing spent pallets from The Home Depot to create retail displays we then take back to those same stores, or turning our Mushroom Mini Farm customers into our best marketers through our Grow One, Give One campaign.

Nikhil Arora
Co-founder, Back to the Roots

The potential for us to move into an authentic and genuine sharing economy depends primarily on our ability to really live our values. While there have been many excellent technical and innovative initiatives in sustainability, there has not been an equally sized shift towards living the five universal human values of peace, love, truth, right-action and non-violence (the five human values which underpin Holonomics).

The good news is that we are now seeing many large national and international companies start to ask questions about how they can develop their work on ‘purpose' by including the introduction of these human values into working life and their business thinking. These companies are the ones who now realise that the new Four P’s of marketing are People, Planet, Platforms and Purpose, and the ones who really get this - the ones who really are authentic and live their values - are the ones who will be the pioneers and succeed in the sharing economy.

Simon Robinson
Co-author, Holonomics

I think the biggest challenge wasn't mentioned: Fair benefits and worker rights to the "providers" (hosts, drivers, rabbits, etc). That takes precedent over the others. Do a search on "Dependent contractors" --this is a form of digital Feudalism (we've listed out nearly all the complaints and criticism of this space in this post).

The Airbnb disruption really isn't a concern, as the cities that legalize it (and many will) put parameters around it. For example, San Francisco has limits of up to 90 days per year on rentals for certain types of properties to ensure people aren't evicted for Airbnb revenues. To make it legit, Airbnb and hosts pay 14 percent hotel tax to the city. That's a sign of it melding. Other cities haven't caught up, but that's a model to replicate.

Nomenclature should be wide and varied in a new market. I've outlined how this has happened before in other markets and how this will shake out, when no one will use any of those prefix(es) and it'll just be "The Economy."

It it certainly not limited to the "Peer Economy," as there are 180 case examples of big companies (many SB members) participating in this market.

Uber is "The Marines" – its role is to shock and awe cities and businesses, which leaves a path for other startups and bigger companies to operate in its wake. While I do believe they're part of this new economy, they don't self-label as sharing; they pin off the 'on-demand' moniker.

Future Trends

We'll continue to see adoption both by people and large companies. We're seeing adoption of "freelancers" increase over time, and they could be a defining economic story over the next decade, many of which will use these tools (more stats here). On the corporate side, we see companies in the physical goods space and food sector launch the most deployments; expect to see more retailers, auto manufactures, increase adoption.

Companies are shifting their business models in three ways:

1) They're launching on-demand programs, which means one good is sold many times, reducing ownership and potential waste (30 percent of the 180 case examples are in on Demand.

2) They're launching online marketplaces to enable the selling of P2P goods and services, increasing resale in used markets. 19 percent of the 180 case examples are in this use case.

3) Partnering with the maker movement so people are co-creating goods, increasing the empowerment of people and redistribution of resources. We've seen 14 percent of the 180 are in this use case.

Jeremiah Owyang
Founder, Crowd Companies


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