Shiftruption (shift – rup – shun) noun
- a movement or change in a business model where unused assets become revenue-generating tools of change that keep the stoke on high
- the sound you hear when consumerism is replaced by common sense, and technology creates new business opportunities where “flash commerce” prevails
- a good idea whose time has come
I have a small, crummy lawn and refuse to spend $200 at Home Depot for a lawnmower. Since I live in California, I could pay $100 a month for a landscaper and forget about it. Instead I go to Vons, buy a six-pack of Budweiser, leave it on my neighbor Sergio’s porch, and then slip around to his backyard and poach his fancy lawnmower. Since it’s high-drought season in Santa Barbara, this happens five or six times a year.
This past Sunday, I bought my kid a bike at a yard sale.
Normally, this life event would go entirely unnoticed, but I bought it from my neighbor two doors away whose son had outgrown it. The bike had been sitting unused in his garage for two years (a two-year period that one of my older kids could have used it).
As I pushed the cobwebbed bike home, I thought of Sergio, cold beer and the unused bike, and I realized that as much as I joke about millennials (and I do make fun of them a great deal), the digital DNA of the current ‘now’ generation just might save us all.
Considering this further, there are easily 25 apps on the market that could have linked me to that bicycle two years ago if my neighbor and I hadn’t relied on traditional markets (Craigslist and yard sales) to exchange goods.
What’s fueling this? Simple answer: It isn’t you.
Demographically we skew young as a nation; 27% of the US population is under 20 years old. 75 million people in the US are under 34, so let’s just say, generally speaking, that about a third of the 320 million people living in the US today are under 30. Do the math folks. If millennials (defined as those born around 1980 to 2002) think something is important, it is.
As the subway platform in London reminds us, you must mind the (generation) gap because “it” is happening right now. The “it” is a perfect storm of old fashioned optimism (thanks technology), an entire generation of people under 30 who reject the status quo, and something that New York Times writer Adam Davidson called the “Hollywood Model.”
Davidson says, “Our economy is in the midst of a grand shift toward the Hollywood Model. More of us will see our working lives structured around short-term, project-based teams rather than long-term, open-ended jobs. There are many reasons this change is happening right now, but perhaps the best way to understand it is that we have reached the end of a 100-year fluke, an odd moment in economic history that was dominated by big businesses offering essentially identical products.”
Psychographically, the millennial demographic is over consumerism as we know it. They see the value in connecting and accessing versus acquisition and reliance on the accumulation of goods. What we’ve known since we were old enough for daycare is that “sharing is caring,” and now it’s a juggernaut of a business platform officially tagged the “Sharing Economy” that will resonate with the freelance vibe of the millennials populating our workplaces and becoming more financially independent.
Generationally speaking, we work together differently, we think differently (the first generation to have access to information immediately), and now we access resources differently. I ran across the phrase “flash commerce” on LinkedIn a few months back and it defined this phenomena as the “coordination of resources that unlocks a transaction.” Connecting two transacting parties is scalable, so as hippie as this sounds, it’s-a-happening.
The freelance economy and the Sharing Economy are the marriage of two movements fueled by lifestyle and social influence. As millennials push into the business workforce in the 21st century, they aren’t married to either jobs or things.
Look, just because millennials wear hoodies as a uniform and think that Coachella is the greatest cultural event in human history (I’ll take CBGB’s in its prime over the festival scene any day), this is more than a seismic shift. According to Time Magazine it’s a big friggin’ deal, and you’d be wise to filter its philosophy through your current business model. Why?
Look around. Depreciating assets abound. Connection is the new currency.
Millennials don’t want a Rolex; they want experiences, travel, and immersion into the new.
Here are the three things I’ve learned from the Sharing Economy model that can apply to your business. If I were you, I’d apply these like sunscreen (liberally and daily):
Put Yourself in the Middle of Your Community
What online community do you live in?
Are you a hardcore foodie?
Do you believe that your cured meats from Spain must be acorn fed? Well, foodies of the world, unite. This is where it happens. Eat With matches you with trained chefs, good food, and culinary experiences.
Are you a Lego nerd like millions of other kids?
Parents like Legos as much as kids, and as a guy with three of kids, Pley would have been better than a nanny (well, almost). It allows your Lego-obsessed child to “borrow” Lego sets each month on a subscription service.
Need to borrow “stuff” and don’t want to pay through the nose?
MyTurn is a peer-to-peer cloud-based sharing platform for asset management tracking and marketplace. Let’s say a church needs chairs for a potluck. It can use MyTurn to rent one or 100 chairs from the high school around the corner as opposed to an expensive party rental vendor. It essentially connects unused inventory to people who need it, and it serves both parties.
Physical communities benefit too. There are several options similar to my “beer-for-a-mower” idea to optimize locally. BlaBlaCar gets you from point A to B if you are car-less in Europe. It connects people on pre-determined routes with drivers heading in the same direction. MyNeighbor, started by a group of dads in Seattle, is for someone like me, a neighbor who wanted something more useful than cold Bud.
My personal favorite Krrb.com (say “curb”) runs classified ads for local communities. Like you, I used to love scanning Craigslist for motorcycles, kids bikes, and other larger goods not suitable for shipping, but Craigslist is “scammy and spammy” and no longer a trustworthy brand. Krrb localizes used items in a safe environment highlighting information from the person with whom you are transacting.
As an entrepreneur, you need to look at your business from the community level and filter it through the possibilities the collaborative economy creates in order to benefit your business. It’s all about the “inch-wide and mile-deep” connectivity of resonating with your core community (foodies who travel, kids who like Legos) and finding an authentic means of relationship-building.
Tell me what your business is (in the comments below) and I will brainstorm a “community” idea. (I promise one, hopefully effective, idea for those who leave a description of their business and the outcome they’d like to achieve.)
Act Like a Marketplace
If anyone can become the Jeff Bezos of the Sharing Economy, I am putting my money on Benita Matofska, chief sharer of Compare and Share and global Sharing Economy expert. She has become the current de facto leader of the movement. She leads sharing events globally, blogs, built a non-profit, and crowdsourced her company.
Matofska believes that “business is forever changed. [The Sharing Economy] does not operate in the way that traditional industries do, because it’s led by people, it’s led by demand. Now, people are the producers and suppliers of goods and services, they are no longer reliant on large corporations.”
Matofska predicts this category will hit $335 billion dollars by 2025. Aggressive?
More like progressive. Just as progressive as the San Francisco startup Stokeshare. Stokeshare cofounder Warren Neilson explains how two guys from the green building space brought their entrepreneurial energy to lending outdoor equipment:
“Both Joel [Stokeshare cofounder] and I are from an environmental background and more of the focus was coming from there. There was this problem that we could develop a solution for, but we believe in the sharing economy not because valuations were skyrocketing, but just because we believed that that was the right way to live on planet earth. We have limited resources to share, [versus] just gobbling them up and spitting them back out.
“We were two people who had traveled to this big city, that wanted to do something adventurous knowing that there was someone in the city maybe even our neighbor, that if we could just connect with them, we’d have a solution. No solution fit so we created a solution. That’s how Stokeshare started. We decided that we wanted to connect people with adventure and that’s the basis of what Stokeshare is, and what it does.”
Want to go kayaking? Surfing? Need a killer backpack or tent? Borrow it through Stokeshare. I have to believe Patagonia or REI will either buy a company like this or plug the platform into their current business model.
Don’t be a Debbie Downer and tell me that the Sharing Economy model can erode gross revenue. Quite the contrary, and Ikea has provided the social proof. They turned over the Ikea online catalogue to customers to sell used Ikea products, making it a virtual flea market where every product sold, and there was no downward blip in sales.
Stokeshare makes use of the community because they are “of it” and not just “in it.” Warren came at it as an environmentalist trying to impact the effect of consumer goods on the environment, not a guy looking to make a buck. As well, Benita Matofska started several sharing events and positioned herself as the thought leader on this before she crowdsourced her website.
Look at your marketplace, and find the sweet spot where you can assert your ideas and offer your leadership. The world has plenty of blogs, so write the book, run an event of your creation, or create a product that connects locally. This movement is about connection and relationships. The monetization occurs when it’s done right.
Experience Is The Brand and The Brand Is the Experience
As Adam Davidson points out in the New York Times article, “It’s probably not coincidental that the Hollywood Model is ascendent at a time when telling stories, broadly speaking, is at the heart of American business.”
You want to talk paradigm shift? Being a low-cost provider simply means you’ve won the race to the bottom, and that’s not the tipping point for millennials. It’s storytelling and creativity in your community, and your brand better be doing one of these well. Etsy told such a great story about craft that Amazon is entering their space now. You can now effectively compete with the big guys.
No one executes the storytelling strategy better than Airbnb — the crazy beautiful birdhouse campaign, stories about overcoming challenges, the difference the extra money made for hosts that allowed them to live their life differently or to “pay it forward.” EatWith will succeed because connection through sense of taste with chefs and talented home cooks on the local level is the bridge to authenticity we seek. It’s the same strategy Airbnb uses, and as EatWith grows, I cannot wait to see how they develop their content and bring their version of authenticity to life.
Even the corporate types are integrating these lessons. Let’s say you have a cold and need some Nyquil. Does it really matter where you get it? CVS? Rite Aid? Target? To me, it’s all the same. Does your answer change if I tell you that you can lie in bed with that cold and have Walgreens (in partnership with TaskRabbit) deliver it to your home? All of a sudden, price isn’t as important, your opinion of Walgreens goes up, and you’ve provided localized opportunities for low-skilled workers.
Similarly, someone from Marriott had one too many meetings at noisy and crowded Starbucks before they decided to partner with LiquidSpace, which offers quiet and dependable mobile work environments by the hour. It allows Marriott to gain revenue from dead space and may allow hotels to extend its brand into new experiences attracting new customers.
Look at your business model and figure out how you can engage with your community, or look at how other businesses succeed, and copy exactly what they do.
Ask One Question
The optimism that fueled both Stokeshare and CompareandShare remind me of the first chapter of Peter Thiel’s book Zero To One. Thiel believes that “new thinking” is more important than being nimble and that larger, more structured companies are bureaucrats with “entrenched interests.” No wonder millennials entering the workforce don’t resonate with Coke and Microsoft and look at the startup world as a reality they can define for themselves.
When you consider that Thiel’s definition of a startup relies on “the largest group of people you can convince of a plan to build a better future,” then you get why the paradigm shift away from the traditional corporate gig means value-based organizations have an edge in recruiting. If you look at business through the lens of Warren Nielsen, who is guided by a different set of values than, say, a newly minted MBA or Wall Street financier, you are reminded of the purpose-based value structures of millennials.
Thiel opens the book with the one question he asks every job interviewee: “What important truth do very few people agree with you on?” I love the question, and when applied to business, it shifts to “what valuable company is nobody building?”
The valuable companies of tomorrow are being built by the conscious consumerism of a new era of thinking. Millennials are revolutionizing the way we purchase, and they’re putting connection and community before brand-name goods and shiny new toys.
Ok, lets exercise the Sharing Economy muscle and create a quick strike social experiment. Drop your name, business name, and your product or service in the comments below, and I will research an idea for your business and let readers comment on it.
B2B, B2C, or even P2P (that’s peer-to-peer, like ONTRAPORT customer Car Next Door), let’s inspire each other and come up with something that will impact your business.
On your mark, get set….