Diary of a start-up: The sharing economy is shaping the future of business
With the sharing economy set to reach £230bn, Needham looks at how this fast-growing approach is "fundamentally" changing the way we do business
Founder and CEO of creative meeting and venue space booking platform HeadBox, Andrew Needham is our regular Diary of a Start-up blogger. In his most recent blog, the start-up entrepreneur advised on how to build market share and take a ‘bigger slice of the pie’. This month, our diarist discusses the growing impact and influence of the sharing economy…
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Last month I spoke on the panel “Events Interrupted” at the Confex Conference and also at the PA Show where I discussed the collaborative and sharing economy and how it is fundamentally changing the way we do business, and the effect it is having on the world of events and meeting spaces.
Many of the points I discussed, which are set out below, are applicable and now apparent to most other industries in the start-up community.
The impact of the sharing economy began to hit mainstream consciousness early last year with a quote that was doing the rounds on Facebook: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening”.
In 2016 Airbnb is predicted to book 129 million room nights compared to 37 million room nights across the hotel industry. According to Rachel Botsman, author of What’s mine is yours, this is a new economic system that is enabling people to realise the enormous benefits of access to products and services over ownership while saving money, space and time, making new friends, and becoming active citizens once again. PwC has calculated that on a global basis, the sharing economy is set to rise to a massive £230bn by 2025.
Millennials are driving the sharing economy
The drive towards a more collaborative and sharing approach to consumption is being driven by millennials empowered by social technology; the scale and interactivity this brings and the belief that doing things together is greater than doing them on your own.
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Millennials will make up 75% of the workforce by 2025. Studies have found that as many as 74% of millennials want flexible work schedules, and as many as 88% favour the kind of collaborative culture offered by flexible working environments.
At the same time the world of work is going through a major transformation. In the UK there are 4.2 million home workers, the highest level of home working since comparable records began. Micro-businesses (fewer than 10 employees) are also increasing; representing 96% of companies in the UK and employing more than seven million people. Micro-businesses are predicted to account for 1.1 million new UK enterprises by 2024. As a result there is an increasing number of small enterprises and micro-businesses in need of off-site and creative working spaces.
Opening up more choice to more audiences
The sharing economy is helping to unlock under-utilised assets from boats to car sharing, peer to peer lending and to meeting and event spaces.
HeadBox is uncovering thousands of unknown spaces that were previously sitting idle at a certain time of day, days of the week or months of the year to a range of different industries – research, photography, film location – a cross-pollination of different audiences that hadn’t happened before.
More choice is delivering cheaper prices
The unlocking of under-utilised spaces is driving down prices so that we can either buy services, products or experiences we couldn’t previously afford or now buy them more often.
At HeadBox, we’re already making many more amazing spaces available at much cheaper prices. Our most successful host has already had 14 bookings (a number of them repeat bookings) because they have opened up their own office space in the evenings and at weekends charging a tenth of the price from more established incumbents.
Democratisation of everything
The sharing economy is empowering us to do things together and without the need for third parties to help us. We are already seeing more and more DIY events driven by tribal gatherings and meet-ups as well as by the huge growth in DIY events where companies, particularly small businesses, are organising their own one-day events with their own agendas and their own guest lists.
Frictionless booking and payment
The “uberfication” of customer experience in every aspect of our life means people want to be able to choose, access, pay and enjoy a vast array of experiences really easily and quickly.
The demand for a more frictionless approach to how we search, book and pay for things is forcing hosts in the events industry to think more seriously about the quality of their service and to set much higher standards in overall customer experience.
As with the events and meetings industry, the sharing economy is bringing better and more seamless customer experiences at cheaper prices driving more opportunities for people to buy and share while at the same time saving people money, time, and unnecessary waste.
As Brian Chesky, CEO and co-founder of Airbnb, said: “The status quo is being replaced by a movement. Peer-to-peer is going to become the default way people exchange things whether it is space, stuff, skills or services”.
To follow HeadBox’s journey (and for content from previous diary bloggers), check out our Diary of a Start-up channel.