3 Things Entrepreneurs Can Learn From the ‘Sharing’ Economy
Karl R. LaPan President & CEO, The NIIC
The ‘sharing economy’ today is robust and ever expanding. Just look at recent brick & mortar closures at The Limited, Bebe, Family Christian Bookstores and other traditional retailers. Contrast this bleakness for the dynamic online marketplaces transacting business everyday. For example, Uber is now a household name transforming a key mode of transportation. Airbnb – the largest lodging entity yet- doesn’t own any hotels or resort properties – and is a popular choice for weekend getaways or extended stays. But these successes are not limited to these companies’ respective industries. Here’s what entrepreneurs can glean from the current marketplace disruption.
1. Efficiency is the name of the game. Uber entered the scene and disrupted the traditional taxi business model. The result was an intuitive and data-based pricing model that customers worldwide have come to know and trust. Uber continues to innovate and improve the user experience. One way entrepreneurs can follow their lead is by strategically investing and leveraging technology.
2. Trust is the currency. The success of the sharing economy hinges on trust between the buyer and seller. This can be difficult at times because these companies usually act as a middle man and do not actually deliver the product or service. You, as the entrepreneur, have the advantage in that you are the agent and facilitate the transaction. Still, trust is nothing to take lightly. You must build up a positive reputation through all viable channels – word of mouth, social media, crowdsourcing and traditional advertising.
3. Get plugged into the local community. Companies like Uber and Airbnb must be in touch with the communities they are in, to grow and scale. They are successful at grassroots marketing because they maintain a consistent feedback loop between buyers and sellers. In the U.S. today, scaling is difficult because of all the U.S. business establishments (over 28 million), there are only .7% (200,000) that are high potential. As a business owner, focus your efforts on exceptional customer engagement and retention while using social media to actively listen and respond to your customers and your raving fans. Check out the NIICs resources and how we work with high performance, high potential companies and organizations.
By investing your limited resources in these three areas, you might be able to introduce the Next Big Thing to the online marketplace.