How companies can leverage the 'collaborative economy' (Q&A)
With Crowd Companies, Jeremiah Owyang is hoping to help companies develop business models and best practices around the shared economy, the maker movement, and more.
As anyone who has been paying attention knows, the world is changing rapidly. No longer do consumers have to rely exclusively on large companies making products for them. Instead, thanks to technologies like 3D printing, people can design and make their own products. Similarly, there's no end to the number of ways that people can create one-off products like shirts, coffee mugs, and more.
At the same time, companies like ZipCar and GetAround are making it possible for people to use cars on demand, and every day there are new examples of ways in which businesses and consumers alike are discarding the economic paradigms that we've long been used to.
With Crowd Companies, Owyang and his co-founders are hoping to help foster this new economy by giving corporations that want to be part of it access to education, tools, and other information that can help them navigate this new world. CNET caught up with Owyang, formerly the founding partner and research director at Altimeter Group, to talk about what he is trying to achieve. The following is a lightly edited transcript.
Q: What's the elevator pitch for Crowd Companies?
Jeremiah Owyang: Crowd Companies is a brand council for large corporations who want to tap the collaborative economy, which is made up of the sharing economy, the maker movement, and co-innovation. I've found different regions use different terms, such as association, or trade council.
Why is now the right time for this?
Owyang: The last 10 years have seen the democratization of media: People created media, and then shared it using social media technologies. Using similar tools, we're seeing people create the physical world (maker movement) and share it (sharing economy). This is the natural order of progression. As the collaborative economy is radically accelerating, brands are falling behind. With the rise of 3D printing, Google investing $258 million into Uber, the US federal government scrutinizing crowdfunding, and Bank of America pricing a Bitcoin value, we're seeing companies scratch their heads on how to make sense of this democratization of the physical world.
Your business model is to charge companies membership fees. How much will companies pay to be involved?
Owyang: The value that the members receive in connecting to their peers, saving time by learning from experts, and partnering with startups will have a net positive investment. We conducted market analysis to find out the pricing of other councils, and priced it similarly.
What are the requirements for a company that wants to be part of the Brand Council?
Owyang: Crowd Companies has a mission: empowered people and resilient brands for shared value. We expect these large corporations to align towards the vision of shared value, which often means providing platforms and resources to the crowd to help fund, design, shape, and share brand experiences. We're focused on large corporations, most which are Fortune 5000, often international.
How does this benefit end users?
Owyang: Because of our mission of shared value for empowered people, it means those that are making goods, or sharing them, will benefit from new business models that support these behaviors. For example, Etsy partnered with Nordstrom and West Elm to resell their goods at local stores. These big retailers benefit as they now offer unique local artisan goods to buyers, the makers win as they get broad distribution, and the buyers win as they get unique goods that are made at a local level. That's "shared value."
How do you expect potential competitors will feel about working together, and helping the other benefit?
Owyang: Like most councils, competitors are segmented into different sub-councils. At the right time, and working with the members, we will deploy similar methods.
How quickly do you expect new best practices to emerge from this?
Owyang: We're at the start of a new market for corporations, so what's required now is market definition and business case development. When I started tracking companies in the collaborative economy last February, there were about a dozen corporations deployed. Today, there are over 60 examples, but many have been experimental, by their own admission.
Once we're out of the market definition and business case development phase, we'll move to getting started followed by best practices, and then business model integration. We've seen these same phases repeated in sequence with e-commerce and social business.
What does it take for companies to "win" in a sharing economy?
Owyang: Our mission is a formula that defines how to win: empowered people (those who share and make) and resilient brands for shared value. Companies must enable those who are sharing to continue to share, and companies must also develop new business models that add new value, and associated revenues. For example, BMW offers the Drive Now car-sharing program, and offers parking options. Peugeot now offers the Mu Mobility program, which enables a long-term subscription fee in exchange for access to a bus system, scooters, cars, and more.
Will there be a way for end users and consumers to have a direct voice in this?
Owyang: They will have a voice through the startups in the Innovation Network. Crowd Companies also has an Innovation Network of 22 startups and venture capital firms that represent the empowered people. Many of these startups, like GetAround, CustomMade, and Cookening, enable people to share goods, make goods, or create experiences. These startups collectively work with millions of end users on a daily basis. The members of the Innovation Network will present to the council their point of view, and share how they want to work with brands.
Why did you want to do this?
Owyang: I want to make a difference. This is a great opportunity to help define and shape a new market for some of the most powerful forces in the world. I also see this as the natural extension of my focus on the social media business, as we see the physical world become democratized. Lastly, it's freaking fun, and that's priceless.