Like Johnny Carson who supplied the answer(s) before the question…Peer-to-Peer Services. Collaborative Consumption. Collaborative Economy. Sharing Economy. What is so old it’s new? The bartering system – straight person-to-person business dealing. The enduring global recession has shocked consumer behaviors into a cultural shift where people want to bypass faceless brands and rely on people. Technology has facilitated this shift into strengthening buyer-seller relationships by re-introducing “disintermediation,” i.e. the elimination of the middleman.
Customers are now empowered to transact directly. The internet has taught us what the power of sharing and technology can do. It has shaken up the marketplace so more players are involved – the barrier to entry has been lowered. It is decentralizing big business and creating more autonomy. This is what Thomas Friedman wrote about in his book, The World is Flat. This economic model where underutilized resources are surfaced by a keystroke has resulted in market efficiencies which have birthed new products, services, and stimulates business growth.
Big business rightly fears that its market share is threatened. They claim the marketplace is “disrupted” and that their market share is being “stolen” by competitors “evading regulations and breaking the law.” They do not like that both sides of the marketplace are benefitting from network (i.e. technological and social) effects. They claim that technological platforms, such as UBER, which introduce Suppliers with End Users are “unfair competition.” Yet, as Airbnb CEO Brian Chesky points out, “There are no laws written for micro-entrepreneurs.” So is big business suggesting that government should regulate our garage sales and lemonade stands? Why don’t we de-regulate the hotel and taxi industries and see how they survive in today’s Social Media landscape?
Benefits for P2P
- Zero Marginal Cost Model. It is a distinct Competitive Advantage to have no overhead costs such as office space or staff. The infinite supply of individuals generates income with personal assets.
- Variety. Consumers are no longer held captive to marketed brands. Personal alternatives which provide more of a customized match are now available.
- Marketing Power. In the dawn of this new Social Era, the internet has accelerated and democratized producer-supplier abilities by connecting supply with demand.
- Network Effect. Technology platforms offer structure for new brands, such as UBER. These brands gain value by attracting more suppliers (e.g. drivers), which creates more demand (e.g. passengers who want a ride on-demand). The trust is fortified by a dual accountability system, where suppliers and consumers rate each other. Caveat Emptor (i.e. Buyer Beware) is, therefore, less of an issue, when you see that your friends have endorsed a particular business / person.
We are living in a Connected Age. Gen Y/Millennials are moving us from a “Culture of Me” to a “Culture of We.” A true global community and marketplace.
Vox populi. (Voice of the people).
Rossina Gil, MSOD, MAIS, is a Leadership and Organization Development Practitioner, and the founder of a boutique consultancy of OD experts, Corporate Looking Glass. Visit us at CorporateLookingGlass.com.
© Rossina Gil, 2014
Posted on June 15, 2014, in Uncategorized and tagged Airbnb, bartering, Brian Chesky, collaborative consumption, collaborative economy, micro-entrepreneurs, P2P, peer-to-peer, sharing economy, supply meets demand, Thomas Friedman, UBER, zero marginal cost model. Bookmark the permalink. 2 Comments.