The new generation of consumers feels comfortable being “asset poor” but “experience rich.” This new way of thinking has given rise to the sharing economy. PricewaterhouseCoopers predicts the global revenues of the sharing economy could hit $335 billion in 2025, up from $15 billion in 2014.
The beauty of the sharing economy is that it allows sellers to get more value from their resources, and it allows buyers to enjoy products and services without commitment. For example, a customer might enjoy the experience of wearing a fancy watch but doesn’t want to spend thousands of dollars to own one. Companies such as Eleven James cater to such desires by renting luxury watches to people who don’t want to bear the ownership cost.
While this creates great opportunities for entrepreneurs, there are things that need to be in place for the growth trajectory of the sharing economy to continue to skyrocket. It pays to learn from both the established and fledgling companies leading the charge.
As an entrepreneur, here’s what you can do to carve out your own success in the growing sharing economy:
1. Establish trust and accountability.
When money changes hands, people expect accountability. While Craigslist is a successful listing platform, people would rather do transactions on eBay. Why? Because eBay brings trust into the equation. Should a transaction go south, the company provides both sides with a method of recourse through its resolution center.
Both eBay and Uber provide post-transaction accountability in the form of ratings and reviews. In fact, if an Uber driver’s rating drops below 4.5 on a five-point scale, he’s suspended. Being transparent while providing trust and accountability will help accelerate the growth of the sharing economy and your company.
Related: What's Next for the Sharing Economy?
2. Help others identify monetization opportunities.
The fastest way to grow the sharing economy is to learn from startups such as RelayRides. This company shows people how to make money by renting their own underused vehicles and provides a platform for them to do so. Likewise, Shyp and Postmates enabled Uber drivers to make extra money by picking up and delivering items between their Uber trips.
3. Build friction-free marketplaces.
A seamless transaction platform is key to facilitating sharing. The number of users sharply drops when consumers hit a snag. Part of what makes Uber and Airbnb successful is that they give their customers what they want -- a ride or place to vacation -- in seconds.
4. Make the out-of-reach affordable.
The proliferation of technology allows traditionally unattainable services to reach anyone, to the benefit both sides. For example, interior design is typically reserved for the wealthy. But Laurel & Wolf is connecting the masses to this elite service.
Its users provide details about their tastes and budget, then upload photos of their rooms and enter dimensions. The company sends this information to interior designers to draft room concepts. Not only can anyone now access interior design, but the designers also have a way to leverage their skills to earn extra money.
5. Make the most of available resources.
The foundation of the sharing economy is making the most of available resources. PivotDesk helps its users do just that by connecting startups that need office space with companies that have extra space. The platform arranges for office tours and handles payment processing after helping both parties agree.
6. Capitalize on secondary opportunities.
All of these disruptive businesses in the sharing economy leave the door open for another layer of services. That’s where Checkr found its sweet spot. It helps make other sharing economy businesses more scalable by vetting people through quick and cost-efficient background checks. The company’s API pulls everything from criminal records to driving histories and provides an easy-to-read report.
It streamlines other companies’ onboarding processes, and customers can feel comfortable knowing that renters and service providers have received background checks.
As the sharing economy grows and becomes more intertwined, the opportunities for innovation are endless. If you understand how to navigate and capitalize on it, the barriers are lowered. You can enter the marketplace or disrupt it and create your own success story.