By Scott Annan, The AIMbitious Startup
Full Article Here: http://www.businessinsider.com/the-share-economy-will-change-business-2013-2
At the end of December
About two weeks ago Twitter released a new social video app called Vine, and companies are using iterative methodologies to find the greatest return on investment (ROI) – my friend Benji Rabhan in his new book Failure is Obsolete discusses the power of constantly testing and refining concepts to maximize conversion rates – both on and offline. What Francis Fukuyama proclaimed would be the End of History could similarly be a harbinger for the end of failure – A/B split testing and minimum viable products as the means through which predicting the immediate future in the least capitally intensive ways possible could bring an end to investing in projects that don’t yield high adoption rates and robust profits.
In hypothesizing the trends that I feel will move the needle in the business world, I hinted at the importance of the
The idea of spare capacity is not a new one. A factory that can produce 100 widgets, but that only has current demand for 80 can rent out its spare capacity to another company for the production of 20 extra widgets, thus enabling the factory owner to maximize its resources and optimize its ROI. But applying the notion of spare capacity to an individual is more novel.
More and more, individuals are viewing themselves as businesses. Take the Airbnb model, for example. It’s a site that allows owners of homes to rent out spare rooms, apartments, or entire houses when they are not being used – in effect, creating a whole class of business owners whose main asset is its spare capacity. Lyft is another application that enables owners of cars to rent out rides when they have availability. The ability to provide the use of an otherwise depreciating asset for the purpose of capitalizing on spare capacity is a significant development in our economy.
Moreover, the ingredient that makes the
In her 2012 Ted Talk, Rachel Botsman makes the case for trust as the most important currency in the new economy. Our ability to offer our own spare capacity and
I sense that as an economy, we will increasingly search for ways to capitalize on our spare capacity and look for opportunities to turn our sunk costs into cash-flowing assets that might even provide for our financial independence. Rent your watch out to a dinner-party or gala attendee, lend your extra winter coat out to someone visiting from a warmer climate – there are numerous possibilities.
What this means for our economy is that assets will be shared and used like never before; currencies such as paper money and hard metals will gain competition from traditionally more intangible ones such as caring and trust; and finding ways to use what’s already in the marketplace to reduce monetary expenditure and production will become ever more important.
I think what we’re collectivity realizing as an economy is that resources are scarce and need to be consumed responsibly. Many of us have been duped into believing that we need to invest individually in assets or goods rather than in the sharing of them communally. The new generation of conscious consumers is aware of some of the externalities of doing business and wants to reduce the collective footprint by sharing more and producing less. It is also a generation that needs ways to make extra money as the economy isn’t providing the job security to which prior generations were traditionally accustomed.
Technology provides scale and accessibility in ways that