UBER-nomics: The New Holy Grail of Value Creation

UBER-nomics: The New Holy Grail of Value Creation

UBER-nomics is emerging as the new Holy Grail of value creation. It is no longer just the domain of start-ups as Industrial Age companies like General Motors are starting to make strategic moves into this space, joining the growing ranks of companies like Amazon, LinkedIn, and Expedia. Although these companies have vastly different business models, they all have one thing in common: they recognize the exciting value creation potential of marketplace sharing platforms. I define UBER-nomics as the economics of abundance as it allows companies to defy traditional economic principles of scarcity in terms of both supply and demand: · Long Tail of Supply — inventory growth is not limited by traditional time or capital constraints, as companies are able to access a long tail of latent/under-utilized assets, goods and expertise. · Blue Ocean of Demand — revenue growth is not constrained by existing demand, as companies are able to attract new tiers of non-customers and access new blue ocean market demand, expanding their Total Addressable Market (TAM) beyond traditional categories. It is exciting to imagine the endless possibilities as companies discover the Holy Grail of value creation already lies within them. Just as the democratization of content in the past decade led to structural disruption in media-related sectors (just ask the former executives of Blockbuster, Yellow Pages, Kodak!), the emerging democratization of physical and human capital will lead to a radical transformation of the corporate landscape. What I love about UBER-nomics is that it exposes what I call “the fallacy of the shareholder-centric business model” as it negates Milton Friedman’s traditional scarcity-based doctrine that: “There is one and only one social responsibility...
UBER-nomics: It Takes More than Just a Marketplace

UBER-nomics: It Takes More than Just a Marketplace

“Creative destruction of the status quo…idealistic vision of a better way…fearless, uncompromising, and creative…” What I love about the Sharing/On-Demand Economy universe is that it is rich with founders who epitomize these words that Jonah Sachs uses to describe “The Rebel” in his book “Winning the Story Wars”. By being “rebels with a cause”, Brian Chesky and Travis Kalanick have not just created marketplaces, but movements. And as Scott Goodson observes in “Uprising”, movements are what attract people “…hungry for meaning, authenticity, sense of belonging, and purpose…beginning to engage with and shape culture around them as opposed to being passive consumers of culture created for them by others.” It is the movement, not just the marketplace, that enables Airbnb and Uber to defy traditional economic principles of scarcity and operate in a New Era of Economic Abundance. Under the new laws of UBER-nomics (my new term for Copianomics, which I define as the science of choice under abundance, as opposed to scarcity), the following economic forces act as growth catalysts: Long Tail of Supply — inventory growth is not limited by traditional time or capital constraints. The companies are able to leverage the passion people have for their cause or mission to attract a long tail of latent/under-utilized assets, goods and expertise. Blue Ocean of Demand — revenue growth is not constrained by existing demand. The companies are able to attract new tiers of non-customers to their movements and access new blue ocean market demand, expanding their Total Addressable Market (TAM) beyond traditional categories. It is fascinating to watch Airbnb and Uber as they are continuously innovating. For example, on October 26th, Airbnb...
The UBER-ized Consumer: A Company’s Worst Nightmare?

The UBER-ized Consumer: A Company’s Worst Nightmare?

The real disruptive threat of companies like Airbnb and Uber will come from people – like you and I. I don’t know about you, but ever since I experienced the wonders of Airbnb and Uber last year, I have started to look at the world differently. I feel myself getting increasingly impatient with how archaic companies operate (why can’t I just push a button and get the good/service delivered now?) And I am getting more and more frustrated by the soulless experience in dealing them (why can’t all employees be as authentic and engaging as my Uber driver or Airbnb host?) What I have realized is that we are subconsciously evolving into what will become a company’s worst nightmare: the UBER-ized Consumer. How is it that I could spend over a year heads-down researching the Sharing/On-Demand Economy and not come to this realization until now? Good question – I think it is because I have been looking at it from an analyst perspective: trying to discover how these companies have been able to achieve accelerated levels of value creation. I think I’ve figured this out – by democratizing under-utilized/latent human and physical capital, these companies are able to defy traditional economic principles of scarcity. And as I discussed in my in-depth research report “The New Era of Economic Abundance”, by threatening the core activities and core assets of a wide range of industries with obsolescence, these companies would lead to a radical transformation of the corporate landscape over the next decade. However, the reality is this could take a number of years to play out, because as I wrote...
Podcast Interview Highlights: “The New Era of Economic Abundance”

Podcast Interview Highlights: “The New Era of Economic Abundance”

Financial analyst Barbara Gray discusses her recent research report The New Era of Economic Abundance and predicts how the sharing economy can disrupt incumbent business models. To listen to my full 25-minute podcast interview with Adam Broadway, Co-Founder of Near Me., please click here. Adam: Okay. Hi everybody. And I have the pleasure of talking with Barbara Gray who is an analyst with Brady Capital Research Incorporated and the website bradycap.com. Wonderful to have you on this podcast. Well, I’d love to dig into the details about what you’ve done with this fantastic research about the on-demand economy – Barbara: Hey, Adam. It’s great to be here. Adam: The sharing economy and the New Era of Abundance, a specific report you’ve obviously poured a lot of time and effort into. But before we jump into that report, I’d like to find out a little bit about how you got to where you are today. Barbara: Sure. Okay. Just as background, I’m an equity analyst by training. And I’ve spent over two decades analyzing a wide range of companies and sectors. And specifically, I launched Brady Capital Research back in 2011 to focus on researching companies that are actually making a  positive difference in the world. Adam: So specifically, you’ve talked about in your report about this New Era of Abundance. How have companies like Uber and Airbnb defined the traditional economics in achieving this accelerated value creation? Barbara: So. I’m an analyst. An analyst, you basically want to look for what’s going to happen in the future. And what I realized when I started looking at Airbnb is that these companies...
A Wake-Up Call for CEOs – from Amazon, LinkedIn, and Expedia

A Wake-Up Call for CEOs – from Amazon, LinkedIn, and Expedia

What do Amazon, LinkedIn, and Expedia have in common? In the past month, they have all made strategic moves into the Sharing/On-Demand Economy. This is a wake-up call for CEOs that still operate in the Traditional Era of Scarcity. A month ago, I had the opportunity to share insights from my new in-depth research report “The New Era of Economic Abundance” at the Collaborative Economy Conference in San Francisco.After spending over a year doing heads-down research, it was great to finally get out and talk with people and share my research. The Sharing/On-Demand Economy offers exciting potential for aspiring entrepreneurs (and especially rebels with a cause with social missions revolving around accessibility, sustainability, and community) as the capital continues to flow, with $15.5 billion having been raised by the top 75 companies.   But what I’ve realized since is that this new form of commerce creates an even bigger opportunity for traditional companies that are now able to uncover new sources of value by leveraging their under-utilized tangible physical and human capital through innovative new Sharing/On-Demand Economy business models. A perfect example is Amazon, which launched Amazon Flex at the end of September, its new On-Demand delivery service. This Goods Delivery platform will enable Amazon to cost-effectively build a long tail of delivery drivers for its 1-hour Amazon Prime Now service while creating opportunities for people to easily monetize their under-utilized human capital by using their own vehicles and Amazon’s routing app. And less than two weeks later, Amazon entered the Trades Services vertical with the launch of Handmade, a rival to Etsy, featuring over 800,000 factory-free and handmade...