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...
Has Airbnb Masterminded the Ultimate Game of Monopoly?

Has Airbnb Masterminded the Ultimate Game of Monopoly?

Remember playing Monopoly when you were younger? It was one of my favorite games growing up. Even though I didn’t know anything about economics or investing back then, there was something addictive about the game. I especially relished the special moment when you got to trade in those little green plastic houses for a big shiny red hotel. Which takes us to Airbnb… As we noted in our in-depth research report last year“The Abundance Economy: Where the Long Tail Meets the Blue Ocean”, it took Airbnb only six years to amass an inventory of over 800,000 accommodation listings in 190 countries. In contrast, it took Hilton Worldwide nearly a century to grow to 11 brands operating 4,200 hotels in 93 countries with total availability of 690,000 hotel rooms. As shown in Figure 1, since last summer, Airbnb has attracted an additional 700,000 accommodation listings versus only 42,000 additional rooms for Hilton Worldwide, a multiple of sixteen times. Figure 1: Growth in Supply Since Last Summer – Airbnb vs Hilton Source: Google Finance, Company websites, Brady Capital Research Most importantly, Airbnb is successfully converting its long tail of inventory into actual revenue. According to the June 17, 2015 article in theWall Street Journal titled, “The Secret Math of Airbnb’s $24 Billion Valuation”, Airbnb’s revenues are close to approaching $1 billion this year and are forecasted to climb to $10 billion by 2020! According to the company, the average listing is available 66 days of the year. In simple terms this implies that the average listing on Airbnb is available two months out of every year, or that it takes six...
Expectations are Rising in the Age of Uber…

Expectations are Rising in the Age of Uber…

I grabbed my iPhone and dialed 911 as I watched in panic while my 15-month old baby lay convulsing in my husband’s arms. As I breathlessly repeated my address for the third time, my heart racing, I thought to myself “why can’t I just push a button and call for an ambulance”. And as we stood waiting helplessly for the ambulance to arrive with tears in our eyes, as our baby lay limp and pale, I thought to myself “why can’t I just look at my iPhone and track the ambulance to see how far away it is”. For six months before this, we had travelled with our baby to New York City and experienced the magic of Uber for the first time. And ever since then, I resolved never to set foot in a taxi again and I found myself growing more and more impatient with how archaic the rest of the world seemed to operate. Why can’t all service providers provide such a seamless, enjoyable, and convenient customer experience as Uber? As my husband will attest to, I recently got into a heated debate with our moving company when I called them the morning of our move and was informed the crew would arrive between “7am and 10am”, depending upon traffic. “Seriously? Can you not just use Google Maps or Waze to give me a closer estimate of your arrival time?” And as we waited impatiently for the moving truck to pull up in front of our house, I kept thinking to myself “why can’t I track the moving truck on an app?” and “why do I...