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 nearly a year ago in my article “Taxi Medallion Prices Plummet: The Dominoes are Starting to Fall”, the taxi industry is the only domino that has started to fall. Consequently, only the most innovative and forward-thinking companies have started to re-design their business models to capitalize on the opportunities created by the emergence of the Sharing/On-Demand Economy as I discussed in my recent article titled “A Wake-Up Call to CEOs from Amazon, LinkedIn, and Expedia”.
But what I have just realized is the catalyst for the radical transformation of the corporate landscape over the next decade is not related to economics – but to people.
A few weeks ago I met up for coffee with Andrew Reid, the visionary founder ofVision Critical, the customer intelligence software firm he launched in 2000 that built upon the foundation of his father’s legacy market research company, Angus Reid & Associates. I was excited to meet with him as his firm had recently published a new market research study titled “The New Rules of Collaborative Economy”. It’s ironic as I actually met Jeremiah Owyang, the co-author of the study and Founder of Crowd Companies, last month down in San Francisco where he presented on the key findings of the study at the Collaborative Economy Conference. And at the same conference I also met Carey Lefkowitz, a Managing Director at Bovitz, an LA/NY-based marketing research and strategy consulting firm, who presented on the insights from his firm’s recent study “What’s Next for the Collaborative Economy: A Consumer-Driven Perspective on Opportunities for the Collaborative Economy”. Interestingly, both market research studies revealed that price and convenience were the key drivers for people to try and use the Sharing/On-Demand Economy. But ironically, it wasn’t until I sat down and talked face-to-face with Andrew about price, convenience, and brand that I had a flashback back to the research I did five years ago – and all of a sudden, the dots started to connect…
Flashback to 2010: I decided to leave the corporate world and take off on a 2 ½ month road-trip around the US in my convertible with my fiancé (highly recommended!) Our travels took us to the five-day SXSW Interactive Conference in Austin and the #140 Conference in New York City, which inspired me to start research the emerging world of social media. This lead me to publish my first independent research report in January 2011 titled “Social Media: An Exposing Disruptive Force – Look for Companies with “Heart” and “Soul” But Beware of “Empty Shells”. In the report, I wrote about how “the transparent nature of social media will peel away the layers of a company, exposing the true authenticity and depth of its customer relationships” and came up with the concept of visualizing companies as having one to three layers:
Functional: The basic outer layer of a company is its “Shell”, which represents the utility value proposition (price, convenience, variety of choice) that its product or service offers to stakeholders.
Emotional: Some companies go one level deeper and have “Heart” which represents the emotional connection stakeholders have with the company’s brand.
Psychological: The companies with the deepest level of customer relationships are the ones with “Soul”, who were founded with authentic passion, purpose, and vision and have cultivated a real community and loyal following.
Here is how the dots connect… Airbnb and Uber are so disruptive because they meet functional, emotional, and psychological needs and desires we didn’t even know we had. And in doing so, these companies are subconsciously raising our consumer mindset and expectations.
For example, earlier this year I decided to use Airbnb during a business trip to Southern California. Instead of staying at the high-status 5-star (yet cookie-cutter and to be honest, soulless) business hotel closest to the office, I decided to make the trip an adventure and stayed at a mid-century modern house in Laguna Beach. In functional terms, by using Airbnb, not only was I able to access a greater variety of choice, but it was half the cost and more convenient as instead of being stuck in the middle of nowhere at the end of the work day, I was able to go for a walk along the beach. In emotional terms, although it felt a bit strange the first night to be sleeping in the guy’s bedroom while he slept in the guest room down the hall, it ended up being a great experience as he was at home the following night and we sat down in his living room and drank wine and chatted. And in psychological terms, by the end of the stay, I really did feel like I was living Airbnb’s community-focused mission “to imagine a world where you can belong anywhere” and I was eager for my next Airbnb adventure.
To commute back and forth to the office, I didn’t rent a car or call a taxi – instead I used Uber. In functional terms, not only was it much cheaper and incredibly more convenient, but I got to experience a wide variety of choice in terms of vehicles (it was fun to travel in the front seat of a Mercedes, BMW, and Prius) and drivers (interestingly, most of the people were professionals and either used Uber to earn money to commute to work, to supplement their income, or as a means of real estate or marketing lead-generation). In emotional terms, I ended up looking forward to the commute, as it was fascinating to talk with the drivers and find out their story. And in psychological terms, I became a strong advocate of Uber’s accessibility-focused mission “to bring transportation as reliable as running water to everyone, everywhere”. Ironically, as I live in one of the rare cities in the world that disallows car-sharing (hello City of Vancouver – isn’t your vision to be the greenest city in the world by 2020?), I unfortunately only get to experience Uber when I travel.
I find it fascinating to follow Airbnb and Uber as they continue to create consumer abundance, pushing out the boundaries of the consumer value frontier. For example, on October 26th, Airbnb announced the test launch of Journeys, a fully managed travel service that allows people to experience curated excursions with locals through democratizing the latent skills and passion of their existing host community. And on November 16th, Uber announced the launch of Driver Destinations in the Bay Area, which makes commuting more affordable and convenient by enabling its drivers to earn extra income by picking up passengers on their drive to and from work.
What I love most about social media is that it empowered us as consumers by giving us a voice. So instead of just silently lamenting – “why can’t that company be more like Uber?” – let’s join together and use our voices. While many companies may view us as their worst nightmare, the truly progressive innovative companies will see the opportunity to embrace us – the UBER-ized Consumer.