Uber, Airbnb, Couchsurfing, and JustPark all have one thing in common: they’re all successfully operating within the sharing economy. While you may have heard of these companies, you might still be a bit fuzzy on the sharing economy business model and what startup founders can learn from it.
The sharing economy is a fascinating model that is defined as “an economic system in which assets or services are shared between private individuals, either for free or for a fee, typically by means of the internet.” In other words, it’s a model where assets or services are shared between peers. In the case of Airbnb, homeowners temporarily share their living space with others for a fee. The sharing economy business model works well when the price of an asset (say a home or a car) is high, and that asset is either underutilized or operating at idle capacity. And it’s a successful model at that, with growth projections of more than 2,000% over the next decade.
Although this model doesn’t work for every business, that doesn’t mean there aren’t lessons to be learned. As a startup founder, you might want to take a closer look at the economy business model and the success of its pioneers.
Building Trust Should Be a Top Priority
While leaving your home or pet in the hands of a stranger may have seemed unthinkable 20 years ago, now it’s an everyday reality. All of that comes down to trust. Trust is the cornerstone of the sharing economy. These companies build trust by consistently delivering a reliable product or service, and implementing quality assurance checkpoints throughout. For instance, Uber vets its drivers and uses a rating system for quality assurance.
Trust should also be a top priority for startups. By monitoring the customer experience from start to finish, startups can continue improving and strengthen trust over time.
Improve Employee Satisfaction With Flexibility
Most Uber drivers or Rover pet-sitters will tell you that autonomy and flexibility are the biggest benefits of their jobs. Not only can they choose when to work, but in some cases, they can even choose where they work—turning the whole world into their office.
While giving employees total autonomy over their hours doesn’t work for every company, offering some kind of flexibility can help to improve employee satisfaction. In fact, Stats Canada recently found that “79% of employees with a flexible work schedule reported that they were satisfied or very satisfied with their work.” If that’s not convincing enough, consider that many employees are also more productive when they can flex their hours. As one Stanford University study uncovered, employees were 13.5% more productive when working from home.
Develop an Active Community
A sense of community is part of what has allowed the sharing economy to thrive the way it has. For instance, Couchsurfing helps to connect travelers from across the globe by making travel a more social experience. It’s this global community of engaged travel enthusiasts that help to keep the platform growing.
Startups should strive to achieve active communities of their own, with customers who can act as evangelists for the business. By paying close attention to customer service and community management (particularly in the realm of social media), companies can create a loyal following that endures for decades.
To point your startup in the right financial direction, consult the experts at OpenDigits.