SAN FRANCISCO -- To embrace the collaborative economy -- and the resiliency it provides to companies -- businesses need to play a game of musical chairs.
"If you have products or services or a marketplace, the opportunity to is actually change that function," said Jeremiah Owyang, chief catalyst and founder of Crowd Companies, at his VERGE SF presentation on Tuesday, "When Corporates Outlive Their Usefulness."
The sharing economy is usually discussed in terms of consumer-focused, peer-to-peer services. But what does it mean to companies, and what B2B opportunities are being explored?
Companies, Owyang said, have three options:
1. If you sell products, turn them into services.
2. If you offer services, create a marketplace.
3. If you run a marketplace, empower that marketplace to build products.
Shifting to services
Businesses that sell products need to go beyond just selling and start offering products on demand, renting them or turning them into subscriptions.
"These are not new models," Owyang said, "and these models achieve resiliency through efficiency."
Netflix and Salesforce, for example, have been offering DVDs and software, respectively, as subscriptions for years. BMW and Toyota have begun renting cars in San Francisco. And Dollar Shave Club and Beauty Box are turning shaving razors and cosmetics into items people can buy subscriptions for.
These models, Owyang said, build deeper loyalty and commitment while also selling products quicker by making them on demand.
Building a market
To move from selling services into running a marketplace, companies need to enable and encourage customers to resell products, Owyang said, in turn, reducing the need to buy new products.
GM, for example, has partnered with car-sharing service RelayRides to help people find idle cars that are available for rental.
Outdoor gear maker Patagonia and online auction giant eBay teamed up on Patagonia's Common Threads program to help people resell used -- but still useable -- Patagonia gear, with a portion of sales gong to non-profits.
Again, embracing such collaboration with customers can build deeper brand loyalty, Owyang said.
Setting up a platform
Coming full circle, those who run marketplaces need to activate those marketplaces, Owyang said, to help customers become the ones who make products.
Nike has an online system that lets people co-design shoes by picking styles, colors and other personalization.
Etsy, the online market for artists, makers and crafters, is now working with West Elm and Nordstrom to put local artisan crafts on store shelves.
GE is working on advanced manufacturing by partnering with Quirky, using social media to determine things to build. Paul Rogers, GE’s chief development officer, described the effort as, “If we built this, would it sell?”
And a whole host of products wouldn't exist -- or wouldn't have been launched as fast as they did -- without Kickstarter, which allows the crowd to "choose" which products should be created by funding them in advance of their creation.
"This is the highest form of loyalty, when you have shared fate with your customers," Owyang said. "You and your customers will come together for new shared value."
Owyang ended his role three weeks ago as partner with the Altimeter Group, which advises companies on market disruption. He continues to serve as an advisor there.
Jeremiah Owyang image by Goodwin Ogbuehi, GreenBiz Group