4 Keys to a Successful Sharing Economy Business Model

Being successful in the sharing economy means building a business model that’s based on trust, authenticity and transparency with your customers

Being successful in the sharing economy means building a business model that’s based on trust, authenticity and transparency with your customers

Collaborative consumption is no longer an unknown phenomenon for consumers and businesses around the world, thanks to technology. The number of people taking part in the sharing economy has skyrocketed, and businesses such as Airbnb and Zipcar working amid its influence are equally competitive with large hotel chains and car rental services. In addition, new services have emerged such as Task Rabbit that let you outsource day-to-day errands.

As communicators, it is interesting to look at what makes people share and how any business within the sharing economy can leverage this by creating a business model that stresses consumer interaction. With that in mind, here are four things that should be considered for anyone wanting to become successful when developing sharing economy startups:

What fuels the sharing economy?

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First of all, understanding the core values behind sharing is crucial. People share, mainly, because of four reasons: social reasons (to meet new people), economic reasons (to save money), practical reasons (to save time) and sustainable reasons (to protect the environment).

When marketing the sharing economy, it is important to acknowledge these values and make sure people achieve at least some of them when using your service. For example, with sharing economy websites for car rentals, incentives for people to use that platform might be all of the above, so the site should clearly address how using the service can fulfill each of these values. Same goes for sharing economy apps.

How to develop a business model

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The sharing economy only exists when people are willing to share. However, in order to share, both parties must be trustworthy. So, it is important that users and business owners leverage reviews to help build trust throughout the process.

In a TED talk on how reputation is the new capital, founder of the book “What’s Mine is Yours,” Rachel Botsman talked about how technology is key to build trust and to empower each other to make meaningful connections and eventually start sharing.

“The real magic and the secret source behind collaborative consumption markets like Airbnb isn’t the inventory or the money,” she said. “It’s using the power of technology to build trust among strangers.”

You can also build trust between members in your community, including producers, suppliers and users, by being authentic and transparent in communications. All told, trust is the most important factor for attracting more people to use the service, interact with each other and, if everything works out right, create a fellowship around your service.

Top sharing economy companies working within this business model should be able to take a step back and let consumers shape the brand. Even though it is the company that offers a place for people to share, lend, rent or borrow, the users of the platform drive its success by delivering the services and interactions. So, be humble, and let the users do their magic. If they like your platform and the values it represents, they will use it to share goods and services.

Sell experiences, not products

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In an article on Today.com, CEO of Airbnb Brian Chesky stated that it is also important to acknowledge the fact that people no longer simply want to buy a product, but an experience and a relationship with other people.

“The stuff that matters in life is no longer stuff,” he said. “It’s other people. It’s relationships. It’s experience.”

If you go to Airbnb’s website, it is easy to see how the company — through several unique visuals of peoples’ homes and a catchy slogan (Welcome Home) — highlights the consumer experience, rather than detailing the actual rental property. The Danish peer-to-peer car sharing company GoMore also features unique user quotes on their website that highlight social, practical, environmental and economic needs fulfilled through their service.

Thanks to technology, the future of sharing economy is bright. Never before have people been able to connect and share goods and services with so many others around the world.

But to be successful in this new and exciting world of commerce, you have to build trust among users as well as convey authenticity and transparency. Plus, by stepping back and letting the users shape the platform, businesses can be a go-to place not only for purchasing products and services, but also for enriching experiences. So, always be aware of the four core values — social reasons, economic reasons, practical reasons and sustainable reasons — and integrate them as an important part of the sharing economy experience.

 

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