Blog Sep. 20, 2018
5 Keys to Success for Sharing Economy Companies
There are points in our life when we say, “Thank goodness, there’s an alternative way!” In other words, an “efficient alternative” to cure the struggle in some part of our daily lives is why sharing economy companies (or also known as “collaborative consumption”) like Uber, Airbnb, and Lyft are here for.
Traditional services and digital ones both aim to help solve problems or serve people. However, the rise of the sharing economy in the digital world has become a disruptive force that threatens a lot of industries. Seeing “sharing” as an emerging trend, it’s natural that the competition will continue to be more fierce, and more developers will join to create such services for everyone. In that case, how are you going to stand out from the rest?
The sharing economy and its transformative change in the industry will keep evolving. Successful sharing economy companies have already proven why their services deserved to be valued by the customers. Moreover, they also showed what the factors and features are, and where they focused to make it happen. With this, let’s learn the 5 proven keys to success from those sharing economy companies that are worth taking note of.
Lessons from Sharing Economy Companies
First of all, how has “Sharing” become more important today?
All of us in this world have been practicing the concept of sharing ever since; to say it simply, it is not entirely new. But, of all ideas in the world, how did “sharing” become a new face in business? If the word itself is not enough to understand what it truly brings, here are 3 values people gain through sharing economy:
- Trust – connecting with people
- Convenience – saving time, money, and effort
- Bigger Purpose – contributing to social responsibility and environmental sustainability
Customers today want every experience to be great. The level of trust, convenience, and purpose have higher demands from people in general because they see growth in technology and innovations every day.
1. Not Only “Millennials” but also Useful For Seniors
The key to business success is the consumers, and among them, millennials are the largest market for sharing economy companies. This group of people has the ability to influence not only politics and society but also the economic power currently, and for the upcoming years. A point to note, however, is that consumers of a sharing business model are not only one kind but two: the seller and the buyer are both consumers.
Despite the image of new industries only being catered for the young and tech-savvy, focusing only on millennials as your target may not just be enough. Seniors are increasingly participating in the sharing economy industry as well according to Hartford Courant, and one of their examples is the senior couple listing three rooms for rent in their house on Airbnb. Two more examples in the said article are seniors who utilize services to be an on-demand dog-sitter and an Uber driver. The article explains that such retirees they interviewed were participating in the sharing economy for the reason of enhancing their income and social lives. The belief that this industry may not fit other generations is untrue. Sharing economy advocates convenience that fits with any person’s lifestyle in terms of earning money and getting solutions with minimal effort.
2. Eliminate Consumer Pain
Sharing economy businesses, or any other similar business model, tends to succeed when they are able to solve a pain point that makes people use their services regularly. These solutions are paired with instant gratification as customers now expect almost everything literally at their fingertips. This is why being “mobile-first” would be a priority for sharing economy business models.
Let’s talk about how ride-hailing or ride-sharing apps contribute to our daily life. There are lots of pains in getting an available transportation. A situation when we need to get as fast as we can from one location to another could be one. Compared to those who own a car, not having a private vehicle leads a person to wait for a cab, which sometimes is more difficult due to weather is another. Sometimes, you will need to wait with the rest of the other people who also need one, especially during rush hour. Other situations such as commuting via public transportation are not ideal for a person who carries a lot of stuff as going in and out of a train station is such a struggle. These few pain points are what apps such as Uber and Grab are remediating, most importantly, addressing these problems even more conveniently. Ride-sharing apps don’t only give a solution to lack of transportation. They also meet some other needs such as making digital payment options available, as well as having discounts as a perk.
3. Creating Personal Experience
Being able to provide a personal experience to your customers is a nice touch to have in any business. The more users feel at home using a service, the more they integrate it into their daily lives. Take the world-known accommodation platform Airbnb. This successful app has given consumers the options to pick their type of lodging, space, accessibility, amenities, budget but most of all the ability to deal with the hosts personally. Every home is unique in their own way and has different stories (including people) inside it. Dealing with a person, not a brand nor a business, makes you feel more in touch with the service or experience received. The great thing about this is that there can be special requests or the hosts may give special benefits. What are these? Perhaps, the home that is booked is near a beautiful view or maybe the host offers other amenities to be used for free.
4. Trust and Transparency
The direct supplier of products or services in the sharing economy cannot be easily guaranteed professional. Although sharing economy businesses are believed to be open for everyone, it’s still important to curate those who will provide services to avoid risking quality or incidents. That’s why there is still a need for careful curation coming from the entrepreneurs themselves. On the other side, usually at the end of traditional services, customers are frustrated to voice out their feedback. However, in the sharing economy, it became easier for customers to share their opinions because there is already a highly valued feedback system attached to the provided sharing economy services. Merged companies Rover and DogVacay are such examples where this system works well. Trust and transparency are very critical in the sharing economy business models. Trusting your pet to a complete stranger is hard because for most people, dogs are literally their family member. However, doubting these dog sitter apps are not the case because they continuously build the pet owners’ trust. Aside from a thorough background-checking of every sitter, both apps provide more features or tools on their platforms such as user feedback system, pet insurance, vet consultation, 24/7 customer support, and Rover Cards (an update or report card). They also help the dog sitters by giving pet care education. To no surprise, DogVacay has helped take care of millions of doggy stays and was on the north of a $70 million annual run-rate in 2017. While Rover, recently raised $156 million investment in a previous fundraising efforts.
5. Focus on Building Community
Gone are the days when consumers only paid money to businesses, but to each other within a community through sharing platforms. Businesses that focus on building community become less restricting and more flexible. With this, they can create better experiences for the customers. The benefits of the sharing economy industry can be divided into three sides. The people behind the platform, the suppliers or sellers, and the consumers or buyers. Individually, they already have a sense of belongingness in the sides they are in. However, these different groups of people when combined can build a community that can move forward and help each other out more.
Successful Sharing Economy Companies think as if there’s no box
The future of the sharing economy is progressive, that’s why there are a lot of entrepreneurs wanting to try their luck in entering this industry. The qualities that stand out from the most successful sharing economy companies majorly focus on convenience and personal experiences. Businesses must take risks because playing safe won’t lead to success. If you really want to work your idea on this model, you have to know your target market well. Your business should know your customers to the extent of understanding their pains and coming up with the best or new solution to address their needs.
In adish, pursuing your goals for your business is our main focus because we believe in customer success. We are here to provide services that will help ensure your business a meaningful user experience. We are with you in every step of the way, making sure your product or service is getting the success that it deserves.
