Long-standing businesses that are seeing fast-growing startups like Uber and Airbnb take away their revenues could learn a thing or two from Frederick VII of Denmark.
That was the message from Jeremiah Owyang today at the Seattle Interactive Conference. Owyang, founder of a collaboration consulting firm called Crowd Companies, gave a keynote speech that detailed how corporations can shift their businesses and adapt to what he calls the “collaborative economy.”
Owyang retold the story of Frederick VII, the former King of Denmark who had a revolution coming at his doorstep back in the 19th century. He was faced with two options: Fight against the new wave, or work with them. He chose the latter, adapted to the societal changes, and turned the country into a constitutional monarchy.
“King Fred gave up his throne but he kept the kingdom,” Owyang said. “If you want to be part of this market, you have to give up your business model — but you’ll gain the market. My question to you is, what side of history will you be on?”
With the advent of new technologies and increasing population numbers, Owyang explained that companies today can use the same strategy to avoid being pushed out of the economy by new startups like Uber and Airbnb, which utilize the “crowd” to churn out millions in profit.
Owyang outlined what he calls the “collaborative economy value chain”:
Owyang said there are three ways that companies can enter the value chain:
- Brand as a service
- Marketplace model
- Enable a platform
For an example of “brand as a service,” Owyang noted how BMW is allowing people to rent their electric vehicles.
“Instead of selling 1,000 BMWs, they can sell one BMW 1,000 times,” he said.
Owyang predicted that there will be membership models that emerge of “access over ownership.”
“People may not own goods,” he noted.
As far as the marketplace model, Owyang showed how companies like Patagonia have created a portal for used products, or how Wal-Mart has launched a used game marketplace.
“If Wal-Mart is launching applications in this new crowd economy, then we need to pay attention,” he said.
Owyang also explained how hotel corporations can compete with a company like Airbnb by utilizing this marketplace model. Marriott, for example, could partner with people who want to rent out their own homes or apartments and supply amenities like robes or cleaning supplies, or provide access to a list of trusted loyalty members.
“This isn’t new,” Owyang said. “It’s just called franchising. They already do this with their business model now, but now they can franchise the crowd.”
With the third model, Owyang said that corporations can allow people to build on top of their companies to create a “shared destiny” together. He showed how U-Haul has enabled customers to fund trucks, or how Barclay’s created a credit card designed and built by community crowdsourcing.
“We won’t be able to tell the difference between employees and customers,” Owyang predicted.
However, Owyang warned that while companies may try to become more collaborative now, there will be a new disruptor to watch out for.
“You can worry a little about the collaborative economy now, but robots will significantly impact us,” he said. “That’s my speech in five years here.”
Check out Owyang’s presentation here: