When it comes to starting a new business, the Internet is incredibly powerful. Its influence and ease of access to our economy is truly unparalleled and one in which gives new ventures a greater chance for success.
Robby Slaughter, a principal of AccelaWork, published an article on this exact topic in the February/March 2015 issue of the Hamilton County Business Magazine. In his perspective, the sharing economy of our internet-based world is not only changing the way in which businesses are created, but how service efficiency is valued and consumer trust positively influenced.
According to Slaughter:
These days, it seems every corner of the business community is talking about startups that upset traditional industries. Many of these leverage the democratizing power of the Internet, where everyone has the power to participate in a conversation—or a transaction—regardless of geography or social class. Instead of a business operating out of local storefronts or monolithic warehouses, companies are now everywhere. And most interestingly of all, we carry brand messages along with us and voluntarily share them with our friends.
There certainly is a difference between simply having an idea and actually putting it into action. Before the Internet, entrepreneurs seemingly had a much tougher hill to climb. Nowadays, having a great idea and a good business plan–paired with the web–can do more than just create a lucrative business, it equalizes competition with bigger, more established companies. Slaughter points out this fact with well-known examples of recent successes (or upsets depending on how you view it):
Consider a few of the older examples of industries that have been irrevocably altered by the flattened playing field of the web. Classified ads, once an enormous source of relevance and revenue for newspapers, have been taken over by Craigslist, CareerBuilder, and Monster.com. Yard sales and antique malls now compete with groups on Facebook. Home-based crafters and artists sell via Etsy. Video stores were made extinct by Netflix and Amazon. Travel agents struggle in the era of Expedia and Travelocity.
In the end, technology makes everything easier and more accessible. We have become a society that not only knows but expects that products and/or services are always readily available and immediately at our fingertips. Gone are the days where people rush to the store before the best-selling novel is sold out and are forced to become a number on a never ending wait list. Instead, we download books from the comfort of our own homes and are able to begin reading within minutes of purchasing.
Slaughter states, “In these cases, technology makes connecting buyers and sellers more efficient . . . But a new class of businesses do more than increase the convenience of spending money. Thanks to the so-called sharing economy, we’re now in the business of renting and borrowing directly from one another.”
Examples of these types of companies can be seen in Airbnb, Lyft and Uber. For those not familiar with Airbnb, it has taken on the world of hotels, motels, and hostels by allowing people to list their own spaces online for temporary accommodation. You can offer a stranger a spare bedroom, an underused RV, or your entire home. Hamilton County boasts seventy-five lodging options on the website. Worldwide, Airbnb now fills more rooms nightly than the entire chain of Hilton hotels.
Likewise, the two giants of ridesharing, Lyft and Uber, operate under a similar model. Drivers sign up and make themselves available to give rides. Passengers download an app to their smartphone and request a pickup. The company facilitates payment through a credit card and takes a cut. It’s an elegant system for earning extra cash and for putting an otherwise idle vehicle to work.
When it comes to the notion that Internet-based companies have developed increased trust by its consumers, Slaughter’s view is quite intuitive:
What I find most fascinating, however, is that while Lyft and Uber seem like high-tech startups that leverage the most advanced technology, they could have been invented decades ago. A business from yesteryear might have certified everyday drivers and mass-produced window decals. What’s different now is really not the technology, but the trust. We’re starting to recognize that most people want what we want. We’re starting to realize that it doesn’t take much authority to confirm who can be trusted to give you a ride or stay in your home.
We can only expect the sharing economy to grow. If Lyft and Uber work for transporting people, why not for local deliveries? What about extra room in your trunk for a long road trip, or an unused luggage slot for your next flight? These are obvious extensions of a new way of thinking: that an individual’s excess resources can be a source of profit, but only if we have confidence in each other’s character. That may be the most important lesson from these world-changing startups. There’s money waiting to be made if we put aside our fears and collaborate.
To learn more about how AccelaWork can guide your growing business into a more efficient entity, reach out to us today.