A rising star
The sharing economy has been the source of disruptive and innovative new business models for over a decade now. Traditional companies with successful ‘linear’ business models have been under attack by companies such as Airbnb & Uber who provide a platform for suppliers and customers to buy and sell services and goods in a peer-to-peer fashion.
While growth has been the standard for a majority of the companies in the sharing economy (PWC predicted a 2000%+ growth of consumer spending in the travel, car sharing, finance, staffing and streaming categories of the sharing economy between 2015 and 2025), the industry is currently on life support.
Not dead, but definitely in trouble
Why is that? Well, the cornerstone of the sharing economy is the willingness of individuals to hire out very private things such as their cars, homes, personal time and pets (I kid you not) to other individuals.
For such a peer-to-peer transaction involving something as private as your bedroom to take place, trust is the magic word. Trust in the supplier, trust in the platform facilitating the transaction for a handsome fee, trust in the insurance covering the transaction — without trust one of the parties will most likely bail on the transaction.
And that is exactly why companies active in the sharing economy are likely to be hit harder from the COVID-19 induced crisis than more traditional companies. The COVID-19 crisis is very likely to lead to an increasing distrust in people’s hygiene. The virus is everywhere, and we don’t want to catch it. And people’s homes and cars sound like very likely places to contract the virus.
So what can they do?
Companies active in the sharing economy can choose from two scenarios. The first is to choose a reactive, passive approach. Cut costs, ensure your organisation is as lean and mean as possible to run the business you have left, and pray that a vaccine is found soon and things return to normal.
The second is a more proactive approach. Running with the assumption that the COVID-19 crisis is likely to permanently change consumer behaviour, it is crucial for your company to start understanding their consumer all over again.
This practically means two things:
- You need to talk to their customers who are still using the platform. Why are they using it? How are they experiencing it? Do they experience the service differently compared to 3 months ago?
- Equally important, you need to talk to your non-consumers. This category of consumers is a golden source of information for you right now. I’m talking about the consumers who were regular users of your platform but stopped using it altogether. Why did they stop using your platform? What emotions and thoughts are leading to the fact that they stopped using the platform?
Validate validate validate
Both activities will lead to valuable insights. However, insights alone won’t save your business. Based on these insights, you need to start validating how you can adapt your business model in such a way that it fits your customers’ changed pains, gains and jobs to be done like a glove.
Maybe you have to stress hygiene more in your communication. Maybe you need to change something in your customer journey so that it puts their anxiety at ease. Who knows — you need to do whatever it takes to turn the non-consumers into happy customers again. All these assumptions will need to be validated via well-designed experiments, allowing you to make data-driven decisions that will benefit your company in the long run.
We’re here to help.
The Talent Institute has over 5 years of hands-on experience in helping market-leading companies validating and building winning new products and services. Hit me up if you want to share some experiences, share your challenges, or if you want to discuss any of the ideas mentioned in this article.