In the wake of Uber and Airbnb’s rapid growth and billion dollar valuations, everyone is talking about the sharing economy. Sharing marketplaces are experiencing tremendous growth, and today anyone who can rent out a room in their home, share their car, or even leverage their free time running errands can become a micro-entrepreneur.
The on-demand delivery service market has received huge injections of capital from venture firms and analysts claim that revenue from the global sharing economy could hit $335 billion by 2025.
The sharing economy’s growth is attributed to increased connectivity of people (aided by smartphones) and a desire to become more efficient and sustainable. People are beginning to rent underutilized assets, and the extra income has provided a much-needed source of relief for many families.
The next generation of the sharing economy is B2B
Though peer-to-peer marketplaces dominate the current sharing economy, the number of business-to-business sharing companies is growing steadily—and will only continue to increase. Sharing resources streamlines companies, enabling them to operate faster with less red tape, as well as allowing them to react quickly to market changes in a less expensive and more efficient manner.
Additionally, companies only have to pay for what they need, which facilitates greater efficiency and drives a higher bottom line. With B2B sharing, companies can focus on their strengths and outsource the rest, developing better products for consumers while still providing the same functionality that a more traditional organization would.
Key differences between B2B and P2P sharing
Mobilizing underused resources and cutting costs drives sharing within B2B and P2P businesses. However B2B goes one step further. It also increases access to services you wouldn’t otherwise be able to get. For example, in an individual’s case, if you aren’t able to get an Uber or Lyft (due to high usage or sabotage), you could still theoretically get a taxi, so lack of access does not mean your needs won’t be met. Certain B2B sharing companies, however, are providing access to once inaccessible resources that businesses had no way to access prior to the disruption.
The currency of the P2P economy is trust. Companies like Uber and DogVacay allow us to engage in behaviors some would have been skeptical of five years ago and are able to engage in because of the increased connectivity of users, as well as the ability to share information via social networks, apps ratings, and reviews.
For B2B sharers the currency is not directly contingent upon trust, but the quality and user experience. Anyone can pay for a service once, but a business will not continue to pay for shared services if they are not satisfied with the quality. Quality can mean increased convenience, speed, user experience, or the satisfaction rate of the final deliverable.
B2B sharing means assembly line efficiency
You can think of a traditional large organization like an umbrella, with all functions of the business run in house under different departments.
The B2B sharing economy fundamentally changes this umbrella, moving business from ownership to access, and from an umbrella to something more similar to an assembly line. Every worker on the assembly line represents a different business providing a specialized business need, thereby increasing efficiency. Companies pick and choose what they want in their assembly line and pay accordingly.
At the end of the assembly line you still have a complete business, with all needs addressed, but you are paying only for what you need. As everyone along the line is specialized, this results in a higher-quality finished product for a need that was previously unmet.
This shift ensures you won’t overhire or have a sluggish workforce. Imagine: You can turn your assembly line on and off as you need, so if you have a rough quarter there is no need for layoffs. You can just turn down the outsourcing for a bit until revenue bounces back.
Biggest players in B2B sharing
Some of the major business-to-business players in the sharing economy are enabling businesses to share access to everything from collaborative office space to underutilized machinery in the supply chain.
Below are some of the rising stars in the B2B sharing economy:
- WeWork and Co-Working Spaces
In the last year the number of co-working spaces has increased 83% with WeWork, PivotDesk, and Liquid Space being just a few of the many options. WeWork provides entrepreneurs an office and a community for $250 a month, eliminating the need for young companies to make large investments on office space that they may quickly grow out of. Not only is WeWork providing space, it’s providing an incubator-like community complete with coffee and beer perks along with access to investors.
- Floow2 and the sharing the supply chain
Floow2, a Netherlands-based company wants to share every aspect of the supply chain between companies to increase efficiency and sustainability. With Floow2, businesses can share all of their assets including machinery, vans, workers, office supplies … you name it. The company currently has 25,000 offerings available on its site.
- Crowdsource and Consulting
Companies like Crowdsource will manage crowd-based talent for you and produce and deliver content, moderation, and transcription solutions. According to Crowdsource, enterprise adoption of crowdsourcing has fueled 730 percent growth of completed tasks since 2008, and you can use the agency on a flexible basis without having to excessively hire. In the consulting world, HourlyNerd (full transparency: I work at HourlyNerd), is offering on-demand consulting for small-to-medium businesses to enterprise companies as an alternative to the Big Three.
- Uber and Airbnb, the flagships of the sharing economy, have both realized the potential of the B2B sharing opportunity and have released business versions of their products as well as closed a partnership with Concur, a business expense software. These two are bringing the sharing economy to business travelers, and companies can benefit from the streamlined, more efficient travel and lodging.
WeWork, Floow2, and the like are at the forefront of B2B sharing and we can expect increased growth, diversification of available services,and the opportunity for sharing assets between businesses in the future. The B2B sharing economy is just beginning.
Dan Slagen is currently the CMO of HourlyNerd, disrupting the consulting industry by offering a marketplace that connects specific, top MBA alumni and students directly to businesses all across the globe.