How to Tap the Shared Economy with Your Tech Business
Is there a place for your growing tech business in the shared economy? Learn more about shared economy trends and how tech brands can be involved.
As a tech company owner, the idea of somehow diving into the sharing economy might seem counterintuitive and outside your purview. After all, what can you do to share tech?
The truth is, however, thinking creatively about your tech company's business model can help you gain new clients, foster new revenue streams, and cultivate a brand new, more expansive outlook for your business.
It's a good question. Although it may appear to be a business model for a handful of much-talked-about companies, the sharing economy is actually reshaping consumer behavior. Wielding impressive purchasing power, younger generations simply expect to access goods and services via sharing. They're less likely to own things—especially those big, marquee purchases that other generations once thought a rite of passage or even mandatory.
Further, the numbers simply do not lie: The sharing economy, pegged at a mere $15 million in 2014, is projected to be worth $335 million by 2025—an incredible boom.
Pivoting toward or integrating a model of sharing potentially opens your business to a new and exciting market centered around the borrowing and return of items. You'll likely find the opportunity to expand your offerings with more desirable price points for a larger audience that now cherishes the opportunity to sample a product or service rather than purchasing the full package outright.
Less risk on the consumer side could very well mean more sales and profits on yours.
Are you ready to innovate and evolve? Considering your current offerings through the sharing prism could spark a product or process you may not have otherwise summoned into existence.
That’s good for your customers and your business.
A New Revenue Stream
The sharing economy can diversify your revenue streams. This is important for every business owner, but for tech companies that rely on the whims of search engine algorithms or app store placement to surface their products and generate revenue, it is of particular value.
Although the capital you may generate via sharing is likely less than outright purchases, it is nonetheless an additional type of revenue in case your primary source slows—a backup that could one day prove instrumental to your sustainability.
Finally, think beyond revenue. Bringing in new customer segments or offering new products may avail you to different customer feedback. This can help you develop more or better products at stronger, more attractive price points that also may expand your revenue possibilities.
Making Your Move
As you might expect, you'll need to think deeply about certain parts of your business model before you move into the sharing economy.
Although this list isn't exhaustive, getting these three aspects of sharing right can make a major difference in the success of your new venture.
- Consider your target customer. Decide whether or not your customer profile will change based on your pivot. For example, when you shift toward a sharing economy model, will you now target individual consumers rather than enterprises? The answer to this question will affect your marketing plan, sales operation, and even your pricing.
- Update your platform. Can your technology handle sharing economy requirements? It’s a foundational question. Remember, from reservations to legal policies to privacy agreements, and beyond, any feature you want to see from a sharing economy company, you need to consider integrating as well.
- Invest in quality product. Upgrading your tech stack to accommodate a sharing economy model may take a bit of cash. To get it done, consider a business loan or line of credit to finance equipment, expand your tech stack or frontload payroll expenses.
Pivoting toward the sharing economy is a big change for your business—it involves being brave enough to revamp your mindset, nimble enough to integrate technology and, of course, a deft approach to raising capital. That said, done right, it can be well worth the spend and the time invested to open up your company to new markets and revenue streams.