Collaborative Economy Market Update, May 11th, 2015
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Questions Cropping Up About Sharing Valuations: Jason Zweig’s recent article in the Wall Street Journal opened with this sentence: “Investors weren’t wrong; they just paid too much to be right.Investors weren’t wrong; they just paid too much to be right.” He was talking about the bubble at the turn of the millennium when investors were pumping more cash into tech firms than they were worth. Much more. And it was not based on normal calculations, but on expected growth. The point of the article is that investors are repeating the trend by investing in sharing startups as a group the same way they did with techs and dot-coms. Whilst S&P components are typically valued at about 16 times earnings, Uber’s estimated valuation, based on funding, is $41 billion dollars, about 50 times the S&P price-to-sales ratio and 100 times its 2014 revenues. Read the entire article in the Wall Street Journal.
Airbnb Success Not Harming Hotel Business As Alleged: There can be no doubt about the success of Airbnb. Its success is often cited as the standard for other collaborative platforms, defining them as “The Airbnb of _______.” Critics have created a lot of hoopla over the “damage” that Airbnb has done to the established hotel business. However, a study by two Boston University professors, based on empirical data, has more narrowly defined the alleged damage. In short, the study found that the impact on major hotel chains is miniscule. Airbnb caters to a significantly different clientele, ones that the chains might never get and ones that cheap hotels might sometimes get. The insightful, 28-page study is available here.
Gett Is the App to Tap to Get Things Done: London-based ride service, Gett, has announced that it is preparing to offer a one-stop app for that adds delivery services to its basic service. Founder and CEO Shahar Waiser said that “We plan to become the first app you to tap to gett things done. Everyone will use it and no one will remember how they coped without it.” Although the company has not announced which new service(s) it plans to launch in July 2015, it could be anything from Gett Pizza to Get Dry Cleaning or Gett Plumber. Gett is available in 32 major cities worldwide. Read more about Gett becoming a collaborator aggregator read the article in Entrepreneur.
Universal Avenue Gets $2 Million in Seed Capital: MOOR Capital recently invested $2 million of seed funding in Sweden’s Universal Avenue, a collaborative sales site that trains and manages freelancers as brand ambassadors for online technology companies. Once certified, the freelancers select from an array of brands to represent. There are no set hours or work locations. Wherever the freelancer goes, he or she may present their brands to businesses that might operate more efficiently or effectively by using the brand. Brand ambassadors are paid commissions. The startup company is operational in Sweden and Greece, but could easily become a worldwide success story. Read more in the April 27th issue of Arctic Startup.
To Disrupt or Not to Disrupt?: That is the question. California Senator Mike McGuire has introduced legislation (SB 593) that may help everyone involved understand disruption more clearly. Disruption of business is always to be expected, whether from the Collaborative Economy or from other competition. The disrupted entities may not like it, but they didn’t get where they are without disrupting someone else. Disruption of state and local regulations, however, is not acceptable, whether from the Collaborative Economy or entrenched corporations. Sen. McGuire is an advocate of the Collaborative Economy. His legislation is intended to ensure cooperation with regulations while allowing for disruption of business as usual. Read more in the Lake County New.
Amsterdam Named First “Sharing City” in Europe: Although London and a few other major European cities would covet that official title, Amsterdam’s vice-mayor has already given it unofficially to his own city. On February 2, 2015, he unveiled a major metropolitan collaboration that may truly be the first of its kind in Europe, if not the world. Citing research that 84% of Amsterdam’s citizens embrace the sharing economy, the city has brought together a number of leading community, corporate and collaborative entities to “utilize as a city, the chances the sharing economy offers in the areas of sustainability, social cohesion and economy.” Peter de Groot, a director at Achmea, the Netherland’s largest insurance company, shared a sage insight for all followers of the Collaborative Economy: “The sharing economy provides local connection and reduces social isolation.” Read more about this subject at sharenl.nl.
A New Sharing Opportunity?: A recent post in 21st Century Supply Chain proposed a potential new opportunity for some enterprising entrepreneur in the sharing economy. It all began with a question posed about why it costs $100 to send a piece of mail from Ottawa to Caracas and why it takes three to five days to get there. When one realizes that there are often multiple daily flights from major city to major city, one also has to wonder if these is an opportunity to connect senders with flight passengers to carry important mail. It would be like a courier service, but achieved by crowd collaboration, just like Lyft or Uber or Roadie. Could this be the next big opportunity for a bright light in the sharing economy? Read more at 21st Century Supply Chain.
Image by GotCredit used under Creative Commons license.