Business Buzz
Sharing Can Truly
Disrupt Business By Mixing Money
And Social Change
Assaf Weisz - Co-Founder and Partner, Purpose Capital
A look at how the new sharing economy can - and should - knock
down the divide between social entrepreneurship and just plain
entrepreneurship.
Enough fair trade cafes and T-shirts. Entrepreneurs intent
on changing the world should stop dwelling on copycat and
non-scalable models and focus on becoming business model
hackers.
In the same way that lines of code create software, and genetic
code gives shape to physical identities, business models encode
the incentives and behaviors that shape social and economic
realities. Health disparities, housing shortages, environmentally
ruinous practices and many other ails all trace their roots to
malignant business model algorithms.
Social change emerges from disruptive innovations
Viewing society through this lens also counters the default
perception that we live in a bifurcated world--a social, cultural,
and civic sphere separate from the economic sphere. Reality
is far messier and more interconnected. A world subdivided
between social entrepreneurs and “regular” entrepreneurs is
one in which only half feel obliged to mind the impact of their
ambitions. Instead, we should aspire to a unified approach to
change.
Social change emerges from disruptive innovations--business
model hacks that upend industries, enlarge markets, extend
access, and stir power dynamics. Disruptive innovations
challenge the prevailing economics of industries by finding
ways to offer products drastically cheaper or more accessibly.
This was how the computing revolution accelerated from
million dollar mainframes to mobile for the masses, all the
while changing every aspect of social life. The phenomenon,
observed by Harvard University researcher Clay Christensen,
provides something of an instructive guide for entrepreneurs
who are serious about changing the world.
Solar rooftop installations have traditionally required upfront
investments of $20,000 or more by homeowners, dramatically
limiting the market to wealthy and willing households. Enter
SolarCity, whose business model hack (the insight of Elon Musk,
no less) was to front the full cost of inventory and installation, in
exchange for retaining the tail of revenues for the next 20 years.
With $280 million in help from Google, the cost to homeowners
evaporated. At the same time, startup Solar Mosaic took a
more democratic approach to the same problem, creating a
crowdfunding platform that has mobilized $3.8 million toward
74
rooftop installations so far.
These are not rarities. Indeed, there are great hacks fuelling at
least a few trends that stand to alter society as much as they
alter industries. Over three posts, we’ll take a look at some of
them: collaborative consumption, the maker movement, and the
Internet of things. These trends highlight opportunities for social
change on a scale no social entrepreneur should ignore.
All Together Now
At the arrowhead of these shifts is the collaborative consumption
movement. Its main hack has been to replace ownership with
sharing as the main form of consumption, in domains previously
(and even currently) considered impossible, and often through
technology platforms.
Sharing is proving disruptive across remarkably diverse sectors,
from transportation (Zipcar, Autoshare), and hospitality (Airbnb)
to crowd financing (Kickstarter, Angel List, Kiva) and education
(Udemy, Skillshare). Its value is not merely in providing cheaper
alternatives. The downstream effects have also been numerous
and notable:
Sustainable, Efficient, Shared
While the shared product is often cheaper, in many cases it
is also more socially beneficial. Zipcar claims that every one
of its cars replaces 15 personally owned vehicles. As with its
fleet, companies like ParkAtMyHouse and Kitchen Library are
enabling more optimal use of dormant physical assets--space,
tools, even parking spaces--where creating or buying new
inventory is just redundant and wasteful.
Spreading the Wealth
Companies like Airbnb, Udemy, and TaskRabbit are also
providing average citizens with new opportunities to earn
CORPORATE SOCIAL REVIEW