It’s a great time to be disruptive. Still, billion-dollar valuations aren’t the norm. There will always be plenty of people telling you that you can’t be the next Airbnb or Uber. But what’s interesting about the sharing economy is that the speed to which you can earn market share is drastically shorter.
It would take years–if not decades–to compete with companies that have true economy of scale like Wal-Mart or Amazon. But disruption can be found anywhere. And if you’re using the sharing economy then there is no infrastructure. It’s all based on customer confidence, a highly-functional app and brand recognition.
What You Can Learn From Airbnb?
They know their customers. They know the markets they serve and have a created a brand voice that reflects their core customers. While other companies shy away from promoting progressive ideas and being out front on social issues, Airbnb knows that both the climate and nature of their business lends well to being as open, diverse and inclusive as possible.
And remember, they don’t own any of these properties. People could choose to find another option to rent their home, apartment or personal space. But they don’t because Airbnb has an incredible userbase and a brand people trust.
What You Can Learn From Uber?
You may not want to model your company culture around Uber. That’s still a work-in-progress. But there is no denying that a company with a $ 68B valuation can yield plenty of lessons for aspiring entrepreneurs.
It starts with convenience. If you’re going to compete in the sharing economy then you better do two things; create an app that is incredibly easy to use and get as much market share as early as possible. Uber was brilliant at proving their concept and then raising the necessary funds to grow rapidly.
Finally, they know that a disruptive technology was going to make enemies. No matter what industry you intend to disrupt, in this case taxis, it will be met with a strong legal response. Uber was prepared for this and succeeded where less prepared startups have not.
Be prepared for the legal expenses that a disruptive idea will create. No matter where you get your market share it will come from somewhere else and it won’t come without a fight.
Find Smart Advisors
There are always people with more experience, more resources and more knowledge of the space than you. Don’t let that intimidate you. Seek them out or seek out programs on where to find them. Check your ego and bring as many talented people in to your idea if you want it to grow quickly.
If you live in Los Angeles, Mayor Eric Garcetti has an Entrepreneur in Residence program.
Jason Nazar, co-founder/CEO of compensation & culture site Comparably, is one of two EIRs Mayor Garcetti leans on to help grow entrepreneurship in Southern California. The former Docstoc CEO already has one successful company under his belt, selling for a reported $ 50M to Intuit in 2013. Now he is tackling a space, compensation and culture, where Glassdoor is the household name. He’s a great resource for creating disruption.
“In my 15 years of experience as a serial entrepreneur and advisor, I’m always surprised at how defiant, slow moving, and scared large companies are when faced with the necessity of evolving to survive,” said Nazar. “Start-up businesses are constantly working to disrupt them. Every large enterprise is eventually overtaken by a startup that solves an industry problem. The successful ones are backed by a strong leadership motivated with a clear vision and goals.”
A healthy bit of insecurity goes a long way in keeping a sharing economy company relevant too.
“The smartest businesses are those that don’t assume they’re going to keep being successful. The best companies disrupt and evolve themselves before their competition does. And they place importance on workplace culture because they know it is the employees at the heart of their culture,” said Nazar. “It’s the values, work habits, and personalities of the people servicing the product and customers that creates long-term success.”
Putting It In To Action Requires Trust
Even when there are established companies in the sharing economy, market share is available. Lyft has capitalized on Uber’s bad press. And VILLAWAY has created a high-end luxury market in Airbnb’s space with over 5,000 villas globally used for corporate retreats or vacations for celebrity clients that need an extra layer of privacy and/or service.
Joe Liebke, CEO and Founder of VILLAWAY, created his Los Angeles-based firm less than a year ago. “Its about earning their trust and keeping it. We know that some folks are hesitant to use a luxury vacation rental as opposed to what they have experienced at a five star hotel, but once we get them to cross that trust bridge, they rarely go back,” said Liebke.
And that’s the key, trust. In the sharing economy you need a great idea, fast execution, access to many smart advisors, great strategic alliances (because you can’t get there alone) and most importantly trust. People aren’t buying a product. They are buying trust that you are the best company/app/entity to execute for them.