What Startups Need to Know about Shared Economy?

Sharing economy is witnessing its heydays currently but despite that, it is still in its infancy phase. As community builders, the startup companies have a lot to learn regarding development of sustained community engagement and peer-to-peer marketplace. Only this can ensure long haul of the entire business model on which shared economy is based. Startup owners and community leaders need to bring the emerging yet booming concept of shared economy out of its infancy phase into the maturity level. This can be done if they follow the following tips:

  • Bringing in the Human Connection:

In theory as well as in practice, the concept of shared economy is all about the human connection and connectivity. Although we live in an era where technology is dominating every aspect of our lives, and lets us interact less but the prospect of having a smaller and more intimate world through shared economy is quite heartening. Shared economy should be directed towards bringing together all the circles of society and transform strangers into acquaintances, friends, customers and partners.

The problem is that a majority of the shared economy platforms are more focused upon technical grandeur of their startups instead of the human interactivity element.  It is time we understood that human connection is the first thing that needs to be developed and strengthened in order to make shared economy a lasting business model. So apart from designing and convenience, focus should also be on making the service humane and human-centric.

  • Creating a Trustworthy System:

Accountability and transparency are key aspects to be noted and adopted to make the system stronger and reliable. It is important to develop community structures and reputation systems that make people accountable to each other; traditional modes of renting such as hotels and taxis or cabs haven’t ever followed this tradition. TripAdvisor and Yelp are probably the first ones to take steps in this direction by adding customer reviews sections.

Consumers are always looking for immediate feedback as it helps in increasing their level of trust on a particular service provider. So, additions like that of customer reviews and salient other strategies would help in enhancing the level of trust on the company.

  • Think about the Risk & Reward Camaraderie:

The risk and reward balance must always be considered while starting a sharing economy company. Many people believe that anything can be turned into a shared economy business, which is partially true unless you don’t want maximum uptake. If revenues and earnings are on your mind then you need to think about the risk factor involved as well as the reward factor. Such as, whoever has an extra room in the house or owns a car wants to make some bucks by renting them out but it is important to note that there is always a risk of receiving damages.

In this context, house is a rather safe option to rent than the car since it has higher risk of damages. Similarly, renting out furniture would not be a very safe bet as it is also prone to damages. So, always think about the balance between effort, risk and reward. Consider the kind of value you deliver; is it really worth it?