Source: Collaborative Economy | Web Strategy by Jeremiah Owyang | Digital Business

This may come as a shocker to many, but in the next few years, the peer-based sharing/collaborative economy will shift to automation.

I’ve studied this market closely and want to make some clear predictions on where things will head. Four years ago, I mapped out the Collaborative Economy, which is the phase where humans get what they need from each other (peer-to-peer commerce). In the next phase, the Autonomous World, robots will augment and replace humans, and they will serve humans. In some cases, robots will serve other robots as we advance further.

The transition from traditional business models to the Collaborative Economy and ultimately to the Autonomous World is already creating ripples throughout the world. We are in the midst of global disruption due to widespread mobile Internet and cloud technology, vastly improved processing power and Big Data, and the rise of the sharing economy and crowdsourcing, according to the World Economic Forum. These changes have prompted new waves of geopolitical volatility and the creation of a new middle class in emerging markets.

These innovations are now spawning new energy supplies and technology, the Internet of Things, advanced manufacturing and 3D printing, and societies that live longer — all of which are quickly altering expectations about the future.

The next turn is likely to produce robots and autonomous transport, AI, and breakthroughs in advanced materials and biotechnology. These represent a new frontier that may only be a few years on the horizon. WEF posits that the world could look fundamentally different by 2020.

Let’s indicate how timely this is, and how it lines up with what we see.

How the Collaborative Economy will shift to Automation

Category Automation Phase Examples Impact
Ride Sharing(Uber, Lyft, Didi, Ola) Self-driving cars are quickly emerging, most by 2021, from many car manufacturers Uber has experimented with cars, Lyft’s bold pronouncement, and Didi Professional drivers will need to upskill and find a new career
Delivery(Postmates, Instacart) Wheeled and flying drones will deliver packages, beyond humans Starship, based in my area, is delivering food, and Amazon’s patents are inspiring Postmates, Instacart and other couriers will be displaced by robots
Home Sharing (Airbnb, VRBO, HomeAway) Home automation will enable hosts to offer hospitality without being present Airbnb could offer digital locks, Wi-Fi management, digitized home appliances, and more Hosts can manage more properties, and guests get a personalized experience
Online Service Marketplaces (Upwork/Freelancer) Simple AI bots will complete rote tasks currently performed by online service providers While a plethora of early-stage bots have emerged from M, Alex, and Watson, advanced AI to conduct intermediate tasks hasn’t emerged Online workers will need to specialize their skills for project or robot management, human-based design, community skills, and humanities
What’s next? Anywhere repetitive tasks exist but could be automated Simple machines will replicate human behaviors Jobs will be lost, so humans must upskill or specialize in humanities

 

The implications of these coming changes will likely have a profound effect on the people of the world. Here are some concrete observations:

  1. Only some, not all, humans will be able to upskill, unlike other social economic revolutions. Humans could grasp industrial revolution roles as we shifted out of agriculture because they were taught single repetitive jobs. The challenge now is that robots will always learn faster than humans, as they are networked and can process faster and work at an accelerated pace.
  2. The world will need solutions to unemployment. From a nonpartisan standpoint, the next threat to Western employment isn’t offshore workers but the rise of automation. Predictions from the former White House administration predict that automation could replace 83% percent of lower paying human jobs. The impact to other nations that will develop these automated technologies are also at hand, they must prepare for changes in society and their economy. Humans will need to redefine what purpose means, for those where human labor is the primary driver.
  3. The impetus to push for universal basic income is at hand. The experiments are happening in Finland, Oakland and more, proposing such a policy would provide every human — regardless of age, gender, educational attainment, or intelligence — with a guaranteed living wage to cover basic needs: food, shelter, and clothes. For anything else they want, they will have to earn it. The companies that own and/or profit from these technologies should be taxed to cover this societal benefit. The robots should not only provide more resources to the planet for cheaper, but they should also fund a quality life for others.
  4. Who will maintain employment: Those who manage robots, humanities, nonlinear roles. While we actively try to teach our children coding, technology is quickly advancing that robots will be able to self-code. This means that understanding how to manage systems of robots towards solving problems will be key. Secondly, arts, humanities, entertainment, sports, psychology and other softer skills will rise to the forefront as skills that are needed. It’s assumed that robots will replace many repetitive and rote jobs, humans that can solve complex tasks that are constantly unique, will thrive.

In summary, Uber, Lyft are ushering in self-driving cars and a wave of automation that will cascade across the broader ecosystem as humans are augmented then often replaced by robotic systems.

Industry Impacts of Airbnb’s Shift to Experiential Business Models

The future of Airbnb lies in creating memorable guest experiences, and brands will benefit by complementing these experiences in relevant, valuable ways.

Since attending Airbnb Open in Los Angeles a few weeks ago, I’ve been contemplating what Airbnb’s announcements around shifting toward experiential hosting mean for both guests and corporations. Guests will find authentic travel experiences that complement their hospitality choices, while corporations will find opportunities to partner with Airbnb and sponsor these entertainment and cultural adventures.

During the event, executives from Airbnb revealed a few interesting data points:

  • The average business traveler stays at an Airbnb for six nights
  • The average Airbnb host makes $7,530 ≈ Typical week-long trip for two to Hawaii
    ≈ Average in-state public tuition, one year, 2009

    “>[≈ Per capita income – Russia, 2006] per year

  • Travel spending is nearly 10% of global GDP ($7.2B)
  • Airbnb had 40M guest stays in 2015 (see graph below), in 34K cities in 191 countries

screen-shot-2016-12-12-at-10-51-51-am

With guests staying for nearly a week at their hosts’ abodes, many are looking for immersive experiences in the local scene––activities and sights that can’t be booked through a travel agent or seen from a tour bus. There are already more than 600 experiences available to travelers through Airbnb! The company is also experimenting with on-demand car delivery for off-the-beaten-path travel, as well as prepared food delivery.

What does this mean to you? Corporations have the opportunity to connect directly with tastemakers around the world, inserting their brands and products into diverse experiences with lasting impact. Let’s explore a few of the potential industry opportunities:

  • Consumer Goods: Airbnb is the world’s largest showroom, with the goods in hosts’ homes used to influence buyers as the level of trust between guest and host are high.
  • Retailers: These new “experiences” mean that local retailers will be visited in cities, led by the hosts and tour guides.
  • Hospitality and Travel: For hotels, this new offering is about the entire trip, and they’ll soon offer flight deals and cars, in addition to experiences and homes.
  • Food: Food will be delivered directly to Airbnb locations, and continued on-demand food models will become important.
  • Finance: Hosts are generating a modest amount of income per year, but need money to upgrade their locations, an opportunity for small loans.

What does this mean for all companies? Today’s modern customer is seeking experiences, they show off using digital technologies, and access to physical goods is easy with on-demand models, rather than ownership of a house, car, electronics and more. Established companies need to revisit their strategy to provide customers with experiences that connect to the real meaning of why customers want platforms that enable new adventures and more.

 

So Who’s Really Going to Own Autonomous Cars? There’s Four Scenarios.

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Above: Mercedes Benz Autonomous Car

Two mega trends are coming together: The Collaborative Economy and the Autonomous World, which means shared mobility from self-driving cars.

Early this year, we published a research report on the Business Models of Self-Driving Cars, and we’ve presented our findings at a number of industry events. A commonly asked question is: “In the future, will we even own cars?” I want to share a few scenarios that are likely to emerge.

Today’s 3-year-old toddlers are unlikely to ever learn how to drive. With autonomous cars already making their debut now, and then en masse in 2021, per Ford and others, these toddlers are unlikely to require driving skills in the year 2031.

Here are four scenarios of car ownership that could play out:

  1. The on-demand model, a.k.a. “Uber/Lyft” model. In this model, autonomous cars would be like a “utility” where most don’t own them, certainly in cities; they are summoned on demand.  John Zimmer, the CEO of Lyft, put forth a visionary piece where most city dwellers do not own cars in cities by the year 2025. Uber’s executives paint a future where mobility is like any other utility, where at a “twist of the tap,” mobility can flow out of a nozzle. In urban areas, home garages could be converted to living space (or Airbnb rentals), and large multi-story garages could be converted to green spaces.
  2. The shared car model, a.k.a. “Zipcar” model. A group of cars are available in a convenient regional area, where many can share and own these cars. For example, some progressive apartments now have shared vehicles in their garage for renters. In this model, a group of neighbors could invest in the commonly owned costs of these cars, and share insurance, car ownership, and maintenance costs. We’ve seen a growth in P2P insurance models, which could further enable this market.
  3. The wholly owned model, akin to current ownership. Just as we currently own most vehicles, we could continue to own vehicles in the future, but they will self-drive. This makes the most sense in rural areas and, to some degree, in suburban areas. Some people with families that have specific car seat or mobility needs (the elderly, those with wheelchairs, etc.) may require their own self-driving vehicles. Others we have spoken to suggest that human-driven cars will only be owned by the very rich — or very poor — similar to how horses are owned today.
  4. Autonomous cars own themselves. Also called a distributed autonomous organization (DAO), self-driving cars could become sentient creatures in the radical future that can not only self-drive and self-charge, but also then take themselves to be repaired at a local garage, and pay for it on their ownership. In this future, the excess profits generated from these self-driving cars would enable them to purchase an additional vehicle, expanding themselves from one car to eventually a fleet. All of this, in theory, could occur without human intervention and without human ownership.

In the end, there won’t be one single model. We’ll likely see a mixture occurring, just as we see this occurring now. Below, the models are broken out into a grid.


Matrix: Scenarios of Future Car Ownership

Mobility Model Who’s Likely to Adopt Who Will Own Business Model
On Demand Urban areas will embrace Uber, Lyft, car manufacturers On-demand service
Shared Car Urban areas, suburban Enterprise, Avis, private owners offering cars on Getaround, Turo Subscription, pro-rata
Wholly Owned Car Wealthy, young families, special care Individual owners Ownership/lease
Autonomous Cars Own Themselves An advanced artificial intelligence that can self-manage a fleet Cars will own themselves Computer-owned “corporation,” an undefined model, or a nonprofit akin to Wikipedia

tesla-autopilot

Above: Tesla’s Autonomous Car

Tesla showed its hand by prohibiting customers from sharing.
Recently, Tesla made an unusual mandate, that its own customers cannot enable their privately purchased self-driving Teslas to be listed on Uber or Lyft. This is a strange mandate considering the cars were purchased outright. It, of course, forebodes a few future business models that we’ll see from Tesla; it’ll likely offer a service model where the owners, or Tesla themsleves enable their autonomous cars to be made available to others as a service.

When would human-driven cars become obsolete?
While Elon Musk suggests that manually driving a car may someday be illegal due to human error and safety reasons, such vehicles won’t go away anytime soon. There would be a significant economic bottom if so many owned assets were quickly depreciated by a government decree. But looking decades forward, when autonomous cars become dominant and common, we will see a social and perhaps government cry for human drivers to be curbed. Perhaps if it’s not illegal, the insurance costs of manually driving would become too high.

To summarize, autonomous vehicles will not only significantly impact how we will be transported, but also the very business models in which our economy operates and how cities will change.

bmw-concept-4-1000x600

Above: BMW’s Autonomous Concept Car

Facebook joins the Collaborative Economy with Marketplace

Facebook Joins the Collaborative Economy
Facebook has announced the launch of its Marketplace, a new feature in four countries that enables users to buy and sell their used goods using Facebook connections. While Facebook’s strongest advantage is a network of trusted users, it must develop more sophisticated features to compete against established players. But it has a good start, as the environmental benefits of Facebook Marketplace for helping individuals reuse goods rather than send them to the junk yard will be of particular help for many migrating students, new families, or those seeking to change up their personal items.

screen-shot-2016-10-03-at-6-30-00-am

Market Timing: Existing Startups Under Fire
At a macro level, the startups in the Collaborative Economy Honeycomb are undergoing a shakeup as VC funding is being reduced, startups are being acquired, and regulators are putting the pressure on. The end result is that some startups are having to fold up shop. Facebook’s market entry is smart timing, as it can be a trusted player.

Marketplace Competition
To the casual observer, it would be easy to compare Facebook Marketplace to established players like eBay, Yerdle, Nextdoor, Listia, or Taobao, but these players are far ahead of Marketplace. Marketplace could pose some threats to Craigslist local listings for users seeking to find people they may know, or listings from friends of friends. And the potential is huge; for scale, massive eBay has 164 million active users in Q2 2016, a far cry from Facebook’s 1.7 billion users in the same period.

Four Features Facebook Is Missing:
While Facebook offers a very strong trust graph of people you know in your area, Marketplace lacks a few key features, including:

  1. A payment system that enables digital transactions, similar to eBay using credit cards or PayPal.
  2. A guaranteed bidding system so the buyer doesn’t have to worry about getting the item.
  3. A shipping solution or meeting place (sometimes called a “sharespot”) to enable people to share goods, whether it be at local police stations or Amazon lockers.
  4. Lastly, there doesn’t appear to be a ratings or review feature so buyers and sellers can rate each other, especially if people don’t know them, to build further trust.

The Future for Marketplace
Facebook must improve its feature set, then move into ride and home sharing. An ideal next move would be for Facebook to tie in its Messenger payment system, enabling seamless transactions, and potentially move into more lucrative on-demand commerce systems like ride sharing, or perhaps even home sharing, thereby threatening Uber and Airbnb. By enabling the commerce aspect, not only does this make transactions easier for members, but Facebook will have yet another revenue stream. This isn’t an odd concept, as in China, Uber has sold off assets to Didi, which is owned by Tencent and Alibaba — companies that offer a wide range of Internet products. Yet before Facebook can move into new markets beyond used goods, it must first bolster those four missing features in order to prepare the platform.

Want more? Read my body of work on the Collaborative Economy, filled with data, slides, and more.

 

 

 

 

Three Challenges for the Next Economy

Screen Shot 2016-08-08 at 9.17.34 AM

There are three topics that should be discussed as we forge the next economy: the Autonomous World, Silicon Valley feudalism, and ensuring human safety from advanced robots.

For the second year, I’ll be at Tim O’Reilly’s Next:Economy Conference in San Francisco on Oct. 10–11, which brings technology, the economy, and forward-thinking industry leaders together under one roof. These events set the tone for the impacts of technology on businesses, governments, societies, and global economies.

I see three red-hot challenges for the Next:Economy:

The Autonomous World. What role do humans play when robots do jobs better? This topic, which was discussed at the last Next:Economy, was a major theme –yet we’re nowhere near from settling it. Did you know the White House predicts that 83% of workers who make less than $20 an hour are likely to be replaced by robots? And it’s about a one-third replacement rate for those who make $21 to $40 an hour.  We need continued dialog about solutions, including a combination of: upskilling, which will likely never catch up to robots because they will learn faster than humans ever can; and universal basic income or a guaranteed wage for all humans to offset the robots that will increase productivity and replace human jobs.

Is Silicon Valley creating global feudalism models? Economically, is this the best way forward? This topic, which I’ve tackled a few times in my own keynotes, is in response to the fact that Silicon Valley startups are owned by the 1% elite — who then create platforms for the rest of society to use. Who are these 1%? Are they benevolent dictators? Early risk-takers? Deserving capitalists? Folks who just got lucky? They’re likely a combination of all of the above, but the reality is that they’re becoming the most powerful group on the planet. For example, Mark Zuckerberg could, on a whim, place his thumb on the Facebook newsfeed and fill it with content and stories that veer to either the Left or Right points of view. Elon Musk has already developed powerful space programs that are starting to challenge public sector aerospace and are innovating quickly for future world exploration and transportation. These powerful entrepreneurs not only own and control the data and technology we use daily, but they are also able to fund the nonprofits of their choosing through incredible wealth that sometimes outmatches public sector spending.

To protect the human economy, should we have an “off” switch for computer intelligence? How do we influence, manage, or even control advanced robotics and artificial intelligence systems that will eventually become superior to human intellect? Should there be a standards board, a set of legislation, or even a security force that manages robots? Beyond the fears of most dystopian science fiction films, what can we do now to set the groundwork before these technologies are self-sufficient without human support. For example, scientists seek to create a system of checks and balances for advanced robots that ensure humans have fail safes, power-offs, and other security measures that could provide forms of safety. Today, technology is dependent on humans to be created, managed, and supported. Tomorrow, a new level of co-dependency will evolve. On the day after, advanced technology may be independent of human support — will we be ready for this future?

So there you have it: three distinct topics that are set to reshape the economy of the future. You can see the themes of technology overtaking human jobs, those who own these technologies, and ensuring we have balance points for safety. All these and other pressing issues will demand our top insights and ingenuity in order to prepare us all for the next phases of technology, business, government, society, and the economy.

 (photo by Pexels)

Market Snapshot: Crowd-based Insurance Startups on the Rise

Insurance_10 (2)

Above Image: Crowd Companies has identified more than a dozen crowd-based insurance startups emerging from financial industry hotbeds like London, more will emerge from each region.

Crowd- and peer-based business models have impacted the hospitality industry, transportation space, financial sector, and other industries as indicated within the latest Collaborative Economy Honeycomb 3.0.

We’re now seeing the rise of a growing set of startups in the insurance industry that are enabling P2P, pro-rata coverage or crowd-based models that leverage the crowd. These emerging insurance tech startups include mostly peer-to-peer offerings, with a handful that are also improving the delivery of insurance through new technologies.

P2P insurance allows for more people to be insured by aiding underserved markets. It provides coverage for gig workers in the collaborative economy, while collective purchasing yields preferential pricing (or even funds returned) to those subscribed to peer-based insurance programs. With most of the emerging startups acting as brokers, the insurance carrier startups are still forthcoming in the insurance world. Lemonade is a clear example of this (though they’ve yet to launch).

There are several companies popping up for specialized insurance, too. From insuring cyclists to pet owners, and one––Bought By Many––that specializes in ‘long tail’ insurance. This means insure those items that aren’t often insured. Then, there’s Trōvthat provides ‘on-demand’ insurance, for those who want to insure in the moment by simply snapping a pic in the app, granting fast coverage. It’s coverage for when people seek access over ownership.

The map above of crowd-based insurance startups isn’t complete; there are more emerging, and we expect for each geographic region to develop their own capabilities. See the table below for additional details.

Sample of Crowd-Based Insurance Startups: 

Startup Category Description
OnSource On-Demand Inspection On-demand visual inspection by a group of independent crowd workers
trov On-Demand Insurance On-demand protection for belongings – home, auto, personal property. Easy to turn on/off.
Tong Ju Bao P2P Broker TongJuBao is a P2P insurance platform that helps its users manage risks. TongJuBao was developed by QiBao Investment Consulting (Shanghai) Co., Ltd, a WOFE (wholly owned foreign entity) and is ultimately controlled by its French founder, Tang Loaec. (CB Insights)
Broodfonds P2P Insurance – Crowdfunding Group of freelancers crowdfunding each other’s sick leave
PeerCover P2P Insurance – Crowdfunding Join group, pay fee upfront, users decide if claims are fair and can get up to 5x your balance to cover claims. ‘Crowdfunded cover’
MetroMile Pay-Per-Mile Auto Insurance Metromile is a car insurance startup that offers pay-per-mile insurance and a driving app. It is currently the only company offering pay-per-mile insurance in the United States.
CommonEasy P2P Insurance Broker CommonEasy is a peer-to-peer insurance platform that utilizes the power of the crowd to collectively insure and protect material possessions, homes, and livelihoods.
Besure P2P Insurance Broker Peer-to-peer risk sharing for property insurance, not currently launched.
Friendsurance P2P Insurance Broker Pools users into small groups. Brokers with 60 insurance partners.
Inspeer P2P Insurance Broker Users form small groups for auto, motorcycle, and home insurance. Users pledge to cover up to a certain amount.
Guevara P2P Insurance Broker – Auto Pools friends and acquaintances, or other small groups, for car insurance.
Gather P2P Insurance Broker – Business Business insurance shared across a group/community.
Bought By Many P2P Insurance Broker – Long-Tail Works with insurers to develop policies and negotiate discounts for long-tail insurance needs like pet insurance, cyclist insurance, etc.
SafeShare P2P Ins Broker – Share Econ Develop insurance products and partner with sharing economy businesses to offer users and providers insurance solutions. Work to fill in the gaps of insurance for Sharing Economy providers and users.
Cycle Syndicate P2P Insurance Carrier – Cyclists Bike insurance shared over a small group. Insurance held by cycle syndicate.
Lemonade P2P Insurance Carrier Lemonade is peer-to-peer insurance and one of the only carriers, but they’ve yet to launch. Groups of policyholders pay premiums into a claims pool, and if money is left at the end of the policy period, they get refunds.
Uvamo P2P Insurance Carrier Uvamo, which plans to launch by the end of the year, aims to cut administrative costs by offering property and casualty insurance direct to consumers online. Those policies can then be diversified and grouped into a pool, which collects all the premiums paid by the policyholders. -CNBC

 

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