Tech startups thrive when markets are disrupted. The rise of the sharing economy — which brings together private individuals who want to share their resources — has presented a major opportunity for tech startups wanting to take advantage of shifting priorities and a lack of platforms.
Here’s how tech startups are motivated by the sharing economy, one of the fastest-growing trends in the economy right now.
What Is The Sharing Economy?
The sharing economy is a term coined to describe changes that we’ve seen overtake place in the economy over the past few years, structured around peer-to-peer relationships and asset sharing.
With the sharing economy, someone who needs something — a ride, a place to stay, a loan — relates to someone who has that something. Uber connects ride-sharers and ride-needers, Airbnb connects people who have real estate and people who need lodging and so on. Sharing economy platforms facilitate direct relationships between people who have idle assets and people who need those assets — but just for a little while.
The rise of the sharing economy is part of a broader trend of market decentralization and democratization that is happening as a result of tech developments — mostly advancements related to app technology, and more recently blockchain, Artificial Intelligence (AI) and cryptocurrency.
How Tech Startups Are Working With The Sharing Economy
Tech startups benefit from the sharing economy in two ways. First, tech startups are taking advantage of how the sharing economy is disrupting the market. These startups find new niches — places where the sharing economy hasn’t been explored yet — and build platforms to fit.
Some of the biggest sharing economy apps — like Uber, Lyft, Airbnb and WeWork — are household names, whose wins and losses are regularly reported on the evening news.
These aren’t the only players. For any resource that can be shared — like film equipment, parking spaces, and PR services — there is a tech startup creating technology that wants to bring together individuals who need those resources and individuals who have them and don’t need them all the time.
The sharing economy is also excellent at connecting tech startups with the resources they need to get off of the ground. Tech startups are often rich in certain resources — investor cash, talent, and ideas — but short on office space, equipment, and other business necessities.
Their needs also tend to be highly fluid. A tech startup might need twice as much office space or three times as many laptops next month, compared to what they have right now. As a result, tech startups depend on services that can rapidly respond to their changing demands.
Tech startups can also take advantage of freelancing platforms that connect startups with skilled workers who they won’t necessarily need to establish a long-term relationship with. A tech startup may need a logo designed or some copy written for a pitch, but don’t have the money to commit to a full-time graphic designer or copywriter yet. In cases like these, freelance platforms can provide just the labor that these startups need to get going.
Tech Startups & The Future Of The Sharing Economy
Whenever the market is disrupted, tech startups are presented with an opportunity — the sharing economy, one of the latest trends disrupting the market, is good for tech startups in a few different ways.
The sharing economy motivates tech startups by providing greater opportunity for connection between individuals and new possibilities to create sharing platforms that serve an unmet need.
At the same time, the sharing economy also makes the tech startup model more possible than ever by making resources available in part and on-demand. Sharing platforms allow startups to lease resources that would have needed to be either purchased outright or rented for longer periods of time than a tech startup might want to commit to.
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