Posted by: Contributing columnist, Clarion-Ledger, Business, June 24, 2016
You’ve probably noticed the peer-to-peer revolution going on even if you aren’t familiar with the term “peer-to-peer.”
Companies like Uber, Lyft, Airbnb and others are all part of the revolution. All of these companies and many others are all built on the same business model — utilizing technology to enable peer-to-peer transactions. They are also causing incredible disruptions to existing and long-established businesses and in some cases causing customers, government and the public at large to struggle with how best to adapt to the new paradigms they create.
To step back for a minute, I think it’s important to think about why peer-to-peer businesses are able to be successful. The answer relies on two vital things to be in place: underutilized assets and a technology solution that conveniently makes that asset available for others. That may be an overly philosophical approach to thinking about this revolution, but it really is the key. Any asset not providing full value is ripe to be utilized to provide value to others — and money for the owner. All that is needed to enable a business around using that asset is a practical solution for connecting the asset to those who can use it and a method to monetize the transaction. When one person provides their asset directly to another person in exchange for money, a peer-to-peer transaction has taken place.
That house that is sitting empty — whether a vacation house or your house while you’re away — is a valuable asset that with the right solution can be rented to others. That car sitting in the garage for an extended amount of time can be rented and if you have the free time to drive it, you can get paid for taking people around town. Hopefully these sound familiar, since Airbnb is very popular for renting houses, Uber & Lyft are popular replacements for taxis, and Turo and a crowded field of others are working in the peer-to-peer car rental space.
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While these are popular enough that people recognize them and many people use them, I think it’s important to remember that we are still in the fairly early stages of the peer-to-peer revolution. There are still assets that are greatly underutilized and there are many companies trying to find the next market for peer-to-peer commerce.
A rapidly growing company Innovate Mississippi works with, “Curtsy” from Oxford, allows college women to monetize the dresses in their closets by providing them for rent. Curtsy is initially targeting college women in sororities, who have 10-20 events requiring dresses or formalwear. These college students may not be able to afford formalwear for 10-20 events, so renting a dress for events and getting paid to rent their wardrobe to others is a great solution. Curtsy was recently featured in TechCrunch and has landed a highly coveted spot in the Y-Combinator Accelerator in Mountain View, California, for this summer. Considering Airbnb went through Y-Combinator before it hit it big, I’m expecting great things from Curtsy this fall.
While parents of college women probably can’t think of a bigger, more valuable, example than Curtsy, the most interesting opportunities in peer-to-peer business may still be on the drawing board and may not have even been thought of yet. That 3-D printer that sits idle all but a few hours each week can easily be used to print parts for other people. The processing power of that computer that is barely used definitely has real value. There are dozens of opportunities that await entrepreneurs in the peer-to-peer sharing space.
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While our homes, cars and clothes represent valuable assets we can monetize, these are also intimately personal assets for us that in many ways are the hardest to share with strangers. Many other assets won’t have the same issues regarding privacy concerns, so they should be even easier to bring to market as long as they provide value.
Some of the most interesting stories of how these businesses have developed center on how they used technology and systems to overcome many initial fears from consumers. There have been many other interesting stories as consumers have come to accept these companies and their systems, so I hope to cover them in more detail over the next few weeks. For now, please take the time to notice what other peer-to-peer solutions you see and which new ideas could be developed based on mostly idle assets. You may see an idea that could be the next big opportunity for a peer-to-peer business.
Tony Jeff is the president and CEO of Innovate Mississippi. He can be reached at tjeff@innovate.ms.