Posted by: Contributing columnist, Clarion-Ledger, Business, July 14, 2016
In this final installment on peer-to-peer businesses, I want to pose the simple question that I hope you’ll think about and respond to: What’s the next big peer-to-peer business opportunity?
I’ve previously talked about what it takes to create a peer-to-peer business: an asset that isn’t fully utilized and a technology platform that allows users to efficiently make a transaction to use the asset, pay the owner, and make everyone happy. Uber and Airbnb have found models for their industries, but what are the next industries to follow that model to success? I’m convinced we’re like the wild west in 1869 — the opportunities are practically limitless.
TONY JEFF: Regulations can hurt peer-to-peer businesses
If you think about it, there are thousands of people who leave their car at the busiest airports and pay for parking the entire time they are away. There are also thousands of people arriving to the same airports who need a car for a few days and are paying rental car agencies to rent a car. If only the idle cars could be used as rental cars, the parking garage fees would be avoided and the owner of the car could actually get paid to lend their car. That was the simple inspiration for Turo, the peer-to-peer car rental company. Of course there are issues like how to swap keys and how insurance is covered, so Turo and their competitors have had to solve those problems as a part of their growth.
Besides your home and car, one of your biggest assets is actually your wardrobe. Not that every T-shirt is a good fit to let someone borrow, but prom dresses, formal dresses, and even some dresses for college football games and parties are high-cost items that are needed very frequently. Add the fact that social media photos for every event are shared widely and it becomes harder to wear the same dress to multiple events. Enter Curtsy, the app and website that lets women rent their dresses to other women who need them. Curtsy, based in Oxford, launched in January and has already had users who have more than covered the cost of some dresses from renting them every weekend.
Peer-to-peer lending isn’t a new idea, but it’s historically been pretty much limited to loan sharks or small borrowing from close friends. All of that changed with the launch of Zopa in the UK in 2005 and then the launch of LendingTree and Prosper in the US the following year. After some initial conflicts with the Securities and Exchange Commission were worked out, LendingTree and Prosper have gone on to process more than $20 billion in peer-to-peer loans. Anyone can set up a business profile for a loan and anyone can loan money. Default rates seem to be lower than they are at traditional banks — something that’s particularly surprising given the relatively “distant” internet connection that binds the lenders with the borrowers.
TONY JEFF: Peer-to-peer revolution is happening
Are you too busy to pick up the dry cleaning before 6 p.m. or out of town and need someone to water plants, feed the dog, or check your mail? No task is too big or too small for TaskRabbit — the leading peer-to-peer service company. Anyone can define a task to be done and how much they are willing to pay. If someone wants to respond to the offer, they do the task and get paid through the app. GigWalk started off with pretty much the same model as TaskRabbit, but now focuses on more professional staffing needs. They are great for things like setting up retail product displays across the country and allowing product manufacturing companies to just ship a pallet to the store without the trouble of deploying people nationwide to set up displays.
Innocentive has taken problem solving to a whole new level, and companies can offer hundreds and even thousands of dollars through their platform to get solutions for their needs — from designing new parts to solving unique and difficult problems. Many fortune 500 companies and even NASA have used their services successfully.
Despite all of these examples, I’m convinced there are still dozens of huge business opportunities for peer-to-peer businesses. All that is needed is someone to develop the technology platform that lets people monetize their underutilized assets. If you have an idea for one you want to turn into a Mississippi business, please let me know.
Tony Jeff is the president and CEO of Innovate Mississippi. He can be reached at tjeff@innovate.ms.