In the digital era, Cineplex President and CEO Ellis Jacob has kept his company ahead of the curve by diversifying the business and embracing change.
“It’s an interesting time to be a big brand right now,” says Andrew Reid. The head of technology company Vision Critical wants to help traditional enterprises find their place in the collaborative economy, a social movement that is rapidly turning sharing into the new buying.
The collaborative economy may be disrupting old business models, but Reid puts it in perspective. “This is about people getting the best product at the best price in the most flexible way possible,” he says, referring to key players such as property rental service Airbnb Inc. and custom-product marketplace Etsy Inc. “Those are core tenets that every big business is all about. And so if you look at these broad categories and the speed at which this economy’s growing, there’s a lot at stake for big brands to pay attention to.”
Reid is Founder, President and Chief Product Officer of Vancouver-based Vision Critical, which specializes in what it calls insight communities – online groups of customers and prospects. The company powers these communities for more than 650 brands worldwide, including U.S. media conglomerate Discovery Communications Inc., Singapore Telecommunications Ltd. and Colombian airline Avianca S.A.
In March, Vision Critical published a report called Sharing Is the New Buying: How to Win in the Collaborative Economy. It co-authored the document with Crowd Companies, a San Francisco-based brand council whose founder Jeremiah Owyang guides big corporations through the new economic landscape.
The backbone of this landmark study is a survey of more than 90,000 consumers in Canada, the U.S. and the U.K. Although the collaborative economy may have started out as the domain of environmentalists and hipsters who think sharing resources is the right thing to do, it’s gone mainstream. Eighty million Americans and 10 million Canadians obtain goods and services from each other online or plan to do so soon, the report estimates, whether through a long-standing business like eBay Inc. or upstart car service Uber Technologies Inc.
Delivering everything from crowdfunding (Kickstarter Inc.) to meeting-room rentals (LiquidSpace Inc.), the collaborative economy is growing fast. Vision Critical and Crowd Companies divided it into 11 categories of providers. They also identified three kinds of customer, from those who intend to start using sharing services to patrons of the newest websites and apps.
Given survey respondents’ willingness to try sharing or explore new categories, the collaborative economy could double in size this year. “We found that every single category has a very small percentage of market share, but all of them are growing at 50 per cent or more year-over-year,” Reid says.
Another tantalizing statistic: sharers skew younger (ages 18 to 34) and more affluent. “These are people that are here to stay, and these are people that have money to spend,” says Reid, whose 700-employee company has offices in the U.S., Europe, Asia, Australia and South Africa.
Facebook and other social media helped lay the groundwork for the collaborative economy by allowing digital peer-to-peer connections, Reid explains. That foundation has enabled people to share physical goods because they can create trust through their online networks. For Reid, who founded Vision Critical in 2000, social change is driving the move toward sharing too. “You’re going to see this accelerate as millennials get older and have more money to spend, because they have more of a social conscience and they’re worried about climate change, they’re worried about sustainability,” he says.
In an increasingly urbanized world, Reid thinks the sharing model will become even more entrenched as people coexist in smaller spaces – and demand personalized products, thanks to new technologies such as 3-D printing.
“You’re going to see some big guys bubble to the top,” he says when asked what the collaborative economy will look like in five years. “You’re going to see some consolidation.” One of the biggest current successes is San Francisco-based Airbnb, which is valued at $10-billion (U.S.) after it closed a $500-million (U.S.) funding round with private equity firm TPG Capital.
But a larger trend will be established businesses jumping onboard, Reid believes. As he points out, moving-equipment rental giant U-Haul has taken the plunge with a foray into peer-to-peer lending. “I can be using a trusted brand I care about, get a better rate of return than I can at the bank and I can completely sidestep the entire banking institution and do it straight with U-Haul,” he says. Reid also sees big opportunities in the business-to-business world. He cites LiquidSpace, which large companies could use to manage office space internally or rent out unused inventory. For corporate travel, they might switch from hotels to Airbnb. “The minute the enterprise starts embracing those models and says, ‘Let’s at a corporate level start leveraging technology and some of these services to be more efficient,’ you’re going to see a sea change,” Reid says.
That scenario may seem ridiculous today, he admits. But the collaborative economy works partly because it’s self-governing: participants rate and review each other. “It’s scary to think about using reviews as currency for the enterprise, but I think we’re going to start to see the enterprise taking hold of this economy,” Reid predicts. “Some people are going to go fast, and some people are going to be a little late to the game.”
With the rules quickly changing, enterprises rely in Vision Critical to connect with consumers through branded insight communities. “Our model allows companies to build these communities of five, 10, 15 thousand of their customers that have coverage across all of their core segments and that allow them to talk to people on an ongoing basis and do that very quickly,” Reid says. “Our platform remembers every question we ever ask, so we don’t ever ask the same questions twice.”
Based on feedback from its community, Discovery Communications launched a new network, using the information it had gathered to settle on a name, a theme and content, he notes. “The only thing they did was talk to their community members, because they knew those are their core customers.”
As the collaborative economy keeps growing, Reid expects to see innovative brands adding big areas of their business to the mix. Germany’s Bayerische Motoren Werke AG (BMW) now offers car rentals at its dealerships, and U.S. retail chain Walgreen Co. recently teamed up with online marketplace TaskRabbit to offer pharmaceutical home delivery. “You’re going to see them partnering with some of these disruptive technologies and companies,” Reid says. “Everything’s up for grabs.”