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Lead Your Team Strategy

Sharing is the Future of Small Business, Author Says

Sharing is the Future of Small Business, Author Says

Once upon a time, there was an American Dream. It was based on the idea that each and every American is entitled to pursue his or her own particular brand of happiness. In the 20th century, though, the American Dream evolved into being mostly about one thing: Stuff.

A house, a car, a white picket fence. Owning these things was a sign of having arrived.

In a post-9/11, post-Great Recession world, however, the old American Dream has mutated from being about possessing things to being about sharing them, according to Lisa Gansky, a tech entrepreneur who founded the company ofoto, started the Internet's first commercial website and has managed AOL's Internet services. Gansky details the ongoing shift in her new book “THE MESH: Why the Future of Business is Sharing” (Portfolio Penguin, 2010).

In addition to writing a book about the phenomenon, Gansky now runs The Mesh community directory in which users contribute the names of sharing-based businesses in every imaginable industry. There are currently 2,500 businesses listed on the site.

BusinessNewsDaily asked Gansky to explain the theory behind the MESH.

BND: Summarize what your theory of change is.

Lisa Gansky: We are moving away from a world where we aspired (in our personal lives and businesses) to own everything. Now, we can have access to goods and services with the same utility, convenience and enjoyment as owning them, but without the associated expense and hassles. This shift is at least in part powered by the little devices that we are all carrying around—the web-enabled mobile devices that allow us to easily reach out to find each other and locate “stuff.”

BND: What do you think precipitated this change? Technology, the recession, changing values?

L.G.: I think that all three play a role. The pervasiveness, low cost, and comfort level with technology has created a capacity that we have simply never had before. There are more people connected to each other than ever before. So technology is essential in the Mesh. You can now walk outside of your city-based office and find a cab, share a ride, or pick up a shared bike within seconds of departing the building. And with the strong movement toward open systems, public transit is increasingly integrating their tools, schedules and services with private forms of personal transportation. Beyond transportation, there are thousands of Mesh companies in food, finance, art, real estate, fashion, energy and more.

Certainly, the recession provoked us to move forward faster, since access is less costly than ownership in many ways. At home and in business, we are in the process of re-valuing what we have and bringing the relative cost in balance with the value. For example, peer-to-peer car sharing offered by companies like WhipCar (UK) and RelayRides and Spride in the U.S. provide a service where you can share your  neighbor’s car. That puts the car in a very desirable location—near you! If you are offering your car to others through these services, you can make money and get more utility out of what you already own. Many early customers of these systems are generating $500 plus per month additional income while helping out their fellow neighbors in the process.  We are seeing similar trends with homes and commercial buildings. People are able to easily find someone to pay for the use of what they currently own and aren’t fully using. This, I believe, was at least in part provoked by the recession. But in the process of working and living this way, people are expanding the tools and types of services being offered as well as their relationships with people around them. I think we are just at the beginning of a new wave of businesses. It’s good for the health of our communities, businesses and ourselves.

BND: Do you think the change is permanent?

L.G.: Yes, I think that if we look at the first 10 years of the Internet and how it has evolved, it has changed the way that most businesses present themselves to their market, find new customers, partner, and promote their services and products. A similar thing is happening with the Mesh. The expectations of business partners and customers has changed, and I don’t see how we will go back. We can have more choice at less cost with better products and more transparency about what we are buying and from whom. But, again, I think we are at the beginning. The Mesh community directory (www.meshing.it) has already doubled in less than two months, and it’s still growing daily. As people add their businesses to the directory, I see more definition, refinement, funding and sophistication in these new additions.

My guess is that the standard for convenience and our capacity to access things will continue to improve. Businesses will need, as always, to evolve with their customers’ desires and expectations. There is also a tremendous opportunity for these businesses to try new offers and reach out to new customers without the need for a long-termed, expensive program. The infrastructure that we have invested in over the past recent decades has given us, as business owners, far more ability to test, learn, refine and expand new ways of delighting our customers and partners.

BND: What can small, local businesses do to adapt?

L.G.: Wow, many things. One of the more exciting aspects here is that in most cases, you can buy just enough capability as is needed. I founded several Internet businesses, and in one case we raised quite a bit of capital, about $60 million. Today, if we were going to start that business, we would approach it very differently–buying only the tools, team, equipment and market reach that we needed at the moment. I think that we could have built that business today for about 10 percent of what we needed a decade ago. There a B2B services like UPS, Mailboxes, Kinkos, FedEx, Amazon Web Services, Survey Monkey and Facebook, as well as mobile social services like Groupon and Foursquare. All of these provide platforms for business customers that are easily accessible, relatively inexpensive and expandable as needed.

I am especially fond of a Mesh tactic for local businesses called “tryvertising.” For digital products like music, the ability for people to sample before they buy it and then, share what they bought with their friends, thereby enabling their friends to also buy it, has completely altered the music business. Technology and the expectation that sampling and distribution could all happen online or via a mobile device has forever changed how music is distributed, promoted, shared and enjoyed. For physical products, like the world’s most sought-after doughnuts or handmade all-natural vegan fruit pops, these products must be tasted in person to be sated and fully appreciated. Yet, with the rise of social networks, a friend can try it Chicago and tell you about it in Seattle, and your desire to seek it out leaps forward. Social media like Twitter and Facebook have been amplifiers of small, local businesses who have a following. These “Big Mouths ” create buzz and help to drive real traffic and sales. The care and feeding of these Big Mouths, or “influencers,” is something all businesses should experiment with and hone.

BND: How can they embrace technology to make it happen?

L.G.: I’m a fan of meeting people where they are. Which means if your customers are technology-savvy and using mobile social services like GoWalla, MePlease, Foursquare and Groupon , then learning about these services and how they may work for your business is essential. As convenience continues to move up in priority for many, technology is the glue that can help to identify, reach and transact with new customers or hold on to your current ones.

Additionally, partnerships with other local businesses may help expand your markets. Partners can deliver fresh and relevant data for you to consider about what your customers are seeking, and how best to deliver something that they would find irresistible. I’ve seen food companies paring a special selection with an entertainment venue, or using farmer’s markets or pop-up shops to get in front of new prospects quickly and affordably. These are tools available today that give business owners the chance to engage with their customers and FOC (friends of customers) in memorable ways. The goals here are to: (a) learn from the experiment or trial; (b) create buzz and delight those who have newly found you, and (c) decide if your business should expand by incorporating this new type of offer going forward. Tryvertising gets your brand and your ears closer to your future potential market, and at a cost that is minimal. Again, you may want to explore some Mesh services and platforms that would be compelling for your business. (www.meshing.it)

BND: What will be the next industry to undergo major change as a result of the new “Mesh” dynamic?

L.G.: The design of cities—transportation, commercial buildings, food systems (growing, distribution, and recovery), energy, finance, waste recovery and management, and public services. It is most easy to create and offer sharing-based businesses where there is a greater density of people and community services. This reality, coupled with the movement in the past decade toward cities as our global population soars toward 9 billion people, creates a compelling case for sharing the assets we already have. I also fully expect that there will be places in the world and generations who may skip over ownership as a primary approach and will move directly to access (similar to places in the world that leapfrogged land lines for mobile , and film for digital).

BND: What are the environmental implications of this change?

L.G.: Huge and positive. If we use what we already have more effectively and efficiently—squeezing more value out of what we have been calling “waste”—we will not need to buy more and more stuff.  By gaining more utility out of what we own, in businesses and in our personal lives, we will have richer and fuller lives. And we’ll be successful in business. Fundamentally, we have the opportunity to use what is already around us and locally available to create more and more value for our businesses and communities. At the local level, this approach can bring less stress for our businesses, communities and the environment.

Jeanette Mulvey
Jeanette Mulvey

Jeanette has been writing about business for more than 20 years. She has written about every kind of entrepreneur from hardware store owners to fashion designers. Previously she was a manager of internal communications for Home Depot. Her journalism career began in local newspapers. She has a degree in American Studies from Rutgers University. Follow her on Twitter @jeanettebnd.