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PHILLIPS: What I’m learning from disruptions

June 13, 2015

PhillipsWriting this article has been on my calendar for a week, so today I planned to engage in my favorite writing ritual: a closed door, solitude and my go-to writing playlist.

Because this article is about disruptions, with a primary focus on “collaborative consumption,” it’s fitting that this ritual has been disrupted by a flat tire that has me home with my wife and Norah, my 2-year-old daughter, who is capable of Category Five disruptions.

Norah is at her disruptive best when she enters my office and asks what I’m doing. Then follows an inquisitive, “Why?” This is similar to a challenger brand entering an existing business model and asking, “What if …?” “What if consumer behavior is changing?” “What if we invest in technology instead of inventory?” “What if we say, ‘Why not?’”

To the marketplace incumbents, these disruptions often are met with unease. However, consumers increasingly applaud the moves as innovative and understanding. Why? Because, more times than not, they’re focused on a modified consumer experience that favors facilitation, efficiency and cost savings.

Exhibit A: The economy of collaborative consumption.

At a high level, collaborative consumption aggregates consumers and technology to facilitate transactions between peers for underused assets. I’ve got extras of something you want; I use technology to make it available to you.

With this model, three parties win: the facilitator (the platform owner), Peer 1 (the inventory owner), and Peer 2 (the consumer). Each party benefits from fees, return on investment and cost savings.

Of course, this platform-inventory-consumer model has existed for centuries. The difference here is, the inventory isn’t being manufactured; it’s being made available. Ebay offers a long-standing model for collaborative consumption success; now, companies are applying this thinking to items that can’t fit into a shipping box.

For its disruption to the hospitality industry, Airbnb is the belle of the collaborative consumption ball. Airbnb allows you to book accommodations from existing dwellings around the globe. As a homeowner, think of it as owning rental property by simply making your fold-out couch available.

For the right traveler, this means paying for only what you need: a place to sleep. With three booking options—Shared Room, Private Room or Entire Place—priceonomics.com estimates a savings of 49.5 percent when booking a Private Room versus a hotel room. Uber and Lyft are using this model with automobiles.

(Writing paused for a brief visit to the dollhouse with my daughter. The dollhouse is not listed on Airbnb.)

This model isn’t for everyone, and it will not displace all other models. However, these shifts are gaining favor with a growing number of consumers. As such, they should be forcing business leaders in even the most traditional industries to stop and wonder how disruptions and collaborative consumerism might affect them. Airbnb reports more than 25 million guests in more than 34,000 cities. Ignore marketplace shifts like that at your peril.

For the record, I support consumerism and the manufacturing of goods, but also an ideology that maximizes usage and eliminates waste. Fewer cubic feet in a landfill could only benefit the future of our children—one of whom has entered my office multiple times and desperately needs to understand my position on the color green.

I’m embracing collaborative consumption and pursuing the power of disruption—especially when it simplifies my life, makes the world seem smaller and, sometimes, comes with child-like curiosity, curly hair and a genuine interest in what I think.•

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Phillips is co-founder and executive creative director of The Basement, an Indianapolis-based digital agency. Send comments on this column to ibjedit@ibj.com.

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