* Note from Pierre Mitchell, chief research officer of Spend Matters: I'd like to thank Bob Solomon for guest posting on our site (after some repeated begging on my part). I've been a big fan of his work for a long time. He led the development of the Ariba Supplier Network for nearly a decade and there are a lot people who made a lot of money because of his leadership. For now, he's doing some B2B technology consulting, and you should definitely subscribe to his blog here.
The "sharing economy" gets a ton of press in the B2C software world (or "P2P" peer-to-peer world). Rightfully so, I suppose. After all, Uber, the poster-child for sharing, sports a $41 billion valuation and AirBnB is reportedly worth $13 billion. Besides sharing cars and homes, consumers can now share their:
So far, the only things we don't seem willing to share are underwear, leftovers, pets and spouses. Time will tell.
As with all "new" concepts, there's no real definition for the "sharing economy." Most economists probably feel the term is redundant. Economies mean trade and trade means, to some extent sharing. Many articles on the sharing economy include in their definition almost any marketplace, matchmaker or crowdsourcing platform: eBay, Elance, Task Rabbit, LendingClub, Zipcar, etc. The list goes on and on.
A more strict definition for the "sharing economy" is one where a person (or a company in the B2B case) shares a hard asset, for which they have excess capacity, with another person/company. In addition, the software platform that facilitates this sharing does not own the asset, one of the sharers does. This tighter definition includes all of the bulleted examples above, but eliminates:
- eBay does not facilitate sharing of hard assets, just selling
- Zipcar, which owns the cars, and is perhaps better thought of as a rental car company renting by the hour
- Peer-to-peer lending and other crowd funding techniques, which may be better thought of as a new form financial disintermediation
- Freelance marketplaces (e.g., Elance and Task Rabbit), which enhance the long-running practice of part-time and freelance work
(I'm not saying these are not really cool ideas, I'm just trying to narrow the definition of the sharing economy so it does not include every application that allows people to find each other and conduct commerce on the Internet!)
Articles on sharing in B2B typically use a broader definition, but include some interesting examples of companies sharing hard assets:
- Excess Real Estate: Several companies are in the space of helping companies share unused meeting or office space (LiquidSpace, WeWork, PivotDesk).
- Excess Trucking Capacity: This concept is akin to Uber for freight, in a sense all freight marketplaces operate under this premise. Cargomatic and many other freight marketplace are examples. It makes immense sense for companies located in the same area to build these types of consortia.
- Excess capacity in Capital Assets: Floow2 in the Netherlands facilitates sharing of capital assets and personnel between companies.
As you can imagine, sharing in B2B is fraught with complications. Who is going to share with a competitor? (If the potentially shareable hard asset is industry-specific, this is sure to be a problem.) What kinds of insurance issues does sharing raise? Can most companies even say "yes" to such an initiative?
Recently, I read about a startup that is trying to address these issues within hospital systems to avoid many of these problems. Cohealo offers a platform to allow sharing within sprawling hospital systems of its expensive medical equipment: assets such as MRI machines, CAT scan and other pieces of equipment I hope you never have to use. From its website:
It's not clear to me if the software allows inter-system sharing, (not just intra-system sharing) but perhaps this is possible. Hospital systems are a little less competitive (?) and have a history of working collaboratively in the form of GPOs.
A public company that does not meet the definition of helping companies share "hard" assets, but instead helps them share intangible assets, that is patents, is RPX. RPX helps operating companies share the cost of buying patents defensively, provides licenses to these companies and does not assert it's rights offensively in the market. The idea is to remove the costs of litigation between patent owners and licensees-putting the "patent trolls" out of business. It is a great example of B2B sharing that tends to be overlooked.
It's probably worth it for most procurement organizations to think about what assets they own with excess capacity and that could be exploited for others' use. There will be all sorts of issues in extracting this value externally, but perhaps it will at least stir up new ideas for better internal sharing and resource utilization.