David Kirkpatrick reports on sharing economies in Fortune magazine. In this article he describes how the global economy is changing as communication between producers and customers grow. Customers actually help the producers by providing advice, describing how they use the product, and sometimes even providing code or other direct elements of production.
The surprise here for producers is that people will actually lend their personal time to make the producer's product better. This cooperation was previously unimagined. In the past, to get feedback, producers had to invite people to cramped conference rooms and bribe them with small amounts of money. What they generally get from these focus groups is a room full of people that participate in focus groups and not a true picture of their client base.
In the past, if I bought a Ford and I hated the rear view mirror, I might go out and buy another mirror and replace it. I wouldn't tell Ford. They wouldn't know. Their mirrors would always be substandard. Maybe a focus group would catch that, but maybe not. Maybe it wasn't something you'd notice until you were blinded in the middle of a night while ascending a hill.
So now producers have a direct line (or a more direct line) to their customer base. The customer base doesn't want to build whole software packages. They don't want to make cars. They don't want to produce product. But they do want the things they buy to be better. They are willing to talk about it and even help design new versions.
This is a double-edged sword. Consumers are becoming more and more used to this as SOP. With that, they expect faster results in product development. So before Ford could have a new model come out and run with that model for 5 years or so. Now they need to update the design every year to take into account the new information stream. If they don't, consumers will quickly abandon them as non-responsive.
This begins to make manufacturers more like a service business. Upgrade or Perish becomes a new business paradigm. Underlying this is that upgrades need to be conspicuous. Features are judged with near-beauty pageant fervor. You want something that is going to create a stir outside your user base and delight current users as well.
Current users want the system improved but not radically altered. That lets them continue with what they are doing and to take advantage of new features. The general public, however, is looking for something surprising. System improvements are rarely surprising.
Also like a service business, companies are moving increasingly toward fee-for-service or subscription models. Even auto leases can be seen as an automobile subscription. As this happens, cash flow paradigms, income projection mechanisms, and the relationship between company and consumer (current and potential) all change.
The sharing economy could well be the real fundamental business shift everyone was looking for in the 1990s. The Internet was the fancy box, the sharing economy was the real gift.
