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THE MESH: Why the Future of Business Is Sharing by Lisa Gansky
Even before the rise of the Mesh, the Web had ingested, dissolved,
and reshaped hundreds of industries and tens of thousands of
businesses, communities, teams, and expectations worldwide. As a Web
entrepreneur, I've watched old business models and brands tumble one
after another. From publishing to retailing to banking, companies
have been forced to adapt or die. Amazon grabs the bookselling
market from Borders, Barnes & Noble, and Blackwell. It marches on to
become the world's biggest online retailer, and then to further
disrupt the publishing industry by introducing the Kindle and
widespread access to e-books. Song sharing via the iPod and iTunes
transformed the music industry. Ofoto created a platform for sharing
digital photos that Kodak was compelled to embrace and that helped
inspire other digital share platforms. Industries and brands that
once seemed bigger than life and eternal are now scrambling to find
a new way forward. Many were already in a free fall when the
recession gave them an extra shove into the spiral of doom. Dozens
of industries and brands that once seemed indestructible are now
struggling to find solid footing in a changing world.
'better things. easily shared.'
To date, the biggest disruptions have occurred in businesses that
largely involve digital products and services, such as music or
financial data. The Mesh enables businesses to also profit
handsomely by streamlining access to physical goods and services.
These businesses are relatively easy to start and are spreading like
wildfire: bike sharing, home exchanges, fashion swap parties, energy
cooperatives, shared offices, cohousing, music studios, tool
libraries, food and wine cooperatives, and many more. They leverage
hundreds of billions of dollars in available information
infrastructure--telecommunications, mobile technology, enhanced data
collection, large and growing social networks, mobile SMS
aggregators, and of course the Web itself. They efficiently employ
horizontal business to business services, such as FedEx, UPS, Amazon
Web Services, PayPal, and an ever-increasing number of cloud
computing services. All the Mesh businesses rely on a basic premise:
when information about goods is shared, the value of those goods
increases, for the business, for individuals, and for the community.
Mesh businesses are legally organized as for-profit corporations,
cooperatives, and nonprofit organizations. Once I started looking, I
quickly uncovered over 1,500 relevant companies and organizations.
The Mesh, I realized, was further along than I had originally
imagined. In less than a decade, the Mesh model has infiltrated
dozens of categories, including fashion, real estate, energy,
travel, entertainment, transportation, food, and finance. The shift
to the Mesh is quietly changing the way business is done, and it's
picking up speed.
Mesh businesses come in all shapes and sizes, including extra large.
Netflix, for example, is a share platform that transformed the video
and film distribution industry. The company posted $1.36 billion in
sales in 2009 and a $4.76 billion market cap in 2010, only a few
years after displacing the reigning company in video rentals (more
about that in chapter 8). Netflix has inspired similar models
elsewhere, including Seventymm, a similar service in India that
offers movies in eighteen Indian and foreign languages.
Other Mesh businesses take advantage of local resources. Crushpad
helps wine lovers experience the joys of selecting, crushing,
fermenting, and blending their own Napa varietals with the help of
seasoned wine pros, and at substantially less cost than buying their
own equipment. Several of their customers have created custom labels
that are sold on the site.
'put on your Mesh lenses.'
Sometimes, as Crushpad's Michael Brill discovered, Mesh
opportunities reveal themselves when you're paying attention. It
helps to put on what I like to call your "Mesh lenses." Look around
you for physical resources that could be more efficiently and
profitably shared using information networks. When you see in this
new way--through Mesh lenses--rich and surprising business
opportunities reveal themselves, even in your immediate
surroundings. Ask yourself how you might reduce the burdens of
ownership, such as storage, insurance, maintenance, and disposal.
CASE STUDY:
Crushpad Wine
When Michael Brill ripped up his backyard and installed two dozen
grapevines at his home in San Francisco, it was, he said, by far the
coolest thing he'd ever done. While Brill was making the wine in his
garage, people walking by stopped to help. At the season's high
production point, one hundred people popped in to lend a hand, have
some pizza and beer, and get their clothes dirty. By accident, he
had tapped into a latent passion in many people to make their own
wine.
Inspired by this experience, in 2004 Brill started Crushpad. The
company is targeted to people, like his volunteers, who want to make
their own wine but don't own a vineyard. Crushpad provides
everything they need, including high-quality grapes, access to wine
experts, and crushing, fermentation, and bottling facilities. Brill,
now the CEO, thought the primary business would come from
restaurants, bars, and retailers who wanted their own wines and
labels. But it soon became clear that no restaurant--always cash-
tight on low margins--was going to pay $10,000 for a private wine
label that they wouldn't see for two years. Today, Brill laughs.
"That model was 'so' not going to work."
Instead, the company figured out there were a lot of people who
wanted to make fifty to a hundred cases a year. Today, anyone can
make a barrel of wine using Crushpad's tools and metrics, including
fermentation data and information for interpreting it. The Crushpad
customer base remains passionate. Many of them fly in for the crush.
The company offers a fairly low price point for beginners and
provides lots of assistance. For those far away, it sends barrel
tastings. For those who only want to blend wine, it sends a case of
six small wine bottles (splits) and a graduated cylinder, and you
add different volumes of claret, pinot noir, and cabernet until you
come up with your preferred blend. Through Crushpad Commerce,
customers not only make wine but sell it under their own brand. The
company offers a platform for creating a customized Web site with
the feel of a big winery. There, wine lovers can order fabulous Napa
wines for a nice price.
Crushpad offers access to materials and tools that are too expensive
and involved for most people to own. Starting with 5,000 square feet
of space, the company now has ten times that much. As Crushpad has
grown, Brill has started investigating what's been learned by music
providers such as Pandora, Rhapsody, or MOG about how to create
"influencers" that help people discover new music. Who are the
influencers for wine purchases? Retail store staff? Magazines and
blogs? Restaurant sommeliers? These are exactly the kinds of
questions that can help a Mesh business take off.
If you're like most of us, there are many things you now don't use,
or use infrequently, such as musical instruments, specialty sporting
equipment, or a second car. You may own them for the convenience of
having them available, just in case, or possibly to impress friends.
Imagine how much wasted money and time they represent. (Some sites,
such as wattzon.com and carbonneutral.com, will actually calculate
it for you.) Consider how much you'd save or earn if it were easy
and secure to share the stuff you seldom use. Mesh businesses turn
that potential into profit, much the same way that people rent out a
second home when not using it. You just have to "see" it.
Of course, not everything can or will be shared. That's an extreme.
I'm not looking at the extreme. I'm looking for where you get a big
payoff for a family, for a community, for a business, and for the
planet by reducing the friction of sharing. Zipcar succeeds, for
example, because the value proposition of car sharing is compelling.
Cars sit unused twenty-three hours a day, on average, and many
families own more than one. Through car sharing, a person in the
United States saves an average of $400--600 monthly on insurance,
maintenance, and other costs. Dense urban areas, where car sharing
is most efficient, can gradually free up valuable parking and street
space for public and private use. And a UC Berkeley study found that
members of one car-sharing service drove 47 percent less after
joining. As a result, the car-share service saves 20,000 pounds of
carbon dioxide emissions each day. That's a big payoff.
Hardcover: Today's read ends on page 22.