4 Challenges of Innovating in the Collaborative Economy
One of the most notable characteristics of the collaborative economy is the shifting power dynamic. As sharing markets take root, control moves from corporation to customer, and key drivers are a result of consumer choices and exchanges, rather than service and production decisions made by organizations. It’s one of the reasons that many larger companies are shaking in their proverbial boots, and worrying about what that means for internal innovation programs.
But, even if a company should decide to embrace the collaborative marketplace, there are still quite a few hurdles to be considered. Here are four challenges to watch out for when it comes to effectively innovating in the sharing economy.
1. Trust Anyone = Trust No One
Whether it’s agreeable, sustainable, and bureaucratic or not, consumers tend to feel safer when the products and services they enjoy are protected by guarantees, warrantees, regulations, and approvals from expert bodies. In a sharing economy, much of that is stripped away, leaving doubt in its wake. For innovators, this could be particularly frustrating when employing crowdsourcing, crowdfunding, or P2P product-testing initiatives.
2. Quality (Out of) Control
By the same token, a lack of regulation means an uptick in failed quality control. Things like background checks and certificate requirements are in place to keep people protected, whether from unlicensed drivers or chefs who don’t have anyone systematically inspecting their products. Stuff like jewelry, clothing, and your kid’s lemonade stand might get a pass, but things get pretty iffy when we’re talking about cleanliness, freshness, legality, and safety. In an uncontrolled arena, innovations might not be measured, compared, or analyzed as accurately, leaving innovators with great products that consumers are afraid to purchase.
3. Distilled Ownership
A major concern of copyright and patent holders, distilled ownership is a nearly inevitable part of participating in the sharing market. As products and services are dissipated across consumers, their origins fade, liabilities increase, accountability is shaken, and the risk of choosing a shared service over a regulated one is exponentially higher. Innovations could be subject to serious infringement, but with no way to successfully question or stop the infringer.
4. Dwindling Monetary Influx
At its basest, basest level, a successful economy requires constant input to produce continuous output. The collaborative economy model significantly reduces overall spending within the marketplace, and it’s clear that the negative impact of that could be disastrous. It’s no secret that driving innovation requires resources — like money, or people, who also like money — in order to work. Coming up against even fewer resources than exist in a traditional company environment could be the biggest challenge innovators face in the sharing economy.