Right now, the sharing economy is going strong all over the world. Sharing one’s home, car, or parking space is increasingly becoming a normal part of everyday life.

Ten years ago, most people never thought they’d share things with total strangers, or that they’d let them stay in their place for the weekend. But it’s something most of us do now without thinking twice about it.

Renting a parking space, a car, or a room via online marketplaces makes life much easier for everyone. Of course, it’s also more affordable, which is very appreciable since everything has become so expensive in many countries.

The sharing economy helps people save money, and earn money too. People who rent property online or sell a service can effectively act as solo entrepreneurs and earn a very consistent side income to pay the bills. That’s something we couldn’t even fathom ten years ago.

People trust sharing economy platforms because they make their life easier and because they’re ‘vetted’ online by fellow users through customer reviews, review websites, and social media.

The sharing economy is also becoming increasingly popular because people rely so much on technology nowadays, particularly mobile devices.

Mobile phones make it very easy for people to book a car or a private driveway at the last minute. Thanks to WiFi connections on our devices, we can do these things instantaneously.

How can startups and small businesses benefit from the sharing economy?

First of all, prospective entrepreneurs should understand what is and what isn’t part of the sharing economy.

The sharing economy has at times received a bad name due to the disruptive nature of companies such as Uber.

Over time, the sharing economy sector has become blurred, with on-demand services such as Uber, Deliveroo, and TaskRabbit often being considered part of the sharing economy.

In reality, these on-demand services are not part of it. No previously unused or under-utilized resources are being shared, they are simply providing a new, innovative way to deliver an existing service through flexible employment practices.

The true sharing economy involves sharing previously unused or under-utilized resources. Empty rooms, driveways, and attics are limited resources that would be going to waste without sharing economy services to match them up with holidaymakers, drivers, and people requiring storage space.

This means that anybody can become an entrepreneur with the sharing economy, as long as they own something that they can share with other people.

A car owner can choose to rent his/her car to drivers, but a start-up or small business can also think big and decide to become the platform that connects drivers and car owners, for example.

Where should your inspiration come from?

Airbnb is the stand-out example that entrepreneurs should keep in mind if they want to work in the sharing economy.

They have transformed the accommodation sector, providing a popular alternative to booking hotel rooms.

Go back just a few years and people would have thought you were crazy to let a stranger into your home to stay for a night or two. Fast forward to today and this is the norm.

The Airbnb website is incredibly user-friendly, with reviews and high-resolution photos prioritized, and this is what sharing economy entrepreneurs should aim for.

Inevitably, there are the occasional horror stories reported, but Airbnb has become so popular because the vast majority of people have a great experience when they book accommodation.

Interestingly, Airbnb is now really starting to push their experiences, giving small businesses and local residents the chance to tap into the tourism market, something that used to be the domain of the large tourist attractions.

The experiences are often unique and authentic; it’s an example of how to add real value to a core service.

And the recipe to be successful with the sharing economy is…

There is no secret: to be successful as a young entrepreneur in the sharing economy, you should

1. Respond to a need
2. Deliver great service via a user-friendly website and/or app
3. Offer experiences that add an extra layer on top of the core service.

Startups and small businesses should also keep in mind that new technologies will have an influence on the sharing economy.

Driverless cars, drones, robots, and virtual reality will create new ways to share things. The world will become even more connected with artificial intelligence, and this will create new opportunities for people to save money and earn a side income.

Increasingly, people will quit their day job to invest their time and money in this economy and become solo entrepreneurs.

New technologies will make it easier for them to advertise their properties or services. For instance, they’ll be able to let people visit their home with 360-degree videos or using virtual reality headsets before they rent it.

They might also be able to rent their drones to send physical mail, their driverless cars for easy transportation, or their robot for pet-sitting. The possibilities will be endless.

If your small business is a hotel, a car rental company, or any other classic business, you will have to adapt to this new situation.

As people will easily be able to share things with each other, this type of business will need to bring something else to the table to justify the extra cost. This could represent a challenge for you, and you may need to strike new partnerships with sharing economy businesses to survive.

To sum things up

Young entrepreneurs who want to invest in the sharing economy should focus on the quality of their service.

Being an entrepreneur is like being a chef: the most important thing is the quality of the product you’re offering. Customers need to be able to trust you.

Young entrepreneurs should also learn as much as possible about the sharing economy, technology, marketing, and read plenty of business books to get ideas and inspiration. Two favorites are the Zappos Story, Delivering Happiness, and Seth Godin’s Purple Cow book.

Finally, learning on the job is often the best way to learn. You’ll never be able to launch with the finished product, so don’t be afraid to just get started.

Stay open to feedback and new ideas of doing things, be ready to pivot if necessary, and above all, keep going when you meet the inevitable challenges and setbacks along the way.

About the Author

 

Harrison Woods is the co-founder of YourParkingSpace.co.uk, an online marketplace connecting drivers with parking space owners.