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Circular Economy

Five business models in the circular economy: #4 Sharing platforms

Burgess COMMENTARY

Peter Burgess

Five business models in the circular economy: #4 Sharing platforms Quentin Drewell • Accenture • Blog Post • 1 Dec 2014 Research by Accenture reveals five business models companies can adopt around the circular economy. Here Quentin Drewell takes a look at the phenomenon of rent, share, swap or lend to gain advantage. Share. The circular economy is about radically changing business models to break the old “take, make, waste” approaches that are threatening the future of the planet. Next up on our exploration of the five models is the 'sharing platform'. It’s one of the most unorthodox of the models, and one that’s gaining the most momentum. 'Fewer resources go into making products that are infrequently used, and consumers have a new way to both make and save money.' In fact, a 2014 study by market research firm Nielsen Company found that just under seven in 10 (68%) global online consumers are willing to offer their personal items to sharing communities for payment. Two-thirds (66 percent) are likely to use resources from a share community. The premise behind the sharing platform: In developed economies, up to 80% of the things stored in a typical home are only used once a month. The sharing platform model - increasingly enabled by new forms of digital technology - forges new relationships and business opportunities for consumers, companies and micro-entrepreneurs, who rent, share, swap or lend their idle goods. Fewer resources go into making products that are infrequently used, and consumers have a new way to both make and save money. Peerby is one company that exemplifies this model. It operates a peer-to-peer borrowing service for a variety of products. As a start-up in 2011, the company wanted to build a platform that let individuals easily and safely share goods. It also wanted to create an online element that would incentivize people to participate in real life without being motivated by money. Peerby is active across all major cities in the Netherlands (where it has developed a critical mass of users) and Belgium, and is piloting its service in several US cities in preparation for a launch there. Peerby’s goal is to expand to other countries as well and introduce an insurance product and other related services. As 3D printing becomes more popular, it’s only a matter of time until customers start looking for ways to use this powerful new technology without having to actually buy a 3D printer. As far as 3D Hubs is concerned, that time is now. 3D Hubs offers a collaborative production platform for makers and 3D printer owners. Using 3D Hubs’ platform, anyone with a 3D printer can bring customized, locally produced goods to those around them. By creating a platform that connects printing capacity with users who want to print, 3D Hubs makes the market of 3D printers more liquid and allows one printer to serve more people. A number of companies built on this business model have gained millions of members, considerable media attention and in some cases $10bn+ valuation. These include Airbnb (home sharing), Uber (ride sharing) and Deliv (shipping services sharing). By making it easy for people and companies to use idle products, these businesses are squeezing much more value from the resources used to make them. Companies advancing circular economy principals will compete for a prize sponsored by the World Economic Forum’s (WEF) Young Global Leaders initiative and Accenture. Called, The Circulars , award categories include awards for leaders, cities, digital disrupters, entrepreneurship and pioneers.