Opportunities abound for entrepreneurs to create the next Uber or Airbnb. Are you up for the challenge?
December 11, 2018 5 min read
Opinions expressed by Entrepreneur contributors are their own.
From a young age, we were all taught that sharing is good. But who knew that “sharing” would become the basis of an entire economic system? From eBay to Uber to Airbnb, the sharing of resources has quickly evolved from a fad to a vibrant marketplace; and this business and cultural shift is only just beginning.
There are still many niches entrepreneurs can find in already established sharing-economy industries; and there are ways they can forge new business paths in untapped industry markets. The whole world economy is changing, offering exciting opportunities for those who are willing to dare. Are you one of them?
A fast-growing trend
The sharing economy is one of the fastest-growing business trends across the globe and is estimated to grow from $14 billion in 2014 to $335 billion by 2025, according to Brookings. In addition, the Henderson Group, the think tank of the Boston Consulting Group, estimates that venture capitalists have poured over $24 billion into the sharing economy market since 2010.
As market disrupters, such as Uber and Airbnb, continue to take on entrenched industry leaders and win, these investments will continue to be available to people with a “sharing economy” vision.
Consumers and the sharing model
Millennials are more likely to participate in the sharing economy than their older counterparts, according to the experts at Statista, but for the purchasing of pre-owned goods, this age gap is at its smallest.
In all other categories, from automobile services to crowdfunding, millennials lead the way. Participation in the sharing economy is now being reflected in other purchasing decisions. The Henderson Group survey found that 85 percent of U.S. consumers polled said they would spend more on products designed to be shared.
Our culture’s apparent approval of consumer products specifically crafted to be sharable is opening many new doors for the creative entrepreneur.
Room- and home-sharing
The shared shelter market is currently dominated by Airbnb, but that doesn’t mean that there aren’tstill opportunities. Vacation rentals will continue to be a hot market because there are significant reasons why people are choosing vacation rentals over hotels, especially for longer stays. In the United States, revenues from vacation rentals were over $13 million in 2018 and are expected to see a continued annual growth rate of 7.2 percent, according to Statista.
For entrepreneurs, opportunities in this market include purchasing homes to rent to others and taking long-term leases at popular tourist destinations, then renting out some or all of the building. Offering luxury homes for rent is a growing submarket within this industry; so is providing unique options such as yacht rentals and glamping sites. With many niche options and markets underserved by quality rental options, this market is far from saturated.
eBay remains the dominant force in the peer-to-peer, consumer goods category, with an annual net revenue of $9.6 billion,according to Statista. This site brings together sellers of everything from the mundane to the bizarre with people willing to pay for it.
Etsy is another massive site, serving consumers seeking handmade or original goods, Rent the Runway is the go-to site for fashionistas; and SidelineSwap is where athletes go to buy and sell sporting goods. These sites generate millions of dollars each year because their creators know their marketplace and have designed the perfect platforms to bring buyers and sellers together.
For entrepreneurs, there are many opportunities in the shared consumer-goods markets, from buying and selling, to establishing a new platform that meets the needs of a specific niche group. There is also a demand for goods created specifically to be shared, which leaves the possibilities wider open still.
By 2020, the healthcare industry is predicted to generate annual revenues of $8.7 trillion dollars. The sharing economy has not yet impacted this market yet, but it is ripe for change. Hospitals across the country waste over $765 billion dollars in both supplies and equipment. The problem is that some equipment will sit idle at one facility, taking up space and requiring maintenance when a hospital across town could could make good use of it.
Under the best scenario, some of these items will become a charitable donation to facilities in other countries, but so much more is possible.
Cohealo is currently the only company providing sharing economy services to this industry, and there are so many more opportunities there. Few hospitals take advantage of this service, and that’s a shame since plenty of physician groups, dental practices and physical therapy businesses could reduce costs and expand services wherever this type of opportunity became available.
The above examples are just a few of the myriad of sharing economy opportunities available to savvy entrepreneurs. It is important to remember that at the heart of every sharing economy transaction is a match-making process that brings together someone with a surplus with another who has a need. This could be a car, a fancy evening gown, a forklift, a baby stroller and more.
Opportunities abound for entrepreneurs to create these platforms, curate quality goods and services, manage the logistics of delivery and enforce the agreements. Are you up for the challenge?