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December 23, 2013

Social Media: 3.0 is the collaborative economy here’s why

Just as marketers and PRs were finally starting to get to grips with the growth of social media, the landscape has quickly shifted again as new media and technologies have begun to add another string to their ‘network society’ shaped bow.

Conventionally, the use of social media has revolved around the sharing of media and ideas thanks to the rapid development of the internet which has come a long way since the dial up connection and Alta Vista search engines of old. In fact, it’s this progression which has seen a continued growth in society which has resulted in a recent move from the information age, to the social media age and now into the age of the recently announced collaborative economy3971813137_ce72d9a3d8

Defining an age which has only recently started to emerge can be difficult as it hasn’t perhaps had long enough to develop a distinguished identity, however in essence, the collaborative economy is a term used to describe the way that products and services can be delivered en mass using the same social channels previously used to communication.

One of the pioneers in this new age of digital consumer technologies is popular industry analyst Jeremiah Owyang who is actually responsible for coining the term the collaborative economy, also known as the sharing economy. In his report on the collaborative economy, Jeremiah said:

“Social technologies radically disrupted communications, marketing, and customer care. With these same technologies, customers now buy products once and share them with each other. Beyond business functions, the Collaborative Economy impacts core business models.”

Like so many of these new digital phenomena, it is built on a simple concept but one that carries with it much depth and capability. Realising that companies may need a helping hand in understanding this notion of sharing and people power, Owyang founded Crowd Companies, an organisation whose focus is to steer people and companies through the collaborative economy. This reminds me of the Word-of-Mouth-Marketing Association WOMMA and when that was created. I helped publicise the UK version of (Womma) way back in 2007 and we helped to set up the guidelines for Word-of-Mouth Marketing in this country. The truth is these emerging sectors do need somebody to help steer them in the right direction. The organisation’s mission statement lists the bringing of “empowered people & resilient brands together to collaborate for shared value” and it’s this idea of empowering people which is so important to the cause.

In the UK we need to accept we are always around 2-3 years behind the US at adapting ourselves to these new ways of thinking. The collaborative economy enables people and enterprise, especially small start-ups, to create and share goods and services thanks to the capabilities of digital technologies in a way which allows them to compete with big business.

One of the most prominent examples of a start-up using the sharing economy to its advantage is Airbnb. Airbnb provides an online platform for people to rent out spare rooms or empty houses without the need of a physical environment provided by an intermediary. After being founded in 2008 in San Francisco, Airbnb now connects people in more than 33,000 cities from 192 countries and on a good day will provide placements for more than 200,000 people a night. Numbers such as these just go to show the power of social connections and the way social media can undermine long established business models and firms, like in this case the Hilton.

Perhaps the most ‘Tomorrow’s World’ like and certainly most impressive example of the collaborative economy is brought about thanks to the creation of the 3D printer. This incredible piece of printing technology, which is slowly becoming more viable for the (somewhat) average consumer, allows people to design and create remarkable objects and then share these online for free. . I love the concept of 3D printers and Formula One teams have been using them for years to print out new designs across the globe so when they are racing in Japan they don’t need to fly the parts from the UK to Japan – a brilliant idea. It also has the potential to completely reshape the manufacturing industry with the field of prosthetics already being impacted as well.

There are lots of ways that businesses can harness the collaborative economy and benefit from its capabilities and potential as they look to utilise this new social shift. The first is by seeking profit that can’t be quantified. Companies are looking to contribute more than just profit to the economy and this sharing ideology allows them to do just that. Rachel Botsman, social innovator and speaker, says: “the currency of the collaborative economy is trust”, and businesses must learn to become more humanised in order to take advantage of this social age.

Another way in which it can be made the most of is through the maximising of resources. Lisa Gansky, entrepreneur, investor and author says: “access to goods, services, and talent, triumphs over ownership.” So rather than trying to swim against the tide of these new business models, corporations need to work with them.

A little closer to home, one of the more recognised brands here in the UK, B&Q, has itself realised the impact of the collaborative economy and has tried to use its resources to work with it via Streetclub. The aim of Streetclub is to bring back a sense of community and it’s a way to connect neighbours via a private ‘online community notice board that’s easy and safe to use.’ It hopes to provide an online setting where a neighbourhood can talk, share, plan and be altogether more social. streetclubFor B&Q, this allows them to maximise their resources and provide opportunities which enables them to form a relationship with these small communities. All of these new ways of communicating and working together take me right back to Dell Computers and its Ideastorm which allowed customers to provide ideas and the best idea as voted by the community became an actual product or service giving the power to the community.

It’s also important for brands to be aware of the power of crowds in a time where organisations are yearning more and more for innovation, the benefit of looking outwards should not be underestimated. Owyang predicts that over the next decade crowds will begin to operate like a company and could eventually even grow to be one as the lines between employee and customer continue to become exponentially blurred. It’s not really that new though as web developers are doing it every day working with teams based all over the globe – it’s just a different way of connecting, working and thinking.

So as new media socialises the world and restricts the necessity for physical environment, small businesses and marketers have been given a helping hand to compete with industry giants. People have become empowered to make and share their own goods and if big blue chips wish to remain relevant they must engage in already proven social strategies and cooperate with the communal sphere. Failure to do so could see them ostracised as trends seem to point towards a future in which a collaboration between the crowd and companies could be the key to economic success. I certainly think this is the start of more and more collaborative projects and if you are not involved you are going to miss out.

Photo Credit: Marc_Smith via Compfight cc

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Chris Norton

Managing Director at Prohibition
Founder of Prohibition, listed in the world's top 30 marketing bloggers and an award winning online PR and crisis management specialist. Co-author of Share This Too.

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