Local Embedding could save 'Sharing Economy' platforms from failure
Very conveniently for us CollaborativeConsumption.com has just published a report underlining how we can learn from many of the failures in the collaborative economy. Out of the 15 of the key reasons sited 5 (highlighted below), are directly linked to not understanding the hyper-local behaviour of their communities and target audiences.
These are listed as follows:
Lack of Product Focus: The company offered too many product or service or service types, or addressed too wide a geographic area, resulting in weak uptake.
Market Readiness: The company did not find an enthusiastic customer base because the concept was launched prematurely into market.
Trust: The company suffered a significant and damaging trust in their communities.
Invalidated Product Offering: The company launched the offering successfully, only to find that there was limited or nonexistent market for it.
Lack of Community Engagement: The company struggled to build and engaged community around the business to support with viral growth.
This proves that there is a consistent lack of awareness in what communities actually need and how they function, with many of these platforms building their business on assumptions rather than observed behaviors.
Collaborative platforms work brilliantly when they can globally address local and hyper-local needs but are doomed to fail when they are based on pure speculation with no insight into the above. Having a deep and authentic understanding of specific communities and areas will undeniably save time, money and potential flops!