Our very own Gang Leader Elle shares her thoughts with the CBI on why businesses and individuals should be thinking about the platform economy and its game-changing potential…
So, you need a product or a service, what do you do? You go to a company who provides what you want, and you purchase it from them, online or offline. The company makes money from you – and you use what you’ve bought. Then the process begins again. That’s the way the world works, right?
It’s certainly the way that many of us are used to participating in what is often described as the ‘traditional economy’. But thanks to online platforms and apps, people can now connect and transact with other people, and not just businesses.
This ‘platform economy’ is growing rapidly: according to a recent report by Accenture, platform companies represent $2.6 trillion in market capitalisation worldwide.
But what exactly is an online platform? One way to imagine it is like a huge virtual stage, which people can step onto or off – and when on it, can interact with others in a range of different ways.
This imaginary stage has many different areas. In the social media area, platforms allow you to interact socially. The gaming part of the stage lets people play with one another, while search platforms let users look for listed providers, a bit like a directory. Then there are video and music platforms, map platforms, news platforms… the list goes on.
At the ‘business end’ of the platform economy are marketplace platforms: they allow you to exchange goods or services with other people, whether that’s by buying or selling (Etsy or Shpock) – or by sharing (anything which could be described as ‘the Airbnb of…’). Exchanging services as opposed to goods is often described as the ‘gig economy’ (think TaskRabbit or Lyft) and exchanging money in the form of investment or loans is known as ‘peer to peer’ or ‘P2P’ finance (Zopa or Funding Circle).
But what are the benefits of these ‘peer to peer’ transactions? Spoiler alert: there are quite a few…
Read the rest of the article here on the CBI blog.