Investors are starting to take notice of the ever growing sharing economy. With a consumer peer market worth $26 billion that continues to develop the sharing economy has some serious potential. This week Raj Kapoor of TechCrunch gave us a comprehensive review of what a sharing economy start up needs to succeed.
It seems like there are new start ups daily, especially within the shared economy. Kapoor points out that, like in other businesses, those who do best are usually scratching an itch that consumers haven't been able to reach.
“Sharing economy models work great when there is a high degree of consumer pain. As the saying goes, “if it ain’t broke, don’t fix it.” In a lot of markets, consumers are happy with the status quo, and it will be hard to get user adoption. ”
Kapoor believes that is why ridesharing and fitness have done exceptionally well:
“For ridesharing and fitness, the consumer pain is more obvious. Until Uber and Lyft, it was impossible to hail a taxi in most cities, a huge pain to force drivers to accept your credit card, and an all-around unpleasant experience in the car.
When you look at the fitness industry, it’s generating $75 billion each year on gym fees, yet 60 percent of people who belong to gyms don’t even go and our nation’s growing obesity and inactivity problem are evidence the solution isn’t working. Lyft and fitmob hack these pain points by creating an experience that is fun, accessible with the push of a button, and affordable giving consumers clear benefits that are lacking in traditional services.”
Kapoor also cautions start ups to be aware of the watchful regulatory eye, currently challenging the sharing economy daily. Lyft, Uber and Airbnb are a few of the many sharing platforms that are constantly under fire for violating the law. Kapoor wisely recommends that you should work hand in hand with the government to create a win-win for all parties.
To see what else is needed for your sharing economy start up needs to be successful, check out the full TechCrunch article and let us know what you think.