Read an Excerpt
I was in Manhattan right around Christmas when an article about an L.A. landscaper named Scott Martin caught my eye. The recession was in full bloom, and Scott’s business had been in the dumps. As reported in the New York Times, Scott wasn’t one to get all that excited about Christmas, but there was one traditional sight that roused his ire. He hated seeing all the dead trees lying on the curb after the holiday, waiting to be hauled off to a landfill. Scott decided that this year, instead of just complaining about the waste, he would take advantage of it. As a landscaper, it would be simple for him to grow a stock of trees. Why not rent people living Christmas trees?
And that’s exactly what he did. He set up a Web site offering cedars, pines, cypresses, and redwoods in various sizes at corresponding prices. He hired people with disabilities to tend to the stock. He offered customers eco-friendly ornaments. At the appointed time, Scott and a small crew, which included several of his laid-off pals, gamely put on reindeer antlers and delivered the trees to people’s homes before the holiday. A couple of weeks later, he reversed the process. The crews picked up the trees, along with any wrapping paper to be recycled. Trees too big to save for the next season were donated to an urban reforestation project. The crew even offered to pick up their customers’ Goodwill donations and drop them off. Talk about holiday spirit!
Scott Martin had figured out a clever way to share Christmas trees, and make money doing it. Instead of buying, owning, and then tossing a tree, his customers got access to their trees precisely when they wanted them. They had a greater variety of choices than the corner lots offered. The service was fast and convenient. Customers used Scott’s site to pick their tree and delivery time (and one can easily imagine how mobile phones and tweets could sharpen the delivery details even further). No tying the tree to the roof of the car with bungee cords. No tripping and falling on the stoop and scratching your face. No wondering when the tree has become a fire hazard, figuring out the day for the city pickup, and dragging the needle-shedding tree carcass out to the curb. Customers could even take comfort in reducing their carbon footprint just a little.
Like Scott’s business, this book is about a simple idea: some things are better shared. There is much to be said for owning things. But the dominant ownership mindset has often blinkered our business brains. The fact is that our commerce, not to mention our social lives, has always depended on sharing. When you start looking for them, “share platforms” are everywhere. During that holiday season in New York, essential shared goods and businesses seemed to jump out at me—hotels and apartment buildings, subways and taxis, airports and planes, churches and libraries. All the things that seemed to make New York . . . New York. Some are public, some private. The entire infrastructure—from the telephone lines and wireless networks, to streets and sidewalks, to public art and parks, to the legendary NYFD—is shared.
Some of history’s cleverest business minds understood the power of share platforms, from the aggressive titans who made fortunes building the nation’s railroads to Conrad Hilton, who created the first premier brand of international hotels. Now, a new era of sharing-based businesses is beginning. Businesses as big as Netflix or Zipcar, and as small as a guy who rents Christmas trees, have figured out there is gold in giving people convenient access to shared goods.
These new share platforms differ in important ways from the type that profited Conrad Hilton. In Hilton’s first few decades of operation, the communication infrastructure connecting the hotels to each other and to their customers—principally telephones and telegraphs—did not change much. Under that system, you called or wired to make a reservation for a nonnegotiable price. A clerk transcribed the information into the hotel’s paper-based reservation system.
The new share-based businesses are bolstered and built on social media. Using Web-enabled mobile networks, they can define and deliver highly targeted, very personal goods and services at the right time and location. Today, using a pocket-size mobile phone, you can sit in a café while you map nearby hotel rooms, read reviews, play a video of the lobby and guest rooms, compare prices, negotiate a deal, request a recommended room, make a reservation, pay for the room, and generate directions to the hotel from where you’re sipping your latté. In some places, your phone can send your location to a taxi service and find someone nearby who wants to share the cab. In the near future, the hotel’s app may send you a bar code that offers you a room upgrade and a free drink and then opens the door to your suite, bypassing reception.
This shift represents much more than an improved reservation system. Up to now, the information revolution has primarily swept through industries and services that are or can be digital—numbers, text, sound, images, and video. Related sectors, such as banking, publishing, music, photos, and movies, have undergone massive change. Now, mobile networks are rapidly expanding that disruption to physical goods and venues, including hotels, cars, apparel, tools, and equipment.
That’s possible because our GPS-enabled mobile devices move in real space and time with us. An Urbanspoon app on your phone, for example, can pick up your location and guide you to nearby recommended restaurants. The Craigslist app can help you quickly find a mechanic in a pinch. Physical goods are also electronically tracked by location and time—think of the UPS or FedEx tracking numbers that tell you where your package is at the moment. As a result, the network can connect us to the things we want exactly when we want them. We can increasingly gain convenient access to those goods, greatly reducing the need to own them. Why buy, maintain, and store a table saw or a lawn mower or a car when they are easily and less expensively available to use when we want them?
Mobile computing, enabled by GPS, WiFi, 3G, and Bluetooth, is growing at an explosive rate, and is expected to overtake desktop computing within only a few years. What’s more, the game-changing expansion of Web-enabled mobile networks has converged with the explosion of social ones. Each reinforces the other. Within a historical eye-blink, we have constructed a whole new language of sharing. You text, poke, and tweet your friends to meet at the pub you chose on Yelp, and then share the evening’s goofy photos on Facebook the hungover morning after. Awesome.
Something else has changed, too. The credit and spending binge that crashed the economy has left us with a different kind of hangover. We’re increasingly conscious of how we’ve raced through our personal and environmental assets. We’re forced to rethink what we care about. Throughout the world, we are reconsidering how we relate to the things in our lives and what we want from our businesses and communities. We need a way to get the goods and services we actually want and need, but at less cost, both personal and environmental. Fortunately, we’re quickly gaining more power to do so.
For now, most companies stubbornly stick to various twists on a single tried-and-true formula: Create a product or service, sell it, and collect money. Just sell the guy a lawn mower and watch him walk out the door. Few businesspeople, including most entrepreneurs and venture capitalists, have imagined creating
wealth any other way. Though they may use social media to market their products, their minds are still stuck in a 2-D buyer/seller/own-it world.
Around these entrenched businesses, a new model is starting to take root and grow, one in which consumers have more choices, more tools, more information, and more power to guide those choices. I call this emerging model “The Mesh.” In recent years, thousands of Mesh businesses have been created and scaled up, a few into well-known brands. These businesses understand and cleverly exploit the perfect storm of mobile, location-based capabilities, Web and social network growth, changing consumer attitudes, and the historically understood market benefits of share platforms. In this book, I’ll explore the ideas that underlie the myriad forms of the Mesh, and why it conveys extraordinary competitive advantages to entrepreneurs and businesses.
Fundamentally, the Mesh is based on network-enabled sharing—on access rather than ownership. The central strategy is, in effect, to “sell” the same product multiple times. Multiple sales multiply profits, and customer contact. Multiple contacts multiply opportunity—for additional sales, for strengthening a brand, for improving a competitive service, and for deepening and extending the relationship with customers. Using sophisticated information systems, the Mesh also deploys physical assets more efficiently. That boosts the bottom line, with the added advantage of lowering pressure on natural resources. Not always and not for everything, but a Mesh network that manages shared transactions has the growing capacity to soar past a company that sells something once to one owner. All of us reap the rewards of dramatically improved service and choice at a lower personal cost.
This has been my life’s work: how to get more real value for people by leveraging the Web as a sharing platform. In 1993, I had the terrific good fortune to work with Dale Dougherty and Tim O’Reilly in creating GNN, the first commercial Web site. We designed the first online transaction and ran the first ads on the Web. We helped unleash the Internet revolution, which uprooted and reconfigured most major industries and business models, displaced leading brands, and forced the redesign of hundreds of key products. We sold GNN to AOL.
A few years later, I saw a very young boy at O’Hare mimicking taking a photograph with his fingers. Instead of holding his “viewfinder” up to his eye, he held it out in front, like a view screen. There it was. Digital images were clearly the future. Using the Web, here was an opportunity to turn the business of sharing and printing photos on its ear. Kamran Mohsenin and I began riffing about a better, faster, and less wasteful model. Those conversations led to the creation of Ofoto.
Ofoto used the Web’s rich and growing digital infrastructure to share photos through people’s social networks of family, friends, and colleagues. As we hoped, Ofoto became very profitable while generating far less waste than the traditional film model. We sold Ofoto to Eastman Kodak, where it became the company’s core digital photo service. We grew to be the largest online photo sharing and printing service in the world, with well over 40 million customers.
Over the last several years, I’ve continued to bring a variety of Web and mobile services to market, while sustaining a concern about nature and communities. During my career, I have worked with the founders of Yahoo!, AOL, Google, PayPal, and Mozilla. Again and again I’ve watched the same process unfold: an innovator sees a new opportunity, exploits it, inspires others, and we all benefit.
In this fast-moving environment, it has become an essential business skill to recognize, well ahead of your competitors, the discontinuity that generates new platforms, models, expectations, and brands. See it first. Act. Win.
The Mesh is that next big opportunity—for creating new businesses and renewing old ones, for our communities, and for the planet. And it’s just beginning.