Disruption and the Gig Economy

How Appt!

This is interesting.  The dangers and opportunities for your business in disruption from technology keeps coming up, and I’ve been giving you a heads- up a few times this year.

•    More Disruption, But More Helpfu

•   I don’t have the answer

•   Three sources of Business Disruption to Avoid

You might think that this couldn’t happen to you or your industry.  Perhaps not, no doubt the taxi drivers, think Uber, and hotels/motels, think AirBnB, thought the same thing.

And that’s why I found this email from Richard Petrie interesting.  Richard is an expert in what he calls “Speed Marketing”, and you may recall I interviewed him a little while ago on the topic "How to sell more, sell faster, and sell more efficiently".

Here’s what he had to say:

‘San Francisco is run by apps’ says Tom.

Tom’s a cool local String (business partner) and I hung out with on Saturday night.

Head of SEO (search engine optimisation) for Airbnb – one of the star companies of Silicon Valley. I actually slagged them off in an earlier lesson from SF email.  Don’t worry I am sure Tom is not a subscriber.

Being in SF for 12 days is like seeing the future. The future holds even more use of apps (mobile phone applications) in daily life.

Everyone here uses uber.com because it is 10x better than a traditional taxi service.

Tom uses Taskrabbit (or similar) for outsourcing random tasks he doesn’t want to do. Don’t want to clean the dishes?  Then you hire someone from your cell phone.

Tom doesn’t own a car -  he uses a car sharing app.  It’s not that he cannot afford it but rather why would he?

There is a culture called the 1099 generation. 1099 is the IRS form (in the US) that the millions of contractors use to rent themselves out using apps. These people have swapped a regular 9 - 5 job for short term contract gigs using an app as their pimp.

These apps are not only more convenient but the experience is sooo good. So user friendly, so well thought out, so well designed you cannot go back to the old way.

Back in 1800’s the gold rush was gold, now it is finding an app that turns clicks into gold.

When Tom started at Airbnb two and half years ago the company was worth $2 billion, now they are worth $27b. Tom has share options so cannot leave.

The Ubers and Airbnb are really only transaction engines; they don’t own or manage houses or taxis they just arrange the transaction masterfully for 20%. They are logistic companies. That means no overhead – just profit.

These are disruptive technologies that are changing the way we buy (and live).

This new gold rush in San Francisco is driving the prices of living up. San Fran real estate is now comparable to New York. 25 year old techies are buying $5 million dollar properties – it’s a problem.

The other problem is the expectations of service have gone up. My flight from SF to Austin, Texas was cancelled. Virgin America were unorganised arranging alternate flights and accommodation. Grumpy passengers were asking ‘Surely you have a playbook for this situation’.

We expected instant solutions. Technology has trained us to know it can be done.

If Uber had been running the flight – everything would have been sorted in minutes not hours.

This is not really a marketing or selling lesson, but a heads up.

1)   The world is changing …your business needs to be adaptable because we don’t really know what is coming next, but you better be ready.

2)    Expectations of service is rising …clients are experiencing outstanding systems and get grumpy when traditional suppliers are not as efficient.

3)   If you are not using apps now, you will be soon.

Thanks Richard.   You might like to think about his three final points.

Yes - the world is changing, and we often don’t see things coming.  And increasingly they’re coming out of left-field, and not a logical process by people in our field.

Such disruptive developments are a danger, but they also create opportunities.  And opportunities need to be seized.

Customer service - think how can you use technology to improve customer service, or for that matter make your logistics more efficient and improve your processes to reduce costs.

And how might you be able to do that?  Find someone offering their services through the “Gig Economy”!

Let me draw to your attention one paragraph from Richard’s email:  “There is a culture called the 1099 generation. 1099 is the IRS form (in the US) that the millions of contractors use to rent themselves out using apps. These people have swapped a regular 9 - 5 job for short term contract gigs using an app as their pimp.”

Coincidently another newsletter I take said “There is growing awareness of what is being called the “gig economy”, where incomes are earned or supplemented by trading individual goods and services online.”

It’s not just Uber driving or AirBnB, although that is part of it.  In the US, and I suspect here in Australia, there are literally scores of websites and apps where you can advertise your services, get temporary or part-time work, and do so from anywhere you happen to be.

A quick bit of research found Cleaning Services Handy and Homejoy, online work platform Crowdflower, parking-space finder Divvy, all based on the same "community" model that is disrupting traditional marketplaces by bringing suppliers and customers together.   But it is more than that.

The gig economy is not only large in the US – but also growing.  Growing numbers of Americans no longer hold a regular “job” with a long-term connection to a particular business. Instead, they work “gigs” where they are employed on a particular task or for a defined time, with little more connection to their employer than a consumer has with a particular brand of chips.

The same research suggested that the “Gig Economy” has not taken off here as much as in the US, but I’d keep an eye open, just in case!   The world is changing – think reduced costs and improved customer service.

Is your business travelling as well as it could, and should?

When clients approach me for coaching, clients with businesses that are underperforming despite the crippling hours and effort the owner is putting into them, it is not just marketing that is holding them back.  It is the lack of control they have over their business, and eight times out of ten that lack of control comes down to a lack of knowledge of what is happening in the business.

The problems lie in the dark recesses of the business, unseen and un-resolved.  Illumination is provided by knowledge of what is happening in the business, and how to respond.

Three spaces left – The end of the year is approaching rather rapidly. And I have only three spaces left for a business assessment this month. 

If you would like to avail yourself of one, and there is no cost – this is my gift to you, book a Strategy Consult here

© Copyright 2015 Adam Gordon, The Profits Leak Detective 

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