The richest 1% of Americans make an average of $27 million per household. The average income for the bottom 90 percent is $31,244. And today, one third of our workforce is self-employed, sometimes by choice, but often because we can no longer rely on companies to provide long-term security or fulfillment. This means that there is a large chunk of people only making it because they’re doing it themselves.
In response, successful peer-to-peer marketplaces like Etsy, TaskRabbit and Airbnb, have empowered individuals to generate extra revenue. Sometimes people use these platforms as their primary form of income. This is the rise of micro-entrepreneurs–people who, ultimately, act more like businesses than individuals. In other words, our businesses become more human.
There’s a convergence between what it means to be a company and what it means to be an individual in the new Internet economy. This trend will proliferate until the conversation is less about business-to-consumer versus peer-to-peer economy, and instead becomes a conversation about supply and demand, regardless of where it comes from. Here’s why:
People today are better at marketing, especially younger generations, who are used to self-projecting and curating their digital lives. And regardless of age, people who use Airbnb, Etsy or Ebay know a lot about customer service — if they get bad reviews, both their business and their identity is at stake. Ten years ago it cost $5 million to start an internet company. Today, it costs $5,000. Individuals have access to all the tools it takes to build a business for at very low cost.
Companies must improve their practices because they are now held accountable through transparency and social networks. As web has matured, businesses have had to compete not just through technology, but through design, style, and voice. Now companies also have to compete with individuals: Would you prefer to stay in a stylish apartment in Brooklyn for $130 a night, or a seedy chain motel for $200? Businesses must become more human and relatable to hold on to competitive talent. How they operate–allowing midday naps, pets, working from home–will change the way we operate as a society every day.
Platforms are driving new economies, leveling the playing field, and facilitating value exchange. As the cost to start a business decreases, open-source tools will allow for dramatic collaborations between businesses, people, and, people. Businesses are just collections of people working together, after all, though many big companies manage to become faceless, unaccountable, and heavily marketed entities, forgetting all the people who work for them. Now there’s a chance to shift and create things with the values of old-fashioned mom-and-pop shops, where owners show face everyday to their customers, but with the scale of massive corporations
We work on a company called Getable, which connects people to rental businesses much like OpenTable connects diners to restaurant reservations. Someone recently asked us, “Do you think Getable will empower people to start their own rental companies?” We think it will. And that’s because transparency and information will push forward better service and easier entry. As people continue to make things, build companies, and utilize their existing resources, the question won’t be about whether Getable connects rental businesses to renters, it will just be about people connecting to people. That is the democratizing power of the Internet.