From finding places to stay on vacation with Airbnb to snagging a ride with Uber, the collaborative economy model has focused primarily on consumers so far. Yet, the industry, which is estimated to be valued at over $26 billion, is already challenging standard notions of business. While most assume that big companies will find the collaborative economy too risky, too unstable, or too unorthodox, that hasn’t stopped companies in fields like graphic design, software development, and even outsourced back-office services from shattering these preconceptions and proving the viability of the model for the world’s largest and most influential brands.
So why are companies like Visa and Microsoft turning to the collaborative economy? Simply put, in many cases, companies using the collaborative economy model produce the highest-quality results while simultaneously cutting down on turnaround time and cost. Below are several reasons why the collaborative economy has had a pull on top-tier brands.
One of the biggest strains on productivity and customer satisfaction in any market is a lack of access to the full range of available options. Whether it be choosing the best advertising firm, finding a web designer, or identifying the perfect creative talent for a new infographic, the selection process is often so limited by geography and awareness that the match is less about finding the perfect fit, and more about making the best of what’s available.
The collaborative economy, and the marketplaces through which it runs, help solve this problem by aggregating thousands of potential matches in one, central online location. Working online eliminates geographic concerns and places the emphasis squarely on achieving the ideal fit. Marketplaces employ advanced algorithms to help filter vast amounts of information so that each individual can find the best match possible, regardless of how much they know about the market. Additionally, smart-matching technologies give customers the ability to search through a potential vendor’s history, making viewing past work, reviews, and other critical information fast and easy.
The chances of finding the talent you need to complete a task are much higher than if you just consulted your address book, asked for recommendations, or relied on an agency. And a true marketplace goes both ways. Take Uber for example, which insists that both drivers and passengers rate each other before they can complete a transaction. In this way people are rewarded for a job well done, providing a natural performance incentive that raises the quality of the marketplace.
In a standard search, once a marketing manager for example has gone through the arduous process of selecting an agency or freelancer, it’s a long process to start over if difficulties arise. At best, the marketing team needs to find another designer or agency, all while wasting valuable time, money and effort. Collaborative marketplaces already help mitigate this result with their smart matching capabilities, but the guarantees, like switching designers at no additional cost, provided by some can provide peace of mind and greater willingness to consider new and innovative ideas.
The collaborative economy is nimble. With its greater supply, a marketplace can provide creatives with extremely specialized skills. In fact, the ability to offer specialists, where one might have settled for a generalist in the past, is one way the collaborative economy is able to deliver higher value to those that participate in it.
For the talent, too, it’s attractive. Creatives want to work on interesting projects with top brands. The decentralized nature of the collaborative economy makes this possible and leads to exciting collaborations where talent is the only true cost of entry.
Many marketplaces also provide cost guarantees that reduce one of the primary pain points of interacting with a freelancer or agency–price. Because prices are set in advance, both sides have a preexisting understanding that helps brands and designers avoid surprises and allows clients to focus exclusively on the project.
For any brand looking to outsource a project two key factors are how much it will cost and how quickly it will get done. One of the biggest costs for any design agency or freelancer is the time and effort necessary to seek out and identify new clients.
Marketplaces give designers the ability to focus on designing, which means they can do more projects at a faster rate with a lower cost. This filters directly back to the brand who pays less for the project while also cutting down dramatically on their search time.
However, the benefits go far behind lowering costs for designers and taps directly into the value of a wide marketplace. Because they have access to far more creative talent, they are exponentially more likely to have a great fit for the job, available to complete the job under any time constraint. Whether it be two weeks, two days, or 24 hours, tight deadlines are more easily met with a wider talent pool.
The value of the collaborative economy is that it places an emphasis on maximizing value. Resources–whether they be unused apartments, hotel rooms, cars, or creative freelancers–are often wasted as their availability goes unseen by those who could potentially utilize them. The Internet provides the ideal means of overcoming this obstacle by aggregating vast amounts of data in central locations. Now, information is readily accessible, and with the rise of mobile devices, it is accessible at all times of day.
Marketplaces all but eliminate risk for those that participate in them by making sure the talent is suited for the task and by keeping the supply and demand sides honest through an ongoing process of evaluation and feedback. Marketplaces add value for both, which is the secret to their scalability. Consumers get it already. It won’t be long before the enterprise catches up.