Social Commerce and the Evolution of Peer-to-Peer Marketplaces

Greetings everyone. Welcome to the Wednesday, May 7th, 2014 episode of Free Webinar Wednesdays. This is Eric Cook with WSI Internet Consulting where we work with businesses and organizations on helping them better understand and leverage the power of the Internet as a strategic business tool. You can learn more about me online at www.poweredbywsi.com. Or you could just Google Eric Cook WSI and see what sort of cool stuff you can find. It's pretty adventuresome of me, but I figured I'd throw that out there to mix it up a little bit. I was going to say, that's brave. That is brave. Yeah, just Google Eric Cook. What about all those college pictures? Yeah, fortunately the internet wasn't around when I was in college, so I can say that safely. That other guy chiming in with the old college jab is my good friend and Free Webinar Wednesday partner, Mr. Jeff Simpkins. Jeff, say hello again to everybody out there in the Free Webinar Wednesday world. Greetings everybody, this is Jeff Simpkins. I'm with Community Bank Consulting, Inc. And you can learn more about me and Community Bank Consulting, Inc. online at www.communitybankconsulting.com. If I Google you, what will I find, Mr. Simpkins? Hopefully you will find Some very professional videos on YouTube, my webpage. Exactly, your LinkedIn profile, all the really good stuff. Exactly, exactly, exactly. And if you do that on Google Images, you will find that there are lots of people named Jeff Simpkins that use the internet. Exactly, yeah, well, that's the thing. A couple of weeks ago we had a guest on the show who Cajoled me into actually enabling the webcam, so now everybody can actually see who I was. You were absent, so you didn't get a chance to be on the webcam crew, but at least our regular listeners or watchers or viewers or attendees were able to see JP and myself, and that was pretty cool. So you've made a couple of announcements the last few weeks we've been together about some things going on at your business, and I just wanted to make I know you and I both come from a banking pedigree, and we do stuff for a lot of banks, and there's a lot of bankers that join us. I've done a webinar— I did one actually yesterday that some folks may have also attended— on a cool new service called Banker Junior, which is a mobile app that helps kids learn important banking concepts, the whole thing around financial literacy. So I've got that actually up on my YouTube channel, and I'll post a link to that on Free Webinar Wednesdays, or if you Google me, you'll find it probably linked on my Facebook or LinkedIn. Tomorrow I'm doing a webinar with another colleague here in Michigan who has developed a system. Their company's got a system that actually can eliminate the paper receipts that you get at the teller line when you do a transaction. I think all of us have been into an Apple Store and they whip out the iPad and they ask you if you want your receipt texted or emailed to you. They don't even really give you the option for paper anymore. And he's bringing that technology actually into the banking world, and it's really cool. And so we're doing a webinar tomorrow at 11 o'clock, and if you're interested, you can just shoot me an email and I'll be happy to give you the details on that. But just trying to keep my banker friends educated and ahead of the curve and doing some innovative stuff and can save some money as well. So some banker— I saw your email blast on both of those. And the kid banking thing is cool, but I've got to tell you, getting my teller receipt through a text message, I love that idea. Yeah. Well, if you work in a bank, and I promise Adam we'll get you introduced here pretty soon, but if you work in a bank, you can chances are look at the garbage receptacle that's closest to the door, and that's probably where you find about 80% to 90% of the receipts that you give your customers. Because they get their statement. So if you're printing the paper and they look at it and they ditch it, you know, so this is a way that you can do that, you know, save those printing costs and create some convenience. It gives you a little bit of a cool factor because it's not really out there. It's platform agnostic and doesn't matter what teller system you're using. So it's pretty cool and it's not nearly as expensive as what a lot of people might think. So Joel and I are going to do a webinar tomorrow at 11 Eastern and Again, if you are interested, eric@poweredbywsi.com. Drop me a note. With that, last couple of housekeeping items and then I will officially introduce Adam. Today's show and all shows are recorded and available online at freewebinarwednesdays.com. So if you would like to check out the show, share it with friends, or look at anything else that we have talked about in the past, feel free to visit us at freewebinarwednesdays.com. And we do like questions and we hopefully will get some from the audience because we like interactivity. So please feel free to use that chat feature in your control panel. Which is likely located to the right-hand portion of your computer screen, and send us some chats or thoughts or questions, and we will be sure to ask that when we get rolling. So with that, it is my pleasure and distinct honor to welcome Adam Broadway, I say back to Free Webinar Wednesdays because he was here when he was living another life with a company called Business Catalyst/Adobe, a little company you might have heard of. They do things like Oh, I don't know, Photoshop and Acrobat Reader and all sorts of other cool stuff. But I have had the pleasure of working with Adam because Business Catalyst who got acquired by Adobe is one of our best partners at WSI and has got an awesome web development platform. And Adam was instrumental in helping me learn that system and has developed into a really good friend. I jokingly referred to him one time as my running partner because he was also co-host of the Business Catalyst podcast, and I would take him running with me and listen to him educate me on all sorts of cool online stuff. So even though you weren't sweating, Adam, you were out there running with me, and I appreciate all the time that you spent educating me even though you don't know it. But Adam has now moved on and he has started a new company that we're going to get an opportunity to learn about. And the whole concept of social commerce and peer-to-peer market and how this thing called the internet is bringing people together not just to communicate and collaborate but actually sell stuff and buy stuff and ways to generate revenue. So with that somewhat long-winded but hopefully very kind introduction, welcome to the show, Adam. It's great to have you with us.

Hey, thanks, Eric. I really appreciate that intro. And Jeff, great to meet you as well, and everybody else on the call or in the webinar, good Good morning, good evening, good afternoon, or good night, whatever part of the world you happen to be in. It is my great pleasure to be part of this. This is actually the first time I'm going to be going over this in a formal presentation around social commerce and the evolution of peer-to-peer marketplaces. I've actually been living and breathing this for years. As Eric said, I moved on from Adobe after the acquisition of Business Catalyst, which in itself was I guess, a marketplace for building websites for internet consultants like the WSI team, for web designers and digital agencies to use our platform as their marketplace for deploying online businesses. And as the early days of growing that company and moving to the USA, that was my initial first foray into the sharing economy because as we grew that business and moved to San Francisco. We had our offices in Sydney but was looking for new offices in San Francisco. The only options available to us back then in 2008 was long-term leasing of way too much commercial space or executive office spaces, which were 4 times the average per square foot price than it was to do a long-term lease. But, you know, when you're a growing business, cash flow is important, so having that opt-out option of a month-to-month in executive office space was ultimately what we went for. In the process then of being acquired by Adobe and working with lots of other different types of businesses— digital agencies, accountants, architects, you name it— everywhere I went and every business I stepped into, there was spare office space. And I would say, who sits there? Who sits there? Everywhere I went. And at that time, Airbnb was starting to gain momentum. This whole concept of the sharing economy really was starting to hit me as far as this is a bit of a change. Social media having just taken off and proven itself no longer to be a fad, and enterprise businesses suddenly sitting up and realizing it's not just my teenage daughter who's tweeting and Facebooking, but actually all my customers are doing that as well. I'd better get involved. The sharing side of e-commerce started to take off as well. With Airbnb, I thought, wouldn't it have been great to have Airbnb for office space? I would love to have been able to rent a desk for the team that we grew here in San Francisco by the day, the week, or the month without this expensive overhead of long-term lease or the very expensive option of executive office space. That's exactly what I did. I teamed up with my now business partner and CEO of Near Me, Michelle Regner, who had exactly the same problem from the other end of the marketplace. Her previous software as a service company had far too much space. When we connected and talked about it, she said, yeah, I could have so loved to have had you guys come and use our space, not just to supplement our rent, but there could have been some really great business opportunities and synergies in us and you working within our space. In the same way, I think that web designers would have an incredible synergy working within a space of accountants because there's this amazing marketplace of customers that both have, and they're non-competitive, they're very synergistic. So anyway, long story short, we kicked off and started a marketplace called Near Me. But before we launched it, we thought we'd better drink our own champagne. Let's build a marketplace that we understand because it's not just about the technology. It's about the entire end-to-end user experience that you need to be aware of, and that includes customer support. It's understanding the nuances of the types of marketplaces that are going to need to be powered, whether they're buy-sell, whether they're rental, whether they're barter, etc. It's also understanding how high-touch it needs to be in terms of real people on the phone validating people that are putting listings up or putting their profile up. In the process of building up Destiny and Me, we really started to understand the power of the sharing economy and saw it really start to take off. In that, we realized that it really does pay to share, and putting collaboration at the center of a brand is something not just for entrepreneurs like us who are thinking about Airbnb for office space or Lyft or others. But big global brands realizing that this is a space that is actually going to help them engage and increase their sales, and it isn't a threat to their existing business model. It's an adjustment and a change and a revolution, and we're kind of getting back to our roots in terms of sharing. Back in the days of villages and tribes when we would all be collaborating and sharing, and it took a It took a village to bring up a child. Nowadays we're kind of compartmentalized in these little boxes of houses and then schools and then cars and then offices. That village mentality is starting to come back now with social media connecting us all. So really, all in all, the sharing economy isn't anything new. It's sort of a revolution coming back to the way we used to do things, and it's certainly not a fad in the same way that social media initially was thought to be a fad and turned out to be a trend. The sharing economy, collaborative economy, the rental or the subscription commerce, e-commerce concepts are really gathering steam. No fad here.

Hey Adam, you've mentioned Airbnb a number of times, and for those in the audience, I don't know, I know we talked about kind of navigating around to some other sites on the browser, and you may cover that, but for just some perspective, if people haven't heard of Airbnb, Which is kind of like AirBed and Breakfast. You want to maybe give a quick little—

Yeah, great.

Here's what it is, just to make sure everybody kind of knows what we're talking about.

Absolutely brilliant. And please chime in at any point too to just prompt me on that, because one of the things in my job is I get so saturated in it that I assume everybody else is. It's kind of that bubble that Silicon Valley people have. It's another world here. The Airbnb concept is where you are turning your bedroom or one of your spare rooms into a hotel. So rather than book a hotel room when you're going on a travel destination, pretty much anywhere in the world, it's just gone like wildfire, you can go to Airbnb and search for, I'm going to be in Cincinnati, and you might find that there's a whole bunch of people's private homes listed with a room or a whole suite or the whole house available for short-term rent. Airbnb is this sharing economy marketplace where people with excess rooms, excess inventory, happens to be a room, puts it on the marketplace and people can search, find and book that. There's a rating system that ensures people's trustworthiness are there and they're building an incredible business around that. In fact, it's a good point that you raised that, Eric. Airbnb did a survey of 200,000 people last year and found that only 2% of the people surveyed knew what Airbnb was, and it's a massive business. So their focus on just that market is enabling them to grow hugely. They're already over a billion-dollar business. So when I say Airbnb for office space, Destiny and me was taking that concept, but rather than being focused on bedrooms and overnight stays, it's focused on office space that I can rent by the hour, the day, the week, the month. But all of that was built on our Near Me platform so that we could white label that for any other entrepreneurial brand that came along. So with this whole idea of the sharing economy, social commerce, brands can either go head-to-head and feel like they've got to compete against this shift, or they can start to work with their audience and loop the customer voice into decision-making processes and be part of these conversations by running marketplaces for the customer. We'll get to that a little bit more. Let's look at some of the details around the size of the market and the growth. The peer-to-peer rental market is estimated at $26 billion, and the sharing economy in total is a market with nearly 300 established companies at $110 billion. So these established thriving economies, it's obviously leveraging information technology and the connectivity of the web to empower these individuals or organizations to distribute, share, and reuse their excess capacity, whether it be goods, whether it be services. And it's on a very steep growth curve. Forrester has been putting out some research around this which I can send links to everybody afterwards. A little bit more detail on the sizing. You can see here that the US retail sales— this is just the US data. Sharing economy is exploding in Europe. We're ourselves as a business seeing 50% of our lead generation coming out of Europe. Spain, London, Germany, Netherlands, Denmark, you name it. And the rest would be Asia Pacific, US, and North America— South America. You can see here that of the Of the $20— here we go, we've got $4.4 billion of US retail sales, and the sharing economy is just a tiny little slice of that, $6.2 billion, thereabouts. It's growing extremely fast. We're seeing that this pie, this pie is going to shift in the distribution of the way retail of the flow of money from offline retail. Obviously, e-commerce is exploding. That's $233 billion there last year. The sharing economy products and services are a total of $6.2 billion of that pie and growing. Now, the types of marketplaces that we're seeing are like the share or rent, like Airbnb, like DestinyMe. But there's also buy-sell marketplaces, and an example of that is where you've got Craigslist. Craigslist is a huge marketplace. It's all things to all people, very untrustworthy place to go, kind of scary for some people, but it's still a marketplace. But we're also seeing brands jump in and power marketplaces. For example, telecommunication companies who are setting up marketplaces for people to sell their secondhand mobile phone. I'll tell you why that's important to think about later as well. Service-based marketplaces— we've actually— I can divulge this now because we've signed the paperwork, but we're powering up a marketplace for Cisco around a really clever way of connecting Cisco-certified engineers with business owners. Barter and credit are other types of marketplaces that have been around a while. There's a system called Bartercard in Australia, and there's other bartering systems, and then there's the whole way of What do we say when we spend money? The exchange of goods and the exchange of credit also taking shape, and you're seeing the likes of Bitcoin and Dogecoin and other cryptocurrencies. And I know we have a banker on the call or two, and looking at what the impact of that disruptive technology is going to do and how that impacts with FDIC and a whole bunch of other things. All of these are converging. On these different types of marketplaces. We are seeing lots of different companies, there are those established and then there are others like, let's just bring up a website view of this. I mentioned Craigslist, this is a marketplace, very rudimentary but full of stuff, you've got all sorts of stuff, all things to all people as I said. What's happening now though, we are seeing verticalisation, we are seeing people who are domain experts come along and say, actually I can do a far better job. Of running a marketplace for art, media and design. They are verticalising and keeping a very narrow focus and they are the marketplaces that are starting to really take off and get a lot of traction versus the all things to all people type marketplaces like Craigslist. We have obviously got eBay and Amazon and I guess what you could say is marketplaces are now becoming the eBay and Amazon for different brands. And they are getting their own white-labeled version where they focus on a particular service, good, or location type marketplace, and being domain experts, then are able to leverage their credibility around that marketplace. So here is Airbnb, a place where we can go off and find a place to stay that may be a little bit more competitive than, say, the hotels, or maybe a little bit less competitive. Let's go on and agree to these terms and do a quick search. But this will give you the— here we go, I've got to agree to a bunch of new terms here. Looks like they've changed their terms of service. These are the things too that are coming up in marketplace creation. What is the legislative impact? What is the regulatory impact of marketplaces? Here's Airbnb, and these are all people's places. Their homes that they have put up here and I can go and book for a night or a week or whatever. Other marketplaces like Airtasker are allowing people to connect peer-to-peer providing professional services. I need somebody to fix a blocked drain, I need a computer consultant, I need some food delivery, office cleaning, a whole bunch more. These are curated marketplaces curated by the community themselves. Rated, commented on, curated by those who are participating in the marketplace. So it's self-regulatory, and the credibility of the people providing the services is monitored by those using the service. That's— which is a really important part, because trust is one of the big barriers to entry within marketplaces. There's a whole bunch. Let me go through and just have a look at some examples. I mentioned DestinyMe, which is what we built our first marketplace on. The Airbnb for office space. One of the examples of why this was a success is not just because I can find an office in New York and I need to use that by the hour, maybe I need it for the day, the week, or the month, and I don't need to get an executive office space or a long-term lease. As a consumer of that space, I'm happy, but also the person providing the space is getting their rent. Supplement it, but also can connect with other businesses or business people that might be synergistic. So in the case of enterprise companies with too much space, they could possibly open up whole areas of their unused space. In fact, Citibank, I believe, has created a coworking space in their bank so that they encourage business people, entrepreneurs into the bank to work. Connect, create relationships with other entrepreneurs and business owners, and ultimately, hopefully, do business with the bank as well. So we're seeing that it's not just about, here's some space, I supplement my rental income. Here's some space and let's connect at a professional level. That's really important. And again, that ties in with social media to be able to validate the person making the booking by looking at their LinkedIn, their Facebook, their Twitter account, verifying that this is a real person, they're trustworthy, they've got a great network. Yes, I would like that person to come and stay in my space. Or in reverse, the person who wants to use the service being able to look at the rating and the experience that other people have had by the provider of that service. Another example, let's have a quick look here, is Desks, Dog Walking and DNA. Here's a marketplace that is specifically around walking dogs. A trustworthy marketplace that's been set up where people are able to track their dog being walked, there's insurance and the dog walkers are vetted and you can apply to be a dog walker and obviously as somebody with a dog I could go in and try it out. It's pretty unlimited what the types of marketplaces that are popping up, right down to the types like 23andMe, I don't know if you've heard of this, type of marketplace. It is a marketplace. It's a scientific marketplace. It's where I can go. I go and get my DNA tested. I buy a pack. It's $99. They send me a pack. I spit in the pack, seal it up, and send it back. They do a complete DNA analysis of me and my ancestry and all my quirks and etc., and I can start to share and find other people. Who I can connect with peer-to-peer, share my DNA with, look at where our ancestry is, and it's also then going into helping with research around diseases, etc. Pretty incredible. The power of this is in the data, and that's one of the secrets to large corporates getting involved in the sharing economy and being part of the conversation, is that the data is extremely powerful at the end of the day. It's not just about a new revenue stream, of which it can be, but it's also about understanding the behaviors of people, of your customers. Lots of different types of marketplaces from dog walking and desks and DNA. It's a growing marketplace. Let's look at, if I can bring up my slide again, let's look at some of the barriers. To sharing and the sharing economy. These are some surveys that were done by CarbonView, and you can see that some of the— probably the biggest issue here, apart from items lost or stolen— now that's okay, that makes sense for a marketplace where physical goods are involved, but what if it's professional services? You probably don't lose a human being. Generally, if you add up the percentages here, trust, privacy, poor quality of goods and services. So trust and credibility is generally the biggest barrier in sum of participation in a marketplace. Now, what we can do to mitigate that, and we have seen with eBay and Craigslist and Napster that those marketplaces have thrived, they were first movers in the marketplace base and they have got a huge following, but trust isn't necessarily a big part of it. That's starting to change and we are seeing that the psychology of the consumer, they are starting to be less worried about their privacy and they are putting information out there, which then allows marketplace owners to derive a trust score, if you like, and then allowing ratings and comments to be a part of that score It's reducing that issue, and trust is the currency of successful marketplaces. Ways to weed out the untrustworthy is that you have this idea of ratings. Now, it's the recurrent rating system of 5-star rating that you might see on Yelp for a restaurant. You might see different ratings for people in the Airbnb marketplace and many other marketplaces. Places is that generally 4.3 out of 5 is average, it's okay. 4 is actually really bad, 4.5 or higher is fantastic. So it's not— the 5-star rating thing is still a science to be worked out, but it's still important that interaction and rating between the supplier and the person who's consumed that supply, booked the room, or had the handy person come over, can be able to rate, because getting rid of untrustworthy people is really important. Now, some of the things that are going on in this space as far as trust is that these trust engines are being built. It's kind of this build it, they will come idea, that if we build a trust engine, people will just naturally provide their information and we can build a trust model around that. I beg to differ, and I think that really what is required is that marketplaces are the first places people are going to go and log in and transact, well before they interact with any trust engine. We end up now with all this siloed information all around the place on different marketplaces where it's not being shared, and that's something that needs to be fixed. It's something that we're looking at fixing on our platform, but being able to have some sort of open standards around trust Just in the same way we have credit scores with banks, having a trust score within the sharing economy is something that will evolve. Not just looking at how many transactions I've done, because the last transaction I did might have been a really good one, but it's the sum of all my transactions over time. Time series data is critical. Then separately from that, who are in my peer group? What is the peer group pressure that might be able to help define really how trustworthy I am. I could have a great score if it's just based on transactions, but in fact within my peer group of people that I'm connected with, they all have lousy trust scores and I could just be the fence or I could be that one person who seems to be trustworthy in the group of criminals. Being able to understand and use peer group analysis, social network analytics, predictive analytics around that is going to be important. And something that we're looking at is to use the same identification around trustworthiness of marketplace participants that's used with organized crime detection, fraud, and terrorist cell detection, to use that as a score for trustworthiness, and then opening that up in an API so that other applications can use that. Other ways too to have trust is to create private marketplaces. We have the idea of associations and that communities of practice, generally people within a community of practice like accountants, like lawyers, like architects, computer science nerds, nurses, sports professionals, fitness trainers, etc., they all connect within their group or their community of practice and a marketplace might be targeted just at those people because there's an implicit trust already, and that can be protected by a private marketplace that would help make sure that that trust is already there. Other ways to do it is through looking at coopetition, allowing across banks in the same way that credit scores are maintained, trust scores can be shared. Because at the end of the day, everybody wants to build a marketplace, and sure, there might be some competitors in in people offering exactly the same services in one marketplace to the next, but ultimately they want to provide a trustworthy experience. So sharing some of that data— so we're talking about sharing economy— sharing data and sharing that to facilitate trust score is something that we're very keen to see move forward. But as I said, other marketplaces that are private that are association-based, that are focused on communities of practice versus just communities of interest would also help that. Other things that, aside from trust, that is a barrier in some of these marketplaces is political and regulatory barriers. You know, the old boys' club. I'm sure we all know about that and maybe we're participants in it. Protectionism and being able to control markets is something that's been very profitable in the past for so many different industries and That's changing. The whole open-ended availability of information and education is enabling people that weren't part of the club to suddenly enter into a market and compete. Politicians, laws, regulations, insurance companies are really starting to struggle with some of these new concepts. Uber, as an example, if we go and check out Uber or Lyft, You've probably heard of Lyft, and Lyft is a disruptor to the taxi industry. So you've got a car, you can become a taxi driver effectively. They don't call it that, but it's upending the taxi industry. You've got a car, hey, I'm available to drive between these hours, and there's a mobile app which allows me to connect with somebody who's driving around the city, and I jump in and I jump out and I donate. Donation is the the technical terminology for paying for that service, and that gets around some of the taxi legislation laws, but it's really disruptive to the taxi industry. We're seeing that happening elsewhere. Now, what happens around insurance and regulation around that? A very unfortunate thing happened with Uber recently, which is a Lyft-like service where you can book an Uber vehicle. Moving people from one place to the next with a mobile app, tap of a button, I can hail an Uber driver, and somebody was unfortunately killed by a driver. Now, how is insurance managing that? And it's those type of things that everybody's starting to look at very closely. Airbnb had some issues in New York recently around the tax that hotels had to pay on bookings that Airbnb people weren't paying on bookings. And that became a very big sticking point. So these political lobby groups are getting involved in the conversation now around the sharing economy, around marketplaces, and they have a lot of clout, they have a lot of money, they're influencing laws and regulations to place barriers, or they can think about how smart it would be to embrace these and become part of the change and use their domain expertise to inject into the conversation. So here's an example of that approach. When we launched Desks Near Me, we thought that we were going to be upending Regus and PB Centres and other executive office spaces. Not true. What we found is that they loved the idea and they were actually putting their listings on it because they wanted leads. So, wow, that was validation and it contradicted what our assumptions were. Something else that happened is we started to see hotels jump in and list their lobby space and put their office space on the Desknearme platform. Now, what happens in this case is that people coming to Desknearme, they look for a desk. Let's go and just do that quickly. I want a desk in Burlingame, we'll see if there's any here. I've got a few in Burlingame. We find a desk space and some may or may not have photos.

Here we go.

Maybe I want to go to New York, so let's say New York. Now in the process of displaying all of this content, we may find that the W Hotels is in here. And it is one of these listings which I will hopefully get to in moments. There we go, the W Hotel New York Downtown. Now, the W loved the idea of being on Destinymeet because they were getting people booking the office space, but also they would end up having somebody stay in the restaurant and buy a beer at the bar, etc. So it was great lead generation for other services, concierge services. But when they turn around and go, well, hang on, I would like to promote my space, But why would I want to promote my listing on Desks Near Me when suddenly somebody goes there and sees that there's 50 other spaces nearby that they then book? So we have a concept of being able to have micro marketplaces within marketplaces. So Desks Near Me has a marketplace, Airbnb for office space, and then having the opportunity to white label within that marketplace, and then for those other participants who are white labelling to trust each other. So you could have a whole chain of hotels that are leveraging the DestinyMe platform, getting public leads sent to them, but also being able to promote their own URL, which pre-filters only their listings and only the listings of others that they trust within their group of micro-marketplaces. And that's been— think of them as the master franchise and the franchisee, DestinyMe being the master franchise and each of these different brands or businesses being franchisees who then trust each other as and when they need to. There's other things to think about too as we look at how marketplaces work. You've all probably booked an airplane ticket, and at the end of the process, after booking that ticket, you now have the option to book a hotel and book a taxi. As we see more and more marketplaces open up, and as standards start to become— start to build and and we have an API, an application programming interface, that wraps around these different marketplaces, being able to create cross-market synergies is going to be a very powerful network effect as well. Whether or not that is a referral that ends up in a commission being paid between one marketplace and another, for example, we have recreational vehicles, RVs Near Me. Let's just go ahead and see if we can pull that marketplace up here. I'll just go on RV now. RVs, I'm wanting to drive around America and it just so happens that there are lots and lots of RV owners who spend a lot of money on a very expensive item and then it sits in the garage for 11 months of the year. So they've got an opportunity to monetise that and again through trust, being able to allow people to book an RV. Now, if the RV marketplace has a cross-marketplace relationship with a camping supplier, maybe it's REI who powers the marketplace or some other— Kathmandu, another camping-type outdoors retail store— they might have a marketplace which is allowing people to list their secondhand equipment. And so now within this marketplace I can have a cross-market promotion which allows me to drive traffic to and from other synergistic or complementary marketplaces after the initial transaction is done. This is one of the things that is attractive to having these vertical marketplaces which really tightly focus, laser focus on the products or services that I'm looking for. Unlike Craigslist and eBay and Amazon where I kind of get lost, because there's just so much choice, we're seeing domain experts leveraging a focused approach to providing services. The operational benefits of participating in the sharing economy by renting out underutilized assets like office space, maintenance tools, camping equipment, experts, Cisco-certified experts, is is a high consideration for brands now. Some other things to think about are marketplaces for marketplaces. We've talked about Lyft and Uber, people who want to turn their car into a taxi and make extra money. Now there are companies that are coming along who are going, hang on, there is so much demand for people to be a Lyft driver, but they actually don't have a car. So there is a marketplace for people who want to be a Lyft driver use their own car to be a taxi, but they don't have a car. So now there's a marketplace for people to go and lease a car by the minute, by the hour, by the day, by the week, or the month, so that they can then use that car and make money. It's just incredible what we're seeing in the different types of opportunities that are coming along. So an example of something that a big brand might want to do around entering into a marketplace. Think of a home hardware supplier where they are a big brand, they are an incumbent, they have got a whole franchise or chain of stores, and they are sitting back going, hang on, people are starting to share their lawn mowers, or they are sharing or renting out their expensive power tools. That's going to eat into our profit. That's not a good thing. We don't want to be a part of that. We're scared of that. Or, well, they could actually realize that people are going to do that anyway. People are going to go to Facebook or they're going to go to a marketplace and possibly find a tool that they could use. Instead of buying it, they rent it, or they rent-buy, or they share it, or they barter for it. So a big brand might come along and go, hey, we're Home Depot. We're going to allow— we could be a distribution center for that type of marketplace. We could set up a sharing service where people can rent a toolkit with all the tools they need to fix their bathroom or unblock a drain. They don't need to buy all that stuff in one hit, so we're going to have these different toolkits that we rent. It's $25 or whatever it is. It's a fraction of the cost to buy all that equipment, but somebody can take it, rent it, In that toolkit is an opportunity for product placement. In the same way brands pay for product placement within a supermarket, brands will pay for product placement inside these toolkits, or even the brand of car being used for Lyft drivers. Hey, we're BMW, we're releasing a new car. If you're an Uber driver, why don't you use this car at half the price because You're driving around a lot, you're part of a business model that's getting high visibility, this is going to be great marketing for us. So just the marketing opportunities are huge. So back to the hardware example, being able to rent out that equipment that then leads to possible buy, or even if it is only a rental, they've probably got to buy the ancillary products. Like they need the paint, they need the glue, they need the sticky tape, they need the washers to fix the tap. It's driving traffic and letting others in the community put their power tools up there and becoming a distribution center where you don't have to rock up at somebody's house to borrow their equipment. It's kind of done at a central place in the same way that a bank opening up their doors to have coworking spaces brings business people in that may not necessarily be banking with that bank. That same idea is driving traffic. Qualified customers who obviously need the equipment coming in, sharing, swapping, renting, and then being sold other goods. Again, becoming part of the conversation. There are so many examples of that. The mobile phone industry or telecommunication industry, secondhand phones are big business, and people are out looking for a particular model of phone. Now, a telecommunication company could sit back and go, well, that whole market isn't where we want to be because it's secondhand phones. We don't want to have to insure those. There's workarounds for that. There's insurance policies. There's a tick option to buy when that secondhand phone is bought, and then you use a third party to provide the extended warranty. Or it's buyer beware. This is a public marketplace. We're a matchmaking service. So, put up your secondhand mobile phone. Now, what do we see for the example of a telecommunications company participating in this marketplace idea. If they are powering up a marketplace, their branding is attached to it, or maybe they create a new brand, but what's important is both the buyer and the seller of a secondhand phone are immediate customer opportunities, because now they are part of a conversation. They have access and permission to provide now to the buyer who bought that secondhand mobile phone, would you like a top-up card for your phone? And for the seller, they no longer have a phone. Maybe they're a prime candidate for a brand new phone and a new phone plan. And for the buyer, again, in 9 months' time after buying a secondhand piece of equipment, they're probably a prime candidate for a new phone. So being part of the conversation even if it's just powering it and not taking any of the transaction and letting the market self-regulate through ratings, through trust, by not taking a clip of the ticket on the transaction of those goods, but then upselling, cross-selling insurance, new mobile phone plans, and then having extremely rich data that they can then market to later is extremely powerful. And we're seeing brands sit up and take notice. Unlike the days when social media started to take off and they thought it was a fad, they're realizing that this new social commerce, collaborative consumption, sharing economy concept is not a fad, it's a trend, and they can be part of it or they can wrestle against it and miss out. So, some of the benefits, just as we wrap up: better view of the customer, increasing revenue opportunity that's otherwise lost, as I I gave the example with the telecommunication mobile phone secondhand market. Capturing data on customer habits and views and using that in a rich way, particularly around predictive analytics and machine learning. Social commerce is the new e-commerce. It's e-commerce being reinvented. We are seeing people moving away from Shopify and other traditional one-way, one-to-many transactional systems to a many-to-many and letting the general public participate as a seller. We are seeing sites like Etsy. I don't know if you have heard of Etsy, but let's just bring that up as an example. Etsy is a perfect example of an e-commerce marketplace that allows anybody to buy from anybody and very focused on some specific categories, but it just shows to go you that this is a trend that's taking off and people are getting a lot of traction out of it. Being able to then measure that and identify where the trends are, seasonality— there are so many rich things that can be mined from that data, it's amazing. The long-term value is around sharing economy marketplaces giving you an opportunity to participate in the conversation that you are otherwise disconnected from if you are not a business that's embracing this whole way of doing social commerce. Moving up the chain is the e-commerce reinvented, it's re-commerce. It could be that you are participating in secondhand sales of your previously brand new sold products. For example, think of an online fashion e-commerce service that sells high-end fashion goods. The moment somebody sells that, okay, well, hopefully they will come back. We'll do a follow-up in 4 months. But what if we then put them into a marketplace with a private wardrobe where they can now sell their item in 4 months' time because fashion's gone out of fashion, but they want to sell it, re-commerce that? We power that marketplace. We sold them the brand new item, we give them access to a secondhand sales marketplace, and we then give them credit. When they do sell it to come back to the store. We know they've sold the item, we now get them back to the store. In fact, we could use the analytics to take all of that secondhand information, secondhand item information, and embed it in our own ecommerce site so that we can show people, hey, people that bought this also bought that, and people— this item is out of stock, however, somebody has a really, really pristine dress that's exactly that model or that style, and you could buy it from there instead. Keeping the customer again on the brand is just critical. Over time, the trust is going to increase. The self-regulation that happens within the marketplace of people reviewing dispute resolution, automation around that, peer analytics looking at the peer group effect and using the same techniques that's used in criminology and fraud detection to define a solid trust model, and then opening that API up to anybody else who wants to use it. And ultimately predictive analytics and identifying where are the cross-market synergies, where are the communities of brands that may want to do some cross-marketing promotion. Just— it's pretty endless. It's a very exciting place to be. There's lots of long-term value. It's not a fad. It does pay to share. Putting collaboration at the centre of a brand and working with small, medium-sized businesses and entrepreneurs to power up marketplaces is what we do. Working with brands like Cisco and other big global brands as well as entrepreneurs to power their marketplaces, that's what we've been doing with the Near Me platform. So we can either go head-to-head with companies that are part of the sharing economy Or we can work together with the audience that matters most to them and loop the customer voice into the decision-making process so that we can be part of those conversations. Running these marketplaces for the customer is going to certainly benefit everybody in the long run. I just want to open up to questions now. I know I've just gone non-stop talking, and hopefully it's been of use for you. I'll just show you a couple of marketplaces while Eric jumps in now and maybe opens up the floor for questions. Some of the marketplaces that we are powering are secure bike lockers that are distributed all over Australia, and people then just rent these secure bike lockers, come online, search for a place that a bike locker exists, and they They rent it by subscription. A lot of food sharing marketplaces, it's incredible how many of those are starting to pop up. Tidier is another marketplace that's about to go live, which is find the best cleaners and organisers and storage experts. That's a marketplace where anybody can become somebody who is an expert in storage and cleaning, and I can come along and book that person. Tidio takes a clip of the transaction. Maybe there are other concierge services that they are offering. So many different verticals that can be approached and attacked, and there are so many different proof points of that going on now with the sharing economy and social commerce just taking off and exponentially growing month on month. Eric, I just want to open up the the floor for questions at this point and happy to answer anything.

I am willing to bet, I don't know about Jeff, but I'm willing to bet if we had webcams on our audience, we'd see a bunch of people with their mouths wide open going, wow. What do you think, Jeff? You think that's what we'd see? Yeah, I was brainstorming. I was doing lots of brainstorming as I was Really thought-stimulating information, Adam. Thanks for sharing it.

No, my pleasure.

One of the questions that came in, because obviously the larger the metropolitan area, there's a lot of stuff that you've shown in San Francisco. What would you say the adoption rate of peer-to-peer options is from a nationwide perspective? All the way down to rural Midwestern kind of communities. Is it more of an urban thing or is it really more of a people thing and it just needs to get out there?

It's a people thing. Yes, we see these sort of fads start in the big concentrated areas and cities like San Francisco and Sydney and New York. Airbnb, a case in point of massive growth In rural areas. We're seeing dog walking services in all sorts of areas, and it's not just— yes, you get the effect of a lot of volume or a lot more people in the cities, but think about how a marketplace could be in rural areas where, hang on, I've got this really expensive tractor that sits in my yard 90% of the time. Yeah. And that I could maybe build a little sharing economy, a neighborhood, close-knit community of farmers who put their equipment up there and just share it altruistically, or maybe they rent it. Rural areas have another way of being able to jump on the marketplace bandwagon. Food distribution is another thing. We're seeing food hubs look towards marketplaces in rural areas where the farmers market movement is growing. People are then looking at, well, hang on, why don't I set up a marketplace? Everybody, whether they're competitors or not, they go on the marketplace. Some might do a micro marketplace inside that one, they white label, but for the most part, it's one place where I can come in and I know I'm going to be in Montecito or Santa Rosa and I'd like some home-cooked meals or maybe I'm looking for a supplier of fresh organic produce. These sorts of marketplaces that you're seeing happen, they're happening naturally anyway in rural areas. People are sharing stuff. I see it both in the cities and the country areas and globally. Europe, as I said, is just so surprising to see what's happening out of Europe. It's definitely part of a generational shift as well, that whole idea of consumption and I need to own 2 of everything and that's mine. I remember being a kid, I hated sharing. I wouldn't share. That was just how I grew up. I grew up that there was enough. I wanted mine. That was mine and I don't share it. My kids themselves are quite happy to share. There are certain things they don't, but my 6-year-old is now subscribed. This is amazing. I was spending a fortune on Lego. The boys love Lego. You can drop $100 on a nice Star Wars Lego piece and my kids will put it together in less than a week and then they are like, Okay, next one please. I'm not going to spend $400 a month on Lego, so I can rent it now. I can rent for $15 a month. I rent Lego and the boys get their Lego sent to them. It's in a special pack. It's all sanitized and washed. They put it together. They're happy. They pull it apart. They put it back in the bag. I put it back in the mail, which is free. It's a free mail reply. And I get another one. They are constantly entertained with new Lego and way cheaper. For 10 months, $150, I have had 10 different Lego sets that would have otherwise cost me a lot more. Sure, you could say, well, I want to own that and I will put it on the shelf, and I will still supplement that. But overall, this whole idea of renting or subscription, my kids are already part of it. They are doing it. It's changing. It's kind of like it's just going to be a mind shift, and we may not be completely on board, but I know everybody I'm talking to in different rural areas as well as the cities at a certain age level, it's just what they're doing. They're very conscious of the environment, wastage, etc. So I think it's something to embrace.

Well, even though— and you say that even though they don't exist anymore, I think of way back in the day When Blockbuster came around, this was the whole Blockbuster play, is you don't want to have to buy all these movies. Why own it? You're going to watch it 2 or 3 times and then it'll sit on the shelf. They just didn't adapt to the digital marketplace. And then along comes companies like Netflix and Hulu and some of the others that displaced them. But it's, it's, it's kind of like the resurgence of the skinny leather tie, you know, what was— What was in vogue years ago is now coming back. It's just in a different format, and it's embracing the technology. I've seen this done informally between friends and connections on places like Facebook where they'll say, hey, I need to borrow a leaf blower. Does anybody have one? So it's been done by people, and they've realized that I can use this social connectivity engine that's been created To tap the knowledge of people that I'm around. I know them, but it doesn't make sense for me to pick up the phone and call everybody that I know. But I can bounce it out to all my friends in a blast on Facebook and get to 20 or 30 or 50 or more people.

Exactly.

Yeah, there's lots of gears spinning in my head. This has been really eye-opening, and there are some sites here that I absolutely had no clue Well, some great links around identifying others.

A gentleman called Jeremiah Owang here is an analyst particularly focused on the sharing economy, collaborative economy, collaborative consumption, and I might just— I'll just pop that in the chat window so you've all got a link to that. I think if I go and say organizers and panelists, how do I send that to everybody? I'll just pop it in the chat panel and you can pass it on, Eric.

Yep, I'll just pop that in there. We'll get it on the Free Webinar Wednesday site, absolutely.

Awesome. There's another one that I've got to put up here, and that's collaborativeconsumption.com. They're another site, very active, that have a directory of a whole bunch of various types of marketplaces that are opening up. I think we're just hitting the tip of the iceberg right now. There are some analysts that are coming along to ride the wave and try to be a first mover in this space. There are platforms like us who are coming along, who see the trend and go, traditional e-commerce is not going to keep up. We need a new platform, and particularly one that's based around trust and being able to share trust over time and share analytics. That's something that people will be able to opt into. We're definitely not about sharing everybody's data, but it's there available if people do want to share it. Certainly at a trust level, people do want to share trust. Just like a credit score, trust score is going to be something that's critical for the longevity of the sharing economy, and it will work out. Somebody will crack the nut.

Well, I just looked at the clock and we are at the top of the hour.

That's great.

That flew by, and we could probably spend another half an hour just chatting, but as is always the case when we do something like that, that just creates an opportunity to invite you back and have a number 2 if you're willing to do that at some point down the road, because I think you've hit on something that I think has got some very interesting economic and cultural and interconnectivity elements to it that I don't suspect is going to go away anytime soon. So this has been really good.

Thanks, Eric. Yeah, I'd love to come back and maybe just have a more informal Q&A sort of panel type thing, and we could invite others along that just pose the questions around, you know, what are models that could work and brainstorm things. We're learning so much from people reaching out to us. I'd love to share that knowledge.

Yeah, great. Good. Well, Jeffrey, any closing thoughts on your part before we put a bow on this show? This is awesome. One of the comments in the box says, best Free Webinar Wednesdays yet. Very cool. Good deal. Well, I set Adam up. I kind of gave him a little bit of pressure beforehand. I said, we've had some awesome shows. We would like to make sure that you're one of them. And I didn't have any doubt. I always enjoy chatting with you. You are one of the smartest guys I know when it comes to anything Internet related and digital. You've always got some great ideas and thoughts. It's just really a pleasure to have you with us and share your info. It was cool that we are kind of your first public display/presentation of Near.me. We certainly wish you the best in your new venture. Even though I'm sad you are not at Adobe anymore, you are still doing really cool stuff. I'm excited about it. Thanks, Eric.

Yeah, thanks. I really appreciate coming on board, and as always, it's a pleasure to chat.

Good, good. Well, that concludes this week's show. I do want to make sure everybody knows we're going to actually take a couple of weeks off. I've got a vacation scheduled that's going to knock me out for at least a week, maybe a week and a half. So we're probably going to bow out next week and then likely the week after. So keep an eye on FreeWebinarWednesdays.com for show updates. We'll send our email notifications. You can follow us on Facebook as well. But I promise you, when we come back, we'll have another great guest and another great show. But until then, everyone, thanks for joining us at FreeWebinarWednesdays.com. On behalf of Jeff and Adam, we'll wish you a good week, and we will see you online at FreeWebinarWednesdays.com. Bye-bye, everybody. Bye.