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Ask the Experts: How the Sharing Economy Impacts Software Firms

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Editor’s note: The media is bringing a lot of attention to the on-demand and “sharing economy.” We asked several experts in their fields to share their opinions regarding how it affects software companies and also asked them to share their primary external source of business insights. Our five experts for this week’s question are: 

  • Q1: By the end of 2016, in what way(s) do you think the rapidly developing “sharing economy” will affect software businesses?
  • Q2: Please share with your SandHill peers — When it comes to gaining business insights and info on market trends, what is the one external blog or publication you consider an ongoing “must read?” 

Christopher Lochhead, co-founder and partner, Play Bigger Advisors – 

We see the sharing economy empowering the software industry in at least three ways:  

1. Driving more software innovation. The more people get used to giving away, trading and sharing things, the more likely they are to do this with software. In this context, “sharing economy thinking” will increase the amount of open source software while creating new models of collaboration among developers. 

2. Converting sweat into equity. Just like Airbnb allows you to monetize your couch, one of our companies, Equity Directory, allows you to monetize your skills. It is a platform that matches great startups with talented people who are willing to share their skills for upside. 

3. Sharing IP. Another way the sharing economy is changing the game is in sharing ideas. From Elon Musk on one level giving away Tesla’s patents or people sharing their learnings on sites like Quora. There is a new level of idea sharing and open dialog today in the software business that is unprecedented.  

Chris’ must-read publication is the Harvard Business Review. He says, “For decades HBR has been in a leading place to bone up on legendary ideas and from leading thinkers. We love it.” 

Andrew Bagrin, founder and CEO, My Digital Shield – 

Andrew BagrinEveryone is becoming the Uber of X, or the Airbnb of X. Everywhere we’re seeing very similar type apps that allow people to share resources. This is a powerful tool and I can see another level of explosion that will happen. But where there is economic growth, there will be a new way for people to get around paying for taxes and another mechanism the government will start looking at to collect taxes. 

I predict more platforms that enable you to enable apps that are hosted on their platform and allow you to now offer the next social sharing app. Now anyone with an idea will be able to build something; just add things like scheduling, payment, location, resource, etc. and put together a business model. Borrow a bicycle, need some milk or alcohol when the store is closed, etc. 

I can see a wave of non-cash payments that would happen. It’s not necessarily bitcoin but could be some other point system. As an example, in some countries in Africa they use “air time” as a currency because everyone needs air time on their cell phones; it can be transferred but is not taxed. 

As this new economy develops and other taxed items start to produce lower revenue for the government, it’s only a matter of time before they start looking to tax any transaction in these systems. Think Amazon and shipping out of state. Of course this is probably not a 2016 thing. 

Andrew’s “must read” publication is: Krebs on Security. 

Lauren Kelley, CEO and founder, OPEXEngine – 

The evolution of the US and world economy towards a “sharing economy” will have a tremendous, expansive impact on the software industry. Software is the backbone of the sharing economy; without software, we wouldn’t be moving in this direction at all. Software is required to actually share products and services as well as to manage delivery and manage customers. The move towards a sharing economy gives rise to all sorts of new software applications and technology requirements, which will drive software revenues, hiring and innovation. Much of the growth will come in the form of Software as a Service (SaaS) applications, as well as Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) technologies.  

We are just at the beginning of a global tidal wave towards offering products and services on a share or rental basis. I expect there will be a compounding effect that as more products are offered for share, more applications will be developed to make it easier to do so; then the vendors of these software applications will invest great energy – and capital – into helping their customers be more successful, which will attract more companies and entrepreneurs to offer products and services to share. 

This, in turn, will attract more investment and make the consuming of “shared” products more common so that as new shared products and services are offered, their acceptance in the market will happen faster and faster. And more technologies will be developed in order to facilitate sharing as well as make the selling of shared products and services easier and to manage the business of “sharing.” Innovation in this area is in its infancy. 

So, just as nuts and bolts were the basis of the manufacturing economy, software is the basis of the sharing economy. 

Lauren’s “must read” publication is Inc

Avinash Lakshman, CEO and founder, Hedvig Inc. – 

Avinash LakshmanToday’s sharing economy fueled by new, modern applications and the data they are able to gather, is disrupting long-established business models. Young, agile startups that need application support above and beyond what legacy infrastructure can provide are driving innovation in software. The old ways are just not fast enough and won’t scale.  

Sharing economy startups have achieved massive valuations demonstrating that it is no longer about the small competing with the big. It’s about the fast competing with the slow. In today’s world, speed and agility are paramount. Sharing economy companies invest in software – and software development – to adapt to changes faster. Technologies like distributed systems, software-defined infrastructure, and big data analytics make these businesses possible. Everyone wants to hire DevOps data scientists! Larger, more established companies have been slow to make this transition. Companies that invest wisely in technology that enables change and fosters adaptation will be the winners.  

The sharing economy is one of the biggest forces driving new priorities within the technology community and this will continue for the foreseeable future. In 2016, businesses built on software will continue to evolve as the pace of innovation increases. The biggest irony is that software companies need to be as agile as the products they sell. The sharing economy is a response to today’s fast-paced lifestyle and the software that helps startups disrupt old businesses can just as easily be disrupted. Tomorrow’s software will need to focus on adaptability, interoperability and scalability like never before. 

Avinash’s “must read” publication is Facebook. He says, “It’s partly because I worked there and helped build the product, but more so because it’s the best way to get timely insights and thought-provoking dialog on business and market trends. I share with and read news from CEOs, investors and developers across the industry.” 

Stewart Florsheim, VP marketing, Kenandy, Inc. – 

Stewart FlorsheimI think we will see an acceleration of the changes we’ve been seeing in 2015. More and more participants are entering the sharing economy. Not only are people sharing homes and cars, but they are also sharing clothing, tools and services. As a result, we’ll see an increase in the number of apps to support the participants. I also think these apps are setting a new bar in user-friendly software. For example, the app for Lyft is so intuitive it anticipates every action I need to take. 

We’ll see an increase in the number of open source development tools. InfoWorld even sponsors annual awards, called the Bossie Awards, to rank the best tools, and Forrester Research has been tracking tools and usage. In fact, in a recent report, they said that four out of five developers use open source. As a result, the most popular tools will just get better and better through collaborative use, creating more competition for their commercial counterparts. We’ll also see an increase in the number of service providers that spring up to support (and capitalize) on the tools. 

And we’ll see an increase in the number of free (and freemium) apps. The Apple App Store has over 1.5 million apps. Sometimes there’s a specific need that drives the app (e.g., to get a handle on traffic), and sometimes folks just develop apps for fun (e.g., to develop cool games). At some point, I suspect one will inform the other, i.e., the ability and desire to develop apps may lead to entirely new ways to socialize and do business. 

Finally, as software user communities continue to proliferate, we’ll see more and more sharing of knowledge, ideas and reports to enhance the software ecosystem. 

Stewart’s “must read” publication is the CIO Journal (part of The Wall Street Journal). 

Andrew Bagrin is founder and CEO of My Digital Shield (MDS), providing Security-as-a-Service (SECaaS) for small businesses. Prior to MDS, he was director of service provider business development at Fortinet. Earlier he worked for network security consulting companies, served as director of network and security with Regal Entertainment Group and worked on managed security services at Check Point Software Technologies. Andrew has been quoted in the New York Times, Bloomberg BusinessWeek, Small Business Computing and Business Solutions Magazine. 

Stewart Florsheim is VP marketing at Kenandy, Inc. He brings over 25 years of experience and is responsible for Kenandy’s marketing communications and user assistance tools. Prior to joining Kenandy, Florsheim was director of learning products at Advent Software. He managed a team responsible for the company’s client website as well as all documentation, online training and user interface design. 

Lauren Kelley is CEO and founder of OPEXEngine. She brings 25 years of tech company management experience to OPEXEngine, as well as six years as an international economist at the U.S. Department of Commerce’s Office of Computers. She managed worldwide sales and strategic development for ecommerce pioneer, Art Technology Group, managed 20 countries for Borland Software, and helped build Compaq Computer’s business in Eastern Europe in the early 1990s. Ms. Kelley is currently based in Boston and has previously lived and worked in London, Paris, Munich, Bonn, Berlin, and Kingston, Jamaica. Contact her at lauren@opexengine.com.  

Avinash Lakshman is CEO and founder of Hedvig. He founded Hedvig in 2012 after co-inventing Dynamo while at Amazon (2004-2007) and Cassandra at Facebook (2007-2011).  

Christopher Lochhead is a veteran CMO turned strategy advisor who is a co-founder and partner at Play Bigger Advisors.

 

 

 

 

 

 

 

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