The structure, economics, and strategy of sharing economy companies dramatically complicate the design and validation of a successful business model. In this session with Ted Ladd, professor of internet economics and a research fellow at the Center for Disruptive Innovation at the Hult International Business School, you will learn, apply, and critique several Lean extensions to decrease risk and accelerate return for your sharing venture.

1. Ted Ladd PhD
Professor of Entrepreneurship
San Francisco | Boston | New York | Ashridge | London | Dubai | Shanghai
Leveraging Lean
in the Sharing Economy

2. Sharing venture:
1. an online platform
2. between two sides of a transaction
3. that reduces coordination costs
4. to provide access without ownership.

3. Challenge
Sharing ventures are 4x harder to design
1. Business Model for Suppliers
2. Business Model for Demanders
3. Same Place
4. Same Time
• Why?

4. Network Effect
• Value for each user ≈ # of users
• Bigger = Better
• Economies of scale of demand

5. Problem: Theory is incomplete
• # of users ≠ value for each user
• Value = volume x diversity
• Example: Smartwatch apps
• Where to look?

6. Sales Cycle

7. Diversity

Volume


8. 1: Diversify acquisition channels
• Keep old Canvases
• Evaluate sub-optimal channels
– For non-overlapping appeal
• Rotate channels for diversity of value
• Example: Hooves.dk
• When?

9. First Mover Advantage
• Typically, a myth
– Second Mover Advantage, Fast Followers
• Network Effect  Winner Takes All
– Explosive growth after tipping point
– First Mover is real!
• Renewed attention on Early Adopters
– To drive indirect network effect

10. Adoption Cycle
Area under curve = installed base
Moore, G. (2002) Crossing the chasm: Marketing and selling disruptive products to mainstream customers
Venture maturity 
#ofcustomers

11. (Poor) Options for Early Adopters
• Spend on marketing
– Increases early costs
• Lower prices
– Reduces early revenue
• Arrive with deep pockets
– Expensive capital
• Build  Measure  Learn (Experiment)
– Shows biz model to competitors
– Jeopardizes early reputation

12. 2: Formalize Customer Discovery
• Data for Hypothesis Testing
• Conversations as Warm Sales Leads
• Track, revisit, encourage, persuade
• Explore and exploit for ambidexterity

13. Leverage Lean for Sharing
• Network effect promotes Early Adopters
1. Rotate channels for diversity of demand
2. Dual use for Customer Discovery
Ted.Ladd@Hult.edu

14. Related Research from Ted Ladd
• Limits of Lean
– Harvard Business Review (2016)
• Customer Interaction and Experimentation
– Academy of Management conference (2015)
• Social Venture Canvas
– Stanford Social Innovation Review (Spring 2015)
– International Journal of Entrepreneurship & Innovation (Feb
2017)
• Customer Development and Effectuation
– Management Teaching Review (March 2016)
• Impact of Lean on Risk Aversion
– Drafting