Outside Innovation

The Peer-to-Peer Economy Is Growing

I received a thoughtful reader response from Jeff Conklin on my recent Zopa case study/update. Jeff wrote:

“Your piece about Zopa (which I hadn’t heard of) is fascinating, and reminds me of a quote I saw on LinkedIn yesterday:

‘In 2015 Uber, the world’s largest taxi company, owns no vehicles; Facebook, the world’s most popular media owner, creates no content; Alibaba, the most valuable retailer, has no inventory; and Airbnb, the world’s largest accommodation provider, owns no real estate.’ (Marcella Shinder, Nielson)

It sounds like a Zopa-like company might become the world’s largest lender (investor?), without any capital.

What is going on here? It appears there’s a whole new niche in the economy for P-to-P coordination at scale. Is there a name for that niche? What does it look like when you take that model to its logical limit? Does it make large companies at risk of being replaced by networks of independent agents supported by coordination apps (i.e., Uber and taxi companies)?”

I agree with Jeff’s observation that something profound is going on here.

P2P in Finance. I just returned from Africa, where P2P money-swapping via mobile phones is ubiquitous. The primary form of banking for most families is Savings and Credit Associations (SACCOs) that are formed by groups of villagers in every community. People put in a few dollars each week, and borrow money at interest from the kitty when they want to buy a pig or fix their roof. At the end of each year, the profits are distributed out based on the amount each person has saved/invested. This tried and true model has been flourishing for decades in third world countries. Zopa and other online savings and loan enterprises around the world are an electronic equivalent of a “spread the risk” model that has been well-proven.

Every mobile network in Uganda lets you move money from your phone to someone else's phone.

 

Peer-to-Peer Lending for Retirement Savings?

I’ve been following a fascinating development in the U.K. Budget process this month. It appears that Britain may be on the cusp of legitimizing P2P Lending as an investment vehicle for tax-exempt retirement savings. If this happens, it’s likely that P2P lending both to consumers and to small businesses will increase dramatically. And, if the financially conservative Brits can do it, why not other countries?

Peer-to-peer lending (the electronically-enabled kind) marks its 10-year anniversary this month. Zopa was the first business to create a really viable model that enabled consumers to lend directly to one another with low risk. Its innovation included spreading the risk. Each amount you loan was spread across small loans given to 50 different borrowers. Zopa has evolved and simplified its offerings over its 10 years in business. It has spawned hundreds of imitators and competitors. Zopa remains the leading P2P lender in its local market.

One of the things I most enjoyed about revisiting Zopa this week was browsing around their Zopa's customers’ forum. You can get a really good idea of how well a company is doing by eavesdropping on its customers’ conversations with one another, particularly when there are 10 years’ worth of conversations to mine. The Zopa Customer Forum provides a fascinating glimpse into the sociology of peer-to-peer lending over the last decade.

We first wrote about Zopa in 2006 (both in my book Outside Innovation and in a longer case study). In this new case study (which is available for download to Customers.com Strategies’ and Technologies’ subscribers), we bring you up to date on the company and its evolution.

Zopa: Peer-to-Peer Lender Celebrates 10 Years
Spawned a Global Multibillion Industry; Still Going Strong
By Patricia B. Seybold, CEO & Sr. Consultant, March 20, 2015

 

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How to Create Senior-Friendly Services & Communities

Several people sent me the same article from this Sunday’s New York Times: Retirees Turn to Virtual Villages for Mutual Support. They all knew that I’m interested in, and working on, the creation of “virtual assisted living” solutions. The article describes “Virtual Villages” – most of these are part of the Village-to-Village Network, which started with the creation of the Beacon Hill Village in 2001. What interests me about this grass roots movement to create senior-to-senior support networks around the country and around the world are three things:

1. It’s a great example of customer-driven innovation. Seniors are banding together to create the same services they would enjoy if they moved to a purpose-built senior living community, but without moving out of their own homes.
   
   
2. It speaks to my condition. I just turned 65, my husband is older than me, and my mom is older still. We are figuring out the best living and support arrangements for aging with grace.
   
   
3. I’m now immersed in such a grass roots effort in my own community (which is the topic of my article this week). Among other things, we’re trying to decide whether to join the Village-to-Village Network or take our own path.

In future articles, we’ll describe some of the lessons learned from the Village-to-Village movement, and I’ll keep you posted on our own efforts in Boothbay, Maine. If you’re involved in similar efforts for and with your own family members and communities, feel free to reach out.

Crowd-Sourcing Safety in War Zones

Given the recent news reports about chemical weapons in Syria, terrorist attacks, violence against citizens, and warfare waging in many cities around the world, I was struck by the fact that the Financial Times newspaper devoted coveted space on its first page on September 3^rd, 2013 to an article about two mobile phone apps currently being used in Lebanon, entitled: The must-have accessory for war—app that keeps you out of danger. The first App is called Ma2too3a. The FT reporter, Abigail Fielding-Smith wrote: “It takes crowd-sourced information from its users about protests, traffic, roadblocks, and clashes and then feeds it into a map.” The developer, Mohammad Taha, developed the app after his wife and children got caught in gunfire driving home from school in Beirut. They were OK, but quite frightened. This app has more than 80,000 downloads.

Another mobile app under development is described by Abigail Fielding-Smith in the same article: “The idea of Firas Wazneh’s ‘Way to Safety,’ is that users can record gunfire and send it to the site, which will identify the weapon from a sound database and triangulate recordings to pinpoint the exact location and type of fighting.” 

As I read about these two different, but related, uses of crowdsourcing for mobile phone apps in Beirut, I was struck by how powerful and useful our mobile phones have become as literal life-saving devices, and how awesome it is that crowdsourced information can be quickly harnessed and mobilized to help people help each other. My other reaction: what is our world coming to that this is the way people have to live!

Patterns in Innovation: Bottoms Up Activism

Last week, I immersed myself in the wonderful Business Innovation Factory community by attending the BIF-8 conference in Providence, RI. I always find great case studies to pursue at this event, so stay tuned! For my overview “trip report,” I stepped back and squinted to discern the patterns and common themes that I took away from this rich tapestry of storytelling and conversations. A few things really pop out:

1. People of all ages are building networks (physical & virtual) to make a difference in their world. Despite the economic malaise (or because of it) there’s an abundance of grass roots social movements at the local community level and across the country tackling everything from building playgrounds, to reducing gang violence, to improving the lives of homeless children, to bringing peace of mind to the mentally ill.
   
   
2. New forms of institutions are turning up to take the place of the ones that no longer work—for diplomacy, for education, for healthcare, for citizen-led government, for city-planning.
   
   
3. Customer-led, customer-engaged, citizen-led movements and organizations are where most of the action is. We’re moving beyond social networking to social working.
   
   
4. We now know enough about how to create customer-engaged business models and how to support social movements that we’re entering a meta-model era. There are now “platforms for participation” with online tools and structures that can be used as a foundation and/or a model by business and social entrepreneurs.
   
   
5. The biggest boost to our economy will come from life sciences, as our next generation of programmers creates new bio-fuels and new healthy pathways and we tap the power of the human brain to overcome physical disabilities.
   
   
6. To increase our happiness quotient, we need to counter the seduction of our ever-present electronic gadgets by focusing on the present moment, indulging in physical face-time, and experiencing life as we do music.

How Can You Keep Facebook, Google, et al. from Tracking You and Your Friends?

I’ve been blowing the whistle on both Google and Facebook recently for their customer-unfriendly approaches to tracking our activities and the activities of our friends. (I don’t plan to stop there. Next, I’ll take a look at Apple’s privacy practices and Microsoft’s.)

I’m not complaining about the trade-off between using free services and receiving targeted ads in exchange.

I AM complaining about the routine collection of very detailed information about each of us—logs that are not anonymous but connected to our identity, our computers/phones and our physical location, and the actual activities we’re doing online. These are logs that are not only able to be used by Google and Facebook for ad placement, but they can also be used by any entity that claims it has the legal right to spy on any of us.

I am ALSO complaining about how difficult it is for customers to:

a) Know exactly what is being tracked

b) Understand how to turn off tracking

c) Keep the people in our social network from inadvertently violating our privacy

d) Keep applications and other websites that are “in” these companies’ networks from compounding the problem by adding their own tracking and aggregation on top of what is already being tracked about us

The Dangers of Facebook's Non-Optional Timeline

"OMG, I've been Timelined!" is becoming a common lament among Facebook users these days. Facebook is making a sweeping user interface change that:

1. Is mandatory for both business and consumer pages

2. Entices consumers into capturing and sharing life events for easier data mining and target marketing

3. Encourages users to adopt applications that log their actions in the virtual and physical worlds

4. Is promulgating a de facto standard API for defining actions and objects on the Internet

5. Seduces Facebook users into violating their friends' privacy without their consent

Customers Want to Interact With Each Other In and Around Their Activities and Projects

By Ronni Marshak

As we continue to do our web site audits on how well companies “manage our stuff,” Patty Seybold surfaces some insights based on our research and our customer engagements. As customers describe how they’d ideally like to get things done in the perfect world, a subtle requirement emerges: at the core of the next generation of win/win business models are customer-centric ecosystems that don’t just answer product or business transaction questions, but, rather, address the issues of how do I get things done. And, for advice, they turn first to their inner circle of family, friends, and colleagues; next to their outer circle of people out there in the world who are facing the same challenges; and, only as a last resort, to the subject matter experts that are associated with your brand.

Build Community Around "My Stuff"
How Will Online Communities and Social Networks Evolve?
By Patricia B. Seybold, CEO and Sr. Consultant, November 10, 2011