New biz ideas can ride the waves of COVID’s bumpy curve
The time is right for entrepreneurs, freelancers, and giggers
Product makers and inventers are collectively pivoting as the effects of COVID-19’s waves swell through the economy — a rolling ride where openings for new business ideas can unexpectedly be found at each curve.
Enterprising products and services so far include: productivity software platforms, clear plastic protective shields, robot-driven rovers to deliver essentials, and luxury hotels hosting co-working spaces. What original designs will be next? Perhaps the sharing of innovative seating pods for schools or entertainment venues?
The pandemic has also accentuated the direction toward sharing and gigging — already trending during recent years.
“What’s fascinating is to watch bright people continually finding niches in the economy where there are opportunities to create new ways of bringing those buyers and sellers together,” said Robert Kirchman, Truckee Meadows Community College Management Professor. “It’s been demonstrated that there are now more ways to create marketplaces that connect asset owners with customers.”
He calls the sharing space the “collaborative economy.”
In addition, an international entrepreneur and biotech engineer predicts that gigging will become the norm for a vast amount of jobs in the U.S. and abroad.
“It will not be called the gig economy any more, it will just be called ‘The Economy,’ so that the future work will be more — instead of this, you know, pyramid where you have the management, and then you have the HR and finance, and then you have the workers — now it’s distributed,” said director of Appjobs Global, Tobias Porserud in an interview on Mark Anthony Peterson’s May 26 podcast of Gigging: Everything & Sharing Economy.
Kirchman, veteran entrepreneurs, and other startup experts recommend that new collaborative business starters protect their idea, focus on execution, pay attention to hidden costs, and anticipate an evolution toward flexibility and security in the wider gig-based infrastructure.
In Silicon Valley, copying is called “knowledge sharing”
Professor Kirchman cautions entrepreneurs with ingenious collaborative ideas to practice stealth when introducing their new concepts.
“We have seen the extreme consolidation of online services and intermediation by Google, Amazon, and the like,” he explained. “These are obviously companies with virtually endless access to capital.”
He cautions that large companies such as Google can quickly outspend a small businessperson, and says it may be wise to stay in quiet mode for some time until a new business takes off.
“A good idea that was noticed by one of these companies would have to face the risk of being overtaken in short order,” Kirchman added. “You have to protect your intellectual capital.”
Big tech companies are, in fact, scoping out fresh and inventive startups.
Fast Company writer John Paul Titlow noted a Wall Street Journal 2017 report revealing an internal system at Facebook monitoring upcoming, popular apps.
“This ‘early bird’ warning system reportedly utilizes mobile usage analytics technology from Onavo, an Israeli startup Facebook acquired in 2013,” Titlow wrote in his article, “Facebook is spying on your phone habits to figure out which ideas to steal next.”
Wesley Harris wrote on Medium.com that Google launched its program Duplex in 2018, less than a year after he and his co-founder Jeff introduced the virtual assistant John Done. Both systems can telephone businesses for you, using human-sounding voices.
His software — in July 2017 — completed tasks such as scheduling appointments, making restaurant reservations, asking questions about holiday hours, and ordering flowers. Google Duplex schedules salon appointments, makes restaurant reservations, and asks for holiday hours, he added.
Harris thought about how easily Duplex would integrate with customers’ productivity tasks through Google Assistant, and then decided to pivot, iterating John Done to become a digital assistant to help manage phone calls.
“How does it feel? Validating, actually,” Harris wrote. “I knew it was a good idea.”
Good execution is just as important as the ingenious idea
Many entrepreneurs agree that idea-stealing is common, and that execution is more important than being the first one to have the great concept. Large companies are not as good as small startups in making swift decisions — smaller companies can more easily iterate products on the fly, wrote Aquiles La Grave, founder and CEO of Brandzooka.
“If you have a unique idea, can execute it and do it fast, you may have some staying power,” wrote La Grave on Entrepreneur.com. “Startups are a speed play. Small companies usually have 18 to 24 months before they will see even the beginning of competition. Tip: The way you become valuable is by literally coming out of nowhere and rushing the marketplace before anybody else knows what happened.”
Good execution involves the effectiveness of an organization to set goals and make decisions that continually improve the quality of its product or service, respond to changes in the market with competitive pricing, and grow its customer base. Execution also is about increasing revenue while keeping costs manageable, and acting with timeliness to deliver the product. It is simply getting things done.
Proactive steps to deal with imitators can be integrated with your execution strategies.
Chief editor of IdeaToValue.com Nick Skillicorn recommends four ways to manage possible “copycat” designs:
1. Be clear yours is the original high-quality product
2. Get a product out there rapidly — without asking for funding on platforms where you reveal your idea to the general public — and then quickly iterate and improve as you go
3. Invest in long-term strategies; branding, building a strong reputation, and communicating with customers
4. Innovate with approaches outlined in the Deloitte Development LLC system Ten Types of Innovation, including the way your company is configured, what complementary products you offer, and unique ways to deliver your products and services.
And don’t forget to research city, county, and state regulations in your industry.
“I’d assume there’s nothing that excludes these (sharing-based) businesses from all the regulation that would impact any other type of business,” Kirchman said.
Intermediaries cover only some of the costs of business
Collaborative, or sharing, businesses typically are structured so that independent workers log on to an online intermediary platform such as Uber Technologies, Inc., Airbnb, Inc., or Fiverr® to sign up or bid for individual gigs. The intermediary sets guidelines, expectations, and sometimes collects and remits taxes on behalf of workers, but they do not pick up all of the giggers’ costs.
For instance, costs for Uber driver-partners to enter Nevada’s market include a $200 state business license, and expenses involved with making sure the tires and brakes of their personal vehicles are prepared to pass Uber’s vehicle inspection. In addition, Las Vegas is in Clark County, and transportation network company (TNC) drivers there are required to hold a county business license.
When entrepreneurs develop their collaborative-based business — or workers sign up for jobs — Kirchman recommends that all costs should be evaluated; what is paid by the intermediary, and what is owed by each individual gigger.
“(For instance), who pays the asset owner for wear and tear, and depreciation,” he asks. “Who pays DMV fees, registration, gasoline, and insurance?”
Other questions involve whether workers need to bond themselves or pay for their own background checks. These costs should be considered, along with their time.
Regarding responsibility for taxes, one example can be seen in the Airbnb model.
“Airbnb calculates local taxes and collects them from guests at the time of booking,” Kirchman said. “Airbnb pays the taxes on behalf of the individual property owner.”
The gig economy’s infrastructure will evolve to include more flexibility and security
Collaborative businesses and the gig economy started off humbly, but grew and monetized quickly.
“Ten or so years ago there actually were a few examples of more-or-less genuine ‘sharing’ ideas,” Kirchman said. “Originally, you could get a Lyft ride and were just encouraged to give a donation to a driver who may have given you a ride primarily because he wanted to contribute to a reduction in traffic density. That didn’t last long. It’s human nature to recognize the value of assets put to good use, and of the people who can provide and operate those assets. That’s true whether you’re the person with the asset and skill, or the person who needs those things. So we end up putting prices on such things in recognition of their value.”
The AppJobs Institute based in Stockholm collects data on the gig economy to provide insights on trends, and to support gig workers, Porserud explained in the Gigging podcast.
The AppJobs Institute based in Stockholm collects data on the gig economy to provide insights on trends, and to support gig workers, Porserud explained in the Gigging podcast.
The AppJobs.com platform so far has 1.2 million members in 40 countries, including 600 cities. Members give peer-to-peer reviews on about 1,000 gigging app platforms. The reviews include hours worked and pay earned while fulfilling jobs on the app platforms in various cities. Subscribers to AppJobs.com include both independent workers, and the companies hiring for gigs.
Porserud estimates that there were only two gig app platforms 12 years ago — Uber and Airbnb — and predicts that there will be more than 10,000 by 2030.
He explained that the expanding gig economy’s infrastructure will grow right along with it — for example, to better meet workers’ security needs including help with insurance and tax completion. His company is aiming to facilitate third-party-sponsored insurance policies for giggers. In addition, he said that a system is needed which allows workers to own their own data; work history, score, reviews, background checks, and skill certificates. When that happens, companies can find talent more easily, and workers are better able to jump from app to app, thus increasing their earnings, he added. This evolving infrastructure may foster both trust in workers’ reputations and strengthen confidence in the gigging platforms.
Porserud explained that workers will realize they don’t need an employer to monetize their proficiencies and skills.
“But it will also be that a lot of companies will go into the gig economy because they can extract more value per dollar by having this on-demand workforce — so this will, you know, shift the way we work in radical ways,” he added.
Will some of those who are laid off turn to collaborative platform gigs?
USA Today reporter Paul Davidson recently interviewed Moody’s Analytics economist Dante DeAntonio.
“DeAntonio predicts one-third to one-half of all furloughed workers will be permanently laid off, putting the figure (of positions lost) close to the 8.7 million job losses in the Great Recession,” Davidson wrote.” That would make for a longer, more arduous recovery as unemployed workers hunt for new jobs, which may require retraining. He expects unemployment, now at 10.2%, to remain high at 9.5% by year’s end and 8.1% by the end of 2021.”
Will these laid-off workers turn to gigs on collaborative app platforms, or start their own sharing-based businesses? Gigging and entrepreneurship have the potential to be a viable alternative for many.
Staffers who have been permanently laid off due to the COVID-19 pandemic may well explore their options gigging, freelancing, or starting a business — and when they do, entrepreneurial experts advise stealth and well-planned execution — as these new market entrants will impact the economy for the foreseeable future.
