implications of the sharing economy for investing
TRANSCRIPT
The Future of Investing-
Implications of the Sharing Economy?
Dr. Robin Teigland Stockholm School of Economics
[email protected]/eteigland
@RobinTeigland
December 2015
Halloween in Nashville, 1974
If the rate of change on the outside (of an organization) exceeds the rate of change
on the inside, the end is near....
-Jack Welch
Thx to R. Wieselfors, Ericsson for photos
Thx to R. Wieselfors, Ericsson for photos
2015
Valuecreation
People• “Net generation”• 24x7 “mobile”
workforce• Knowledge via MOOCs• Sharing not owning• Sustainability
Technology • Broadband access• Mobile phones• The cloud• Internet of Things • Big Data• 3D printing• Robotics/AI• VR/AR• Holography• Blockchain
Open Source IP
• Software • Hardware• Physibles
Convergence of…..
Finance•
Microlending/microfinance
• Crowdfunding/equity/P2P
• Non-fiat cryptocurrencies
• Mobile money/payments
• M2M payments
A system that activates the untapped value of all kinds of assets through
models and marketplaces that enable greater efficiency and access.
- Botsman
The Sharing Economy
Harvard Business Review, 2014
The Sharing Economy: Embracing Change with Cautionhttp://www.slideshare.net/eteigland/sharing-economy-webb
LEARNING
p2p learning
open courses & moocs
PRODUCTION
co-design / co-innovation
digital peer production
distributed fabrication (makers)
FINANCE
p2p funding
p2p payments
p2p insurance
compl. currencies
GOVERNANCESWARM
participatory organizations
participatory government
blockchain / DAO
CONSUMPTION
redistribution
local food systems
product-service
on-demand services
COLLABORATIVE ECONOMY FRAMEWORK V0.1
The Sharing Economy is enabled through peer-to-peer (P2P) transactions on
multi-sided platforms (MSPs)
http://sloanreview.mit.edu/article/strategic-decisions-for-multisided-platforms/
“Sharing” is big business…
http://www.web-strategist.com/blog/2015/06/04/the-collaborative-sharing-economy-has-created-17-billion-dollar-companies-and-10-unicorns/
• ReveUSD 26 bln today -> USD 335 in 2025 (PWC)
• 17 companies valued at over USD 1 bln, but 10 are privately owned
Uber• Launched June 2010
• 300 cities in 58 countries • Limited physical assets• USD 51 bln valuation (Ericsson – USD 32 bln)
Exponential growth by “doing more with less”
Decreased need for capital?
Major efforts to regulate the sharing economy
If Uber were to pay drivers as employees in USA.
Gigs vs Jobs: A race to the bottom?
Spawning a new form of capitalism -Modern day sweatshops?
“Monopoly” platform “Monopoly” platform
“Perfectcompetition”
“Perfectcompetition”
LEARNING
p2p learning
open courses & moocs
PRODUCTION
co-design / co-innovation
digital peer production
distributed fabrication (makers)
FINANCE
p2p funding
p2p payments
p2p insurance
compl. currencies
GOVERNANCESWARM
participatory organizations
participatory government
blockchain / DAO
CONSUMPTION
redistribution
local food systems
product-service
on-demand services
COLLABORATIVE ECONOMY FRAMEWORK V0.1
Banking is essential,
but banks are not.
Bill Gates
In just the past few years in Stockholm…
Company Founded BusinessKlarna 2005 E-commerce payment servicesMyLoan 2006 Loan brokerTrustly 2008 Online paymentsiZettle 2010 Mobile paymentsFundedByMe 2011 Crowdfunding, crowd equityKivra 2011 Digital mailboxTink 2012 Personal financeSafello 2013 Cryptocurrency exchangeKnCMiner 2013 Cryptocurrency mining equipmentToborrow 2013 P2P lending for companiesCryex 2014 Cryptocurrency clearing house
Stockholm #2 FinTech city in EU
2010-2014 investment
● $532 Mln
2014 investment● $266 Mln
Top 2014 Investments in
Stockholm FinTech Companies (USD Mln)
Klarna $125
iZettle $55
Trustly 29
Bima Mobile $22
KNC Miner $14
”Innovative Lending & Investing” emerging
2013 Stockholm FinTech revenue
Cryptocurrency0%
Transfers2% Innovative Lending
5%Wealth Man-age-ment9%
Other FinTech12%
Payments33%
Trading & Banking Tech39%
& Investing
Our report: http://www.slideshare.net/eteigland/stockholm-49722748
P2B lending in Sweden
Enabling local community?
Crowdfunding rapidly growing in Europe
Crowdfunding growth 2012-2015
USD 34 bln E
Competing for investment?
New forms of ownership…crowd equity
Democratizing innovation and investment?
Women in USA <30% of business
owners <15% of angel
investors <10% of venture
capitalists
Marom, Robb and Sade 2014
Women on Kickstarter
35% of project leaders
44% of investors Women invested in
women project leaders (>40% of projects)
VS
Using the crowd to identify investment opportunities
Nesta
No one knows everything, everyone knows something,
all knowledge resides in humanity.
networks.
Adapted from Lévy 1997Image: Krebs
Emerging forms of collaborative investing
Crowd-sourced hedge fund
Activist hedge fund
+
Developing investment skills online
https://www.quantopian.com/home
Enabling financial inclusion
The Sharing Economy is enabled through peer-to-peer (P2P) transactions on
multi-sided platforms (MSPs)
http://sloanreview.mit.edu/article/strategic-decisions-for-multisided-platforms/
The challenge of ensuring trust
1. Trust in the platform2. Trust in the other users
3. Trust in the products and services4. Trust in the financial transactions
Leap of faith when meeting strangers -> Increased trust
in society?
Innovation is forward looking
while regulations are backward
looking.
http://www.weforum.org/sessions/summary/rise-demand-economy
Within 6 years: Challenging
the fiat money system?
Bitcoin – An emergent phenomenon• Open source project on SourceForge in Jan 2009 • Original source code by “Satoshi Nakamoto” –
pseudonym?• Developed by self-organizing community of
thousands of strangers across globe• Approx USD 5.6 bln market cap and approx 145,000
daily transactions of USD 75 mln• 1 BTC = USD 377 (Nov 30, 2015)
Teigland, Yetis, Larsson 2013 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707
What is a cryptocurrency?
DigitalDecentralized, peer-to-peer (P2P), i.e., no
central, third party
Uses cryptography to validate/secure transactions
Also uses cryptography to generate currency itself
Non-technical explanation of Bitcoin−https://www.youtube.com/watch?v=t5JGQXCTe3c
How does Bitcoin work?
Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor”
Blockchain • Shared public
ledger • All transactions
ever made logged• Chronology and
integrity enforced by cryptography
Betting on the Blockchain - Together
Goldman Sachs, JPMorgan, Credit Suisse, Barclays, Commonwealth Bank of
Australia, State Street, RBS, BBVA,
UBS, Nordea, SEB, + ……
+
IoT and smart contracts
Ownership attached to asset/property (e.g., real estate, shares) and can be verified
Run on Bitcoin ledger, execute legal rules between two entities: people, organizations, machines
Trustless because no center, no one in middle – the network is the middleman
Example: I run a private weather station using neighbors’ sensors. Smart contracts enable payment to neighbors for data sent from their sensors to my weather station.
But time will tell… uses we cannot imagine today.
https://www.youtube.com/watch?v=JsC4ptn2Aik
From “trusted”, centralized human authorities
to trustless, decentralized networks
IBM Institute for Business Value (PDF)
La’Zooz – Decentralized transportsharing
http://lazooz.org/
Enablers of a “true” Collaborative Economy?
Blockchains
Collaborative Economy
IoT/sensors
P2P/M2M micropayments
Big data
Thomas Jefferson (1816)“Laws and institutions must go hand in hand with the progress of the human
mind.”
The problem is that the human mind itself can’t keep pace with the advances
that computers are enabling.
http://wadhwa.com/2014/04/15/mit-technology-review-laws-and-ethics-cant-keep-pace-with-technology/
Challenges in the Sharing EconomyEnsuring trust
−In the platform, other users, products and services, financial transactions?
Regulatory−What is “employment”?
Security, taxation−What are new “rules” around “consumption”?
Taxation, safety, big data and privacy, IP and ownershipEconomic implications
−New pricing mechanisms -> deflation?−Lower demand for capital in “Zero Marginal Cost
Society”?−Net effect on labor productivity?
Some questions…
• What basic assumptions will no longer hold, e.g.,centralized, third party verification?
• How will trust be enabled?
• How will new forms of value creation and investment be regulated?
The future is already here, it’s just not very
evenly distributed.
- William Gibson
Robin [email protected]
www.slideshare.net/[email protected]
If you love knowledge, set it free…
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