Skip to main content

When Robin Chase co-founded Zipcar, it seemed a unique opportunity to tap into an ecologically minded urban demographic who preferred not to own cars. In fact, she believes the secret to her success – which other companies have also discovered, and you may want to explore – is excess capacity, platforms and peers.

Capacity

Many people had cars that were sitting idle for large chunks of time while other people wanted occasional use of cars without the burdens of ownership. Excess capacity and potential demand.

Story continues below advertisement

BlaBlaCar takes advantage of excess capacity in Europe by arranging shared commuting rides. Apple opened up excess capacity by inviting developers to figure out creative ways to use its iPhone. Waze uses vehicle navigation systems to provide up-to-date route information for drivers. B&B operators have long thrived on excess capacity in their homes, but that is being taken to new levels with Airbnb's global operation.

Excess capacity "is a low-cost fuel," Ms. Chase, of Cambridge, Mass., said in an interview. "It should be a magnet for entrepreneurs. We need to think about excess capacity in our own assets, networks, providers like Amazon and experiences."

But excess capacity is only latent value. Once you spot it, you must make use of it. And that requires two other crucial components: platforms and peer power.

Platforms

Platforms increase the scale of the opportunity, making it viable for millions of people to use. For Zipcar, Ms. Chase needed a way to bring people together and figure out how to cut the 16-minute processing time for a typical rental car transaction since her rentals might be for only an hour or two.

She also needed a way to make it safe and easy to share cars. The platform can be a mixture of technology and the prowess of a company to turn something that would be complex and expensive – be it renting cars or getting your creative app to market – into something simple and inexpensive. It ensures consistency. "The platform is the key enabler," she said.

She delineates three ways platforms make excess capacity accessible to others:

Story continues below advertisement

Slice it: Zipcar took this approach, moving us from thinking about car possession in terms of years for owners and days for traditional renters to half-hour slices. There are now many companies following that approach in everything from bicycles (Bixi) to health-care administration (Hello Health) to gadgets (Simplist, formerly known as SnapGoods) to hospital gear (Cohealo).

Aggregate it: You can take excess capacity of assets that are individually too small to bother with and group them together to provide more reliability and consistency. Airbnb does this, of course, as does MyBoat.com for buying, selling and servicing boats, and Rover.com for dog sitters.

Open it up: You can open up excess capacity and invite others to create value. The open data movement allows this, encouraging people to come up with new ways to use data.

Peer power

The third component required for success is peer power, whether it is companies or individuals who offer their own energy to realize the latent value of the excess capacity through collaboration. Every time you post on Facebook or tweet, for example, you are engaging in peer power.

In Ms. Chase's new book, Peers Inc, she writes: "There are more smart people outside your organization than inside. And this is precisely why Peers Inc is the structure of choice if we want to speed the pace of innovation."

Story continues below advertisement

Indeed, she says the pace can exceed the laws of physics as the three elements work their magic. It took 54 years for the InterContinental Hotels Group to build a 674,000-room hotel chain in nearly 100 countries. Hilton Hotels took 95 years to develop its 715,000-room empire.

Yet Airbnb reached more than 800,000 cumulative total listings in four years. "It could tap the co-investment of a huge number of people around the world. It didn't have to build its own hotel rooms around the world," Ms. Chase noted.

"And no matter how big and innovative Apple is, it couldn't have built all the apps developed over the last few years. Uber doesn't have to hire people. They just pay them for time working. It changes the economics."

Exponential growth can occur when you tap excess capacity. It also creates a localized, diverse model: All the networked peers mean the right person or the right room can be accessed at the right time.

Michelin can't review her neighbourhood restaurant; Yelp does. Your GPS can't give the same breadth of up-to-date information on commuters that Waze can.

But there are cautions. "Platforms are like mini-governments. They set rules of engagement. Right now everything is decided by the whim of the CEO and people who invented it," she said.

Story continues below advertisement

As the squabbles between Uber and the taxi industry and local governments show, we may have to rethink outdated regulations for this new era to protect the public good but avoid confusing that with protecting the existing industry players.

"This transition to Peers Inc is happening. Companies need to look at how they might be disrupted by new challengers, but also what are the new opportunities they can take advantage of," she concluded.

Harvey Schachter is a Kingston, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column, Balance. E-mail Harvey Schachter

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter