Disruption | Paul Wallbank - Communications Professional

Profiting from the industrial internet

How will companies make profits from industries being shifted to lower cost structures?

Opening the first official day of Oracle Open World, CEO Mark Hurd spoke with James Fowler, the Chief Information Officer of General Electric about the company’s digital transformation.

Fowler described how the company intends to be driving $15 billion in revenues from its digital operation in the face of stagnant industrial spending.

Earlier in the presentation Hurd had described the problem of stagnant spending facing all major industrial companies, whether they are enterprise software providers like Oracle or engineering organisations like GE, where companies are ‘sweating the assets’ ruthlessly.

For GE, making a compelling argument for companies to reinvest in new capital equipment is essential while Oracle is facing an industry wide decline in revenues and a structural shift to cloud technologies which Hurd described in stark tones.

Last year, he claims, the major tech companies saw a gross decline of $16.4 billion in revenues while cloud services only picked up by billion meaning the market shrank by fifteen billion dollars.

That decline would deeply worry a salesperson like Hurd given the declining market means smaller commissions and fewer sales so it’s unsurprising the company is pivoting as hard as it can into the cloud.

GE on the other hand is making a huge bet on the future of its market by proactively shifting onto digital and cloud services.

The challenge though for all these companies is making money from these new business models those who figure it out will be the industrial giants of the next century. There’s no guarantee any of today’s will be among them.

Rethinking customer service in the connected age

Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his book Lethal Generosity.

Businesses would be wise to stop telling people what they should want and let customers tell them what want says Shel Israel in his latest book, Lethal Generosity.

In this book, Israel’s previous works include Naked Conversations and Age of Context which were both written in collaboration with Robert Scoble, he looks at the technological and social changes affecting business and how they can adapt to a rapidly evolving marketplace.

Key to that evolving marketplace is the explosion of data offering businesses deep insight into their customers. as Scoble describes in Lethal Generosity’s introduction in talking about social analytics service Vintank;

VinTank was acquired by a big PR agency that wants VinTank to do for all sorts of industries what it has done for the wine industry. Are you a restaurant or a winery ignoring that data? Go ahead and keep doing that for a decade. Your competition won’t.

Israel illustrates the need to watch the marketplace in citing a campaign where Canadian brewer Molsons completely wrong footed an oblivious competitor, something similar to how one bank discovered a rival’s successful marketing campaign through real time bank deposits data described at the recent Splunk conference.

Focusing on the customers

A customer centric outlook, not looking at competitors but focusing on what consumers want is key to success in the new economy, Israel believes. This is enhanced by technologies that allow both products and marketing to be personalised as shown in the chapter detailing how retailers and airports are using beacons and data analytics in their operations.

One good example is AirBnB, while Israel trots out the ‘biggest hotel chain’ in the world fallacy that’s pervasive among commentators, its effects on the established industry has been profound and have forced hospitality operators around the world to re-evaluate their business models.

Israel suggests the best response for businesses affected by the ‘Uberization’ of their industries is to adopt the social and analytic tools and strategies being used the upstart businesses and he provides a wealth of examples.

Seamless sales

Tapingo, the food ordering service for US college students, illustrates the seamless experience that consumers are increasingly demanding in their shopping, business and leisure activities. Israel cites how Tapingo’s merchant partners are seeing an in-store traffic boost of 7 percent and a gross profit rise of 11 percent as a result of using the service.

Shel also illustrates some of the failures in deploying new technologies, specifically London’s Regent Street Alliance that failed due to poor execution and a failure to engage the marketplace.

One of the weakness in the book – which Israel acknowledges – is its focus on US, and specifically Bay Area, case studies. While there are some non-North American examples such as Australia’s Telstra and China’s Alipay, most of the examples cited are of companies based in or around San Francisco and Silicon Valley.

Focus on Millennials

Another weakness of the book is the over-focus on Millennials or Digital Natives. While this group is important that obsession risks Israel’s message being pigeonholed amongst the noise of poorly thought out pop demographics and poor analysis that marks much of the discussion around changing tastes and habits between generations.

Israel’s point that the post 1982 generation will soon outnumber older cohorts in both the workforce and the marketplace in the near future though is an important aspect for businesses to keep in mind with the safe certainties and predictable customer behaviour of the baby boom era being long gone.

However the shift in consumer and workplace behaviour is just as pronounced among all the post World War II generations as technology and the economy evolves in the early 21st Century. Focusing on the younger groups risks missing similar shifts among older members of the community.

The value of customer service

Ultimately though, Israel’s message is about customer service. Shel himself flags this is not new, in describing the competition between hiking goods suppliers The North Face and Sierra Designs in 1970s Berkeley.

What is different between today’s businesses and those of forty years ago is technology now allows companies to deeply understand their customers and provide customised marketing, products and experiences to the connected consumer.

For the business owner, manager or entrepreneur, Lethal Generosity is a good starting point to understand the forces changing today’s marketplace. The case studies alone are worth considering for how an organisation can adapt to a rapidly evolving world with radically shifting customer behaviour.

Opportunities in broken systems

Uber shows how opportunities arise when systems are broken

“Taxi drivers are good people, they are just treated badly”, Uber founder Travis Kalanick told Salesforce CEO Marc Benioff at Dreamforce last week.

Kalanick flagged how in most cities around the world the taxi industry is broken. Nowhere is that more true than in Australia and a piece I wrote for Business Spectator about the disruption to the nation’s taxi industry illustrates that well.

The success of Uber in disrupting those markets – although it should be noted the company is far from becoming profitable – shows the real opportunities lie where existing markets are broken or distorted.

If you’re benefiting from a broken market then this is a risk to your business. For outsiders, it’s an opportunity.

How design will change the world of business

Changes to the world of design are going to have an effect on all businesses

“I always believe small companies usually illustrate big shifts faster than larger companies. In many ways big companies are responding to the shifts being driven by smaller businesses,” says Andrew Anagnost, the Senior Vice President of Industry Strategy and Marketing at Autodesk.

Anagnost was talking the Dreamforce media contingent after a tour of his company’s San Francisco Gallery where possibilities of today’s design and manufacturing tools are displayed.

Those possibilities are changing business, not just in design but across most industries as the means of financing and building new projects changes along with consumer demand as production methods change.

Anagnost breaks these changes into four major trends – the way things are designed, how they are produced, the nature of demand in a world where things can personalised and the very notion of what a product is.

“What people expect in from products today is very different.”

A supercomputer at your fingertips

“Every generation brings something new to design,” says Anagnost. “Imagine the generation that grew up with social media, online gaming, all the things that previous generations did not grow up with.”

This generation will be more collaborative and the idea of working in fluid, unstructured groups where many of the members will never physically meet anywhere.

Cloud computing is the other factor Anagnost sees as changing design as “it puts a supercomputer behind every screen”, which brings to the desktop great power in testing designs. “The designer gets a chance to explore options they couldn’t access before.”

That supercomputer at your fingertips changes all businesses, giving them processing power to carry out complex analytical tasks and modelling in all industries.

Financing the change

Another change to the production process is how people are financing their products. Increasingly platforms like Kickstarter are creating new ways for entrepreneurs to raise funds and also to test the market for a product before investing money and time.

“Before people would have to pitch their ideas to a larger manufacturer, an investor or a VC but now they can pitch it to anyone,” says Anagnost. “The means of financing products is now changing.”

The new means of production

‘Fabless manufacturing’ promises to change manufacturing by reducing the need for massive factories as micr0-factories start to change the economics of making products. These miniaturised robot factories are easily configurable and can be located locally rather than across the country of oceans.

Coupled with 3D printing, again it becomes cheaper and quicker to bring products to market and changes the dynamics of getting goods to market. “When it gets cheaper to deliver a complex product, the field gets levelled and more people can deliver innovative products to market,” says Anagnost.

The other trend within manufacturing is prefabricated assembly. While nothing new, improved design tools and manufacturing methods are making it easier and more efficient to assemble things like buildings onsite, coupled with 3D printing this is going to see massive changes in sectors like the construction industry.

Generational changes

Changing manufacturing and designs creates changed consumer expectations, as design becomes more accessible and personalisations easier customers are increasingly going to want products that meet their specific tastes and needs.

Another aspect to this is generational change, where younger consumers expect personalised products and don’t identify the same way with major brands as their grandparents and parents did.

“We’re going to see a move from rampant consumerism to a more selective consumerism,” says Anagnost.

This means markets are going to be far more volatile as the brand loyalty erodes in the face of a demanding customer. You’re only as good as the last conversation you had with your customer and if they aren’t happy they’ll go elsewhere.

Connected devices

The final factor Anagnost sees is the world of connected devices, increasingly consumers will demand products that have online functionality built in.

Increasingly we’re seeing this with motor cars and in the near future we’ll be seeing devices as diverse as motorcycle helmets and light bulbs being shipped with networked capabilities.

“Everything in your home is going to be connected in some way and people are going to have that expectation they will be,” says Anagnost. “Sensors are getting cheaper and cheaper and cheaper. There’s an assumption of connectivity.”

What Anagnost and Autodesk are flagging is business is changing, barriers we thought were unsurmountable are increasingly falling. For every industry, easily accessible computing and manufacturing power is changing the competitive landscape.

Paul travelled to San Francisco as guest of Salesforce.

Avoiding the next wave of tech carnage

Today’s high growth businesses could be in tomorrow’s deadpool

“From the EMC boardroom you can see the carnage of the mini computer industry – Wang, DEC, Data General – you can see their buildings from the headquarters,” said VMWare’s CEO Pat Gelsinger during an interview this morning.

Gelsinger’s point is well made, those companies were victims of the last major computing shift which saw the minicomputer fall out of favour and be replaced with workgroup servers largely running Windows.

For VMWare, those Windows based servers were the basis of their successful virtualization product and the company was one of the winners of the shift to Personal Computers.

Shifting to the cloud

Now a shift to the cloud, something that Gelsinger sees as a bigger and more fundamental change than the one that dispatched companies like Wang, DEC and Data General to the deadpool in the 1990s, threatens to do the same to the companies that did well in the PC era.

That shift is seeing VMWare repositioning their business to their “unified hybrid cloud”, Dell shifting away from being primarily a PC manufacturer and Microsoft rethinking its entire existence. All of these companies are deeply threatened by IT’s move to the cloud and mobile services.

Watching for unicorpses

It isn’t just today’s incumbents that are threatened by shifting markets, a few of the current crop of today’s billion dollar unicorns will almost certainly become ‘unicorpses’ warns Nick Bilton in Vanity Fair.

That some of today’s seemingly untouchable tech startups may also join venerable older companies in the history books may surprise some but the risks are high, the shifts are great and the successful business strategies are not always obvious early in a technology shift.

One clear point is that size is no barrier to eventual failure, as we see with once untouchable giants winding up after technology and markets move against them it’s only the fast moving and flexible thinking that will survive.

The Age of Rattling the Cage

We’re in a time where when taking risk is the lowest risk in business says VMWare CEO Pat Gelsinger

“It’s no longer the big beating the small, it’s the fast beating the slow,” says Eric Pearson, CIO of the InterContinental Hotels Group.

Pearson was quoted by VMWare CEO Pat Gelsinger in his five imperatives for digital business keynote at the VMWorld 2015 conference being held in San Francisco this week.

The five are an interpretation of the trends in a radically changing business environment where the barriers to entry have fallen dramatically, industries are globalised and the time to market for new products has collapsed.

Put together, Gelsinger believes established businesses have to be more nimble as market and industry forces are going to punish those who are too slow to adapt.

Elephants must learn to dance

Gelsinger’s initial point is the world of business is now asymmetric – incumbents have everything to lose in the face of new businesses where upstarts have nothing to lose.

Part of that asymmetry comes from the world of shared resources, which gives startups and smaller businesses access to tools that were once only available to large organisations.

An obvious example of this are the cloud computing services that is concentrating VMWare’s minds, however another good example of how shared resources will change industries is the self driving car where Gelsinger cites vehicle utilisation will go from 4% to 71%.

Gelsinger points out using a car on a pay for use basis will change the structure of our cities which in turn changes the economics of living in suburbia and the business models built around it.

Standardising the cloud

Cloud computing is at the end of its formative, experimental phase and entering into a professional era where different types of services are going to have to work together.

“We have the private cloud which is focused on IT as we know it today, pulling out costs, slow and complex applications but also has powerful governance and does what I need it to do while meeting compliance purposes,” said Gelsinger. “On the the other side we have the public cloud which is fast and is able to scale effectively but has weak governance.”

In a perverse way, it’s Edward Snowden’s revelations that are driving many businesses to maintain their own private cloud networks due to concerns about foreign powers tapping their information flows and the sovereignty of data.

The consequence of a range of different cloud environments mean they are all going to have to get along with open standards becoming more important as businesses ‘mix and match’ their requirements.

Meeting the security challenge

As the Snowden affair shows, IT Security is difficult, complex and messy and becomes more so as workers start using their mobile devices and data is pushed around the cloud.

Gelsinger sees the online security sector as being the one of the biggest opportunities for startups and one of the fastest growing costs for business, “the only thing growing faster than the spend on security is the cost of security breaches.”

While Gelisinger’s focus is on VMWare’s security proposition, the security mindset is going to have be adopted by all business people. As the Target and Ashley Madison breaches have shown, the damage that can be done by a security lapse can be crippling and is a tangible business risk that senior managements and boards need to be across.

Proactive technology

Artificial intelligence has been through a thirty year gestation and Gelsinger told of his early days as a computer engineer working on AI projects in the late 1980s. Those early days of AI were a failure as the results as the time didn’t live up to the hype.

Gelsinger sees this as the next wave of computing as it moves from being reactive to proactive as systems become able to anticipate actions based on the data they are seeing.

While this has major ramifications for the computer industry, it also promises to change management and the role of many professions.

“This is going to change human experiences,” says Gelsinger however there will be challenges as businesses strike a balance between creepy versus convenience and invasive versus valuable.

Welcome to the age of rattling the cage

Half of the firms on today’s Tech 100 list will be gone within 10 years, was the warning in Gelsinger’s final point and he focused on the need for businesses large and small to break out in order to stay relevant.

“Welcome to the age of rattling the cage,” stated Gelsinger. “A time when taking risk is the lowest risk.”

Paul travelled to VMWorld 2015 in San Francisco as a guest of VMWare

Dealing with an app driven world

The challenge of dealing with a app driven, mobile workforce isn’t just one for technology companies.

“It isn’t easy to create apps for the real world,” is the opening line of this morning’s VM World conference in San Francisco.

That line encapsulates the challenge facing almost every company, not just tech companies like VMWare, in the face of shifting marketplaces and technologies.

One of the biggest business shifts is the move to mobile technologies. This isn’t just changing marketing and user experiences but also changing companies’ operations as staff increasingly use their own smartphones and tablets to work.

Managing a shifting market

That shift though is not simple, as ZD Net reports Facebook’s move to ‘mobile first’ was a tough path in the words of the company’s senior engineer Adam Wolff.

“I think everyone would say it was worth it, but it was extremely painful,” Wolff admitted, explaining each sub-team was building in their own ways because there was no one to crossover with necessary knowledge.

Facebook has probably been the most successful company is dealing with the mobile shift and their difficulties despite their massive resources show just how difficult it is for companies to change not just their technology, but their business processes and in many cases the entire mindset of the organisation.

Those pain points in transitioning between ways of doing business is where opportunities lie, for VMWare they are seeing IT departments struggling with the development and deployment of apps along with the security risks of staff bringing their own mobile devices.

Happy coincidences

For VMWare, this is a happy coincidence in that their main business of computer virtualisation is as much at risk from the shift to cloud computing and mobile applications as any other business. By offering the tools for companies to manage that shift, they can retain their place in the market.

The threat though is this space has many other contenders – not least Facebook itself with its open source React platform the company developed out of its experiences in developing its mobile product.

One of the strengths VMWare has is being an incumbent, which is why they are pushing their ‘hybrid cloud’ offerings where companies use both their own data centres along with the public cloud providers such as Amazon and Microsoft.

Stuck with sunk costs

For large corporates with huge sunk costs in their own infrastructure and those with security or operational reasons for keeping some of their functions in house that hybrid strategy makes sense as it’s unlikely any board or CIO is going to happily burn their existing systems and process down and go to a ‘pure cloud’ or mobile strategy.

While catering to that market is lucrative for the moment, the longer term risk is that the next wave of large corporations – and today’s high growth businesses – are pure cloud companies.

For the companies catering to the old ways of doing business, for the short term there’s profits to be made in the pain points from an evolving marketplace but in the long term it’s how well businesses are placed for the world the end of that transition that will guarantee their survival.

The process facing software companies like VMWin dealing with as business shifts is a challenge faced by almost all industries, the question is how to adapt to a very changed way of working.

Learning the tools of online business

Accountants are faced with a great opportunity, but they have to learn the tools of online business

The accounting and professional services industries are uniquely positioned as the economy goes digital, while their own sectors are undergoing radical change so too are their clients.

Given the changes facing the accounting industry, the invitation to host last week’s CPA Australia Technology Accounting Forum‘s second day in Sydney was a good opportunity to see how the profession and its clients are dealing with major shifts in their industry.

The accounting profession has been one of the big winners of the Twentieth Century’s shift to a services economy. Last week’s story on how the workforce has been changing illustrates this with a chart showing how the occupation has grown over the past 140 years.

In many respects accountants should be well placed to benefit in a data driven economy given the training and skills they posses. The big challenge for existing practitioners is to shift with the times.

The transition from what’s been lucrative work in the past will be a challenge for some in the profession. Many of the manual tasks accountants previously did are now being automated with direct data links increasingly seeing operations like reconciliations and filing financial returns being done in real time without the need for any human intervention.

In private practice, the shift to cloud computing and direct APIs has stripped out more revenues with useful earners like selling boxed software petering away as services like Xero and Saasu arrived and established players like Intuit, Sage and MYOB moved to online models.

Shifting to the cloud

That shift has already happened with the presenter in one breakout session asking the audience how many practitioners used exclusively desktop software, purely cloud service or a hybrid of the two. Of the twenty in the room, the vast majority were using a combination with three being purely online and one sole operator still stuck with a desktop system.

For accountants the message from all of the sessions was clear; the future is online and businesses based around paper based models are doomed. The question though for them is how will they make the transition to being professional advisers.

Strangely, the big challenge for accountants in private practice may be their clients. A number of panel participants pointed out small business owners are slow to adopt new technologies and this holds both them and their service providers back. Divorcing tardy customers may be one of the more difficult tasks facing professional advisors.

The Technology, Accounting and Finance Forum showed the potential for accountants and professional services providers to be the trusted advisors in an online world, the task now is for practitioners and their clients to learn and understand those tools.

Saying goodbye to the boxes of gold

Intuit’s plan to sell Quickbook is part of the shift to cloud computing that’s leaving old business models dead.

“No-one is making money from cloud software, in the early days everyone made money from software,” bemoaned one of the panellists at last week’s CPA Technology, Accounting and Finance Forum.

A good example of this is the US accounting software giant Intuit putting the 32 year old Quickbooks on to the market.

Intuit was built on the back of Quickbooks but today the product today makes less than 6% of the company’s revenues and under 2% of the profits. Making matters worse is the old code base is clunky, proprietary and expensive to maintain.

Apart from getting a captive – and almost certainly dwindling – client base, there doesn’t seem to be a lot to attract buyers for Quickbooks as a desktop based product in a market shifting to the cloud.

The shifting business model hurts more than Intuit; the accountants, resellers and other service providers who were making a decent income from selling or supporting the box products have seen their margins evaporate.

For users, both Intuit and the services providers moving away from the product risks leaving them and their data stranded, something every business should understand about the risks of proprietary formats.

The shift though by Intuit should be a warning to small businesses that the days of box and inhouse software are numbered and running packages on servers and desktops will soon be for large organisations or niche applications.

Almost every business is going to have to plan its move to the cloud, those who don’t are increasingly going to be left behind in a shifting market.

Learning from the workforce of the past

A Deloitte study of past workforce changes gives us clues, but not answers on how the future of work will look

One of the constant questions posed to anyone reporting on the technologies changing the workforce is “where are the jobs coming from?”

A paper by Deloitte UK economists Ian Stewart, Debapratim De and Alex Cole titled Technology and people: The great job-creating machine looks at how technological change has affected the British workforce over the past 170 years.

While the study itself seems somewhat hard to get hold of, The Guardian earlier this week reported on what the economists found when they examined employment patterns through the rapidly changing economy of the last 150 years.

One clear shift the collapse in manual jobs, particularly farm labourers whose numbers fell from a peak of 950,000 in 1881 – 7% of the workforce – to less than 50,000 or 0.02% in 2012.

The decline in the employment of farm labourers shouldn’t be surprising – in 1871 the proportion of the British workforce employed in agriculture was 15% while today it is less than 1%. A graph from the UK Census office illustrates that shift.

It’s notable comparing the UK to the US in this respect; at the beginning of the Twentieth Century nearly half the US workforce was still working in agriculture while the Britain had been a predominantly service economy for nearly fifty years.

Even today nearly 3% of American workers are employed on farms, a number not seen in Britain since the mid 1930s.

In both countries, the late Twentieth Century saw a shift to a service economy, something illustrated in the Deloitte survey by the rise of the British barman where the proportion of workers in the liquor industry tripled from 0.2% of the workforce between 1961 and today.

That British bar employment tripled in the post World War II years probably illustrates best the rise of the consumerist culture during the late 20th Century.

What should be flagged is those transitions away from agriculture to consumerism weren’t painless, much of Britain’s economy was racked by recessions through the Twentieth Century and many of the nation’s regions were devastated by the shift away from manufacturing in the 1970s and 80s.

In the US, the transition away from an agricultural economy in the 1920s was particularly painful, Steinbeck’s book the Grapes of Wrath tells of the human costs to families displaced from their mid-west farms during that time.

That technological and economic factors have driven massive changes over the centuries isn’t new, but the fact the vast majority of today’s workforce are in jobs which couldn’t have been imagined a hundred years ago should encourage us about the prospects for the future workforce.

However, assuming the future will look like today and that employment will be largely in consumer service industries may be as mistaken of the beliefs among 1960s policy makers that manufacturing would be the future.

Even more pressing for today’s policy makers and leaders is to prepare for the pain of transition. If we are seeing a workforce shifting to new business models then there will be high community and personal costs. We need to be preparing for the pain of the shift as much as we anticipate the benefits.

The three S’s of employee engagement

How do we engage with an always on, connected workforce?

We need to rethink how we measure performance in the workplace says Andrew Lafontaine, Senior Director Human Capital Managemet Strategy & Transformation at Oracle Australia.

As business adapts to a changing society and mobile technologies, one of the questions facing managers is the mismatch between the Millennial generation and those GenX and Boomers who make up most of the executive suite, Lafontaine sees this as been in how the younger cohort approaches authority.

“There certainly can be a disconnect between Millennials and boomers. Millennials don’t see hierarchy the way boomers see it as important,” says Lafontaine. “Boomers have ingrained view of the way they have come through the workforce.”

Breaking the old rules

Unfortunately for those older managers, their world was based on a formalised, ‘straight line’ hierarchy dating back to the days ships’ captains used flags and voice tubes to communicate.

That rigid military style worked well for nearly two hundred years of business with mail and then the telephone only reinforcing that management model. Now newer collaboration tools mean different ways of working becoming possible.

A problem with those different ways of working in teams is how performance is measured warns Lafontaine. “What they are not measuring at the moment are what I call ‘network performance’. How workers they helping their colleagues, collaborating and working together.”

Separating home and office

With mobile technologies becoming ubiquitous it becomes harder to separate work from home life, “we working now from home and on the tram. You don’t need a nine to five workforce nad companies have to deal with and embrace the technology,” says Lafontaine.

In the context of babyboomers and GenX workers, that technology meant longer hours in the office but Lafontaine suggests things are now changing. “There other areas to measure. How are they looking after themselves? The days of babyboomers working 12 or 14 hours a day and neglecting their health or outside life are over.”

For the future company, the key to success lies in engaging their employees Lafontaine says. “A more highly engaged workforce delivers better outcomes. Engagement is the three S’s: Stay, Say and Strive”

Those S’s come down to three questions for the worker; should I stay? What should I say? and How should I strive to do a better job?

For managers the challenge is engage all workers regardless of age, the task of finding what engages and motivates workers of the computer generation is only just beginning.

What should we call the sharing economy

What label should we give to businesses like AirBnB and Uber?

Stop calling it the sharing economy, cries marketer Olivier Blanchard in a blog post describing how the label is inappropriate and doesn’t accurately describe the imbalances in the relationships between providers, users and the online platforms that facilitate them.

The question is what do we call the business model of companies like Uber, AirBnB and the myriad other services that take providers’ time and resources – cars in the case of Uber, homes or spare rooms for AirBnB – then make them available to people who can use them, taking a commission in the process of course.

Blanchard wonders if much of the success of these companies is because America’s cash strapped middle classes are desperately trying to find additional source of income and there is very much a strong argument for that.

More importantly, is what do we actually call these businesses? While they are potentially are as exploitative as the free labour models that have evolved in the media with businesses like Huffington Post, at least they provide some type of income even if for Uber drivers the net returns may be marginal at best.

Blanchard himself suggests the Microtransaction Economy however that’s not a satisfactory label as the transactions – which may be many thousands of dollars for some AirBnB rentals – are not always small.

Maybe we should call it the downtime economy, where we’re using the time we’re not busy or when we’re not using our homes, cars or others assets to earn income. That too though doesn’t strike me as satisfactory although it does seem to address the underlying idea these services are really only intended to supplement somebody’s earnings, not be their primary livelihood.

None of these labels though are satisfactory and maybe we have to ditch the economy moniker. It’s time to start thinking about what we really should call these businesses.

Your thoughts.