The folks that brought you America Online have quietly launched Zipcar, LivingSocial and the Web 3.0. But is the sharing economy a peculiarity of the recession or the beginning of a brave new market?
Pictured: Steve Case, the CEO of Revolution, a venture firm with investments in shared resort properties, Zipcar, and LivingSocial.
Three days after Steve Case, the founder of America Online, stepped down as chairman of AOL Time Warner in 2003, he took a longtime colleague out for pizza. Case wanted to get back to building companies. He wanted to open a new venture capital firm to attack old industries with the same dynamic, unwieldy Internet that AOL had harnessed before it was trampled in the mid-2000s.
One year later, his firm, Revolution, had acquired a vacation-home sharing company that now owns $1 billion in mansions around the world. Three years later, it helped to create what you know as Zipcar, now the world's largest car-sharing company. The same year, it invested in a new company started by four former employees called LivingSocial, an online social commerce company with more than 45 million global members.
A luxury-home network. A car-sharing company. An explosive deal site. Maybe you see three random ideas. Case and his team saw three bets that paid off thanks to a new Web economy that promotes power in numbers and access over ownership. The so-called sharing economy has taken off in the Great Recession, as companies like Netflix and Zipcar have allowed the exchange of DVDs, cars, clothes, couches, and even kitchen utensils. The
promise of a post-ownership society is that we can do more, own less, and rent the rest with Web-enabled companies. That's a huge break for cash-strapped families in a weak recovery. Whether it's good news for companies who rely on customers to buy new things, rather than share old purchases, is much more complicated.