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A SUMM ARY OF

THE MESH

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Introduction The Mesh Is Everywhere Ever since we were children we’ve been taught the importance of sharing. Sharing our toys with our friends, our snacks with our school mates, and perhaps space on the couch with our loved ones. Somewhere along the way of text books and case studies we were taught that while this well all well and good for making friends, it wasn’t the way we made money in this world. Lisa Gansky, the author of The Mesh is here to tell us that we are wrong - very, very wrong. She believes this so firmly that the subtitle for the book is Why the Future of Business is Sharing. In the next 12 minutes you’ll learn why traditional business models are being challenged with new models where social media and using goods without owning them, just might be the future.

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INTRODUCTION THE MESH IS EVERYWHERE

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Lesson #1 The Four Characteristics of a Mesh Business As Gansky points out, “Mesh businesses are thriving on the growth of social media, the Internet, wireless networks, and mobile phones”. They use the data generated from these things to deliver products and services to people when and where they want them. Here are the 4 characteristics that Mesh businesses share. First, Mesh businesses focus on things that can be shared. These are businesses that can be started fairly easily like bike sharing, home exchanges, and music studios. However, they don’t have to be small businesses to qualify. One large Mesh business that most people will recognize is Netflix - an innovative take on video rentals that posted $1.36 billion in revenue in 2009. The second characteristic that Mesh businesses share is that they use advance web and mobile data networks to track goods and aggregate usage as well as information about their customers and products. Netflix is famous for generating customized information about their customers to create a “recommendation engine” that figures out which movie you are most likely to want to watch next. This is made possible by the fact that we are increasingly connected not only to other people, but to businesses, organizations and things as well. The third characteristic of a Mesh business is that the focus is on physical sharable goods. This includes the materials used to build the products. This makes the delivery of the services and products valuable to local markets. For instance, ZipCar is a car rental company for people in urban areas who want the convenience of a car, without all the hassle of the upkeep and storage when it’s not in use. The last characteristic of a Mesh business is that offers, news and recommendations are driven largely by word-of-mouth. It’s unlikely you’ll see ads for these companies on network television, and very likely that you’ll hear about them from your friends or in a social network you belong to.

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LESSON #1 THERE ARE FOUR CHARACTERISTICS OF A MESH BUSINESS

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Lesson #2 The Four Global Trends Driving The Mesh It’s not news that the world is changing, and business is changing along with it. Here are the 4 global trends that are driving The Mesh. First, the economic crisis we are just starting to pull out of has fostered a distrust of older brands and models. If we look back in history, whenever something like this happens we see the emergence of new businesses and a lucky few reinventing themselves. A big shift here is a focus on local businesses. A sign of the times is that Groupon, a group-buying service with a focus on local businesses has been heralded as the fastest growing company of all time by Forbes. Rumour has it that they’ve gone from $0 in revenue in 2008 and will be approaching the $1 billion in annual revenues mark in 2010. Second, that same crisis has made a large group of people reevaluate what’s important to them. The writer Po Bronson puts it this way: “crisis can actually take people from thining about what’s next to what is first”. As it turns out, some of the things that we grew up thinking were necessities are now seeming more and more like things we can do without - like owning a home, and owing a car. Essentially, people are feeling empowered by relinquishing ownership of material goods. Third, the cost of doing business is being driven up by climate change, which has an enormous impact on the making and selling of throwaway goods. We’ve been talking about this for decades, but the rubber is finally hitting the road. Companies are being held to account for the environmental damage that they are exacting on our natural resources. Organizations who until recently had a small minority voice, are now using the power of the web to spread messages about the culprits. These costs are mounting up, and it’s becoming increasingly expensive to make and distribute throwaway goods. Fourth - more and more people are living in urban areas which is creating population centres that favour Mesh businesses. Lastly, information networks have matured such that almost any business can tap into the power of data to provide personalized services and products.

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LESSON #2 THERE ARE FOUR GLOBAL TRENDS DRIVING THE MESH

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Lesson #3 4 Questions to Ask Yourself Before You Start a Mesh Business. So, you want to build a Meshy business, do you? There are plenty of examples to inspire you, as Lisa has identified over 1,500 businesses that are using these principles to build a business. The first thing you’ll want to do is look around at your everyday life. Look especially for people that have complaints - this is the petri dish for good business ideas. Take those complaints that you hear, and then ask yourself the following four questions. How could a physical asset be managed using technology that allows you to offer and track it? The important thing here is to identify high-cost assets that people would love to rent but not own. A great example of this is expensive purses that Bag Borrow and Steal offer on a rental basis. Also look for assets that sit idle for a good portion of their existence, such as your car or garden tools. What would you need or want to know about the customer that you wouldn’t need if you were selling something outright? For instance, Zipcar might want to know what types of cars their customers like during different circumstances: a smaller car for city driving, and a much larger one for trips to the family cottage over holiday weekends. This isn’t something that Ford or BMW needs to know about their customers as they are only selling them one car at a time. What kind of service or maintenance is required for the business to thrive, and what kind of risk are you asking to your customer to incur? For instance, if you are Zipcar, you need to make sure those cars are maintained and kept spotless so the next driver has a great experience. You’ll also want to consider how you’ll keep the risk levels down for your customer in order to make them comfortable with a new business model. What are you seriously passionate about? This one has made an appearance in almost every single business book since Jim Collins included it in his hedgehog concept in Good to Great, but it bears repeating. Building a business is hard work. You better LOVE what you are up to, or you simply won’t have the stamina to suffer through the inevitable roadblocks and setbacks thrown your way.

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LESSON #3 THERE ARE FOUR QUESTIONS TO ASK YOURSELF BEFORE YOU START IN THE MESH

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Lesson #4 Why Trust is Critical, and How To Build It Just like 30 is the new 40, customer retention is the new acquisition. You’ve probably heard that the cost of acquiring a new customer greatly exceeds the cost of keeping an existing one. So how do you keep these customers happy in this new meshy world we live in? Here are 6 tips: Say what you do and do what you say. When you launch your new business, you’ll be really excited to get it out to the market. But you only have one shot at building a buzz around your new, world-changing business. Make sure you’ve created something you can execute on flawlessly. Use trials. One of the key differences between your meshy business and a traditional one is that it’s something that the customer is not familiar with yet. So, they are unlikely to make a significant commitment to your product or service unless they get a chance to kick the tires. Do that. Delight your customers, over and over again. This isn’t a new idea either. However, we are finally at time in history where it makes economic sense to go overboard on customer service. Why? People talk. Except now, delighted customers now have a voice that’s heard in the thousands and sometime millions. Ask Zappos how that’s working out for them. Embrace social networks - especially the loud mouths. Some people are more influential than others. You’ve got no excuse not to find out who these people are and the ability they have to spread messages in their respective social networks. There are now two ways in which all customers are not created equal. Value transparency, but protect privacy. Simply put, customers want you to be as open and transparent as possible, while at the same time wanting you to protect their privacy at all costs. Deal with negative publicity and feedback promptly and skillfully. This is more art than science. However, as much as it pains you, you’ll want to respond to your critics. Remember, nobody expects you to be perfect - that’s impossible. They do, however, expect you to clean up a mess when you make one. No pun intended, BP.

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LESSON #4 BUILDING TRUST IS A MUST IN THE MESH

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Lesson #5 How established businesses can tap into the Mesh Of course, the majority of you are working for established businesses, and have no plans of leaving your 9-5 reality anytime soon. Not to worry. There are 5 distinct ways that you can tap into the Mesh for your current business. Provide services or platforms that enable and encourage Mesh businesses. Amazon, PayPal and FedEx are great examples. Making life easier for local and small business is a great place to start. Leverage physical assets as share platforms. How can you turn what is traditionally viewed as waste in your company into a performing asset? Truly engage partners by mutually sharing resources and information. Some of the most innovative solutions are borne when two organizations, seemingly disconnected, come together to solve a problem for a specific customer set. Hint: it’s much easier to do this if you view the world through your customers eyes rather than your own. It’s like the old case study from business school - train companies would have been much better of if they understood that people didn’t want trains, they wanted transportation. Integrate the supply chain in forward and reverse. When you do this, as Walmart has done, you are able to spot the possibilities for Meshy-like improvements like energy efficiency practices, and the ability to repair and reuse products. This is a big win. Extend the Mesh ecosystem. For instance, hotels could easily integrate car and bike sharing into their offering. What other products or services could you integrate into yours? So there you have it. It’s a brand new world out there, and the next big idea is waiting to be discovered. It’s hiding in the Mesh, and if you want it, it’s yours.

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LESSON #5 ESTABLISHED BUSINESSES CAN BE “MESHY” TOO

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What’s next? Buy the Book! Of course, you know that a summary of a book is no replacement for the book itself. If you’ve found this summary particularly intriguing, I hope you’ll go out and buy a copy. Here are a few places you’ll likely find it for sale: www.amazon.com www.amazon.ca www.800ceoread.com www.chapters.indigo.ca www.bookdepository.co.uk PS: these are not affiliate links, and we truly hope you’ll consider buying this book. We only include books that we’ve read and applied to our own business, and believe that this book has at least one game-changing idea in it for you. What are you waiting for?

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WHAT’S NEXT? BUY THE BOOK

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The Mesh Summary