As an accomplished businessman and real estate enthusiast once famously said, “Stocks may rise and fall, utilities and transportation systems may collapse. People are no damn good, but they will always need land and they will pay through the nose to get it.”
This quote, in a nutshell, explains an interesting phenomenon taking place in the world of startup marketplaces as we speak. Though the world itself is transforming into a widespread digital realm more and more with each passing day – we communicate through text messaging, consume entertainment on our tablets – we still do so primarily from physical spaces. You may be able to do all of your shopping on the Internet, but those items are still delivered to (and ordered from) a physical place like your home or office.
When filtered through that lens, it makes a certain degree of sense that the truly successful 21st century marketplaces aren’t merely avenues for selling products and services like arts and craft. They’re built around the very idea that “places” are a commodity in the first place.
The Airbnb Factor
Perhaps the most obvious example of this idea in motion is Airbnb – a service that allows people to leverage their homes, their garages and even their attics as short-term rental properties for weary travelers. As of early 2017, Airbnb’s website had over three million listings around the world with a total valuation of $31 billion.
Ten years ago, the concept behind Airbnb – an online marketplace designed for renting physical places – would have been so foreign to most people that you would have had a difficult time explaining it to them in the first place. Flash forward to today and it is estimated that there are approximately 500,000 stays per night taking place on a regular basis, which explains in large part why the company has been able to raise $3.4 billion to date.
Airbnb may have been one of the first, but they were certainly not the last.
Spacer was able to establish a foothold as the number one source for storage rental in Australia after receiving $1 million in initial funding. Desks Near Me has been able to position itself as an incredibly convenient way for people to list or find office space for productivity purposes anywhere in the world. Garage space, camping property, houses or apartments – it doesn’t matter what type of physical space you’re looking for, there is likely an online marketplace that can help you find it.
The Path to Now
In a lot of ways, the rise of building marketplaces around “places” actually coincides with another movement that is gaining traction: that of the tiny house. Since the worldwide economic downturn of the last decade, people have regularly been looking for opportunities to “downsize” their lives and save money whenever possible. Tiny houses were born out of that idea – smaller homes (sometimes as small as 200 square feet) that contain only the bare essentials that someone would need to survive.
Who out there doesn’t have an extra bedroom in their home that doesn’t really get much use beyond storage? It appears that today, there are two distinct schools of thought about how to handle that situation. You could downsize your house and move into a tiny home, cutting out all the clutter… or you can take that extra space and monetize it. Entire industries have been built around both of these ideas in fascinating ways.
The Future of “Places” as a Commodity
Serious entrepreneurs who have already built marketplaces around places have been able to find success not just in their ability to attract and retain consumers and producers, but in the ways that they’ve been able to nurture trust on their platforms of choice. If you were looking for a place to stay for a night, you would feel confident using a service like Airbnb because of its reputation and because of the checks and balances that are in place to help make sure that night will be a safe one.
But none of it would matter without the most important benefit of all: maximizing service convenience, which also happens to be the key to the future of marketplaces as places. The physical space being “rented” itself may not change – someone’s spare bedroom that they’re renting out to travelers will probably look the same five years from now as it does today. Someone would still be able to get the same amount of work done in a rented office space six months from now as they can next week.
But ways to maximize conveniences like automated transactions, increased communication and smooth and secure operation will become the focal points for serious entrepreneurs operating in this space. Technology gets more powerful, communication gets easier, mobile apps get smoother, all leading to the most important benefit of all: experiences get better for both sides of the equation.