Big Data is a blanket term used to refer to the huge amounts of statistical information companies and entrepreneurs use nowadays to run their businesses. Companies collect data about their customers including age, gender, nationality, interests, and hobbies. Websites may track what time of day their customers are most likely to visit the site, or which pages they visit most frequently.
The advent of big data led to some very interesting insights for corporate executives and scrappy entrepreneurs alike. Big data revealed that people owned things and used them in ways that were extremely inefficient. For example, a person may own a suit that he or she wears once a year. That suit sits in a closet for the other 364 days, unworn. The same goes for many different items, ranging from cars to computers, cameras to handbags. Large amounts of money gets invested into products that are used for very small periods of time, then sit around gathering dust.
This basic insight, that society can’t use its resources effectively without sharing, led to something called the “sharing economy”. The sharing economy refers to the idea that we can share our stuff with other people, including complete strangers, if the right infrastructure is in place. If a person believes that their item will be returned in the same good condition it was lent out in, and if that person benefits from sharing it, they are likely to share.
In other words, if your car is sitting in your garage for two days, but you could generate money by letting someone else use it, you might do that. Of course, it would have to be worth it. You wouldn’t hand over the keys for a few bucks. On the other hand, if you are offered thousands of bucks for someone to ride around town in your car, you might be ecstatic. Forward-thinking companies took advantage of this principle and used big data to find opportunities for untapped sharing markets.
This is how businesses like Uber and Airbnb, two of the most prominent companies using the sharing economy model, determine where to expand and who to target. They even use data for company training to align their employees behind the core concept of sharing. Uber, a decentralized taxi service, knows that for every driver who signs up in a particular city, they can expect a certain amount of revenue in return. The driver understands how much money they will make, and the customer who calls the driver with the Uber app is given an estimate for the cost of the ride. In theory, this means that everybody wins. Uber and the driver both earn money, the car is effectively shared for the duration of the ride, and the customer is happy with an affordable ride to their destination.
Without big data, it is much more difficult to make this sharing economy work. Creating synergy between the needs of customers, freelancers, and companies is a massive task. Big data lets people see trends in how things are used, seek opportunities to create value via sharing, and ultimately create a business model around a new way to share. This is how big data drives the sharing economy and creates new opportunities for people around the world.
Latest posts by Brigg Patten
- A Beginner’s Intro Guide to Performing Your Own Cyber Security Audit - March 11, 2018
- Ways To Boost Productivity Among Your Staff - February 22, 2018
- 7 Tips For Small Businesses to Survive Tax Season - February 20, 2018