Looking for a big idea on a business model? The mesh propositions that some things are better shared than owned. It’s a model based on access instead of ownership. Its central strategy is to target high cost unused waste, leverage existing infrastructure for communication, customize the offering based on personalized information and build customer loyalty. Oh, and by the way, it’s better for environment too.
What is the Mesh?
The mesh describes a type of network that allows any node to link in any direction with any other nodes in the system. At the heart of this idea is information. The mesh uses the interconnectivity of social media, leverages existing wireless GPS-enabled networks and builds on analytics from repeated use to provide people with goods and services at the exact moment where and when they need them.
The poster child for this model is Zipcar. According to Gansky, on average people only use their cars about 8% of the time, fitting the low usage and high cost criteria. Zipcar created an easy and efficient way to access cars, instead of owning them. The value proposition of Zipcar is to provide you a vehicle when you need it in a convenient location. It differentiates from rental cars on models, parking locations, web enablement, keyless entry and no-hassle waiting lines providing the vehicle you reserved waiting at the specified location. Zipcar claims that its average user saves $500 a month compared to car ownership. Beyond financial benefits, it claims less vehicles on the road create a cleaner environment.
There are 4 characteristics of a mesh business:
- The core offering can be shared within a community, market, or value chain – including products, services, and raw materials
- Advanced web and mobile data networks used to track and aggregate usage, customer and product information
- The focus is on sharable physical goods, including the materials used, which makes local delivery of services and products – and their recovery – valuable and relevant
- Offers, news and recommendations are transmitted through word of mouth, augmented by social network services
Humans have a long history of sharing as communities. But Gansky makes the case that the current environment has created the perfect conditions for a Mesh model. Conditions which are likely to continue into the foreseeable future.
· The economic crisis has created a deep distrust of older brands and models
· Consumers are rethinking what they consider valuable in their lives
· Climate change is forcing the cost of doing business, including the making and selling of throwaway goods
· Growing population and greater urbanization create densities that favor mesh businesses
· Information networks and mobile technology have matured to the point where businesses can provide better and personalized services exactly when needed.
This book builds on the experience phenomenon that other authors have highlighted. Where it differentiates is that it challenges common, personal, everyday items – like cars – to be considered from a share perspective. It echoes what some of our thought leaders are proposing; some of our major industries will be constructed as a service, not a product.
Ramiro RomanThis book review was published in PM360 .