Occasionally, we publish blog posts, speech transcripts and other commentaries of interest to the Washington Business community. This post by the chairman and chief executive of the District-based investment firm Revolution originally appeared on the firm’s Revolutionary Views blog.
At Revolution, we made our first bets on the concept of sharing nearly a decade ago with our investments in Exclusive Resorts (2003) and Flexcar (2005). Now the “sharing economy” extends across multiple verticals — we’re sharing cars, movies, extra rooms in our homes, online lectures and even our time. The announcement [Jan. 2] that Avis Budget Group will acquire Zipcar marks a significant milestone for the concept of collaborative consumption.
Throughout my career, I’ve believed in companies that give consumers more choice, convenience and control in their lives — and it’s why we saw so much potential in the sharing economy even during its early days. Whereas 50 years ago, individuals moved away from cities and suburbs to live more independent lives, we believed that the ubiquity, speed and low cost of Internet connectivity coupled with a generational shift away from ownership toward use, community and experience would enable innovative start-ups to disrupt existing markets. We saw a desire among people to not only to save money by not owning a car that is used just 5 percent of the time or a second home used just a week or two a year, but to take part in communities that help the environment and promote responsibility. As Kleiner Perkins’s Mary Meeker puts it, there is a move from an “asset-heavy” to an “asset-light” existence that presents significant opportunities for the sharing economy. And in the words of Startup America board member and chief executive of SunRun, Lynn Jurich: “The new status symbol isn’t what you own — it’s what you’re smart enough not to own.”
To be sure, there are doubters. Some say we’re an ownership society at our core. Others believe this is a passing fad. Stephen Colbert even called me a socialist for backing Zipcar and other sharing companies.
To be fair, there are legitimate concerns and growing pains that the sharing economy will have to address and overcome as it continues evolving. But sharing is not a passing fad, it is a key component of what at Revolution we think of as the second Internet revolution. While the first Internet revolution was about getting people and businesses online and making the Internet part of everyday life, the second Internet revolution — the one we’re living through today — is geared toward leveraging a now ubiquitous and highly mobile Internet to change the way people live their lives. That’s why we have been investing in and mentoring talented entrepreneurs with big ideas to disrupt transportation, local commerce, real estate, health care, and education.
The Avis acquisition of Zipcar suggests that the sharing economy has come of age. And fasten your seat belts: it’s just the beginning.
Steve Case’s stake in Zipcar was worth about $96 million at the time of the deal.