Why Buy The Cow?
As a teenage girl, I was often subject to many parental lectures with topics ranging from school (if you don’t work hard you won’t get into college!) to fashion (that’s not a skirt that’s a belt!) to money (do you think we’re made of money?) to frenemies (just wait, she’ll come running back!). On the topic of boys, the Belfast-born sharp talking mother of a friend used to remind us that, as young women in the dating game, we’d be wise to be discerning with the sharing of our time and attention because, as she used to declare, why would someone buy the Cow when they can get the Milk for free?
Today as a business owner in an increasingly changing world, I can’t help but wonder; is our entire business future predicated on this basic observation about the difference between access and ownership?
Let’s look at the world that we’re living in right now. Air BnB is now the biggest hotel business in the world, but they don’t own any properties. Uber is the largest global taxi company in the world, but with no vehicle ownership and the ability to expand anywhere that people own cars, with just a few days to set up. Blockbuster – and all other DVD rental companies – have been burned alive, not in a fire of disruption, but in the quiet smoulder of the public shunning their exorbitant late fees. Recognising this pain point, competitors quickly cropped up offering unlimited rental, no-fee, membership based home DVD delivery services, but they too were quickly ushered out by the arrival of services like Netflix. In food, for years it’s been possible to ‘Buy The Slice’ instead of the whole pizza; in luxury goods, the astonishing global success of Bag Borrow Steal allows fashionistas to carry a high-end handbag worth €50,000 for €100 per month. And if you think about it, this applies to sex too – humans have been doing this at a very primal level since the dawn of time. Prostitution, affairs, love triangles and swinging clubs all speak to a fundamental need to explore the greener grass that we all think exists on the other side of the fence, but never quite wanting to live there forever – which in itself goes back to the wisdom preached by my mate’s mum twenty years ago. Actually, it’s really quite surprising that as a species, it took so long to formalise this mentality and make money from it in all industries. This mindset shift in business feels revolutionary, but in fact was inevitable – allowing people to live the dream without owning it is just a smart business move.
This isn’t just personal though – let’s not forget that what benefits the masses also makes a difference higher up the food chain – this Cow/Milk ditty is positively benefiting businesses too! In 2013 the rapid emergence and development of the gig economy was marked very definitively by the sudden merger of two giants competing in the outsourcing world – Elance and Odesk, who – once they married and became Upwork – have become the definitive behemoth of the freelancing world, capitalising on the desire of business owners to have access to the best talent, any time of day or night, anywhere around the world and at the click of a button.
The Millennial generation are powering this shift in personal and business thinking. Millennials, in stark contrast to the generation before them, have put settling down and having kids off for as long as they can. These guys want freedom of time, space to explore, and the ability to work when, how and where they want to. In a world where rising property prices are shoehorning millennials into the only option they have left – renting – we’ve bred an accidental culture of perma-travel: where all people need are the basic essentials in a backpack and they can live everywhere and nowhere at once, living for only days or weeks at a time in stunning, otherwise inaccessible locations in exchange for basic services like house sitting and dog walking. Meanwhile, with nothing more than a laptop and imagination they continue to make a living across all industries and employers by offering their services and accepting electronic payments. I mean, think about it: why would you bother saving for months for a deposit, endure the stress of a big mortgage, the boring permanence of a 9-5, all for the privilege of owning a 2 bedroom house in a city when the alternative is to hop on a cheap flight with your bag, laptop and sense of adventure and go live in a French chateau for in exchange for walking a stranger’s dog every day?
One company, with characteristic and canny forward thinking, understood this emerging access economy a long time ago. Let’s put the spotlight on our omnipotent locally trading, global business – Amazon. As a part of their mission to get into every human home, they began launching access-principled services such as Prime with its offering of discounts, products and online media; Kindle unlimited where people can access rich libraries of knowledge at their fingertips at a scale previously unattainable; and Subscribe & Save where members can avail of warehouse-level discounting in exchange for group purchasing. There’s a reason Amazon are obliterating other smaller businesses and it’s because they can see around bends and understand that in a world where the trend is to get smaller and lighter, people want to own less and access more. They want to try before they buy – but if they don’t want to buy at all that’s fine too.
The biggest fight in the world right now is between Amazon and Microsoft – and it’s a fight for space, land. Not many people realise that the slow creeping growth of Amazon is not dependent on drones delivering new washing powder an hour after you run out, or being able to buy nappies on subscription – it’s to do with the bolstering of their revenue streams through the rental of online space. Servers are the future for Amazon: Netflix use them for their hosting; if you shop online, the chances are that your retailer is hosted on Amazon web services and if you’re into e-learning – ditto! Many many roads lead back to Amazon. All over the world, Amazon are not in the online game, they’re in the land game. It’s similar to McDonald’s and the Church. It’s not about food and religion, it’s about land.
They’re not making more land!
Amazon and Microsoft know this and are at war. The more land they have, the more servers they can build. The more servers they can build, the more space they can rent. The more space they can rent, the more access they provide and the more money they can make through incrementally increasing their online footprint. By tapping into the cultural shift where we’re rejecting ownership and instead craving immediate access, Amazon understand that world domination comes not by offering people the chance to own their space. They just want to live there for a while.
We are living in a membership economy and not an ownership one.
The smartest entrepreneurs will recognise this early and move with the flow. If you take great care of your Cow, you’ll sell your Milk forever.