Airbnb’s business took off last year. Nights booked through its peer-to-peer housing rental platform were up approximately 500 per cent in 2011. In several European markets—Italy, Spain, the U.K.—the rate was even higher.
Airbnb’s growth is a vindication of sorts for a new business model that has emerged in the past two years; collaborative consumption. Broadly speaking, collaborative consumption is renting or bartering for access to goods and services between users in a peer-to-peer marketplace. It is not a new idea, of course. However, the new wave of companies differ from predecessors by leveraging online networks to induce offline behaviour.
As we discuss in a recent note, collaborative consumption has enormous growth upside because of its capital efficient business model, potentially huge network effects, and a disruptive ability to bring new industries into competition with the internet.
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