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The rise of the Interstice Economy and the decline of brand accountability

Andrea Fabbri

Much against my better judgment I found myself in a car dealership one hot summer day. I was enticed by a seductive and beautifully crafted marketing video depicting happy and attractive people who found new meaning and joy driving their dream car.

Excited anticipation was quickly replaced by the kind of survival alertness that gladiators displayed in Rome’s mighty Coliseum during their mortal combats. I was surrounded by what seemed like hordes of aggressive, not-so-good-looking associates dressed in Polo shirts ready with their sales scripts and pitches. They had quotas to meet, and I must have looked like easy meat.

Buying a car surely has to be one of the most universally despised and miserable sales experiences. But hope is on the way.

A California-based start up called Beepi is borrowing from the playbook of new business sensations AirBnB and Uber. It replaces the used car dealer and the used car lot with a digital platform that brings together buyers and sellers in a transparent, pleasant, convenient and economically advantageous way where all parties succeed. People save money. No shark-like salesmen. And cars are delivered to your door with a joyful bow (literally).

Beepi is yet another successful example in what I think of as the Interstice Economy in which a new breed of brands are flourishing in the cracks of the old-economy business models. They deliver uncommon convenience, an easy buying experience enabled by technology platforms and substantial efficiency gains achieved through fair, market-based exchanges that increase competitive advantage and feed market appeal – all without owning physical assets.

The success of Beepi, Uber, AirBnb, B2Buy, and many others, offers a clear and welcome sign of market acceptance and value that is threatening traditional business models.

But then, I ask myself: are these new platform brands altering the notion of trust and accountability that all brands have, so far, had to pay attention to?

At a fundamental level, all businesses must deliver on four fronts to be successful: quality, convenience, utility and price.

The control and relative importance of these value-generating dimensions determine the characteristics and types of brands (from luxury to commodity) and the experience delivered. However, the new platform brands exhibit new, interesting characteristics.

So, for example, when customers book a room with Marriott, they have certain expectations on quality, utility, price and convenience. Marriott orchestrates the total experience and is fully accountable for customer satisfaction. On the other hand, one of Marriott’s new age competitors, AirBnB, focuses exclusively on delivering outstanding convenience through its platform, letting buyers and sellers take responsibility for price and the quality delivered.

An even more blatant example of accountability side-stepping is the case of Uber, which, after a series of complaints focused on the drivers, publicly stated that they are not a cab company but a communications company, and hence not responsible for the drivers’ ineptitude.

Beepi provides a 10-day return policy, no questions asked, to customers dissatisfied with their purchase; but only 1% return cars (good job Beepi here at figuring out through predictive analytics human behavior associated with car purchasing and driving).

As brands, Beepi, Uber and AirBnB are, effectively, little more than brokers introducing buyers to sellers in the wondrous global market created by the Internet. They put the buyer in control, delivering instant gratification, enabling personal discovery, empowering self-expression, facilitating fairness and providing convenience; they are neutral, egalitarian brands disrupting the old order of companies with physical assets, fixed costs and indifferent service, much in the way Amazon saw off Borders Books and Apple destroyed Tower Records.

In the technology tsunami of creation and destruction they, too, are vulnerable. It just takes a better idea, the Internet and investment capital. AirBnB has the advantage of actually creating a new market and should continue to dominate it as the category leader. Good luck to Beepi, Uber – may they continue to disrupt and, hopefully, provoke the car dealerships and hotel chains into reinventing themselves.

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