Aside from being wildly successful startups, all three companies have business models based on having on-demand access to assets — what you need, when you need it, without a long-term commitment. From picking up a car for running an hour of errands, to staying in a cozy apartment for a few nights as if it were your own, to wearing a designer dress for a night and then sending it back, these companies make the ownership of assets essentially unnecessary.
If the success of these startups is any indication, this temporary-use model may be the operating model of the future, according to Columbia Business School professor Rita McGrath. In a recent article for Harvard Business Review, she discusses how “owning anything may soon be seen as an industrial-age relic.”
While owning something certainly has a number of benefits, they come at the expense of flexibility or liquidity. When things change — which happens frequently in our fast-paced world — ownership can be problematic, she writes. In addition, permanent ownership is often unnecessary in situations where borrowing something will suffice.
McGrath also includes oDesk in this category of on-demand access to assets — in our case, access to talent. The advantages of the oDesk model present “the interesting question of when an employer would hire someone rather than simply pay for the services used on an as-needed basis,” she writes.
McGrath argues for the positive aspects of this trend: the ability for anyone to earn extra money on the side; the work opportunities for those who are physically unable to get a permanent, on-site job; and the freedom to pick one’s own hours and choose whether a traditional on-site job is best for them. While some may consider this shift to be damaging to the workforce, she also notes that regular employment options are not necessarily the gold standard for work security — in some industries, such as retail, there can be a great deal of instability and unpredictability.
“Many of the assumptions about society that we take for granted are based on the notion that relatively stable employment relationships are the norm,” McGrath writes. “When will our thinking catch up with the new reality?”
McGrath’s theory that the access-to-assets model may soon replace the ownership-of-assets model in certain cases relates back to the concept of Work 3.0, which oDesk CEO Gary Swart introduced in December.
Work 3.0 — a world where work is on demand, virtual and remote — is already a reality for many companies, those that are taking advantage of online work to make their businesses more agile and competitive. Similarly, millions of people are also leveraging the growing momentum of Work 3.0 to access work opportunities around the world, and to have the freedom to choose when, where and how to work.
When McGrath’s theory of on-demand access to assets is applied to the world of work, you get Work 3.0 and companies like oDesk. Businesses now have a huge, global pool of talent to choose from, allowing them to create a specialized, on-demand workforce that crosses borders, time zones and skill sets. In addition, the team can come together when it is needed, and dissipate when the project is done — without the need for office-based overhead or a commitment to yearly salaries.
In other words, not only does the on-demand model bring unprecedented flexibility as McGrath describes, but it also brings a significant competitive advantage.
And, in this Work 3.0 approach, the opportunities are boundless.