Leveraged and Shared Assets
In this module, you will learn that Leveraged and Shared Assets (LSA) will become a major part of the economy in the next decade. LSA involves the renting, accessing or sharing of assets, which can be built around any asset. It allows an organization to stay nimble and unencumbered while significantly lowering the marginal cost of supply. It is important to get the unit metrics right before scaling a business around LSA. By not owning property, physical or digital, an ExO can remove the costs associated with managing that property, along with all related infrastructure costs.
For example, BlaBlaCar is a ride-sharing platform that connects drivers with empty seats in their car to passengers who are headed in the same direction for long-distance trips. The platform operates in 22 European and Latin American countries, and recently expanded to include a budget bus line called BlaBlaBus. Drivers post their destination and the cost per passenger, and riders can quickly and inexpensively travel without the expense of a car. BlaBlaCar takes a 10-12% transaction fee from each passenger per trip, while drivers make their money by charging passengers. BlaBlaCar’s MTP is “We bring freedom, fairness and fraternity to the world of travel. BlaBlaCar has 90 million members in 22 countries who share an average of 263 kilometers per trip, with 25 million travelers per quarter. The community has shared 30 billion kilometers, saved over €1.4 billion, and the company has raised $400 million with a reported valuation of $1.6 billion. Additionally, BlaBlaCar’s mobility network saves 1.6M tons of CO2 and enables 120M human connections every year.
The concept of leveraged and shared assets involves using existing assets to create value, such as through intellectual property and digital assets, opensource platforms, the metaverse, and Web3. The sharing economy is a key subset of leveraged assets, with categories including peer-to-peer networks, fashion, cars, co-working, computation/cloud, and manufacturing plants. However, leveraging and sharing assets requires an abundance of easily available assets, intuitive customer interfaces, algorithms for efficient allocation, and dashboards for measuring financial benefits and increasing capabilities.
Leveraging and sharing assets can provide numerous benefits to enterprises, including scalability, lower costs, increased agility, and dematerialization of office spaces. By taking advantage of leveraged and shared assets, businesses can reduce the need for managing physical assets, such as warehouses and parking garages, and avoid carrying obsolete inventory or maintaining unused assets during economic downturns.
However, there are also challenges associated with leveraging and sharing assets. For example, if a business scales too quickly without considering unit metrics, it may end up scaling losses. Leveraged assets can also increase risk, particularly during difficult times when the reliability of those assets comes into question. Additionally, some unique breakthrough products, like Tesla’s, require owning their own assets to protect trade secrets and because there may not yet be enough demand to leverage.
Several examples of leveraging and sharing assets include initiatives such as The LΛND initiative, which is acquiring land estates and tokenizing land ownership through social, productive, and environmental outputs. Sun Exchange of South Africa crowdfunds solar cells on the roofs of different organizations, allowing customers to get paid in Bitcoin. Waze is a popular urban navigation app that actually has a macro effect on traffic efficiency in regions where it is used. Microgrids are decentralized groups of electricity sources and loads that can detach from the area power grid during challenging technical and economic conditions and operate independently. LabCentral Inc. is a non-profit organization that operates a shared laboratory facility and offers laboratory and office space for biotech startups, largely found nearby at MIT and Harvard.
In conclusion, the future of business lies in leveraging and sharing assets through platforms. Companies that do not do so may face trouble. Rent the Runway is an example of a successful e-commerce platform that allows customers to rent high fashion clothes and accessories. To get started with leveraging and sharing assets, businesses should make a list of assets they own, sort by mission-criticality, dispose of less critical assets and rent instead. Creating a platform for others to rent assets can also be a bonus. The ultimate purpose of leveraging and sharing assets is to engage communities, crowds, and other stakeholders.