The Need for Speed: Why the Sharing Economy Needs a New Approach to Product Development

Editor’s Note: Steve Myers, managing director, Accenture Industry X.0

If you look at the leaders of the sharing economy – companies that operate in industries like ridesharing, food delivery and lodging rentals – there is often a huge gap between them and the rest of the pack. The reason for this is simple: they move faster than everyone else, and they are better at understanding and catering to consumer needs the moment they arise. More so than most other sectors, it's this ability to move fast and constantly evolve to changing market requirements that sets sharing economy leaders apart – and this can be seen in the quality of their software, which is continually being tweaked and updated to keep customers satisfied.

From digital to physical

However, while these organizations have succeeded largely on the basis of their digital innovations, increasingly these companies are launching physical products too. Bike sharing services, usually activated by a smartphone app, are now common in many large cities worldwide. Delivery companies are looking at how they can create more innovative food transportation devices. Room sharing companies are weighing up the merits of digitally connected, remote locking systems that would allow people to unlock accommodations for guests without having to be onsite. Ridesharing companies, meanwhile, are looking at advanced telematics solutions that would allow them to monitor their vehicles and ensure they are being driven with care.

In many ways, we're moving into a new maturity phase for the sharing economy. With the software element now pretty much cracked, businesses are looking to differentiate themselves through physical products that their competitors can't offer. And as sharing economy businesses ramp up their development of physical products, speed will be crucial – every minute lost is an opportunity for a competitor to get ahead and steal market share.

A new model for product development

It's precisely because of this need for speed that I believe we are about to see a revolution in the way sharing economy products are engineered. The traditional ‘waterfall' approach, in which engineers follow a prescriptive spec sheet over a nine to 12-month development period, is simply too slow. By the time the product is ready, it's more than likely too late. Additionally, if customer feedback is absent until the product launches, businesses often find that their development time and the associated costs have been completely wasted because the product falls flat with the target audience.

So, what can businesses do to speed things up? The answer is easier than you might think, as a tried and tested model already exists within the sharing economy: an agile approach. Software developers use agile methods to identify the priorities of a project and rapidly create a minimum viable product through development ‘sprints'. These prototypes are then tested with customers and the resulting feedback is used to create a new iteration. Such feedback cycles continue until the software is perfected. It means that companies can get software into the market quickly while ensuring it meets customer needs exactly from the outset.

The same approach can be successfully applied to the development of physical hardware to massively reduce time-to-market. Rather than going through a long and expensive development cycle, businesses can first focus on the elements of the products that matter most (i.e. those that most directly meet user needs) and create rough prototypes to test with customers – something that 3D printing has made inexpensive and practical. These early prototypes can help businesses rapidly solve any issues with the product before it is brought to scale, using customer feedback to enhance the product and help ensure its marketability.

Agile in action

Most importantly, this idea is not academic. We have already seen several sharing economy companies use this agile approach to successfully bring new products to market in weeks rather than months. One company entering the scooter market knew the scooter itself could be sourced externally, but needed to build a product that would allow people to locate and unlock the scooters via a smartphone app, as well as check the mileage and battery range before use. In such a crowded market, speed is absolutely of the essence, so a 12-month development cycle wasn't acceptable. By applying agile methods, however, the company built and launched its scooter service from scratch in just three months.

Of course, it's not only established sharing economy businesses that will benefit from applying an agile approach to their product development cycle. In fact, the low-cost approach to product prototyping enabled by agile is perfect for cash-strapped start-ups, many of which are unable to hire their own internal development teams. Such businesses can now turn to external partners to help with sprint prototyping, allowing them to test their ideas against what is most important for their customers. This can only be good news for helping drive competition in the sharing economy and keeping up a strong pipeline of innovative products for consumers.

What's more, an agile, MVP-based approach keeps a start-up as close as possible to a tested, functional product with the most important features. This is helpful to secure more funding, or even ship a product when funding runs out. The approach is a world away from having to spend six months on different aspects of a product, some important, some not, without having integrated and tested key elements of the product.

Customer-centric development

When developing a product for the sharing economy, businesses need to know that it is feasible and that it has a market. This requires more than simply designing to spec. It demands close interaction with clients, the ability to learn from them and to pivot quickly and as necessary, and above all, it demands speed. For those businesses that extend agile development methods into the build of physical products, all these requirements are within reach. Indeed, agile promises to create a new generation of products that more closely map to consumer needs and are therefore more meaningful as a result.

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