Is the Sharing Economy High Over?
A slate of startup closures could signal that the hangover has finally arrived.
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Oh, how quickly the world turns. Just over a year ago, Tripda was celebrating an $11-million series A round that was led by Berlin-based Rocket Internet, which invests in ecommerce companies. On Friday, it will coordinate its last shared ride.
Tripda rose among other startups riding the tidal wave created by Uber and Airbnb. These eager-beaver entrepreneurs looked to stake their claim to a slice of what they thought was the next hottest, world-changing industry: the sharing economy. Startup dreams spawned an Uber or Airbnb of everything. And now comes the hangover.
This summer, on-demand cleaning service Homejoy announced that it was closing down. As with Tripda, San Francisco-based Homejoy -- which battled another on-demand cleaning service, Handy -- said that it wasn't able to raise enough money to continue operating.
Related: What the HomeJoy Failure Tells Us About the Future of the On-Demand Economy
Another sharing economy startup that, by the founder's own admission, was born of an idealistic, slightly-naive desire to change the world and ended up run into the ground is Neighborrow. The idea for Neighborrow was that if you lived near by someone with a power drill, then you didn't really need to own one yourself.
It all sounded awesome. Neighborrow founder Adam Berk was featured on CNBC and became the darling of business bloggers. "The problem was people liked the idea of our idea, not our solution. Journalists flocked to write about us, but they never signed up for the service," writes Berk in a Pando-daily confessional, post-mortem. "For the rest of the "sharing economy,' it is going to take more than building a platform and expecting people to share. Here's a sad fact: Most people do not want to share. They want convenience."
Related: How Patience and Good Timing Paid Off for This Super Hot StartupThere's the rub and the diamond at the same time. The sharing economy startups that have done well and continue to do well are those that get in early, are the market leader in the space, and are more appealing to consumers' laziness and desire to save money than their actual desire to share and be green.