| Abstract |
In the digital age, a number of sharing activities have emerged and are forecast to accelerate further. According to experts' estimations, the value of the sharing economy will increase 23 times worldwide. The main reason for this success is that all sectors of the population are involved in the practices of the sharing economy and participate in it to a greater or lesser extent. The examples of the most well-known and successful businesses with a small number of employees show that companies often achieve the best results if they utilize sharing technologies. Researchers and practitioners argue that the sharing economy creates new advantages and potential sources of revenue and profit which include expanding markets, the willingness of customers to pay more in order to get higher quality goods and services, and lack of governmental regulation that allows sharing businesses to act with relative freedom and without limitations. According to the statistics, 44% of sharing businesses fail after 5 years of work. Only 10% of sharing companies stay in the market after 10 years of their activity. In the view of the experts, one of the main reasons for it is a wrong business model chosen by companies. It can be concluded that sharing economy startups should focus more on possible risks related to their market entry. The purpose of the paper is to identify failures of on-demand sharing economy business startups at the A series around the world. In order to collect and systemize data about the most significant international sharing economy startups for the period from 2001 to 2018, we used CrunchBase and Business of Apps platforms. At the next stage, we employed a case study method to describe businesses' activities by using companies' sites which made possible to identify strengths and weaknesses in their business models. Then the Business Model Canvas has been used to provide visualization of the business model and describe links between various segments of the organization. We utilized Canvanizer online software to create Business Models Canvas that allowed us to reflect the most typical failures of the sharing businesses. In total 126 failed sharing economy companies were investigated. We identified critical challenges and problems they faced and found the most typical mistakes which led them to failure. The following mistakes have been identified and presented as Business Models Canvas: lack of strong networks, underestimation of local culture, unwillingness to work on technologically undeveloped market, failure to use pioneer business models/ technologies/ services/ goods, reluctance to be able to revenue-generating from the first day, inability to have scalable effect (business model, goods, services); unclear regulatory framework. Based on the investigation we can propose some areas of improvement in this field: utilizing Business Models Canvas to plan sharing economy business; investigation of not only best practices of successful sharing economy companies but also their failure experience; starting business it is worth changing the existing business model constantly even if you have achieved sustainable development. |