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Peer-to-Peer Disruption: Airbnb &

July 19, 2013

If traditional capitalism is so efficient, why are disruptive technologies democratizing heretofore top-down economic systems? Capitalism as practiced by numerous industries, suffers from structural defects best seen through the lens of peer-to- peer networks, such as Airbnb and 

The hotel industry exudes waste.  Rooms constructed for the sole purpose of hosting strangers, suffer from 66% occupancy rates, despite huge capital investment. Fully one-third of hotel rooms lie fallow, incapable of monetization. Marriott’s tens of thousands of individual shareholders, often capable of hosting guests themselves, lack the necessary infrastructure.  Platforms like Airbnb provide that infrastructure. Shareholders can now rent direct and avoid corporate waste, both capital and operating.

Traditional capitalism also embraces the cash economy, which also exudes waste. We brainwash ourselves into thinking that “it takes money to make money.” Not true for millions of service providers requiring limited capital to sell their time and expertise. Historically, these providers spent heavily on advertising, but platforms like Craig’s List disrupt traditional media venues.  

Sites like similarly eliminate friction between advertiser and media venue, but uniquely eliminate friction between advertiser and advertiser. Advertisers pay cash for neither advertising, nor services received.

Opacity-dependent industries—those hiding from customers, and even more grievously, hiding customers from each other—are doomed to failure.  The information age simply will not tolerate this “structural defect.”  With robust peer-to-peer platforms, these industries themselves will have no place to hide.


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