What Do Amazon and Zipcar Have in Common?

Some of you might respond “The answer is that Amazon is now selling Zipcars!” You’d be wrong. Some of you might respond “What the hell is a Zipcar?” That’s probably where we need to begin. Zipcar is a Cambridge, Massachusetts-based company that allows its members to reserve a car online for rental (no waiting in line, no face-to-face human interaction at all), then go to one of numerous small facilities scattered around city neighborhoods throughout the country, then locate “their” parked car, unlock it by waving their pass card over a sensor on its windshield, grab the key hanging inside, then drive it away for the block of time they’ve reserved (at $6 to $10 an hour), and finally return the car to the same parking facility after filling up the tank. Fast-growing Zipcar boasts 200,000 members in 50 U.S. cities choosing among 5,000 cars. The company is also in Vancouver and London, and is expanding into 15 European cities. Customers tend to live smack in the middle of urban areas where driving and parking cars is a major hassle. My book agent Lynn, for example, lives in Manhattan and likes Zipcar so much that she sold her own car. As a Zipcar member, when she needs a car for a few hours, or for a day over the weekend, she simply signs up for a car and picks it up in a building within a short walk of her townhouse. Unless you’ve been in a deep slumber for the last couple decades, Amazon needs no introduction. But did you know that Amazon’s new, fast-growing business is renting out computer capacity? Amazon has such vast, and now excess, capacity in servers and digital storage that its new category of customers is the nearly 400,000 firms that don’t want to build and maintain data centers and related infrastructure but are perfectly willing to rent it from a reliable brand like Amazon. So what, then, do Amazon and Zipcar have in common? They have both seized a huge opportunity: frequently, customers today prefer to borrow and rent rather than to acquire and own—especially if the rental provider can make their lives easier, happier, more efficient, and more productive. Consider trends like outsourcing, “cloud computing” (computing and storing data on the Web rather than on individual local computers), InnoCentive-type web sites (where companies post thorny scientific and technological problems that their own staffs can’t figure out with the goal of attracting—with appropriate incentives-- imaginative responses from independent minds around the world), and the increased strategic allure of deep collaboration and intimate partnership among companies rather than outright acquisition. These trends are a natural offshoot of something really big: In today’s marketplace, where customers are overwhelmed by information and choices, and where vendors have to maintain lean agility and perpetual innovation—sometimes it makes a lot more financial and strategic sense to rent the best talent and resources rather than to pay big bucks (and make even bigger commitments) to own them outright. From A to Z, Amazon to Zipcar, we’re seeing the emergence of something big. Are the leaders in your company discussing how to capitalize on it?