Shared Ownership

Over the last decade ownership models have shifted. They’ve transitioned from single party ownership to shared ownership. The most important benefit of a shared ownership model is that it promotes greater efficiency and innovation. The idea behind this is to spread the costs of ownership among more people and keep the benefits as high as possible. The big idea with this is that everyone can join in on the fun across all mediums. Innovation dies with barriers to entry, and ownership is a classic barrier.

Share Now is a car sharing company, which provides access to high quality short term car rentals in major European cities. Drivers pay based on usage, a mixture of time a distance driven. An average driver spends less than an hour a day in the car, amounting to care remaining unused for around 95% of the day. This creates unused capacity, which car sharing solves for. Share Now lets users have access to vehicles when buying a car isn’t a good fit because of their proximity to work. Share Now has created a model that is ideal for urban dwellers. Network effects make this model more powerful, the more customers use the service the better it becomes.

Share-Now can create a profitable model in Europe, but would struggle in most large American cities because of their footprint. American cities zone uses for commercial or residential use, which creates distributed cities. This means that you don’t have many mixed use zones, where commerce and residences collide. Instead you have massive swaths of land dedicated to either housing or commerce, forcing car ownership on citizens.

Shared kitchens have recently gained steam among small culinary professionals. Shared use kitchens are small scale semi private kitchens for rent. The idea has existed for many years, some even dating back to the American Civil War. They allow chefs & caterers a professional space to cook without intense capital investment. Instead of creating environments where only the connected have access to high quality resources, more creators can now get into an industrial quality kitchen and make their magic. This is part of a meta-trend of accessibility for creators. Barriers to entry have seen reductions to comically low levels in most areas. This is the critical idea in shared ownership; everyone can join in on the fun.

One issue with shared ownership has to do with surges and can be well illustrated with shared kitchen facilities. Certain events increase demand for catering services, for example the Superbowl. Demand for catered food goes through the roof and the facilities can potentially struggle to meet that demand from their customers.

Fractional ownership is an extension of the shared economy. It suggests that assets should be available to as many investors as possible, instead of only the wealthy. To invest in certain asset classes you have to be an accredited investor, meaning that you either have a net worth of $1 million or earn $200,000 per year. Fractional ownership allows everyone should be able to invest in all asset classes. The last few months I’ve seen more companies creating platforms that allow for this.
Art is one a critical human experience; it’s existed for thousands of years in many forms. It’s also proven itself to be one of the most profitable asset classes of the last decades. Since paintings are unique they are almost guaranteed to increase in value. Caring for and securing art is expensive, so much so that it’s inaccessible to most.

Masterworks is a company opening the art world up to diversification for retail investors. They have securitized world famous artworks, and built a marketplace around them. Users can buy shares of artworks and watch them appreciate until the company sells and offers a return. The company selects works from top performing artists, capping the downside of investment. Masterworks stores and cares for the art, and sells the pieces to a private collectors and returns the profits to the investors. Fractional ownership makes art more accessible not only as an asset class but as an interest.

New ownership models have changed the distribution of products & services. The twenty first century has offered many new ways to look at ownership. We see this in everything from shared kitchens to currency. This space has grown in part because of the rise in crypto currency, which evangelizes distributed ownership. New ownership models find efficiency in existing models. When shared assets win, a larger population gets a piece of the pie. Amazon Web Services are another example of this. In the past servers were an enormous expense for any internet company. AWS changed how the ownership and now supports most of the internet. By spreading the cost among more users prices go down and utility stays about the same. These new models allow more people to win, which in the end is good for everyone. They promote new ways for more access and in the end more innovation. Innovation stalls with barriers to entry, and distributing ownership is a way to nurture it.

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