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Welcome To The Access Economy (And Why It Matters To Entrepreneurs)

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This week I spoke to two Salt Lake City entrepreneurs: The husband and wife cofounders of Parachut. Like me, their alma mater is Brigham Young University. The husband, Philip Niu, played BYU Football in 2003-2006. He’s an extreme wellness advocate, like I am, but unlike me, he stands 6’5”. Wife Melissa played Washington State volleyball, stands 6’, and has done color commentary for the Fox Sports Network and marketing for the Seattle Seahawks. She’s also an expert in the photography realm.

Melissa and Philip Niu are cofounders of Parachut.co (Photo credit: Nick Spurlock)Parachut.co

All of these factors have been key to their business, which is the world’s first access marketplace to facilitate the sharing of already-purchased goods while simultaneously reducing over-consumption and over-production by maximizing the utility of the world’s consumable goods.

By now, we’re all aware of the sharing economy, as exemplified by Airbnb and a myriad of other companies making it easier to get access to the things we’d like to rent or borrow while maximizing the use of our goods.

But beyond the sharing economy lies the Access Economy—a concept experts acknowledge as the next progressive arena that will make it even easier to get what you want, when you need it and for as long as you want. In this era, we’ll no longer be tied to a rental schedule and we’ll have stronger protection for the privacy of the individuals involved. As a concept, the access economy has the potential to change the way industries and consumers evolve, and Parachut intends to be leading the charge.

Parachut has been several years in the making, the couple explains. In their later 30s, they embody the Millennials’ desire to enjoy the goods and experiences they want, but to streamline and downsize the size of the home they require and the number of possessions they feel the need to own, to maintain and to store. As a family, they understand this principle keenly as they recently moved with their three daughters from a half-acre property complete with gardens and chickens to a vastly smaller location as they prepare their venture to soar. Yet they are as happy as ever as they realize the growing ability to access and give back an increasing number of the things they desire.

The Nius are far from alone. As experts Gianna M. Eckhardt and Fleura Bardhi have noted in Harvard Business Review, when consumers have the alternative of trying out a number of products and alternatives, they may want to “drive a BMW one day and a Toyota Prius the next.” Furthermore, consumers value their privacy as opposed to feeling obliged to meet and make social contact with the owners of the goods that they share.

Knowing this, the couple soft-launched the Parachut concept in 2016 in the category they know best—cameras and photography tech. They put the word out through a single article in Resource Magazine, written by a reporter they knew.

The response was immediate and overwhelming. Wired picked up the story and ran. Then they were covered in TechCrunch. More than 500 people signed up for memberships with their credit cards on the spot. The concept resonated quickly with businesses, too. For example, Salesforce.com became a member immediately, signing up for a plan that allows them continuous access to the ever-changing photography equipment needed by the company’s creative team. The membership eliminates the need to buy and store and insure a Flip video (remember those?), then a digital camera and a series of HD video cameras to keep their creative services team at the top of their game.

Members pay a monthly fee. When they’re finished with the equipment they’re using, they Parachut it forward and use their membership points to secure a different item instead.

Overwhelmed by the initial response, however, the couple retreated back under the radar to study the behavior of their members and prepare the program to scale. Would people take care of the equipment? Would they return it reliably? Thankfully, with very few exceptions, they did.

Interestingly, the program spurred reactions on Reddit, with posters starting threads with remarks such as “I like the idea of this program, but I wish it would also do XXX.” With her journalism and marketing background, Melissa jumped onto the threads identifying herself as the company’s president and cofounder and inviting their ideas. The posters welcomed her in, providing their candid thoughts in advance.

Today, two years later, the company is ready to soar. Their initial category of photography and creative tech is approaching full launch.

The first category Parachut is premiering is photography and creative tech.Parachut.co

The ultimate plan for Parachut is a cleaner, more efficient and more enjoyable world that provides a more responsible way for consumers to enjoy their favorite goods. Perhaps we can move further away from the over-consumerism and over-production that currently plagues our society. Taken to its fullest fruition, the program could cover many industries including sporting goods, workout equipment, seasonal goods and even vehicles as the days of buying an item to use once and store forever are gone.

For other entrepreneurs there are several lessons we can take from this model:

  1. Is it critical that we own every asset we need? Clearly, it isn’t – and I believe the model that Parachut is espousing can compel us to take a harder look at the time value of money, the space required to store equipment, and the inefficiency of upgrading to new equipment that our current business models require. I can see the evaluations of own versus rent versus share becoming much more interesting within the coming few years.
  2. What is the most environmentally responsible way to conduct our business? Increasingly, consumers are poised to welcome and to reward our responsible behavior. In addition to responsible use of recycling and green materials, we can help the world and the economy by making better use of our space, our equipment and our consumable goods.

The Access Economy is a concept I can relate to fully at the helm of Restore, where we house advanced wellness equipment such as cryotherapy and hyperbaric chambers that would be inaccessible or extremely expensive to own or access through a traditional medical facility. We’re moving toward the access economy as well, as we work to make the equipment and treatments affordable and available to all, on demand. I’ll be watching with interest to see this organization progress.

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Economy

Economy set to grow despite external threats, says Ibec

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Strong economic growth is forecast for this year and next despite external threats such as Brexit. But there is no room for complacency, Ibec has said.

Publishing its latest economic outlook, the business group projected GDP growth of 5.7 per cent for 2018 and 4.3 per cent for next year. It also said it expects consumer spending will rise by 2.9 per cent in volume terms this year and by 3.1 per cent in 2019.

“The economy is growing, trade remains robust despite Brexit, and households are clearly benefitting through incomes which are increasing at the fastest rate in Europe,” said Gerard Brady, Ibec’s head of tax and fiscal policy.

He said the Irish economy had firmly moved into a ‘post-recovery’ stage with both employment and consumption comfortably passing their pre-crisis peaks.

“With the economy approaching full employment the biggest challenge facing the Irish labour market will be finding workers to fill vacancies. Feedback from Ibec member companies suggests that firms are now finding it increasingly difficult to attract and retain talent.”

Complacency

While the latest report is generally upbeat, Ibec warned against complacency on competitiveness at a time when external threats could impact on growth.

“As the economy comes close to capacity and navigates significant challenges to our external environment over the coming years it is important we make the right decisions to protect our indigenous industry,” said Mr Brady.

Ibec urged the Government to adopt a renewed focus on competitiveness in Budget 2019. It also called for more investment in infrastructure, education and innovation as a means to protect the economy from any future downturn.

Separately, a new study shows that despite 70 per cent of businesses in the Republic expecting Brexit to have a negative economic impact, just six per cent have a plan in place to deal with it.

The situation is worse in the North where just 5 per cent of companies have formalised a strategy to deal with the consequence of Britain leaving the European Union, the latest AIB Brexit sentiment survey shows.

Not surprising, industries that are most likely to be affected by Brexit, such as the food and drink, tourism and transport sectors, are more likely to have a plan, as are larger companies.

While businesses north and south have been slow to put strategies in place, many have rethought investment decisions with 22 per cent of companies in the Republic having either postponed or cancelled expansion plans, a figure that jumps to 49 per cent for businesses in the north.

Hard border

With fears of a no deal growing, 32 per cent of companies in the State now expecting a hard border, versus 15 per cent of businesses in Northern Ireland.

The latest survey comes as the Daily Telegraph reported that Britain will recognise some EU regulations in the event of a no-deal Brexit to ensure continued access to medicines, car parts and chemicals.

EU exit talks restart between Dominic Raab, secretary of state for exiting the European Union, and Michel Barnier, the EU’s chief negotiator, in Brussels this week. Mr Raab is also due to give a speech on Thursday, outlining the British government’s plans for a no-deal.

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Economy

Turkish lira crisis poses additional risk to German economy: finance ministry

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BERLIN (Reuters) – Turkey’s currency crisis poses an additional risk to Germany’s economy on top of trade frictions with the United States and the possibility of Britain leaving the European Union without a deal, the German finance ministry said on Monday.

FILE PHOTO: A 100 Turkish lira banknote is seen on top of 50 Turkish lira banknotes in this picture illustration in Istanbul, Turkey August 14, 2018. REUTERS/Murad Sezer/File Photo

The Turkish lira has lost nearly 40 percent of its value against the dollar this year, hit by a worsening diplomatic rift with the United States and by investor alarm about President Tayyip Erdogan’s influence over monetary policy.

Germany is the second biggest foreign investor in Turkey, whose biggest trading partner is the European Union.

“Risks remain particularly with regards to uncertainty over how Brexit is going to pan out as well as future U.S. trade policies,” the ministry said in its monthly report. “The persistent debate about tariffs and the threat of a trade war are choking trade activity.”

“The economic developments in Turkey present a new, external economic risk,” it added.

Despite such risks, the German economy remains buoyant, supported by state spending, private consumption, low interest rates, a robust labor market and rising real wages, the ministry said in the report.

Companies are also expected to raise investments as the global economy remains in good shape despite the threat of a trade war, it added.

Reporting by Joseph Nasr; Editing by Gareth Jones

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Economy

Newly elected Pakistani PM pledges to restore country's economy

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Pakistan’s newly elected prime minister Imran Khan said Sunday that the country is in the worst economic condition it has seen and pledged to cut government expenditure, end corruption and repatriate public funds.

In his first televised speech Khan, who a day earlier was sworn in as 22nd prime minister, promised reforms across all fields. “I want to see Pakistan a great country” with social services for the poor, Khan said.

Khan pointed to the growing divide between the rich and poor and said he would adopt austerity measures to relieve the strain on the economy and tackle the country’s foreign debt, over $95-billion.

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“The interest that we have to pay on our debt has reached a level that we have to take on more debt just to repay our obligations,” said Khan, calling on Pakistanis abroad to save their money in the country’s banks during this financial crunch.

Khan added that his government will also reform the police, health and education sectors, referring to his party’s successes in those fields in the Khyber Pakhtunkhwa province.

Khan spoke only briefly on foreign policy. “We will keep good relations with all countries; we want peace as without it no progress and development is possible,” he said.

Earlier in the day, the legislature in Pakistan’s largest Punjab province elected a member of Khan’s party as chief minister following last month’s elections.

Usman Buzdar won a majority of 186 votes out of 371 in the Punjab provincial assembly in Lahore, defeating Hamza Shahbaz Sharif, who secured 159. Sharif is the son of the previous chief minister, Shahbaz Sharif, and the nephew of former Prime Minister Nawaz Sharif, who has been jailed on corruption allegations.

Sharif’s Pakistan Muslim League won the most seats in the Punjab assembly in last month’s elections, but Buzdar prevailed with the support of independents and allied parties.

Khan’s Tehreek-e-Insaf is now the governing party in the National Assembly as well as the provinces of Punjab and Khyber Pakhtunkhwa.

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