5) THE ACCESS ECONOMY ==> WHAT WILL HAPPEN?

When I spoke to Chip Conley, head of Hospitality at Airbnb, he used one phrase which changed my opinion on the entire economy.
“Nobody is sharing,” he said, “It’s not the sharing economy. It’s the Access Economy.”

This is the business model of every business in the access economy:

• Some people have an excess of an item (e.g. empty rooms, empty car seats, etc).
•  Some people want access to that excess.
• And then there is a platform in the middle to help with discovery, transactions, problems, mediation, etc (Airbnb, Uber, etc).

If you brainstorm where there is excess in your life (even an excess of knowledge that others might not have) you can create a business in this model.

Economics Lesson: What happens when people have access to things they never had access to before?

Supply goes up. Demand remains basically the same.

So Economics 101. Price eventually goes down. Which means deflation for the first time in 100 years.

Warren Buffett once said that deflation is the worst thing that can happen to the economy.

If prices fall, people wait until they get even lower, so demand goes down, so prices fall more. So less jobs are needed, so less people have money, and then demand goes down even more while supply gets higher than ever.

So prices go even lower.

Death spiral.

Elon Musk recently addressed this. He said we might need UBI: “Universal Basic Income” for everyone to handle the economic collapse that will result.

Maybe. Who knows? Nobody knows.

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