Using Market-Driven Collaboration to Accelerate Innovation in Biomedicine
Science Exchange Inc., Palo Alto, CA, USA
The research landscape is currently undergoing an evolution driven by an “innovation crisis” that has left the pharmaceutical industry facing empty pipelines, patent cliffs and unsustainable development costs [1, 2]. Looking toward other industries for inspiration provides an opportunity to identify new collaborative models that may facilitate an innovation revolution that will enable faster, cheaper and better drug discovery in biomedicine.
A single scientist can no longer master all the techniques required to make major discoveries (many biomedical papers now have more than 10 authors [3]). Therefore, driving more collaboration between scientists is both necessary and highly beneficial. First, it increases the efficiency of research spending by promoting more complete utilization of resources and expertise, and enabling economies of scale. Second, it increases the speed of research because it can be conducted in parallel, and there is no downtime required for nonexperts to learn new techniques. Third, it increases the quality of research by enabling experts to conduct specialized, complicated techniques, which often have a steep learning curve. Improving quality is more important than ever—the quality of published research has recently been questioned, with more than 70% of published results estimated to be irreproducible [4–6]. Using experts not only improves the quality of research produced, but it removes single investigator bias, which may help to improve reproducibility of the results.
The collaborative economy is one model that shows great promise to facilitate increased scientific collaboration. Fueled by social networks and payment systems, the collaborative economy empowers individuals to buy goods and services from each other, rather than large corporate entities. The collaborative economy is highly efficient, allowing better use of existing resources and expertise, and generates higher quality products by enabling the use of specialized equipment and highly trained individuals. Interestingly, dramatic increases in collaboration have been observed in numerous industries where the barriers to adoption of a collaborative economy are far greater than in scientific research (e.g., sharing spare rooms via Airbnb or personal cars via Getaround). This widespread adoption has been enabled by aggregating demand at centralized online marketplaces, establishing trust via integration with social networks, and promoting transactional ease with payment platforms.
Examples from Other Industries
In the last five years, numerous companies have emerged to enable the collaborative economy to transform several industries (Table 36.1).
TABLE 36.1. Examples of Industries Transformed by Companies Creating Collaborative Economies
Industry | Example Company |
---|---|
Transportation | Lyft: A peer-to-peer ride-sharing network with a community of background-checked drivers who offer rides in their own vehicles. Raised over $80M from Andreessen Horowitz. |
RelayRides: A peer-to-peer car-sharing marketplace where people who need a car can “rent” one from an individual vehicle owner. Raised over $30M from Google Ventures, and General Motors Ventures. | |
Getaround: Similar to RelayRides, a peer-to-peer car-sharing marketplace that enables car owners to rent their cars. Raised $19M from Menlo Ventures. | |
DriveNow: Zipcar-like car-sharing membership program started by BMW and Mini. Similar initiatives have been started by Volkswagen (Quicar) and Daimler (Car2Go). | |
Uber: A mobile application that provides on-demand access to black car and limo operators. Raised $307M from Google Ventures, Goldman Sachs and Jeff Bezos. | |
BlackJet: Membership based program from the creators of Uber that provides “private jet convenience and reliability, at a fraction of the cost”. | |
Accommodation/Space | Airbnb: Peer-to-peer marketplace for renting spare rooms and entire homes. Raised $326M and recently valued at over $2B. |
HomeAway: Marketplace for vacation homes. Listed on NASDAQ (AWAY). | |
ShareDesk.net: a peer-to-peer marketplace matching unused workstations, offices and desks with free-floating workers. | |
ParkingPanda: Online marketplace for parking enabling parking owners to drive extra traffic when yield is low and improve pricing when the lot is full. Raised ∼$5M. | |
Labor | oDesk: An online workplace that enables businesses to find, hire, manage, and pay talented independent professionals via the Internet. Raised $44M from Benchmark Capital. |
Elance: Online marketplace to access 2 million freelance workers. Raised $95M from Kleiner Perkins. | |
TaskRabbit: Online and mobile marketplace that helps people outsource their errands and tasks. Raised $38M from Founders Fund. | |
Work Market: An enterprise-class platform and marketplace for managing contractors and freelance labor. Raised $15M from Spark Capital. | |
Banking | Prosper: Peer-to-peer lending marketplace with 2M customers. Raised over $120M from Sequoia Capital. |
Lending Club: Peer-to-peer lending platform that offers an alternative to banks with great rates for both borrowers and investors. Has over $2B in personal loans. |
The most well-studied is probably the transportation industry, which has seen companies like Lyft, RelayRides and Getaround enable car-sharing on a widespread scale. A University of California study found that every car-sharing vehicle replaces 9–13 vehicles [7], reducing the idleness of cars and car ownership overall. This obviously has tremendous benefits for the environment but also challenges the transportation industry’s existing players, many of which have adapted with innovative collaborative solutions of their own. For example, multiple automobile manufacturers have launched their own car sharing networks, including BMW’s “DriveNow,” Volkswagen’s “Quicar,” and Daimler’s “Car2Go,” creating rental markets for their previously purchase only automobiles. Zipcar was one of the early movers in this space, and was acquired by Avis for $500 million demonstrating the enormous value of the collaborative economy in the transportation industry.
Following closely behind the transportation industry—in terms of impact from the collaborative economy—is the accommodation industry. In this space homeowners are disrupting hotels, renting out their spare rooms or entire homes via online marketplaces like Airbnb, HomeAway and VRBO. Although only founded five years ago Airbnb now has more rooms available for rent than the entire Hilton group [8]. This market is estimated to be worth more than $26 billion [9].
Other examples of industries undergoing disruption from the collaborative economy include the labor market, where virtual workers can be hired on demand via oDesk and Elance, tasks and errands can be run using TaskRabbit’s, and businesses can manage contractors and freelancers with Workmarket; and the banking industry, where consumers can lend to each other at lower rates via Prosper and Lending Club.
What has Led to the Rise of the Collaborative Economy?
The major driver of the collaborative economy has been advancement in technology and its widespread adoption. Social networking, often integrated into collaborative economies, facilitates peer-to-peer transactions by matching supply and demand, and promotes trust by providing transparency around the profiles of the interacting individuals. The creation of online payment systems has been essential for enabling transactions to be easily completed between buyers and sellers.
A second important driver has been the ongoing economic pressure that individuals and businesses face. The ability to monetize excess idle inventory and expertise, and increase financial flexibility by only accessing what is required rather than over-investing in expensive capital equipment and full time hires, has driven adoption of the collaborative economy in other sectors.
These drivers are also applicable to scientific research. Companies in the collaborative economy have developed platforms that help people create wealth from excess and underused assets such as cars, houses and their own spare time. Can the same sort of model be applied to accelerate innovation in biomedicine?