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Silicon Valley app-centric upstarts reshape traditional businesses  

What is a Silicon Valley unicorn?  In case you didn't know, that's a startup valued at more than $1 billion. No surprise that the original definition references a mythical animal.  Perhaps the essential characteristic, then, may be that it was mythical.  Let’s consider that in December, 2015, the $66 billion market cap of one of these app-based myth-makers had exceeded that of 80% of the companies in the Fortune 500. Okay, so following a recent trip to Silicon Valley, it seems important to snatch reality back from the jaws of terminology buzz, recognizing that: 

The on-demand marketplace gets you a temp assignment.  Looking back in the distant past, you and I all probably worked briefly in 'on demand' businesses.  But in those days, you weren’t an 'on demand' worker – you were a temp.  Long, long ago, people who accepted brief-tenure assignments worked through temporary staffing agencies.  If you were female, you might even have been called a 'Kelly Girl.' Or perhaps you called a car service to pick you up for a business meeting. And will workers for these businesses (part of the 'everybody is suing Uber' trend), make a decent wagesue for benefits or be categorized as employees and expect unemployment benefits?   Is financing for the on-demand world leveling off? Oh, and perhaps we should note the creativity of corporate tax strategy.

The sharing economy gets you short-term rentals.  First – what is this frothy concept? Definition: 'borrow or rent assets owned by someone else.'  It sounds so artful, so clever and socially forward-thinking, that Airbnb has a $25 billion valuation – because of course, the asset being rented is not theirs, it's yours. The sharing economy has become 'hyper-local' and you can now obtain an item (for a fee) from your next door neighbor.  In the old economy, this used to be called the 'rental' business – and HomeAway, which acquired that other old economy business Vacation Rental By Owner (VRBO), is valued at only $3.9 billion. (FYI – Home Away also did not own the homes you rented.)  

The Internet of Things invades your data, uh, your home appliances.  A WiFi refrigerator is where you can read the news or your email, and also check the weather and whether you're out of milk. Then there's a connected thermostat that accidentally freezes the room, a bulb that dims to tell a child it is bedtime, or you turn off that light from your smartphone while you’re still in the car. Doesn’t that all sound so, well, advanced and sophisticated?  Maybe not -- what if, as with $20 webcams, images of sleeping babies can be viewed all over the Internet? Apparently, say experts, consumers don’t care or won’t pay for more secure devices.

But tech-enabled services do create positive pressure on long-standing businesses.  Consider that Boston taxis and limo firm Boston Coach now have an on demand mobile app, that tech-enabled home care firms may put pressure on traditional home care companies, and that Craigslist and VRBO also compete with Airbnb. Further, consumer shock and awe at Uber surge pricing no doubt contributed to the emergence of external price estimators. You willingly hand over your phone number and address to these on-demand companies to obtain the service -- and trust that they won't package up your information and resell it to advertisers. Also worth considering -- when you buy your next blender, will it be too smart for your own good? When you launch a new economy app from a phone, tablet, or computer, have you looked at the settings and defaults? Have you opted in to share everything? Or did you just trustingly update an app -- just to discover something new, something that you didn't really want after all.


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