Oh, and there we were all in one place / A generation lost in space / With no time left to start again
Don McLean, American Pie
If an alien probe scanned Earth right now, they would probably think “Millennials” are an organized-crime cartel. They would be drawing this conclusion, of course, from the hundreds of “Millennials are killing” articles you can find on the internet. Just a simple Google search shows millions of results under this query — endless lists of things, businesses, and entire industries Millennials have cold-bloodedly killed (or are in the process of killing).
So, what’s up with all these murderous thoughts Millennials have been having? And what does it all have to do with the subscription business model Gary Vee has been grouchily shouting about throughout cyberspace? And why is Gary so hyper about it, anyway?
OK, nobody can truly answer that last question, but the other ones are relatively straightforward.
Let’s start with the elephant in the room.
Millennial Economic Assassins?
The aforementioned Google search portrays everyone born between the mid-80s and the mid-90s as blood-thirsty, inconsiderate creatures of some sort. From napkins to the doorbell industry and from sex to cars, Millennials seem to be the ultimate culprit for the demise of an entire civilization.
In truth, the issue of whether or not Millennials have killed anything is much more complex. Indeed, Millennials have been less than eager to settle down, buy cars, and, all in all, be owners of pretty much anything that previous generations had inserted in their definitions of “success.”
In turn, Millennials have given the world a boost to turn away from ownership and embrace life, one experience at a time. Moreover, they have been shaping a world where people don’t need to own things, but use them at their own convenience, for however long they choose to.
This “new” business model makes a lot of sense. It’s not a fad, and it’s not something that will die with Millennials (as younger generations are coming strong from behind, even fiercer and more blood-thirsty). It’s here to stay and, dare I say, it’s here to reshape how we spend our money.
Millennials are 8% less likely to be homeowners than the two previous generations. The logical conclusion to draw from this leads us to a long list of things Millennials don’t want to be owners of: appliances, furniture, and pretty much everything home-related.
Bear in mind, just because Millennials are not that eager (or financially potent) to settle down in their own homes, it doesn’t mean they all live in tents on the outskirts of the big cities. They just rent places for as long as they need them.
There are also fewer car owners among Millennials, but that doesn’t mean they just stay at home all the time. No, they get around on buses, wacky mopeds, scooters, and bikes, and call an Uber whenever they need to get somewhere quickly.
Excuse Me for Being a Millennial
Despite what Boomers might believe, our first words were not “avocado” or “I can’t even”. Millennials came into a world that was a little broken, a little shaky, and a little unwell. A world where our grandparents could afford houses and cars and education by the time they were 20, but where our parents had started dragging in loads of debt just to own all that.
We like our avocado toast because it’s a taste of a world we never got to bake. We don’t settle down because we’re mobile and, frankly, too poor to buy houses and change our cars every 5 years. We also don’t quite like owning many things because it doesn’t make sense to us. Why buy a car when you’re only going to use it sparingly? And why settle down into a suburban house when your job might take you to a different location on Earth next month?
With Millennials being the biggest players in the workforce right now and Generation Z coming in strong, the reign of ownership will become a long-forgotten story for a very simple reason: it does not make sense and we cannot afford it, especially with our shifting tastes, living spaces, and passion for luxury avocados.
What makes sense for us are Uber and Netflix and subscription boxes that make us smile month to month. What makes sense to us are on-demand products and services.
We may have killed an economy, but we are rapidly building a fresh one on top of the ruins of the old business models. We call it the access economy, and it somehow manages to bring together everything our world needs right now: solutions for the restless luxury lovers who can’t really afford that much but want to experience everything.
The Access Economy and the Subscription Business Model
In 1972, Don McLean was singing about the loss of innocence of a generation that was set out to move mountains, take down the status-quo, and bring socialism “Lite” into the far-Western world.
Whether or not McLean was representative of the Baby Boomer generation (which, mind you, had very little to do with the hippy movement), that’s entirely up for debate, and totally not the scope of this article. Find me on social if you want to discuss the 1960s.
The point of me bringing up those three lyrics is a lot less intricate than discussing the rise and fall of the hippies. In fact, what I am not so subtly implying here is that all generations felt “lost in space” at some point. And Millennials made no exception.
We got lost in Space Invaders, the beginnings of the internet, socializing on MySpace, and, finally, we got lost in geographical and economical spaces we did not fit in, for all the reasons we have already discussed in the first section of this article.
That, of course, until it was our turn to come of age and transformed all the things that made us, the “killers,” into the “promoters” and “users” of a whole new type of economy.
“Access economy” is a term that is frequently used as a synonym for “sharing economy” and commonly used in conjunction with “collaborative consumption”. Given that Millennials are massive fans of all this, you’d think they are the ones who coined the concept, but no, the basic lines of this idea have been around since the end of the 1970s.
It’s just that the internet and the more recent socio-economic context made it all possible.
In very simple terms, the access economy is defined as a collection of business models centered around the concept of no ownership. As Alex Danco puts it, when access to goods and services becomes cheap, rises to a high standard of quality, and is reliable enough, you get what is generally referred to as “access economy”.
Netflix is a great example of how the access economy can become profitable. For a price most people can afford, Netflix provides its users with a seemingly endless array of video entertainment options ranging from low-rated movies to Emmy-winning TV shows. Naturally, nobody on Earth can ever watch everything on Netflix — but, because this entertainment mogul has nearly 200 million subscribers, it can afford the vast range of TV shows and movies it offers for the relatively affordable prices it collects from all these users.
All these subscribers are not paying to own any of the movies. For their subscription price, they can’t take Orange Is the New Black and put it on their shelves for display at home. But then again, they don’t care about that either; they just want access to the experience of watching the show at their own speed, at their own convenience. And for the money, they get that show and that other one, and a thousand others ready to be streamed at the push of a button.
This business model works because it’s affordable, reliable, and qualitative enough for everyone to buy into it. How long will it be before the same can be said for pretty much every other subscription business out there?
Why YOU Need to Embrace the Access Economy
OK, so, the subscription business model works (Netflix and others are proof of it).
Does that mean that we’re all heading toward a world where this is the only model that works and the access economy is completely taking over the old world?
Well, yes. And no. It would be unjust and perhaps a little rushed to say that the access economy will soon be the only viable option. There will probably always be people who’d much rather own than rent and share.
On the other hand, with Millennials being everything we discussed and with them being the next big buying power on the global market, it is quite likely that subscription business models will thrive. And little by little, the “Sharing Economy” concept will stretch outside of the realm of money-making and into the very real world of politics, legislation, and technology advancements.
Simply put, you kind of need to embrace the subscription business model because it is one of the main ways to go forward. As your market splits between owners and renters/sharers, you want to be able to provide something to everyone.
And don’t be fooled, the subscription market today is far from being weak. It is not trembling its way into the world as it did one or two decades ago. According to the Subscription Economy Index released by Zuora in 2020, subscription businesses have an expansion rate of 12%. They are not just “here to stay”. They are here to take over and reign supreme.
Pretty much any product and service you can imagine can be turned into a subscription-based business. Cars, flying, working out, nutrition, health, home maintenance — they can all be shaped into the mirror of the rising access economy. This is not a hipster fad. When car manufacturing behemoths like Audi and Toyota are releasing subscription-based models for their products, you know this is real. As real as it gets.
The good news about the access economy is that it’s still relatively new. This means there’s a treasure trove of subscription business ideas out there, and it’s only a matter of time until our entire lives will revolve around this business model.
We’ll rent our furniture and our home appliances, we’ll have subscription boxes with fruit and vegetables dropped at our doors every week, and we’ll never, ever, want to own a waffle maker again because, let’s face it, we only use it once a year, on our wedding anniversaries.
Millennials might have killed a lot of ownership-based businesses, but they’re all in for the high-end life at a subscription price. And they have all the reasons in the world to love all this, from the uncertainty of what they’ll want (or afford) next month to the insatiable thirst they have for the good stuff. The high-end luxuries and the comfort of an endless world of options available one click away. The high life without the high price. Soul-feeding diversity without the burden of owning things.
Socks, shaving products, laptops, business suits, candy, you name it and it can most definitely be (re)shaped as a subscription business to fit into the Sharing Economy landscape.
Because as long as there are recurrent candy eaters and Halloween comes around every year, candy-as-a-service will make a lot of sense to perpetually sweet-toothed subscribers.
Despite Millennials being a catalyst for it, the future of the economy has nothing murderous about it. In fact, it is an exciting, lively, diverse, and fruitful landscape to be in.
And that is exactly why now is the time to embrace the subscription business model.