It was a hype, the sharing economy. The world would go ‘from possession to use’, sharing things would significantly reduce consumption with a circular impulse to sustainability. In the consumer market, Peerby (renting your neighbors), the car sharing platform Snappcar and of course the house rental company Airbnb grew into well-known brands.
B2b marketplace as a sharing economy
In the business market, Floow2 was one of the biggest promises in the sharing economy at the time. A B2B marketplace where companies can find excavators and other capital goods, but also storage space and staff could share and exchange.
Founders Lieke van Kerkhoven (41) and Rob Haenen (33), like Peerby founders Daan Weddepohl and Victor van Tol from Snappcar, got a podium everywhere to promote the possibilities of the sharing economy. Governments, branches and large corporations thought it was the right thing to do: fight waste and downtime with the parts marketplace.
‘In the first few years we did a lot of missionary work,’ says Van Kerkhoven (photo above). ‘We had a lot support from the other sharing economy actors who wanted to raise awareness of the sharing concept. What we did was innovative, it was in line with the circular economy and we appeared in all kinds of trend reports. We also spent a lot of time on ‘lists and prices’: prices.’
Mixed success Snappcar, Peerby and Airbnb
Ten years later, the sharing economy still holds great promise. Snappcar is doing reasonably well but is far from its dream targets, Peerby recently claimed to have had its first profitable month. But apart from Airbnb, where big money circulates, most sharing platforms have yet to become a part of our daily existence as consumers.
You have to work hard to make a sharing marketplace run well
The business sub-markets that Floow2 established in recent years have not all succeeded either. Co-founder Lieke van Kerkhoven is honest about this: ‘When it came to platforms, the unicorns were flying around you all those years, but in our corner it works differently. You have to work hard to keep a parts marketplace running smoothly. As an entrepreneur, you need a huge layer of hard skin on your soul and a lot of patience.’
Marketplaces as a service
Floow2 is set up as sharing marketplace but now delivering the online marketplaces as a service following the now trusted SaaS model. After an initial fee to set up the marketplace, users pay per account. The customer could be an individual business, but sometimes it was business park managers or municipalities that paid to run a local marketplace.
The healthcare sector is where Van Kerkhoven himself experienced the potential power of the sharing economy. ‘I was the manager of a clinic in Amsterdam and often arranged an operating theater or, for example, a part for an ultrasound machine that broke. But always from our informal network. It was a matter of emailing and calling hospitals and other clinics in the area. You saved 10,000 euros on such a part. But such a reply-all email is of course not scalable at all.’
The healthcare sector is a promising market
That got the entrepreneur thinking. When she found out that Floow2 had just started a marketplace in response to all that email and networking, she joined. She thus laid the foundation for Floow2 Healthcare. From the beginning, the healthcare sector seemed like a promising market, where medical equipment, medicines, but also furniture were redundant in one place, while they were in demand elsewhere.
And in the end, it’s one of those promises that came true. Floow2 also initially scored a hit in the construction sector. In Belgium, with Werflink.be, created in collaboration with The Flemish Construction Association. ‘It went well, a lot of raw materials and equipment were used. Until the pilot ended and no one really owned the project. Then it collapsed again. Such a marketplace needs a party to keep paying attention to it, to keep it alive.’
Sharing requires trust
With many local marketplaces around business parks, under the name Parksharing, this was also the case after the initial enthusiasm of all participants. The lesson here is that community spirit plays a role in a marketplace’s success. Trust is necessary before you offer anything online for all to see. ‘A business park doesn’t seem like the ideal connection anyway.’
“There was a lot of appreciation for what we did. We started many projects, but the participants’ use of our marketplaces lagged behind. At the beginning, we also experienced one participant dropping out because of negative media attention: Collected things that were paid for with public money, dust?’
Specific market or target group
A shared marketplace was found to work best for a particular market or target group whose members share a connecting factor with each other. Ideally, they should know each other or at least trust each other enough to share information with each other. And although any company can be easily convinced of the possible savings or environmental benefits, the daily practice is more unruly.
‘As a consumer, you decide for yourself whether you dare to rent out your car. But if you are a decision maker in a company, you will be blamed if something goes wrong with an expensive machine that you share. It makes people shy’.
Connection to the purchase process
Furthermore, a marketplace does not simply link to existing procurement processes: ‘We support this with support for internal communication. How do you ensure that your employee does not automatically press the order button, but first checks if there is an offer on the Floow2 marketplace? I sometimes joke: We are a software company that sells behavior modification.‘
We even had marketplaces in China and Russia, it drained energy
So gradually Floow2 focused on building specific ‘white label’ marketplaces. Sometimes these are strictly internal, such as in one hospital where departments did not even know from each other what resources they had left. There is now also a care provider with 800 places that share things with each other but also work. “During corona, this came to a standstill due to the restrictions, but it has started up again for a few months.”
Internal crisis due to corona
Until the corona struck, the other marketplaces for the healthcare sector gained the most momentum. ‘But there is also a large European clothing retailer who wanted to establish a marketplace in four countries for sharing store interiors and furniture.’ That marketplace did not go live due to the shutdowns. And then several projects came to a standstill during the corona crisis.
The same would almost have been the case for Floow2 itself. ‘The crisis also caused a crisis for us. We had started so many things in the years before that did not contribute to our success, all just to collect users and transactions. We even had marketplaces in China and Russia. It consumed energy, we were disillusioned and the spirit threatened to run out.’
Get to the point
‘It was hit or miss because after all these years we still couldn’t say: now it works. Together with our two co-founders and investor, we asked ourselves: are we doing this because we believe in it, or are we just stubborn and don’t know what else to do?’
For Van Kerkhoven and Haenen, the belief was strong enough to continue Floow2 as a duo. ‘But under the motto get to the point we’ve stopped doing a lot and are entering the market in a much more business-like way. This is what we offer and this is what we need from you to make it happen. We no longer do one-off projects, but always charge a fee per account or per transaction after the cost of production.’
Corona puts pressure on the sharing economy
Corona certainly gave the healthcare sector the boost that the sharing economy could use. ‘What about the mouth masks, which were impossible to pull on at the beginning? Everyone there now understands the benefits of collaboration and transparency. It has really accelerated the marketplaces.’
The best evidence at the moment is Pharmaswap, which now includes more than 660 pharmacists share unused medicine that would otherwise end up as medical waste. It is a joint venture with two enterprising pharmacists who got the green light from the Health and Youth Authority in 2021 to scale up.
We can live off the production fees, but the SaaS revenue is just as interesting
‘We have made a huge journey with it. Millions are wasted every year at the pharmacies, but as a general rule the pharmacies must not buy medicines together. The results of a pilot with twenty pharmacies were so good that, after a period of tolerance, official approval was given to the model we now use together with Pharmaswap.’ Because the use of the marketplace is prescribed, Floow2 can settle per transaction.
Health marketplaces in Denmark and England
And also internationally, the sharing economy seems to be enjoying a new lease of life. Large marketplaces start up in Denmark and England, which are supplied by the Dutch equity specialist. Danish healthcare is divided into regions. ‘Around Copenhagen is in two months, almost 250,000 euros and more than 70,000 kilos of CO2 saved. There they started with furniture, to explore how it works.’
In the UK, it is a logistics software provider that will offer a marketplace to the public health institutions of the NHS.
SaaS revenue is growing well
Currently, Floow2 is self-sustaining and Van Kerkhoven and Haenen can support themselves and a team of developers with it. Around 30,000 accounts are active across all marketplaces, including institutions, accessed by thousands of employees.
It is difficult to estimate the number of transactions, but Pharmaswap is now circulating drugs on a daily basis. ‘That’s enough confirmation for us to continue: we can live off the production fees, but the SaaS revenue is now growing well, and that’s at least as interesting.’
In the spring of 2021, the Intrakoop Sharing Platform for healthcare was launched, where healthcare institutions can supply and demand products, services and knowledge – powered by Floow2. It is now looking at Germany with pharmacists in Pharmaswap. This autumn, a marketplace will also be launched for European laboratories, with the Swiss Cern as a participant, among others.
Sharing economy works for companies
All’s well that ends well? Not that anymore. “But it feels good now. What the Danes have achieved in such a short time is truly unprecedented.’ The sharing economy therefore has a future – even after ten years – for Van Kerkhoven.
‘The sharing economy works especially for companies. All sectors know how to come up with why they are so special that it doesn’t work for them. But that’s bullshit. Once they have passed that threshold, they can save a lot and better meet the sustainability goals, which are becoming more and more applicable.’