KPI's in sharing economy platforms - What are the most important KPIs for sharing economy platform startups. Case study: A Finnish sharing economy startup.

Abstract

In the recent years, number of industries have seen a rise of sharing economy platforms. Traditional industries such as transportation and accommodation have been disrupted by companies like Uber and Airbnb, which are seeing enormous valuations and have been able to expand internationally at an exceptional speed. In addition to the big market leaders, new startups operating with a sharing economy business model are being born by hundreds annually (Constantiou et al., 2017). Parente et al. (2018) stated, that platform-based marketplaces have been the most prominent business models among new startups.

The current literature is mainly focused on how sharing economy developed and the dynamics of its business models, but due to the novelty of the topic, it is lacking direct studies of KPIs in sharing economy. This study aims to answer the question “which KPIs should sharing economy platforms focus on” by taking a look into the literature on sharing economy, business models and KPIs. This is supported with an interview of a CEO of a Finnish sharing economy platform startup to bring empirical data to the study. The data gathered from the interview is then compared to literature.

The results of the study suggests that KPIs are an important part in decision making among startups, but all KPIs are not created equal. Main factor affecting which KPIs should be prioritized seems to be dependent on the stage of the company. Three most important metrics were retention (i.e., customer churn), growth (i.e., monthly recurring revenue), and profitability (i.e., profit margin). However, when a sharing economy platform has not acquired its critical mass of users, profitability turned out to be the least important aspect, whereas customer-related KPIs, especially customer retention, was considered the most important.