That Convenient Mutual Friend

Whether it be creating a trend, solving a problem, or influencing culture, history or ideas, entrepreneurialism is one of the key ways in which individuals can change the world.

By looking at entrepreneurial businesses, we can explore not just differing structures, but also different cash flows, different balances of company values and the different ways passionate individuals make their ideas reality.

Divvy Parking

Nick Austin’s business Divvy is a prefect example of a one-man start-up. The company was founded in March of 2013, and just last month boosted its investment funding to $5.3 million. It is even discussing plans to expand into foreign markets.

But what does Divvy do?

The Problem

Divvy is an entrepreneurial solution to a specific but cascading problem. In the CBD’s of Sydney and Melbourne, traffic is terrible, most of it comes from people driving through to their destinations, some of it comes from vans and small trucks and some of it comes from drivers circling around desperately trying to find a cheap park. In fact, this minority can increase congestion by up to 30%. Not only is parking often hidden in the inner city or secured by business which don’t use many of the spaces they own, it is also expensive; the average price of parking per hour is around $20 in Melbourne and Sydney.

Nick Austin and his business not only plan to make parking more accessible, but also reduce this price to around $6 per hour. How?

The uncomfortable, tense atmosphere of a congested city road

-Mario Roberto Duran Ortiz-(cc)

The Solution

Divvy is a mobile and desktop application which takes advantage of the unused parking spaces of around 50 property groups in Sydney and Melbourne. These spaces which would alternatively go unused are being opened up through a payment system managed by the Divvy Parking app. A user can search for parking spaces near any location and rent them out monthly.

In their own words: “We use technology to create a digital marketplace allowing owners to list their spaces quickly and allow commuters to search for those spaces, and book them, at a touch of a button.”

“Divvy manages the whole aspect of the booking including payments, reporting, member communication. We essentially create transparency where it didn’t exist before. We automate the whole transaction and we make it safe.”

The Structure

While it is not entirely clear, the Australian propriety limited company currently seems to generate revenue from investments and from cuts made to Divvy by the property groups partnered with the app. A commuter uses the app to find the parking space they desire, then pays rent through the app to the property group or individual which owns it, with Divvy being payed a portion on the side. Because Divvy acts as the market for such transactions, they can afford to broker deals which break out of the price-fixing instigated by large car park companies such as Wilson’s Parking. Property groups partnered with Divvy can only gain money from this arrangement, despite the low prices Divvy claims to aim for, making it a very attractive market to become a part of.

Divvy plans, however, to expand the market, appealing to small businesses and even individuals, which would possibly change this model. Divvy could still be considered as in early stages of starting up, and in the future may transition into a publicly trading company, generating revenue from the stock market.

In all, Divvy’s profitability is only limited by the number of deals it can make with companies and individuals which own car spaces, and thus it is very scalable.

They are already geared up on Facebook and Twitter, and have over 3000 likes and followers on both platforms combined

But this has been done before

Divvy has been called the Airbnb of parking spaces. Divvy, like many start-ups, is a middleman. The resource has already existed for some time; parking spaces that could be rented out to the public have always dotted Australian cities. The reasons why these property groups never decided to rent them outright, or at least, were never able to gain the momentum Divvy has, is not entirely clear. The reality of the situation might be that for these groups, the amount of funds generated by renting out their unused spaces is minuscule, or they simply lacked the effort, drive or marketplace to sell them.

In this sense Divvy is force, a force combining elements of a pre-existing puzzle, just like Uber, Airbnb, or even eBay. These companies are almost convenience based. Their entire business model built around the concept that the world, in all its complexity, is inefficient in distributing resources.

Build a bridge between what people have and what they need

-Adam.J.W.C.-(cc)

Divvy is yet another point of proof that businesses do not always need to create something new. It proves that there is always room for another daring entrepreneur to build the bridge between what people have and what they need. In fact I would go as far as to say that services like this are essential to the development of a nation flung into an era of technological advancement, massive populations and ever more complex interconnectedness.