Disruptive network innovation in free guided tours

ABSTRACT

This article provides an analysis on how disruptive innovation is spurred by the dynamics of digital and analogue networks in the sharing economy. The analysis builds on a free guided-tour company in Copenhagen. Data is collected in a bottom-up reiterative process, drawing on theories on disruptive innovation and network theory. Between 2013 and 2016, one of the free tour companies in Copenhagen was followed by means of participant observations, interviews with tour guides and interpretation of online documents. Results show that free guided tours based on tips alone and orchestrated within the frame of the sharing economy are not merely a product innovation. More importantly, they entail disruptive market innovations that circumvent traditional industry structures and ultimately produce disruptive organizational innovations where trust in network is the crux. Free guided-tour companies operate as communitarian organizations in extractive business models, and they are game changers in the field of guided tours, and ultimately in the field of tourism.

KEYWORDS:

• Free guided tours
• disruption
• networked innovation
• sharing economy
• trust

Introduction

Guided tours have been conducted since ancient times, and they have evolved and transformed through the centuries, adapting to ever-changing conditions in society. They are resilient but concurrently open to innovation. One of the latest innovative turns in guided tours is found within the sharing economy, reflecting a major trend in tourism nowadays (Dregde & Gyimóthy, 2015; Londoño & Medina, 2017; Meged & Kristensen, 2017). The sharing economy proposes new, super flexible business models, eliciting idle resources at particularly little cost. These are facilitated by the dynamics between social networks on- and offline, technological developments as well as by ideological claims of shared communities, sustainability and non-profit (Botsman & Rogers, 2010; Gansky, 2010; World Economic Report, 2014). The sharing economy carries the seeds of disruptive innovation, which has the potential to completely transform a market (Dregde & Gyimóthy, 2015), as shown in Guttentag’s (2015) research on Airbnb in the accommodation sector. Based on these prerequisites, the authors study the conditions and the role of the dynamics in and between networks, and possible innovation outcomes in tourism.

The tourism industry consists of a large number of individual actors and organizations cooperating in and across space. Cooperation in networks is changing rapidly due to access to ubiquitous ICT. Social media like Facebook, TripAdvisor and Twitter empower private customers (Munar, 2013), but they also provide a whole new low-cost interactional marketing platform for the industry (Meged & Kristensen, 2017). Social networks are defined as nodes that are linked by social relationships and that occur between organizations and/or individuals (Sørensen, 2007). Thus, in emphasizing what happens among such nodes, network innovation centers around knowledge that flows from one part to another, thereby facilitating innovative steps to be taken. In this regard, trust is a cornerstone in social networks (Sørensen, 2007). The importance of this statement is growing further as the spheres of work and privacy are becoming increasingly blurred nowadays (Denicolai, Zuccella, & Cioccarelli, 2010; Donati, Zappalà, & González-Romá, 2016; Kuo, Kuo, & Ho, 2014; Shazi, Gillespie, & Steen, 2015; Tolstad, 2014).

Network innovation and trust have been considered important for tourism development, and perceiving that guided tours are changing quickly, this paper argues that such factors are significant for this field as well. As a consequence, we need to understand how guided tours are developing, how new structures evolve as a part of a changing society, and how novel players betake themselves into this field, using new methods to run their business. Weiler and Black (2015) have recently published a fundamental discussion on guided tours based on 280 identified papers within the research field. In addition to them, Cohen, Ifergan, and Cohen (2002), Dahles (2002), Salazar (2008), Meged (2010) and Zillinger, Jonasson, and Adolfsson (2012) are important recent contributors. Guided tours and innovation have been studied in relation to its content, as in the case of Budapest, where Rátz (2017) shows that niche tours can contribute to the repositioning of the city. Apart from this, innovation in relation to guided tours has primarily been understood in terms of technical innovation, as in the study of Meliones and Sampson (2018). To the authors’ knowledge, however, there are no other studies connecting the concepts of social network, innovation and guided tours.

A highly prominent current innovation within the field is the introduction of so called “free guided tours”. Such tours are offered free of any official participant fees and finish with voluntary tips bestowed at the end of the tour instead. They have entered the market swiftly and grown exponentially, which is characteristic for many sharing economy enterprises. In fact, guided tours are part of a current paradigm shift that is transforming parts of our societies via the sharing economy (Botsman & Rogers, 2010; Gansky, 2010; Dredge & Gyimiothy, 2015; Rifkin, 2014). This development is empowered exceedingly by ubiquitously available information. In parallel, research is clear on the fact that innovation, as it takes place, preferably occurs within and between social actors (Hall & Williams, 2008).

Based on this discussion, the paper contributes to comprehending the world as we know it through the study of networked innovation in guided tours. In this, it refines the concepts of networked innovation and disruption in triangulating the terms within the fields of sharing economy and guided tours. Eventually, the paper aims to assist actors in the field of guided tours to understand the current changes, and to make decent decisions in the field’s adoption to this change. The paper asks: How do the dynamics of networks of free guided tours spur market- and organizational innovation and what role does trust play therein? To answer the questions, Copenhagen Free Walking Tours (CFWT) is studied. CFWT was born out of the organization Sandeman New Europe (SNE), and both are presented briefly hereafter.

Introduction to Copenhagen free walking tours

Until 2012, the guide market in Copenhagen was fairly protected – not by law, as it is an entirely free trade, but through collective bargaining with major employers who, by gentleman’s agreement, predominantly hired certified guides (Meged & Kristensen, 2017). There was a market for non-certified guides who either worked as self-employed or were hired at far lower tariffs. Its share was small, however. Free guided tours as a mass phenomenon were unknown until SNE brought the concept to Denmark in 2012, from Berlin at the time.

The basic product is easy to understand: guides offer tours for free and their participants tip them according to their own level of satisfaction. The tours are regular walking tours to the highlights of the city conducted in an informal peer-to-peer atmosphere. The guides’ earnings stem exclusively from tips. From this income, they pay what is called a “marketing fee” to the company, based on the number of participants. SNE’s marketing and sales operates principally through social media and they offer daily tours with several departures in English and Spanish, except for wintertime, when English is the default language.

CFWT was founded by three former SNE guides in late 2012 and is a local independent company. Their products and ways to operate the market are similar to SNE, but they differ in organization: while SNE has a classical top-down structure, CWFT opts for co-ownership and collective management. The two companies work side by side on the same locations, and CFWT, too, have several daily departures in English and Spanish. They operate all-the-year, come rain or shine. Growth has been exponential for both. SNE works with over 400 freelance guides and caters to “over 1.5 million annual visitors per year in 18 cities across Europe” (Sandemans New Europe, 2016). In 2016, CFWT engaged 25 guides during summer, and they forecast 100,000 visitors in 2017 for their tours alone in Copenhagen (Guide D, Copenhagen Free Walking Tours, 2016).

Theoretical reflections on network innovation and guided tours

In order to understand how innovations in guided tours are spurred by networks within a sharing economy framework, the selected theoretical concepts have to be understood cohesively. Such concepts include network innovation first of all, but during data collection and initial analysis, the concepts of trust and disruption were included as well. In discussing the concepts, a web of theory is gradually built in order to conduct the subsequent analysis.

Sharing economy, disruption and network innovation

Sharing economy, middleman economy, peer-to-peer economy and platform economy are just a few of many names for an economic phenomenon on a fast rise, starring Airbnb and Uber, but also smaller companies such as CFWT. The basic notion is that idle resources such as individuals’ underused physical assets or services may be mobilized and connected directly to the marketplace via Web 2.0, where they will be exchanged for free or at lower cost than within regular business. Web 2.0 is the second generation of services accessible on the Internet, letting the users collaborate and share information online. Exchange via Web 2.0 is at the core of the sharing economy, and it is facilitated by trust mechanisms in review systems that work both ways among peers. As such reviews become valuable assets, they will contribute to innovation (Belk, 2014; Dregde & Gyimóthy, 2015).

In a Nordic context, innovation research is vital. Hjalager has examined the phenomenon for a long period of time. Together with Kwiatkowski and Østervig Larsen, she pointed at five innovation gaps in Scandinavian tourism in 2017, among them the knowledge gap. Since 2016, Jørgensen Nordli (2016, 2017) has pointed both at the probability for tourism firms to innovate if they use cross-functional work teams, but also that parts of tourism innovation are actually hidden, due to their partial invisibility.

Christensen’s (1997) concept of disruptive innovations describes a process in which new phenomena completely transform a market by offering distinct sets of benefits, e.g. price or convenience. Guttentag (2015) uses the theory to understand Airbnb’s success, explaining how a disruptive product might first under-perform, but offer other benefits instead, e.g. cost, convenience or simplicity. Such products may first attract low-end- or non-users, but as improvements take place over time, they increasingly appeal to the mainstream market. By then, formerly leading companies may struggle to compete. In contrast to incremental innovations that include smaller modifications, disruptive innovations change the rules of the game and stretch beyond contemporary consumer preferences (Hall & Williams, 2008). In this way, they explain what happens as paradigms shift and thereby completely change market supplies and/or consumer behaviors.

At the heart of the sharing economy lie digital and analogue social networks that are of particular interest for tourism innovation, as the tourism system itself consists of a bundle of cooperating individuals and organizations. The network innovation approach has been used in various tourism studies in recent years (e.g. Della Corte & Aria, 2014; Denicolai, Cioccarelli, & Zuccella, 2010; Fuglsang & Eide, 2013; Tolstad, 2014), all pointing to the importance of studying relationships and trust to understand tourism innovation. Palacios-Marqués, Marigó, and Soto-Acosta (2015) denote the special importance of online social networks for enabling innovation.

Spatial proximity has historically played a major role for the creation and development of networks and their subsequent innovations, and retains its relevance to this day (Hjalager, 2010; Sørensen, 2004, 2007). However, the introduction of the Internet, particularly the launch of the interactive Web 2.0, has substantially simplified cooperation. The establishment of this reciprocal type of conversation encourages interaction between different actors significantly, independent of physical distance. This new type of conversation is characterized by openness, user participation and knowledge sharing in contrast to formerly more institutionalized networking. Min and Ku (2016) process this idea in showing that ICT, as a part of social media, facilitates the development from a mere competitive system to a structure based on cooperation and finally on trust. This indicates that the use of ICT contributes to new forms of innovation processes in which individual actors share ideas on the foundation of trust.

Innovation and trust

Network innovations and the sharing economy are closely related to the notion of trust, which can generally be understood as one party’s belief in another. Principally, links between actors have been described in relation to their strength and intensity as strong and weak ties, respectively. Such theoretical discussions date back to Granovetter’s seminal work in 1973 and have been used to describe network relations ever since. For example, the study by Uzzi (1997) sustains Granovetter’s work empirically, pointing at the importance of trust between actors for innovation to occur – a notion that is also supported by Burt (2005) and Fuglsang and Eide (2013). However, in a recent study, Gausdal, Svare, and Möllering (2016) have identified that a high level of trust is not enough. To achieve innovation, cooperation is required, too. Cooperation is central to innovation in the sharing economy and is nowadays mediated primarily through web-based platforms. In cases where actors do not necessarily meet on a daily basis, as in free guided tours, ICT gains a special importance (Dregde & Gyimóthy, 2015; Gansky, 2010).

In their study on knowledge sharing and innovation, Kuo et al. (2014) found that friendship at work, together with job satisfaction, positively affected organizational innovations. In their discussion on friendship densities, Donati et al.’s (2016) ideas on friendship network density and communication network density help to describe social network characteristics. Here, friendship between team members positively influences the individuals’ inclination to promote new ideas, to suggest new thoughts and to implement these in the network.

Trust can be understood as “the belief that an individual or group makes good-faith efforts to behave” honestly without taking unnecessary advantage of a situation (Cummings & Bromiley, 1996, p. 303). Trust contributes to strengthening relationships and enhancing the efficiency of network structures (Denicolai et al., 2010). In their integrative model of organizational trust, Mayer, Davis, and Schoorman (1995) present the perception of others’ trustworthiness as divided into three possible foci. While ability describes cognitive notions about another person’s skills and competences, benevolence is about the belief that the counterpart has an authentic wish to do the right thing. This also includes emotional attachment. Last, integrity is about values that are shared by both parties. Shazi et al. (2015) have applied these concepts in their research on social innovation networks in project teams, and found that all three of them play an important role for the innovation process, and that benevolence, in particular, has shown to consistently occur as an important factor.

Method

This study aims to understand how network innovation takes place. Data are collected in a bottom-up reiterative process drawing on disruptive innovation and network theory. From 2013 to 2015, CFWT has been followed by means of, (i) interviews with tour guides, (ii) recurring participant observations, and (iii) netnography, i.e. the interpretation of online documents. Netnography was primarily used to receive background information and to find examples on information that was received by observation and interviews. The first two methods were equally important. As CFWT was born out of SNE, the latter was included to some degree as well.

In trying to understand the situation, a constructivist approach was used, in which the authors learned about the activities, that make up the social worlds of the participants (cf. Holstein & Gubrium, 2008; Silverman, 2013). The in-depth interest in the Hows and Whys of networked innovation induced the authors to use the typical case study approach, whose objective is described by Yin (2014) as capturing the conditions of everyday life, and allowing the researcher to observe vital social developments. The case studied consisted of the guide company CFWT in Copenhagen, chosen because it demonstrates innovative capacities within the field of networked innovation.

As studying the occurrence of networked innovation is quite a complex task, a mixed method approach was applied. In this way, the choice of methods reflected more than just mere data collection techniques, but was rather based on the authors’ way of seeing the world. To gain background information on the chosen organizations, netnography was applied. Being used for the analysis of social media, netnography can be seen as online ethnography (Blichfeldt & Marabese, 2014). The organizations’ websites, Facebook accounts and TripAdvisor sites have been followed extensively since 2013 and more intensively throughout 2015 and 2016. Background information on the guides was of interest, including their number and origin, as well as their own presentation. Focus was also on the organizations’ marketing strategy: who is the target group, and how it is reached? This included the language being used, as a peer-to-peer language revealed itself during guided tours. This kind of document analysis also included an e-mail that the guides sent to the participants after the guided tour.

By completing participant observations on four guided tours, naturally occurring data were studied. Sometimes, observations were done by one, sometimes by two researchers, resulting in 20 hours of observation, and subsequently transcribed observations notes (see Table 1). Emphasis was on how the guides assembled and practiced the ongoing network marketing before, during and after tours. Here the focus lay on what the guides said and did, and how participants responded to their actions. When possible, the authors presented their research at the beginning of the tour; however, on tour no. 2, the authors introduced themselves halfway through the tour during a coffee break with sales, where they also met and talked with the SNE city manager. On tour no. 3, the other author introduced herself at the end of the tour, and concluded by going with the guide to a nearby café, where both authors had a two-hour long informal conversation with him. During all four tours, informal interviews took place with both participants and guides, giving insight into the reasons behind the actions observed before. All guides were fully aware of us being researchers, although this happened at a later stage on two of the tours. Because of their openness and willingness to talk about the tours, we consider that they have a high level of appreciation, even though we never asked for a signed admittance.

Table 1. Observed tours.

Type of observed tours	Company	Duration	Year	Reference
Grand Tour of Copenhagen	CFWT	3 hours	2013	Tour 1
Free Tour of Copenhagen	SNE	3 hours	2015	Tour 2
Grand Tour of Copenhagen	CFWT	3 hours	2015	Tour 3
Tour of Christianshavn, Copenhagen	CFWT	1½ hours	2015	Tour 4

In order to gain a deeper understanding of the observed behavior, four semi-structured interviews were conducted with CFWT guides, including three of its founders who were all former SNE guides. One interview was conducted with two interviewees. The interviews focused on the structures of the organizations, their use of networks to develop their companies, and the role of trust to further extend their initial ideas. The interviews lasted one to two hours (see Table 2) and were successful in terms of the guides’ openness about their behavior and the background of their choices. The combination of observations, informal and semi-structured interviews gave us the opportunity to understand the cooperation between individuals and the chosen development steps in-depth. We have to admit, however, that we show the story of one organization only: CFWT. We are unable to provide a genuine insight into the guides’ situation at SNE, since the guides we communicated with have left the organization due to dissatisfaction.

Table 2. Semi-structured Interviews.

	Date	Length	Reference
Guide and co-founder CFWT	09-2015	1½ hours	Guide A
Guide CFWT	06-07-2015	2 hours	Guide B
Guide CFWT	04-08-2015	1 hour	Guide C
Guide and co-founder CFWT (interviewed with guide E)	25-10-2016	1½ hours	Guide D
Guide CFWT (Interviewed with D)	25-10-2016	1½ hours	Guide E

Data analysis started early in the process as interviews were transcribed, websites organized and observation protocols produced. No a-priori categories were used, but the categories emerged by going through the data. There were several rounds of analysis, starting up very close to the data and then becoming increasingly abstract. Examples of categories in the first round of analysis are the importance of human relations, ways of cooperation, fairness, or driving forces. In a second round, such empirical categories were processed into analytical concepts such as trust, networked and organizational market innovation, and disruption. Comparisons were made throughout the process among different units as well as between data and preliminary explanations. Reflexive in each step, the coding process resulted in the scheme of outcomes used in the analysis below. Throughout the process, we worked on our trustworthiness by consistently collecting data from actors with a high degree of experience in cooperation. This way of approach is proposed by Howell (2013), contributing to authentic and trustworthy findings. We enriched the level of credibility by triangulating our ways of approach to data, as we used both planned and unplanned interviews, combined our methods, and consulted participants to ensure the trustworthiness of the analysis.

Findings

Networked market innovation

The concept of free guided tours was introduced in Berlin in 2003 and has since then spread internationally. As can be seen in the quote from their homepage, SNE is aware of its innovativeness in the free guided-tour concept: “Founded in 2003 by Yale University graduate Chris Sandeman, we pioneered the now world-famous FREE Tour concept: an innovative, gratuity-based model that puts the power back into the hands of the modern-day traveler.” The tours are presented as “free”, and guides will repeatedly say that tipping is optional (Tours 1–4). All this applies to the notion of the sharing economy, where guides have free time to spare and love presenting their current place of residence.

The concept of this market innovation includes new marketing targets and a strong encouragement for users to participate in social media. According to their website, they are “connecting great guides with smart travelers” (www.sandemanneweurope.eu), alluding not only to young and independent tourists, but to smart tech-savvy people in general. They are thus alluding to people who have the power and knowledge to choose their own activities without depending on agencies. E-mail addresses are collected from all tour participants before the beginning of the tour (Tours 1–4). Along the way, the guides urge participants to rate the tour on TripAdvisor, explaining that “this is how you found us – now let other people enjoy the same offer” (Tour 2). This amicable request appeals to the participants’ cordial behavior, giving potential participants a chance to enjoy the same offer as they did. Group photos are taken in places with traditional attractions, e.g. at the old harbor Nyhavn (Tour 3), and then shared on the organizations’ Facebook accounts. The pictures are informal and include a lot of hugs and cuddles, although people in fact hardly know each other (Tours 1–4; https://www.facebook.com/CopenhagenFreeWalkingTours).

Participants can either book their tours through the organizations’ web pages or simply show up at departure. This way, organizations substantially adapt to a new, juvenile market that is used to quick solutions and spontaneous decisions. Both organizations use the algorithm of social media that builds on peoples’ personal and professional networks. This procedure allows for summaries of all recommendations and likes to be determinants of the outcome and dispersion, thus building up the company’s reputation. At the heart of these social media lie mutual trust and monitoring mechanisms, where peers trust peer recommendations rather than the companies’ own appraisals. On top of that, the marketing channels Facebook, Twitter and TripAdvisor provide links to web-based sales channels. Finally, the companies build on their analogue networks as they collaborate with still more tourism actors in the city such as accommodations, tourist information or cafés, and do regular pickups from selected youth hostels (Guide B). Accordingly, marketing and sales are run at close to zero cost, which is one important feature of the sharing economy (Guide D; Rifkin, 2014). Facebook is of importance as “there, we can show that things are continuously happening” (Guide on Tour 3). TripAdvisor is the most important marketing tool, however, and therefore it is vital to receive high ratings there (Guide A). Working on cheap personal network-driven marketing platforms and employing guides at zero cost is a genuine game changer. This paper forecasts inevitable implications for certified guides in Copenhagen who work on fixed tariffs, and for the tourism industry that until recently earned money as the middleman.

Like in other cities, the free tours are astonishingly similar to conventional tours based on fees (Koerts, 2017; Londoño & Medina, 2017). They still target well-known attractions in Copenhagen, walking and stopping still alternate, and the guides speak as the participants listen or occasionally ask questions. However, the guides dress and behave in an informal, cordial and juvenile manner and apply deliberate strategies to elicit tips. They will talk about the Danish currency, about the value of money in Denmark, show banknotes, and will in various ways make the tourists understand that they are expected to tip them, although this is claimed to be optional (Guide B; Tours 1–4). One guide was exceptionally good at creating a cliffhanger, asking people to hang in to the very end of the tour, where he dramatically enacted the end of the story. Consequently, he appeared to be rewarded with generous tips (Tour 2).

Both companies have hitherto addressed budget-conscious younger urban travelers unable to pay or unwilling to attend regular guided tours (Tourist on Tour 2). Meanwhile, however, they also manage to target older and more affluent segments, thus reaching for more traditional markets. A well-dressed American couple in their sixties said that they always go on free guided tours nowadays, as they generally find them “very good” (Tour 2). By first targeting low-end foothold and then reaching for mainstream markets with steep growth rates, this shows a clear disruptive innovative development. As participant structures are steadily changing, CFWT is currently conquering shares of the conventional market for guided tours.

The free guided tours build on social media network marketing and sales channels verified by trust mechanisms between peers.

The guides are crucial in building up trust while conducting tours by delivering a credible product in a peer to peer atmosphere, encouraging the tourists to share their experiences on the same social medias, thus generating a forceful amplification.

All together, these factors clearly define the CFWT case as being a disruptive innovator, showing that the results in Guttentag’s (2015) study on Airbnb as disrupting the accommodation market, may be extended to the field of guided tours. However, disruption goes beyond networked market innovation and is extended to organizational innovation, as in the case of CFWT.

Networked organizational innovation

SNE started offering free tours in Copenhagen in 2012. The first generation of SNE guides in Copenhagen soon became discontent with what they understood as too high a share of monetary delivery, combined with a low level of influence on development (Guide A, D). Among SNE guides, a group of coworkers founded CFWT in late 2012, and they opted for shared ownership and collaborative management. Due to high levels of trust, they dared leave and establish a resembling, yet different business (Guide A, D).

Both CFWT and SNE build on close cooperation between individuals when it comes to assembling and sustaining the organizations. Calculated on their number of participants, guides pay marketing fees from the tips they get, thereby generating income for the companies. The operation of this system is based on the individuals’ faith in each other and in the organization as a whole. In other words, organizational survival depends on the guides’ benevolence and integrity. The guides are trusted to deliver correct marketing fees, and they generally share the values of the company (Guide A, B, D). In CFWT, all guides pool their abilities to manage and run all daily operations, thus keeping the return fee at a minimum. They hereby apply an organizational logic that is based on flat hierarchies and membership-driven content as well as on shared open resources and abilities. Thus they build on a high level of benevolence. A high level of ability cannot compensate for low benevolence, however: faith in onés colleague is worth more than the capacity to assist.

Decisions are taken both at monthly meetings and at informal gatherings that are not always primarily job-related. Guides often spend time together at a central bar (Guide C), which contributes to the individuals being benevolent and sharing integrity. This again helps to open up relationships and, ultimately, this combination of trust and responsibility sharing serves as a beneficial base for organizational innovations. Guide B explains the shared responsibility in CFWT the following way:

It is the mindset of Christiania (a small self-governed free town in the centre of Copenhagen) that people create the society, that people themselves create community, like you do on Facebook. If you are not there, Facebook doesn't exist. Nobody from the outside is doing it for you, it is the members who create it.

In this organizational arrangement, the actors depend on individual contributions, as a restricted approach could possibly lead to an impaired development. Accordingly, the organization presupposes a high level of trust to make such a business activity work.

The guide corps draws on young lifestyle entrepreneurs, who are well educated and showing a high level of social and mobility capital. However, as guides they are self-taught but passionate about their resident town, stressing the voluntary aspect in contrast to commercially guided tours (www.neweuropetours.eu). They draw on an international network, enabling access to guiding possibilities in other parts of the world, leading to a constant flux in and out of the companies. This, again, allows for a high level of abilities. Not only does this innovative organizational structure feed on digital and analogue networks, it also taps into a lifestyle where work and leisure are becoming increasingly blurred. It extends the logic of Facebook right into the heart of the company where trust is a central issue. In order to run a collaborative company at almost zero cost, the guides must possess the abilities needed to cover the various tasks involved frontstage, as well as in backstage operations and management. On top of qualifying to become successful guides, they have to write e-mails to participants after each tour, design and distribute leaflets, make forecasts and set up duty rosters as well as attend monthly meetings (Guide A and B). CFWT draws on their external network as well, e.g. the founder’s boyfriend who set up the whole ICT interface at no cost (Guide on tour A). This way, the actors draw on a network of skills.

The guides witness that fairness and trust are of great importance and display a high degree of integrity in that they share the values of a collaborative lifestyle (Guide C). They show engagement in working for the common good, which again demonstrates a high degree of mutual benevolence, including emotional attachment. The distribution of tours is proportionate to both availability and individual engagement. They display less of an economic driving force, and instead focus more on the value of friendship and commonality as prime movers. The guides’ international backgrounds are one contributing factor (Guides A, B, D, E). Many among them have only recently moved to Copenhagen and are longing for a context to belong to. This makes the group of guides an important company (Guide A, C).

To be a guide is a fleeting lifestyle and there is quite a flux of people in and out of both companies (Guides A, B, C). They draw on both dense and sparse international networks when recruiting new people, e.g. by inviting friends to become new guides. There is a remarkable strength in mobilizing seemingly limitless labor and competences not only from within the company, but also from the surrounding network at close to zero cost. One guide explains that economic values are of minor importance to them (Guide B), but while around 18 guides work with free guiding only during high season complementing with other jobs, 6–7 guides manage to live all year around entirely from the tips generated by free guiding (Guide D). Nonetheless, this divulges an economy where cooperation and access to knowledge and networks exceed ownership and economic assets. In the end, this is a transitory lifestyle building on trust and commonality where hierarchies are flat. At the same time, its' actors strongly draw on an international, digital network. All the above-described networks operate in a dynamic interplay, resulting in both market- and organizational innovations that are summarized in Figure 1.

Figure 1. Dynamics of network innovation in free guided tour.

The first network is the social medias on the Web 2, circumventing the traditional market mechanisms by creating direct low-cost links between the company and the costumers based trust on between piers. The second network is a mobile international network of guides and lifestyle entrepreneurs, who are prepared to work on a tips-only basis, and combined the two networks spark a market innovation. However, they may also spark organizational innovations as in the case of CFWT, when guides take the initiative to form new companies drawing on a third offline network between guides and friends. These rely on the individual's ability, benevolence and integrity, and less on money, traditional ownership and management. Finally, the free tour companies collaborate in a fourth network with the surrounding tourism industry, where they are perceived as profitable and serious partners.

Discussion

This article sheds light on how the dynamics of networks based on trust and friendship enable market and organizational innovations in the field of free guided tours. With the rise of the sharing economy, the role that networks have on innovation is taken to a whole new level, as they not only propel the innovation but actually become the innovation itself.

Earlier research (e.g. Hall & Williams, 2008) has pointed at the refusal of many actors in small service firms to share their ideas due to the fear of copying their ideas. Contrary to such research results, this study shows that the organizational innovation based on collaboration and shared ownership creates a communitarian organization in an extractive business model where cooperation, access to knowledge, and analogue and digital networks exceed ownership and economic assets. This goes in line with Tolstad’s (2014) study on small rural tourism firms in Norway. In fact, CFWT is both founded and now growing without any seed money and external funding. This organizational innovation inspired by the spirit of shared communities in social media points to the paradigmatic transformative potential not only in tourism economies, as pointed out by Munar (2013) and Dregde and Gyimóthy (2015), but also in the economy as a whole.

So what does networked organizational innovation look like, ultimately? The studied business model builds explicitly on the principle of the sharing economy in its use of networked social media in a complex dynamic with other off- and online networks and not least of guides working for free. CFWT is tapping into the ideological spirit of the sharing economy with high levels of trust and communication network density. This kind of innovation can be nominated a communitarian organization in an extractive business model, denoting democracy, inclusivity and a fair distribution of assets built in a for-profit business.

The free guided-tour market has experienced steep growth rates since it was introduced in Copenhagen in 2012. It has quickly managed to move from a low-end foothold, addressing mostly young budget-conscious travelers, to now reaching mainstream tourists. This qualifies as a disruptive innovation and places pressure on all firms within the field of guided tours to adopt cost-saving measures as well as innovating new products, marketing and organizational structures (Londoño & Medina, 2017). In this respect, the market of guided tours is like other disrupted markets, such as personal transportation where Uber challenges the market for taxis (Cannon & Summers, 2014) and Airbnb that for overnight stays. However, disruption goes beyond the market, and companies in the sharing economy operate in ways that challenge national legislation, tax systems and labor market regulation. In summary, they challenge the backbone of established welfare models. A worldwide company like Airbnb faces opposition both from the public and regulators around the globe, because they put pressure on real-estate markets, creating excessive supply in destinations that have reached the limit of tourist arrivals, and disrupt local neighborhoods in cities like New York (Mosendz, 2015), Barcelona (Quijones & Street, 2015) and Berlin (Nezik, 2015). But things are changing somewhat. In 2016, Uber was convicted of illegal taxi driving in Denmark, resulting in their withdrawal from the Danish market (Dalgas & Honoré, 2017). In this context, free guided-tour companies are minor players in a mainly unprotected, free guide trade, and have not been put under scrutiny until now. As this article is written, CFWT legally works as an association registered for VAT, and SNE Copenhagen is a subsidiary to its mother company in Berlin.

The study shows that it is vital to research the dynamics of the sharing economy, as it has a profound influence on the established tourism industry. In these years, the certified guides in Copenhagen are losing foothold on formerly traditional guide markets, just as their tariffs are pushed down, a faith they share with other professional service providers (Hvis, 2017).

Conclusions

The aim of this article has been to analyze how innovation takes place within the dynamics of networks of free guided tours, in times when the sharing economy is profoundly transforming the tourism economy. The answer to the research question is that innovation in free guided tours takes place with the help of trust and friendship performed in dynamic interactions analogue and digital networks. Easy and cheap access to markets through networked social media is at the core, and the latter build essentially on trust. This, again, may proliferate into organizational innovation with shared ownership and collaborations, denoting democracy and inclusivity. Accordingly, access to knowledge and networks exceeds ownership and economic assets, albeit within a for-profit business. Cooperation between actors builds on trust that rests on three pillars: benevolence, integrity, and ability. The value of trust, friendship and emotional attachment is high, leading to a great willingness to share resources. ICT hence enables organizers to quickly and smoothly transmit information, both among one another and to their participants.

The study has shown the power of analogue and digital network innovations in free guided tours. In its rapid pace and intrusion into an existing market, the organization is clearly disruptive, moving from a low-end foothold addressing low-budget young travelers to capture the main stream market of guided tours. In this respect, it is currently changing the rules of the guiding market in Copenhagen. The content may resemble ordinary tours, and they are progressively attracting a mass market as is seen other European cities (Koerts, 2017; Londoño & Medina, 2017). By analyzing a disruptive case in Copenhagen, this article hopefully contributes to drawing attention to the need for current actors to quickly analyze the market and actively shift their focus as a consequence. This article explicitly shows that development of guided tours can be theoretically understood by the triangulation of disruptive innovation, network and sharing economy, proposing a model of how four on- and off line network spark market – and organizational innovation. The present study is a single case study, and this paper is calling for both empirical and conceptual studies to further examine the dynamics of network innovation in free service products in tourism. In this context, it also calls for an understanding of how such organizations influence consumer behavior and transform not only existing industrial structures, but also challenge fundamental structures in welfare states.

Disclosure statement

No potential conflict of interest was reported by the authors.