Collaborative consumption

Opportunity Infographic - The New Sharing Econ...
Image by latddotcom via Flickr

An interesting TEDtalk I’ve come across —Rachel Botsman on the “new” internet-enabled sharing and swapping business models that she is labeling “Collaborative Consumption”. In this 16 minute TEDtalk from Sydney Australia in 2010 Rachel presents her views on why this trend is an emerging reality that will have a profound impact over the next decades as our current “buy-centric” consumption model evolves into more of a “rental” market.While I personally believe that our “buy” consumption model represents the status-quo that most of the retail industry strongly wants to keep firmly in place, the “rental” model will continue to grow on the fringes and with particular market segments.

In my own case, faced with repairing an old motorboat that I bought for a few bucks from a friend who was “upgrading” their boat, I am reminded that what I really wanted was access to a working boat the few hours on any given weekend  I am up at the cottage. Instead, what the “market” offered was ownership (and ongoing maintenance) of another asset which — at best — is going to get very limited use in my hands. We have been socialized to “buy” first rather than consider (and spend precious research time investigating available options) some other alternative of a rental, swap, or sharing model.

In Rachel’s talk, she identifies 3 different “collaborative consumption” models for consideration:

1. redistribution market — taken a used or pre-owned item and redistribute it to somewhere/someone that wants it.

2. collaborative lifestyles — (matching money, skills, and/or time gaps) example of matching up people with spare plot of land with someone who wants to grow/garden

3. product-service system — example of renting out little used assets (cars, drills, etc.) for broader community use

In Rachel’s words, “…collaborative consumption as a new social currency that will become every bit as important as our credit rating is today.”

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27 thoughts on “Collaborative consumption

  1. I love TED talks; they’re uplifting, inspiring, and raise my consciousness while challenging my longstanding beliefs – essential to personal growth!
    I’m going to go watch Rachel now, so thanks for the heads up, and grats on FP status!
    ~J

    1. Hi Jim,
      The ideas quotes are just to illustrate the different “types” of collaborating that Rachel proposes. So while they might not be compelling hopefully they are easily understood.

  2. In the humanity’s future, it’s all about sharing. The sharing of information, creative stuff and knowledge had already begun with the internet, Google, Wikipedia, Twitter, Facebook, blogging … etc.
    It is now to start sharing the Earth’s resources. This will enable the global society to get rid of all the destructive problems in our world.

    Interested? http://globalsocietyblog.wordpress.com/orientation

    1. Thanks for your comment. I’m not sure if I agree with your “sharing” comment at a practical level although I can see the general attractiveness of the concept. What gets in the way of full out sharing is things like private property rights, intellectual property (IP) rights, etc. and enforcement through the rule of law — all of which are staples of our market-enterprise system. So the pragmatist in me is looking at how we can reform our current system without “throwing the baby out with the bathwater”….

      I am intrigued by your blog entries and will study your site a little further. Thanks for letting me know about you folks.

  3. It’s an interesting concept, but I do not see it really catching on…I think it sounds good, but the fine points will be to confining, confounding and confusing. Then again, an entrepreneur might find a gold mine here, I don’t see it working collaboratively with single people working it out together large scale… I hate to be so much of a Debbie downer, just sayin’

    1. I generally agree with you, Evie. While it is a fascinating concept I believe the actual business opportunities will have to be very focused and have a lot of logistical issues/costs to deal with. Sharing big ticket items is the first big business opportunity (lending cars = car rental business; lending condos = time-share business); the smaller more specialized assets are more difficult to share effectively. Having said that I suspect lots of people will figure out nice little niche business opportunities all over this space…

  4. I really hope these ideas make their way into the mainstream. I like the idea of a broader rental base for household items that you use once per year, such as window washing equipment or rototillers. I hope services such as kijiji help match people together collaboratively. For example, I have a small yard and want to grow a veggie garden. Is there anyone in my neighbourhood willing to make a trade? This would also help build communities. Have you heard of the Zip Car service? Or what about those bike riding services, where you pick it up and drop it off at community racks. It just makes so much sense. However many of us like to own, and to “have”. Perhaps we should consider the convenience that comes with the lack of responsibility, storage and maintenance. Most of all, it is better for the environment.

    1. Hi Sherry,
      Another thing to keep in mind is that there are lots of vested interests from big players interested in keeping “standard consumption” models at the forefront — if you could rent your lawnmower by the week instead of buying it outright, the whole business model of the retail world has to be re-designed… not something most industry incumbents are going to experiment with too willingly. So all these new opportunities will undoubtedly have to be championed by new market players. It is interesting to see how fast the self-storage industry.is growing these days — presumably we need all this extra storage space so we can empty out the stuff from our homes and store it offsite to buy more stuff that we may not need. Hmmm — must be a business opportunity lucking in those bushes….

  5. First of all, great coverage! Ok, so we are looking into two major components of collaboration – technology and framefork for successful teamwork. One directly influences another. Considering the fact that collaboration is a process where individuals or organizations work together to execute upon shared goals, a deep group determination to reach an aligned understanding of objective must be in place, as well as technical solutions to support particular framework accordingly to which companies plan to accomplish those goals. We cannot look at this subject in fragmented manner; it simply will not work this way. Structured technology supported processes of collaboration encourage introspection of behavior and optimal communication processes. Just some stream of consciousness on the semi-related subject. 🙂

    1. Hi Jim,
      Thanks for your comment. I agree with your statement that we can’t look at this in a “fragmented manner”… I think the collaborative consumption concept is intriguing however we will need to investigate each opportunity holistically and have a supporting business plan/rationale for each specific opportunity.

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