The Wednesday keynote address was a fast-paced pre-recorded video presentation by Rachel Botsman, author of What’s Mine is Yours – The Rise of Collaborative Consumption, entitled “Collaborative Consumption: Technology, Business and Society in the 21st Century”.
Botsman defined collaborative consumption as traditional sharing, bartering, lending, trading, renting, gifting, and swapping redefined through technology and peer communities. The concept involves individuals making their services or things available to consumers and using social technologies. Botsman predicts that collaborative consumption will become as big as the Industrial Revolution was.
The critical ingredient of collaborative consumption is trust between strangers. For example, Task Rabbit is a platform on which its users can post a task they wish done and the price they are willing to pay for it. Other people (the “rabbits”) indicate what they would do it for, and when agreement is reached, the task is done. This can be thought of as eBay for errands. The most popular task is assembling Ikea furniture. $4.3 billion has passed through the system since it started. It is about empowerment and making money around lives. 25% of all rabbits are retirees, and the average income is $5,000 per month.
Technology creates the social glue for trust between strangers. We live in a social village where we can mimic personal interactions.
We have moved from passive consumers to highly motivated collaboration. Technology is moving us back to our previous ways of interaction. Product serving systems pay for the benefit of a product without the need to own it outright. For example, bike sharing has become the fastest growing form of transportation in the world.
We do not want stuff but the needs it fulfills. Access trumps ownership. Idling capacity is the untapped social, economic, and environmental value of underutilized or idle assets, such as spare rooms, cars in the garage, or tools not being used. Technology enables us to redistribute that capacity to where it is needed. Thus, car manufacturers have all enered the car sharing space. They have recognized that they are in the personal mobility business, not the car production business. BMW Drive now permits renting a car by the minute. Access is by a chip in your driving licence. The expense in car sharing is the cars. A similar service, WhipCar, lets you rent an idle car in the neighborhood. The transaction depends on trust. Insurance companies protect the owners so that any damage is not charged against their personal policies. This is an example of accountability and transparency: real people dealing with real people who behave better than big faceless institutions. The whole relationship is transformed.
Redistribution markets are in 3 forms: monetary, like for like, gifted. They function on trust and efficiency. eBay was the start of markets built on a web of trust. 98% of all eBay trades receive a positive rating: people are fundamentally good.
Collaborative lifestyles are an important aspect of consumption. People with similar interests are banding together to share and exchange less tangible assets such as time, space, skills, and money. AirBnB is a peer-to-peer travel site that matches properties and renters.
It has some very unusual spaces listed for rent, this creating a market for things that did not have a marketplace previously. Here is a map of places to rent in New York City.
Through collaborative consumption, people have become micro-entrepreneurs. The average renter makes $1,200/month from their spare room, which has an economic impact on local commerce because people go to different restaurants, etc. and see the city in different ways. Would people trust one another enough to rent out their spaces? The secrets of collaborative consumption are community and trust. The owner’s role is not to connect, but to protect. The “EJ Incident” is a famous example of one of the few rentals that went wrong. Existing networks of information and trust have been set up for these micro-entrepreneurs. Connecting trustworthy strangers is an untapped market.
How do we build trust? Reputation capital is the measure and value of a person’s reputation across communities and marketplaces. In all of your transactions, you leave a trail of how well you can or cannot be trusted. We will start to aggregate different aspects of trust, and reputation capital will become a currency.
Consumption is changing in the 21st century. Here are some of its indicators.
Collaborative consumption is not a threat but a massive multimillion dollar opportunity. We will reinvent entire sectors. This is a high tech industry but also very high touch. Botsman concluded with an appropriate quotation from Rupert Murdoch.
Columnist, Information Today and Conference Circuit Blog Editor