The case for collaborative consumption Rachel Botsman

so today I’m going to talk to you about

the rise of collaborative consumption

I’m going to explain what it is and try

and convince you in just 15 minutes that

this isn’t a flimsy idea or a short-term

trend but a powerful cultural and

economic force reinventing not just what

we consume but how we consume now I’m

going to start with a deceptively simple

example hands up how many of you have

books CDs DVDs or videos lying around

your house that you probably won’t use

again but you can’t quite bring yourself

to throw away can’t see all the hands

but it looks like all of you write on

our shelves at home we have box set of

the DVD series 24 season six to be

precise I think it was bought for us

around three years ago for a Christmas

present now my husband Chris and I love

this show but let’s face it when you

watched it once maybe or twice you don’t

really want to watch it again because

you know how Jack Bauer is going to

defeat the terrorists so there it sits

on our shells loops obsolete to us but

with immediate latent value to someone

else now before we go on I have a

confession to make I lived in New York

for ten years and I am a big fan of Sex

in the City now I’d love to watch the

first movie again as sort of a warm up

the sequel coming out next week so how

easily could I swap our unwanted copy of

24 for a 1/2 copy of Sex in the City now

you may have noticed there’s a new

sector emerging called swap trading now

the easiest analogy for swap trading is

like an online dating service for all

your unwanted media what it does is use

the Internet to create an infinite

marketplace to match personalized halves

with person sees wants whatever they may

be the other week I went on one of these

sites appropriately called swaptree and

there are over 50 9300 items that I can

instantly swap for my copy of 24 lo and

behold there

in risk Resta California was Rhonda on

who wanted to swap his or her like new

copy of Sex and the City

from my compliment when t 4 so in other

words what’s happening here is that

swaptree

solves my carrying company sugar rush

problem a problem the economists call

the coincidence of wants in

approximately 60 seconds what’s even

more amazing is that it will print out a

postage label on the spot because it

knows the way of the item now there are

layers of technical wonder behind such

swap sites such as swap tree but that’s

not my interest and Norris what trading

per se my passion and what I’ve spent

the last few years dedicated to

researching are the collaborative

behaviors and trust mechanics inherent

in these systems when you think about it

it would have seemed like a crazy idea

even a few years ago that I would swap

my stuff with a total stranger whose

real name I didn’t know and without any

money changing hands yet 99% of trades

on swap tree happens successfully and

the 1% receive a negative rating it’s

forbearance in relatively minor reasons

like the items do arrive on time so

what’s happening here an extremely

powerful dynamic that has huge

commercial and cultural implications as

at play namely that technology is

enabling trust between strangers we now

live in a global village where we can

mimic the ties that used to happen face

to face but on a scale and in ways that

have never been possible before so

what’s actually happening is that social

networks and real time technologies are

taking us back

we’re bartering trading swapping sharing

but they’re being reinvented into

dynamic and appealing forms what I find

fascinating is that we’ve actually wired

our world to share whether that’s our

neighborhood our school our office or

our Facebook network and that’s creating

an economy of what’s mine is yours from

the mighty IPE the grandfather rich

change marketplaces to car sharing

companies such as go get

where you pay a monthly fee to rent cars

by the hour so social lending platforms

such as oppa that will take anyone in

this audience with $100 to lend and

match them with a borrower anywhere in

the world we’re sharing and

collaborating again in ways that I

believe are more hip than hippie I call

this groundswell collaborative

consumption now before I dig into the

different systems of collaborative

consumption I’d like to try and answer

the question that every author

rightfully gets asked which is where did

this idea come from now I’d like to say

I woke up one morning and said I’m going

to write about collaborative consumption

but actually it was a complicated web of

seemingly disconnected I did over the

next minute you’re going to see a bit

like a conceptual fireworks display of

all the dots that went on in my head the

first thing I began to notice how many

big concepts were emerging from the

wisdom of crowds to smart mobs around

how ridiculously easy it is to form

groups for a purpose and led to this

crowd mania for examples all around the

world from the election of a president

to the infamous Wikipedia and everything

in between

on what the power of numbers could

achieve now you know when you learn a

new word and then you start to see that

word everywhere that’s what happened to

me when I noticed that we are moving

from passive consumers to creators to

highly enabled collaborators what’s

happening is the internet is removing

the middleman so that anyone from a

t-shirt designer to a knitter can make a

living selling peer-to-peer a new

bigoted US force of this peer-to-peer

revolution means that sharing is

happening at phenomenal rates I mean

it’s amazing to think that in every

single minute of this speech 25 hours of

YouTube video will be loaded now what I

find fascinating about these examples is

how they’re actually tapping in to our

primate instincts

I mean we’re monkeys and we’re born and

bred to share and cooperate and we were

doing so

thousands of years whether it’s when we

hunted in packs or farmed in corporate

farms and cooperatives before this big

system called hyper-consumption came

along and we built these fences and

created our own little fiefdom

but things are changing and one of the

reasons why are the digital natives or

Gen Y they’re growing up sharing files

video games knowledge it’s second nature

to them so we the millenials I am just a

millennial I like foot soldiers moving

us from a culture of me to a culture of

we the reason why it’s happening so fast

is because of mobile collaboration we

now live in a connected age where we can

locate anyone anytime in real time from

a small device in our hands all of this

was going to do my head towards the end

of 2008 when of course the great

financial crash happen Thomas Friedman

is one of my favorite new time columnist

and he pointedly commented that 2008 was

when we hit a wall when mother nature

and the market both said no more

now we rationally know that an economy

built on hyper consumption is a Ponzi

scheme it’s a house of cards yet it’s

hard for us to individually know what to

do so all of this is a lot of twittering

right well it was a lot of noise and

complexity in my head until actually I

realized it was happening because of

four key drivers one and renewably from

the importance of community and a very

redefinition of what friend and neighbor

really means a torrent of peer-to-peer

social networks and real-time

technologies fundamentally changing the

way we behave three pressing unresolved

environmental concerns and for a global

recession that has fundamentally shocked

consumer behaviour these four drivers

are fusing together and creating the big

shift away from the 20th century defined

by hyper-consumption towards the 21st

century defined by collaborative

consumption I generally believe we’re at

an inflection point where the sharing

behaviors

through sites such as Flickr and Twitter

the coming second nature online are

being applied to offline air areas about

everyday lives for morning commutes the

wave fashion is designed the way we grow

food we are consuming and collaborating

once again so my co-author Bree Rogers

and I have actually gathered thousands

of examples from all around the world of

collaborative consumption and although

they vary enormously in scale maturity

and purpose when we dived into them we

realized that they can actually be

organized into three clear systems

the first is redistribution markets

redistribution markets just like swap

tree is when you take a use or pre-owned

item and move it from where it’s not

needed to somewhere or someone where it

is they’re increasingly thought of as

the fifth are reduce reuse recycle

repair and redistribute because they

stretch the lifecycle of a product and

thereby reduce waste the second is

collaborative lifestyles this is the

sharing and resources of things like

money skills and time I bet in a couple

of years that phrases like co-working

and couchsurfing and time Mac’s are

going to become a part of everyday

vernacular one of my favorite examples

of collaborative lifestyles is called

Blanchett it’s a scheme in the UK that

matches mr. Jones

with some spare space in his back garden

with mrs. Smith a would-be grower

together they grow their own food it’s

one of those ideas that’s so simple yet

brilliant you wonder why it’s never been

done before

now the third system is product service

systems this is where you pay for the

benefit of a product what it does for

you without needing to own the product

outright this idea is particularly

powerful for things that have high

idling capacity and that can be anything

from baby goods to fashions to how many

of you have a power drill owner power

drill right that powder will be used

around 12 to 13 minutes and it’s in it

hyoeun lifetime it’s kind of ridiculous

right because what you need is the hole

not the drill

so why don’t you grab the drill or even

better rent out your own drills to other

people and make some money from it these

three systems are coming together

allowing people to share resources

without sacrificing their lifestyles or

their cherished personal freedoms

I’m not asking people to share nicely in

the sandpit so I want to just give you

an example of how powerful collaborative

consumption can be to change behaviors

the average car costs 8,000 dollars a

year to run yet that car sits idle for

23 hours a day so when you consider

these two facts it starts to make a

little less sense that we have to own

one outright

so this is where car sharing companies

such as it park and go get come in in

2009 zip guard took 250 participants

from across 13 cities and they’re all

self-confessed car addicts and car

sharing rookies and got them to

surrender their keys for a month instead

these people had to walk bike take the

train or other forms of public transport

they can only use those at car

membership when absolutely necessary the

results of this challenge after just one

month were staggering

it’s amazing that 413 pounds were lost

just from the exit extra exercise but my

favorite statistic is that 100 out of

the 250 participants did not want their

keys back in other words the car addicts

had lost their urge to own now product

service systems have been around for

years just think of libraries laundrette

but I think that entering a new age

because technology makes sharing

frictionless and fun there’s a great

quote that was written in the New York

Times that said sharing is to ownership

what the iPod is the eight-track what’s

so solar power is the coal mine I

believe also our generation our

relationship to satisfying what we want

is far less tangible than any other

previous generation I don’t want

the DVD I want the movie it carries I

don’t want a clunky answering machine I

want the message it saves I don’t want a

CD I want the music it plays in other

words I don’t want stuff I want the

needs or experiences it fulfills this is

fueling massive shift from where usage

Trump’s possessions or as Kevin Kelley

the editor of Wired magazine puts it

where access is better than ownership

now as our possessions dematerialize

into the cloud a blurry line is

appearing between what’s mine what’s

yours and what’s out I want to give you

one example that shows how fast is

evolution is happening this represents

an eight year time span

we’ve gone from traditional car

ownership to car sharing companies such

as it can go get to ride sharing

platforms that match rides to the newest

entry which is peer-to-peer car rental

where you can actually make money out of

renting that car that sits idle for 23

hours a day to your neighbor now all of

these systems require a degree of trust

and the cornerstones of this working is

reputation now in the old consumer

system our reputation didn’t matter so

much because our credit history was far

more important than any kind of peer to

peer review but now with the web we

leave a trail with every spammer we flag

with every idea impose comment we share

we’re actually signaling how well we

collaborate and whether we can or can’t

be trusted

let’s go back to my first example swap

tree I can see that Rhonda Ron has

completed 553 trades with a hundred

percent success rate in other words I

can trust him or her now mark my words

it’s only a matter of time before we’re

going to be able to perform a

google-like search and see a cumulative

picture of our reputation capital and

this reputation capital would determine

our access to collaborative consumption

it’s a new social currency so to speak

that could become as powerful as our

credit rating

now as a closing thought I believe we’re

actually in a period where we’re waking

up from this humongous hangover of

emptiness and waste and we’re taking a

leap to create a more sustainable system

built to serve our net needs for

community and individual identity I

believe it will be referred to as a

revolution so to speak when society

faced with great challenges made a

seismic shift from individual getting a

spending towards a rediscovery of

collective good I’m on a mission I’m on

a mission to make sharing cool I’m on a

mission to make sharing hip because I

really believe it can disrupt outdated

modes of business help us leapfrog over

wasteful forms of hyper consumption and

teach us when enough really is enough

thank you very much