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