Collaborative Consumption: New business models

07.03.2012

Collaborative consumption has been rising in popularity since "What's Mine is Yours" was published last year. Collaborative Consumption businesses use technology to enable trust between strangers, by enabling the sharing, swapping and trading of goods and services. It's increasingly a better option to have access rather than ownership.

There has been a huge rise in these sorts of businesses in recent years, with names like Zipcar, AirBnB and Freecycle becoming well-known. There is no doubt that consumption is a major issue for the 21st century. We are generating excessive amounts of waste that cannot be sustained as more and more consumers around the world enter the middle class. At the same time, our unused goods and what Clay Shirky calls our 'cogntitive surplus' are multiplying, and we're seeking better uses for them.

Marketplaces for trading your unused goods have been around almost as long as the internet - forums for sharing knowledge, electronic bulletin boards for getting rid of your stuff, and then eBay, the grandfather of all collaborative consumption businesses. Given that the marketplace is thousands of years old, what is really new about collaborative consumption? An important aspect of digital platforms is that they can create better, more efficient marketplaces. If you had something to sell, once upon a time you would go to the post office or the supermarket and put a card on their bulletin board. You might also place a classified ad in your local newspaper, to reach a larger audience. With the internet, you can reach a large number of people and find the specific niche for what you're offering.

When I wanted to find a new home for an old (or should that be 'vintage'?) ski jacket in mustard with fluorescent pink flashes, purchased circa 1984, I put it on eBay. Although it was in good condition, and was high quality when bought, it was unmistakeably eighties, so I didn't expect to get much for it. In the end, it was sold for more than £40 to a buyer going to an eighties ski party in Chamonix. There really is someone out there for everything, and if you can find that person that values what you have, the transaction has more value for both of you.

Early digital marketplaces such as eBay and craigslist replicated old forms of interaction - classified ads, car boot sales, bulletin boards. The new generation of enterprises have spotted that the value you can create isn't just monetary, but lies in the experiences, conversations and communities that are created through these exchanges. These enterprises return to very old ideas of community, but with the reach of digital, new communities can be built, based on common interests or matching needs and wants more efficiently than can be done with a location-based market.

In the past, NESTA has examined the role of collaborative consumption in public services, and in creating social communities. On Friday 16 March, we are hosting a one-day event to talk about collaborative consumption business models and what makes them work. Some of these businesses enable experiences that are hard to reproduce in any other way: an authentic experience of a city by staying in someone's house, and getting a tour from a local. We can now live our lives in a different way. Sharing tasks out among a large number of strangers across the world becomes feasible.

With Samasource, you can get computer tasks like creating content, gathering data and transcription done by women and young people in poverty. Although you can get the same sort of services done by any outsourcing company, increasingly it's the experience and the story behind these businesses that matters. Their social goals are as important as the services they provide. The things we are learning about communities can change not only the way we consume goods and services, but also how we learn and how we work.