Behind the Buzzwords

The Next Big Thing - Collaborative Consumption: A Look Into the Sharing Economy

I’ll gladly pay you Tuesday for a hamburger today. Or perhaps I’ll post about the hamburger through a crowd-funding service, raise the money, distribute perks to those who’ve helped me, and pick up my burger later today.

Ideas like these that pool resources (and funds) to support specific efforts are not only possible, they’re thriving. Collaborative funding sites such as KickStarter and IndieGoGo have been fueled by our economy’s need for capital, and present a subset of a growing industry known as ‘‘collaborative consumption.” 

Collaborative consumption is a business model in which goods or services are shared, swapped, or rented over networks.  Websites like Airbnb, a platform for short term home rentals, and OurGoods, a bartering network for the creative community, have changed the way that we look at the traditional e-commerce model. Social innovator and author Rachel Botsman called this phenomenon a “powerful cultural and economic force” in her 2010 TedxSydney talk and in her book, ‘What’s Mine Is Yours: The Rise of Collaborative Consumption.’ These networks view people as creators and sharers, rather than just consumers, and have thrived because of it.

In the US, groups like Collaborative Chats, SharedSquared, and Let’s Collaborate! have formed to support the growing industry, and investors are keenly aware of its potential. Early investors like the Collaborative Fund turned Skillshare and TaskRabbit into standouts, transforming what was once considered just a fad into a viable business model almost overnight.

In 2013, the winners in the sharing economy will emerge, as margins overtake vanity metrics as a measure of success. Companies need to verify that their business models solve user problems, even as they adapt, pivot, and grow throughout the startup process. We see a healthy obsession with testing at companies like Uber, a private car-sharing service that organizes drivers to provide rides in the U.S. Uber filled an initial void but continues to develop and test new models to address user problems. In the past year, Uber has tested taxi hailing applications and car-share services that adapt to the needs and regulations of different cities and populations. It’s clear that the sharing economy has room to grow in the coming years, led by hard-nosed technology companies that focus on testing, validating, and addressing problems uniquely and efficiently resolved by using a sharing model.

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About the Author

Andrew Bennie, Founder, SliceShares
@andrewObennie

Andrew Bennie is the Founder of SliceShares, a mobile and web application that helps college students share the cost and size of their pizza orders on campus. Andrew is based in New York City and has consulted and worked in the educational technology sector for the past eight years.

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