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“This dissertation is submitted in part fulfillment of the regulations for the BA (Hons) degree in Advertising.”
University College Falmouth
Are we as consumers developing a greater social conscience? Since latter part of the last decade, a groundswell of opinion has begun to gain momentum in Western nations as a result of a growing discontent towards the problems created by consumerist society. A phenomenon known as Collaborative Consumption has emerged from this groundswell, offering people a way out of frivolous, wasteful, consumerist behaviour. In its attempt to find a harmonious balance between the conventional form of consumerism, and a socially conscious and collaborative way of living; can Collaborative Consumption reach a tipping point and change traditional Western habits? This study attempts to find out.
I would like to thank all those who helped me throughout this dissertation. It would not have been possible to complete this thesis without the excellent and constant support of Naj and Jenny Alidina. I would also like to extend my thanks out to Sophie Alidina who helped me during this project. I am particularly grateful to Imran Azam the Founder of ShareMyStorage.com, who has been incredibly helpful during this thesis, and has inspired me to further explore the sharing economy. I would like to send a very special thanks to all of the businesses that took part in the interviews as part of the empirical study. The answers you provided were thorough and fascinating. Finally I would like to thank Carolyn Shapiro for showing great enthusiasm towards my work and keeping me well motivated throughout the duration of this project.
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Introduction …………………………………………………………………………………….. 5 – 6 Definitions of key terms within a brief historical context …………………………………… 7 – 10 Collaborative Consumption …………………………………………………………………… 11 – 16 Literature Review ……………………………………………………………………………… 17 – 22 Methodology ……………………………………………………………………………………. 23 – 28
5.1 Online Survey ……………………………………………………………………………………………….23 – 27 5.2 Interviews with Collaborative Consumption businesses……………………………………………….27 – 28 6. Findings ………………………………………………………………………………………… 29 – 47
6.1 Awareness of Collaborative Consumption …………………………………………………………….. 29 – 34 6.2 Perceptions of Collaborative Consumption ……………………………………………………........... 35 – 37 6.3 Perceptions of Reputation Systems ……………………………………………………….…………….. 37 – 41 6.4 Growth of Collaborative Consumption ………………………………………………………………... 42 – 45 6.5 SWOT Analysis of Collaborative Consumption ………………………………………………………. 45 – 47 7. Conclusions & Recommendations ……………………………………………………………. 48 – 52
7.1 Conclusions of Findings ………………………………………………………………………………..... 48 – 51 7.2 The Tipping Point ………………………………………………………………………………………… 51 – 52 7.3 Recommendations ………………………………………………………………………………………… 52 References & Bibliography ……………………………………………………………………….... 53 – 61 Appendices ………………………………………………………………………………………….. 62 – 119 Appendix A – Tables …………………………………………………………………………………………… 62 – 66 Appendix B – Survey Questions (Structure) ………………………………………………………………… 67 – 70 Appendix C – Survey Gizmo Auto-Summary report ……………………………………………………...... 71 – 86 Appendix D – List of contacted Collaborative Consumption businesses ……………………………….. 87 – 91 Appendix E – Email sent to Collaborative Consumption businesses ……………………………………. 92 Appendix F – Interviews with Collaborative Consumption businesses …………………………………. 93 - 119
‘In the West, our focus as consumers has been about having more – having more in a way that would require the consumption of several planets.’ (Whelan, T. 2011. Online) A groundswell of opinion has formed in Western nations based on a growing discontent towards the excessive and needless consumption of resources, driven by consumerist society. Global Advertising Agency Y&R conducted a study of 750,000 consumers in 50 countries over the last 17 years, identifying the biggest shift in consumer behaviour they had ever seen. People began to place a greater emphasis on community, faith, hard work and creativity, over materialism and excessive consumption. (Whelan, T. 2011. Online) Within this groundswell, exists a movement known as Collaborative Consumption [CollCons1], which promotes the notion of access over ownership. In its attempt to find a harmonious balance between the conventional form of consumerism, and a socially conscious and collaborative way of living; can Collaborative Consumption reach a tipping point and change traditional Western habits? The purpose of this study is to examine key factors which could help to determine whether the movement of Collaborative Consumption can reach a tipping point, and become a global phenomenon. This investigation is important, as it will be entering into new territory within the areas of social commerce and the sharing economy. Currently, there is no other study which examines whether Collaborative Consumption can reach a state of critical mass. As a consequence, this dissertation may be useful to entrepreneurs who are conducting market research, or researchers who are investigating the areas of social commerce and the sharing economy.
CollCons: An abbreviation of Collaborative Consumption 5
In order to further understand the thesis question, the first chapter of this dissertation will define all of the key terms that will be used, within a brief historical context. In addition, a chapter will be dedicated to defining and understanding the Collaborative Consumption movement. The literature review will summarise a series of publications that are important to this study, whilst helping to provide a theoretical framework from which the findings can be analysed and conclusions can be drawn. The primary research for this investigation will be conducted in the form of a qualitative and quantitative empirical based study, comprising a consumer survey and a series of interviews with Collaborative Consumption businesses. This will help to gain insight into whether the CollCons movement can reach the tipping point. It should be noted that the empirical study will have a number of limitations. For instance, there is no guarantee that enough businesses will take part in the interviews, or that a sufficient number people will participate in the survey. Other potential impediments to this study include a lack of literature within the area of discussion. As Collaborative Consumption has grown as a phenomenon, it has received more media attention, putting some aspects of the movement such as reputation systems and the trust between strangers online, into question. In order to analyse whether Collaborative Consumption can reach the tipping point, the findings section of this investigation will be divided up into five sub-sections. These will include: ● Awareness of Collaborative Consumption ● Perceptions of Collaborative Consumption ● Perceptions of reputation systems ● Growth of Collaborative Consumption ● SWOT Analysis of Collaborative Consumption
2. Definitions of key terms within a brief historical context
In order to understand the Collaborative Consumption phenomenon, it is important to define the key terms that will be referred to in this dissertation within a brief historical context. The beginning of the 20th century marked an era of unprecedented change in our world. This change came as a result of global industrialisation, triggered by the Industrial Revolution of the 19th century in Western Europe. It spurred on exponential growth in a variety of different areas including population, food production, technological advancements, urban expansion and migration. The 20th century marked the point when the mass production of consumer goods such as cars, brown goods, white goods and various foods became standardised. In addition, easy access to credit allowed people to buy cheap products and services in near unlimited quantities, at their convenience. There is no question that low-cost mass production, demanded by consumers as a result of intensive and persuasive advertising, has been a key catalyst for the countless environmental, economic, societal and political problems that our planet has faced over the last century. The World Resources Institute, a global non-profit organisation focused on environmental and socio-economic development, says: The United States, with less than 5 % of the global population, uses about a quarter of the world’s fossil fuel resources—burning up nearly 25 % of the coal, 26 % of the oil, and 27 % of the world’s natural gas. (Facing The Future. Accessed 24 Dec 12. Online) A recent study conducted by Marah Creative compiled with data from other research organisations found that around 287 branding and advertising messages are seen by people every day (Marah Creative. 2011. Online). This is the age of consumerism.
Steven Miles, an author who has written extensively about consumer culture, defines consumerism as a: psycho-social expression of the inter-section between the structural and the individual within the realm of consumption. The consuming experience is psycho-social in the sense that it represents a bridge that links the individual and society. (Miles, S. 2000. Pg: 5) The Oxford English Dictionary defines consumerism as: ‘often derogatory the preoccupation of society with the acquisition of consumer goods.’ (The Oxford English Dictionary, 2012. Online). It is important to note that consumerism is a by-product of consumption. Consumption is an innate human behaviour, we need to consume in order to survive and reproduce. An official definition of consumption is: ‘1. The action of using up a resource. / 2. The purchase of goods and services by the public.’ (The Oxford English Dictionary, 2012. Online) Another point to consider when examining consumerism is its close link to the emergence of capitalism - an economic and political ideology that became prevalent in the Western world during 19th and 20th century (Scott, J. 2005), which corresponded to the advent of the industrial revolution. Capitalism can be defined as: ‘an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.’ (The Oxford English Dictionary, 2012. Online) Although the definition of capitalism is not coterminous with consumerism, it does provide a platform from which it can flourish. Of course, capitalism was not the only political ideology in the 20th century; socialist movements such as Communism and Marxism were also widespread. The definition of socialism is as follows: ‘A political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community
as a whole.’ (The Oxford English Dictionary, 2012. Online). The book Marx for our times indicates that: ‘1. capitalism becomes an obstacle to itself; 2. its contradictions create the preconditions for socialism; 3. they also produce the (proletarian) class capable of resolving them; 4. the sole historical alternative to capitalism is socialism.’ (Bensaïd, D. 2002. Pg: 44) Although Marx said socialism was ‘the sole historical alternative to capitalism’, it is fraught with its own major problems and challenges. With the problems of 20th century economic and political systems, are people now seeking new approaches to help reduce consumption and live more harmoniously with one another and the environment? The economies of mass consumption that produced a world of abundance for many in the twentieth century face a different challenge in the twenty-first: to focus not on the indefinite accumulation of goods but instead on a better quality of life for all, with minimal environmental harm. (Worldwatch Institute. Accessed 24 Dec 12. Online) In Western capitalist societies where mass consumerism is widespread, a groundswell has emerged over the last few years where the means of production is becoming decentralised. Traditional trading methods like bartering, swapping and gifting are increasing in popularity due to online share-based, collaborative platforms that utilise social and mobile technologies. This emerging movement owes some of its ethos to socialism. Collaboration can be defined as: ‘The action of working with someone to produce something.’ (The Oxford English Dictionary, 2012. Online) Some pioneering examples of these collaborative platforms are: AirBnB (an online peerto-peer social marketplace allowing people to monetise their spare rooms or space to provide
unique accommodation for its users), Zipcar (one of the world’s largest car-sharing platforms) and Zopa (a peer-to-peer lending service which offers high returns to its lenders and low cost loans to borrowers). It is no surprise that the Internet lies at the heart of this zeitgeist, as its development has allowed people to collaborate through a versatile medium on a scale previously impossible. This new phenomenon is often referred to by scholars in the area of social commerce as the ‘sharing economy’ or the ‘access economy’. Social commerce can be defined as: ‘a stream of businesses, evolved from e-commerce, which leverages social media to assist or promote the online buying, selling and sharing of products and services.’ (Di Santis, G. 2011. Pg: 22) Are we currently witnessing an attitude shift away from excessive forms of mass consumption, to sharing and collaborative consumption between people?
3. Collaborative Consumption
In 2010, social innovators Rachel Botsman and Roo Rogers published the book ‘What’s Mine Is Yours’. This powerful notion describes a proliferating phenomenon referred to by the authors as Collaborative Consumption. It is a concept created out of goodwill, and one which presents a strong optimism for positive change in the world through sharing, trust, cooperation and the idea of access over ownership. Lauren Anderson, the Community Director at Collaborative Consumption defines the term as: The reinvention of old market behaviours such as sharing, exchanging, bartering, swapping, renting and lending, this time supercharged through technology (mobile, social, location-based) to enable us to do these things on a scale and in ways never possible before, helping us to make the most of idling assets, whether that be physical stuff or less tangible assets like time, space and skills. (Anderson, L., personal communication, 2012) The principles behind Collaborative Consumption represent a shift away from ‘20th Century hyper-consumption’ to ‘21st Century Collaborative Consumption’. [See Figure 1 below]
Figure 1. (The Big Shift. Accessed 22 Dec 12. Infographic)
The term ‘hyper-consumption’ shown in Figure 1, uses the prefix ‘hyper-’ to emphasise the excessive consumption that is present in consumerist society. This prefix is also applied to the word consumerism by Botsman and Rogers, which is defined in the book as: ‘the endless acquisition of more stuff in ever greater amounts’. (Botsman, R. Rogers, R. 2011. Pg: 20) Figure 1 illustrates a transformation from a hyper-consumption society to one which is based around Collaborative Consumption. It shows 20th century credit becoming less significant, in time being replaced by reputation systems: ‘an informational system that mediates and facilitates the process of assessing reputations within the context of a specific community.’ (Masum, H. Tovey, M. 2011. Pg: 4) In addition, it appears to indicate a shift away from traditional forms of advertising to collaborative communities powered by reputation. Advertising will not disappear but instead form the basis for a viral economy. Even large corporations such as Nike are now spending less on conventional forms of advertising: ‘Last year  Nike spent just 33 percent of its $678 million United States advertising budget on ads with television networks and other traditional media companies. That’s down from 55 percent 10 years ago, according to the trade publication Advertising Age.’ (Story, L. 14 October, 2007. Online). Instead Nike has started to invest a greater proportion of their budget into online community projects such as Nike+. Finally the infographic in Figure 1 shows a distinct change from individual ownership to shared access of goods and services. This is one of the fundamental principles of Collaborative Consumption and forms the basis for three systems which comprise the model: ● Product Service Systems: ‘In a PSS [Product Service System], a service enables multiple products owned by a company to be shared (car sharing, solar power, launderettes), or products that are privately owned to be shared or rented peer-to-peer.’
● Redistribution Markets: ‘enable used or pre-owned goods to be redistributed from where they are not needed to somewhere or someone where they are.’ ● Collaborative Lifestyles: ‘People with similar interests are banding together to share and exchange less tangible assets such as time, space, skills and money.’ (Botsman, R. Rogers, R. 2011. Pg: 71-75) These three systems are illustrated in Figure 2 [see next page]:
Figure 2. (The Complete Picture. Accessed 22 Dec 12. Infographic)
There are five key drivers to Collaborative Consumption as highlighted in the book Poster-consumerist sharing by Gianluca Di Santis: 1 Technology: The exponential growth in the development of social and mobile technologies (especially peer-to-peer) has created a platform from which the groundswell can expand. 2 The global recession: Occurring in 2008, the global economic downturn shocked consumers to rethink their behaviour and contemplate what value really meant to them. As a result it forced people to focus more on the importance of community. Another factor was people losing trust in traditional large corporate businesses and their brands, prompting them to try out new Collaborative Consumption services. 3 Environmental concerns: The expansion of the world’s population and the diminishment of natural resources create the perfect conditions for Collaborative Consumption to thrive. 4 Urban Density: The increase in the population of urban areas provides an ideal place for CollCons businesses to establish a strong foothold, as they can offer a greater variety of products and services which are much more accessible and cost-effective. 5 Overcome social stigma: People are now more willing to pay for things online, share personal information and meet people from the Internet in the real world. This change in attitude has encouraged entrepreneurs to set up share-based collaborative ventures. (De Santis, G. 2011. Pg: 30-33) As it stands, thousands of examples of Collaborative Consumption organisations exist all over the world; (Collaborative Consumption Hub. Accessed 1 Jan 12. Online) but how far
reaching is the groundswell, and will Collaborative Consumption become a widely adopted behaviour?
4. Literature Review
The purpose of this study is to examine whether Collaborative Consumption will reach a tipping point, and go on to become a globally adopted behaviour. The ‘tipping point’ is a general expression, often used within marketing to describe the point at which something such as a movement, trend, or phenomenon reaches critical mass. The term ‘critical mass’ has numerous definitions; this investigation will refer to it as: ‘The minimum number of people required to start or sustain an operation, business, process, etc.’ (The Free Dictionary, 2012. Online) Best-selling author Malcolm Gladwell explores the drivers behind this notion in his book The Tipping Point. Gladwell identifies the three rules of epidemics, which he says are necessary in order for something to ‘tip’: 1. The Law of the Few: Connectors, Mavens and Salesmen: This notion highlights how different types of influential people are needed in order for a phenomenon to attain critical mass. Connectors are individuals who have a multitude of connections; ‘they manage to occupy many different worlds and subcultures and niches.’ (Gladwell, M. 2001. Pg: 48) Connectors have a natural ability to form relationships between a variety of different people. Mavens are typically individuals who are experts in their particular field, the word Maven derives from the Yiddish dialect and it means someone who accumulates knowledge. (Gladwell, M. 2001. Pg: 60) Mavens are not persuaders, rather they are educators and: ‘information brokers, sharing and trading what they know.’ (Gladwell, M. 2001. Pg: 69) Salesmen understand the art of persuasion; they have the charisma along with the uncanny ability to persuade large groups of people to change their behaviours. Rachel Botsman, the founder of Collaborative Consumption, works extensively within the area of social commerce, raising the awareness of CollCons through high profile
media work and global conventions such as TED – a non-profit global set of academic conferences. Botsman’s extensive knowledge of the sharing economy, ability to captivate large audiences, and experience in building online communities, would suggest she exemplifies the law of the few. 2. The Stickiness Factor: This determines whether an idea is ‘sticky’ enough to remain in people’s minds. If an idea is to grow exponentially, the concept needs to be extraordinarily strong and cohesive. The Stickiness Factor can be broken down into ten different characteristics: - Uniqueness: clear one-of-a-kind differentiation - Aesthetics: perceived aesthetic appeal - Association: generates positive associations - Engagement: fosters emotional involvement - Excellence: perceived as best of breed - Expressive value: visible sign of user values - Functional value: helps goal attainment - Nostalgic value: evokes sentimental linkages - Personification: has character, personality - Cost: perceived value for money (Brand Genetics. Accessed 3 Jan 12. Online) 3. The Power of Context: This outlines that a series of preconditions in areas such as environmental, cultural or political needs to occur in order for something to reach the tipping point. There is a clear link to between the Power of Context and the five key drivers of Collaborative Consumption outlined by Di Santis in the book Post-consumerist Sharing [See page 15]. The three Rules of epidemics instated by Gladwell will be used as a guide to help determine whether CollCons can reach a tipping point. Another piece of theoretical literature useful in examining the tipping point of Collaborative Consumption is Crossing The Chasm by Geoffrey A. Moore. The book introduces
the notion of the technology adoption life cycle, a term used in marketing to describe the different audiences who buy technology goods. The book categorises these audiences into different groups. Innovators: are a small group of tech enthusiasts, whose opinions encourage others to investigate a product. Early adopters: are not overly familiar with technology, but are attracted by the benefits and play a similar role to innovators in recommending a product. Early majority: these are consumers who are not taken in by fads. They are happy to wait, although if the product is practical they may be taken in. Late majority: this large group wait for the early problems to be fixed before purchasing. They represent around 33% of the market. Laggards: do not see the value in the technology, and therefore do not buy into it. (GetAbstract. 2006. Online) Although this book focuses its attention on technology products, these basic principles can still be applied to a movement like Collaborative Consumption. The literature surrounding Collaborative Consumption is somewhat scarce due the infancy of the movement. Only a handful of studies exist which explore some of the key issues within the area of social commerce and Collaborative Consumption. However, it should be noted that an abundance of resources in the form of articles, blogs, videos and infographics, exist online and will be utilised in this investigation. The groundswell driving Collaborative Consumption is not something that has only been identified by Botsman and Rogers. Author Jeremy Rifkin accurately foresees this phenomenon emerging in the future in his book ‘The Age of Access: how the shift from ownership to access is transforming capitalism’ published in 2000, some ten years before the notion of Collcons came into existence. Rifkin says: ‘In the Age of Access, one buys access to lived experience itself. Economic forecasters and consultants talk about the new experience industries, which include the whole range of cultural activities from travel to entertainment, are coming to dominate the
new global economy.’ (Rifkin, J. 2000. Pg: 145) In the book he also refers to futurist James Ogilvey, who notes that consumers are becoming dissatisfied with the unnecessary massproduction of goods that often go to waste. (Rifkin, J. 2000. Pg: 145) Ogilvey goes on to say: “Today’s consumers don’t ask themselves as often, ‘What do I want to have that I don’t have already’; they are asking instead, ‘What do I want to experience that I have not experienced yet?’ (Rifkin, J. 2000. Pg: 145) There are some clear parallels to Collaborative Consumption here, and businesses such as AirBnB might spring to mind. Interestingly, Rifkin often refers to the term ‘hyper-capitalist’ in the book in much the same way that Botsman and Rogers refer to the buzzwords ‘hyper-consumerism’ and ‘hyper-consumption’. References to trends in online collaboration and sharing also appear in other literature, which might suggest that the groundswell surrounding CollCons has been brewing for some time. The book ‘Wikinomics: how mass collaboration changes everything’ [first published in 2006], signals that: ‘The web is no longer about idly surfing and passively reading, listening, or watching. It’s about peering: sharing, socializing, collaborating, and, most of all creating within loosely connected communities.’ (Tapscott, D. Williams, A,D. 2008. Pg: 45) More recently Lisa Gansky who wrote ‘The Mesh: why the future of business is sharing’ (2010) examines at a new type of business model emerging in the area of social commerce which she calls ‘The Mesh’. The focus of her book surrounds the recent trend of businesses specifically web-based startups - that are utilising peer-to-peer technologies to create share-based marketplaces and platforms. At first glance, this would appear to be very similar to Collaborative Consumption. I contacted Lisa Gansky to find out what the key differences were, she said that: The short answer is that collaborative consumption is focused on two sided marketplaces that are peer-to-peer. It is a subset of the Mesh or sharing economy. The Mesh includes share based ventures (businesses, communities, non-profits), which use a model of offering access to goods, services or talent rather than the need to own them.
(Gansky, L., personal communication, 2012) I put the same question forward in an email to Rachel Botsman and received a response from Lauren Anderson, the Community Director at Collaborative Consumption. She pointed out some of the fundamental discrepancies between the two notions: In regards to the difference between Collaborative Consumption and The Mesh, while I agree with Lisa's statement that collaborative consumption is a subset of The Mesh, our definition of collaborative consumption is broader than what she has stated, and if you look at The Mesh directory, it's clear that the Mesh includes a much broader range of businesses than those that enable access over ownership.’ (Anderson, L., personal communication, 2012) Anderson goes on to say: In regards to the Mesh, I believe it probably includes all of the above [in reference to a list of business-to-consumer (B2C), business-to-business (B2B) and peer-to-peer (P2P) businesses] but according to the directory also seems to extend to open-source platforms, social networks (Facebook is on there), and even sales sites (like Fab). The general premise or criteria seems to be anything that uses technology to connect to other people, things or ideas. (Anderson, L., personal communication, 2012) As mentioned earlier in this essay [refer to page 19], there are currently only a handful of studies which place Collaborative Consumption into context. Author Gianluca De Santis attempts to bridge this gap by conducting a study looking into: ‘Value creation in C2C [consumer-to-consumer] Share-based Marketplaces emerged in the wake of Social Commerce and Collaborative Consumption.’ (Di Santis. 2011) The study brings forward the notions presented by Botsman, R., and Rogers, R. (2011) and Gansky, L. (2010). Di Santis conducts seven different case studies of businesses operating within social commerce to identify how they create value. The purpose of the research was to obtain a clear grounding in both social
commerce and collaborative consumption along with establishing a C2C share-based marketplaces value creation model (Di Santis. 2011). The study reveals that there is currently no widely accepted language within the area of social commerce as it continues to grow and evolve. This particular piece of research is extremely valuable to this investigation, as it is one of the first major studies which looks closely at the movement of Collaborative Consumption. Reputation is a key issue within Collaborative Consumption. Rachel Botsman delivers a brief introduction to an idea called ‘Reputation Capital’ in her 2012 TED Talk: ‘The currency of the new economy is trust.’ In the keynote she explains that: ‘reputation is a currency that I believe will become more powerful than our credit history in the 21st century. Reputation will be the currency that says that you can trust me.’ (Botsman, R. 2012. Online) In 2011, a study titled The Reputation Society was conducted by the MIT Press to evaluate the rise and importance of online reputation systems. The book is significant to this dissertation, as reputation systems lay the foundations from which Collaborative Consumption businesses can build and grow. It identifies the pros and cons of online reputation systems and discusses the future of ‘reputation societies’. As reputation systems are still in their infancy, they bring a whole host of problems and challenges. Some of these include: how to quantify an individual's worth through a rating, or developing algorithms which make reputation crosstransferable through different websites. If Collaborative Consumption is to become a widely accepted behaviour, then reputation systems may need to overcome these problems in order for the movement to reach a tipping point. All of the literature discussed will be useful in helping form conclusions around the thesis question, and will be essential when analysing data gathered in the empirical study.
The primary research for this investigation was divided up into two empirical studies. The first was an online survey which measured the awareness and perception of Collaborative Consumption amongst the participants. Clearly the more people who are aware and engaged with the movement, the more likely it is to reach a tipping point. The ten principles of the Stickiness Factor [See page 18], will be used in the analysis of these results. The second empirical study was conducted via a series of interviews with Collaborative Consumption businesses. This was conducted to identify the strengths, weaknesses, opportunities and threats of CollCons and examine the growth of the movement. The findings from these two studies will help to determine what needs to happen in order for the movement to reach a tipping point. To analyse all of the data gathered in this investigation, the findings chapter is divided into five key sections: ● Awareness of Collaborative Consumption ● Perceptions of Collaborative Consumption ● Perceptions of reputation systems ● Growth of Collaborative Consumption ● SWOT Analysis of Collaborative Consumption
5.1 Online Survey
The online survey was conducted using SurveyGizmo (http://www.surveygizmo.com) over the course of November and December of 2012. The survey initially comprised 25 questions (three
were later removed as they were not deemed necessary), and was designed using SurveyGizmo’s logic system. This meant that respondents would only see the questions that corresponded with the answers they selected, making it impossible to answer all 22 questions. The survey was designed this way to make it easier for the participants complete, and allow for a clearer set of results. [See full list of questions and SurveyGizmo summary report in Appendix B and C for further information.] The survey comprised a series of quantitative yes and no questions along with multiple choice questions. This was done to ensure there would be a sufficient amount of numerical data to provide clear statistical results. Many of these questions were followed by qualitative based questions, which gave respondents the chance to elaborate on their answers; this was to help understand people’s opinions and their reasoning’s behind them. In addition to the primary set of questions which related to people’s awareness and perception of CollCons, a secondary set of questions was included to measure people’s online shopping habits along with their opinions of reputation systems. These questions were used to help build up a general overview of consumer behaviour and their attitudes towards Collaborative Consumption, which is helpful in determining whether the movement can reach a tipping point. Images were used throughout the survey to aid the participant’s understanding of Collaborative Consumption and further illustrate certain questions. If people understood the questions clearly, there was a higher likelihood of them responding with a more informative answer. The image in Figure 3 [see next page] was used in: Question 18. Rachel Botsman came up with the idea of Collaborative Consumption; she talks about a world based around reputation. Do you think this is a good idea?
Figure 3. (Botsman, R. Accessed 18 Nov 2012. Online image)
Due to Collaborative Consumption being a recent phenomenon, it was likely that a proportion of the participants might not have heard of it before, which would make the questions difficult to answer. Images alone couldn’t solve the problem, so to counter it, a blog post with an embedded link of the Collaborative Consumption groundswell video - What’s Mine Is Yours (Botsman, R. 2010. Online Video) along with a link to the questionnaire was posted online. This would ensure that people taking part in the survey understood the premise behind the movement. However it should be recognised that even though visitors to the page were encouraged to watch the video, there was no guarantee that people would watch it attentively, or even watch it at all. This left the potential for anomalous results. After watching the video, people were directed to the questionnaire via a link underneath.
Over 100 people took part in the survey from different locations around the world.
Figure 4. (SurveyGizmo Geodata Map, Accessed 23 Dec 2012. Online Screenshot)
The geodata map shows the locations where people took part in the survey. The green dots indicate the completed surveys. The blue dots represent the participants who only filled out part of the survey. The orange dots show where the survey has been abandoned before the participant answered any of the questions. All of the partially completed surveys were subsequently deleted to ensure an even sample, leaving a total of 100 completed surveys. It was decided that a total sample size of 100 would be sufficient to receive some promising results under the time constraints of the dissertation deadline. It is important to recognise that the results have a margin of error of 0.100 (10%) as a consequence of the sample size. The link to the blog post (with the CollCons video and survey link) was posted on four popular social media websites (Twitter, Facebook, Linkedin and Reddit). It took just over two weeks to reach the target sample size of 100. The sampling was conducted randomly to reduce any bias, and anyone who saw the link to the survey was free to take part. Age was the only demographic that was sampled in the survey, and ranged from 21 and under to 65 and over. It was important to sample as many different age groups as possible in order to measure the awareness of CollCons across a broad range. Gender was not essential to the thesis, although it
might have made for some interesting results with regards to the awareness of Collaborative Consumption amongst males and females. In order to maximise the number of results within a short time frame, any questions that were not deemed essential were left out to reduce the length of the survey. This was to reduce the likelihood of participants abandoning the questionnaire. This method was somewhat crude, and in retrospect a more detailed set of results regarding the demographics of the participants might have allowed for a more in-depth analysis. It was later decided that questions 11 - 15 would be left out of the findings section. Despite providing some interesting statistics, they did not provide any real value to the investigation. In addition, question 22 was left out of the findings, as the results were considered inconclusive. All of the data from these questions can still be found in the appendix of this document.
5.2 Interviews with Collaborative Consumption businesses
This was a qualitative study consisting of a series of interviews taking place over a two week period in December 2012. Over 100 Collaborative Consumption businesses were contacted via email with a series of questions about their business and the CollCons movement. The sampling was done using the directory page on the Collaborative Consumption Hub website which comprises a snapshot of 210 businesses and organisations within CollCons. This was the most efficient way of conducting a large sample, as all of the contacts were in one place. [See Appendix D for a list of the questions, the contacted businesses, and link to the directory page.] The objective was to receive as many responses as possible in the shortest possible time frame. The minimum target number of responses was set around 10% as this would provide a broad enough range of results to be analysed. The sampling only became selective if a website was not
in English, in which case it was discarded from the list of contacts. Other businesses on the list were not contacted if their site had shut down, or if finding the correct point of contact became too difficult. I was aware of two additional Collaborative Consumption businesses (GoodGym and EasyBring), which were not included in the directory. They were subsequently added to the contact list, which culminated in a total of 107 businesses that were successfully approached. In total, 21 businesses responded to the email, which was over the initial target of 10%. However, within these responses, 8 organisations declined to take part for undisclosed reasons. This left 13 completed interviews. Although this was slightly under the minimum target, it was still a substantial amount of data and enough to carry out this study. [See Interviews in Appendix F]. One of the interviewees, Imran Azam, Founder of ShareMyStorage.com, requested that the interview be conducted over Skype. Whilst Alex Stephany, COO of Parkatmyhouse.com, preferred that it be conducted over the phone. Transcripts and links to the recordings of the interviews can be found in Appendix F. The rest of the interviews were conducted via email. The empirical study revealed an interesting set of results which will help to determine whether Collaborative Consumption can reach a tipping point.
6.1 Awareness of Collaborative Consumption
In an interview with Theme Media (a digital production company based in Australia), Rachel Botsman stated: ‘The idea is that everyone around the world will have a common understanding of what it [Collaborative Consumption] is.’ (Theme Media. 2010. Online Video) If Collaborative Consumption is to reach a tipping point, then people will need to be aware of it. Two questions were used in the online survey to measure awareness:
i. Figure 5. (Primary data. Gathered Nov/Dec 2012. Online Survey)
The results showed that an overwhelming majority (80%) had no knowledge of Collaborative Consumption prior to watching the video. Only 20% were previously aware, which might
indicate that the movement is acknowledged by the innovators and the early adopters, but is yet to reach out to the early majority. [See pages 18-19 for explanations of these terms.]
ii. Figure 6. (Primary data. Gathered Nov/Dec 2012. Online Survey)
Despite the fact that 80% of the participants had not heard about the movement, 53.8% of this figure was aware of some Collaborative Consumption services. This is particularly interesting as it might indicate that CollCons businesses and organisations are becoming more common within the mainstream marketplace. However, if Botsman’s ambition is for everyone to have a common understanding of Collaborative Consumption, (Theme Media. 2010. Online Video) and if the movement is to
reach a tipping point, the results from the survey would indicate that the profile of CollCons needs to be raised. The survey also asked the participants who were already aware of Collaborative Consumption where they had heard about it:
Figure 7. (Primary data. Gathered Nov/Dec 2012. Online Survey)
[Note to reader: This question was multiple choice which is why the percentages appear disproportionate to the total number of responses.] The results reveal that Collaborative Consumption is a viral movement, and does not follow the conventional forms of Advertising and PR to promote itself. 50% of the respondents said they had learnt about CollCons through word of mouth, with 35% saying they came across it
via technology websites. 25% discovered CollCons through organic web searches, whilst only 10% heard about it through TV. The 20 participants who were already aware of Collaborative Consumption were then asked:
Figure 8. (Primary data. Gathered Nov/Dec 2012. Online Survey)
Only 9 of the 100 participants who took part in the survey had used some CollCons services, which indicate that the movement is predominantly active amongst the innovators and early adopters. 55% said that they had not used any Collaborative Consumption websites. When they were asked why, it provided an interesting set of results:
Figure 9. (Primary data. Gathered Nov/Dec 2012. Online Survey)
Five of the participants responded with answers [marked in red], which could possibly be related to their age. Due to the fact that nearly half of the respondents were aged 21 or under, there is a good chance that these answers were age-related. If this is the case, then it highlights a potential opportunity for Collaborative Consumption services to extend their reach out to a younger consumer base.
Figure 10. (Primary data. Gathered Nov/Dec 2012. Online Survey)
In this survey, 46% of the participants were aged 21 and under. This is important, as many existing Collaborative Consumption services are generally suited to an older demographic. Popular brands such as Zipcar, Buzzcar, Zopa, Skillshare, Carpooling.com and Parkatmyhouse.com, typically target working people with income, capital, and rentable assets. The results from the survey indicate that the awareness of Collaborative Consumption is still relatively low, especially amongst a younger audience. However, it is important to note that the movement is still in its infancy and growing. Furthermore, the results gathered from the survey on people’s perceptions of Collaborative Consumption highlight a strong sense of positivity towards the movement.
6.2 Perceptions of Collaborative Consumption
In a live online Q&A session hosted by The Guardian newspaper’s website in June 2011, Rachel Botsman received a challenging question about Collaborative Consumption from a participant. The comment read: Collaborative Consumption is not innovative or new, unless you were born yesterday, so I would like to ask Rachel Botsman, Is it necessary to invent a technical term for an old and simple concept, and to label it as new and innovative, before the Gadget Generation will BUY IT? (The Guardian. 2011. Online) The question prompted a response from Botsman which included an interesting point in regards to Collaborative Consumption as a brand: Finally, I disagree with you on the giving something a label point. Brands and monikers that tie lots of seemingly disconnected ideas together are very powerful. Collaborative Consumption (the term) has given people all around the world a common way to talk, connect and spread ideas that were previously difficult to join the dots around. I have also intentionally worked to create a brand that is cool and breaks the stigmas around ‘sharing’. So yes, it is necessary to build an innovative concept for any generation to not just ‘buy it’ but to feel like “I want to be a part of that.” (The Guardian. 2011. Online) Measuring people’s perceptions of Collaborative Consumption is important in bringing about a tipping point. If people like the idea, then it increases the chance of it becoming a widely adopted movement. In the book The Tipping Point, Gladwell discusses the notion of The Stickiness Factor [see page 18 of Literature Review], which ties closely into how people perceive an idea. By using the characteristics that comprise the stickiness factor as a guide, it will help to analyse the data gathered on people’s perceptions of Collaborative Consumption.
An overwhelming 87% of survey participants said they liked the idea of Collaborative Consumption, whilst 12% were undecided. Only one person said no, stating that it sounded too similar to communism. [Refer to Appendix C, question 9. of the summary report]
Figure 11 (Primary data. Gathered Nov/Dec 2012. Online Survey)
If Collaborative Consumption is to reach a tipping point, people will need to start changing their behaviours. The high percentage of positive responses tells us that people liked the idea, but it did not necessarily mean they would use any Collaborative Consumption services. In retrospect, it might have been beneficial to include a question which asked the participants whether they would use any CollCons services. Despite this, the results from question 8, which asked respondents what they liked about Collaborative Consumption, yielded an interesting set of answers relating closely to the characteristics of the stickiness factor. Table 1 [see Appendix A] lays out a range of 30 different
responses (three for each of the 10 factors) taken from 87 of the participants who answered with yes in question 7. The ten aspects of the stickiness factor are not definitive, but they do outline the critical components that need to be in place in order to create an idea that ‘sticks’. The table of results shows that Collaborative Consumption certainly fulfills these characteristics, or has the potential to. Despite the positive set of results, it is important not to ignore those participants who were undecided on the matter [See question 13 on auto summary report in Appendix C]. The key issues that people raised were as follows: ● Apprehension towards reputation systems, particularly in regards to abuse. ● Lack of understanding about some of the legal aspects surrounding Collaborative Consumption services, such as insurance coverage. ● The issue of trusting and relying on strangers. ● Abuse and malice of assets. ● Uncomfortable with change from consumerist lifestyle. ● Lack of understanding about Collaborative Consumption in general. (possibly linked to lack of awareness).
6.3 Perceptions of Reputation systems
As mentioned earlier in the dissertation [see page 22], reputation systems go hand-inhand with Collaborative Consumption and therefore need to be addressed in this essay. If Collaborative Consumption is to reach a tipping point, then people will need to become accustomed to reputation systems. Two questions were used to gain an insight into people’s opinions of online reputation systems:
i. Figure 12 (Primary data. Gathered Nov/Dec 2012. Online Survey)
The vast majority (90%) of the participants stated that reputation did influence whether or not they made a transaction online. This shows that reputation is vitally important to people when purchasing via the Internet. Using the image shown in [Figure 3, page 25], the following question asked the respondents whether they thought a world based around reputation was a good idea:
ii. Figure 13 (Primary data. Gathered Nov/Dec 2012. Online Survey)
The results indicated that a high proportion of the participants (62%) liked the idea of reputation systems. Listed below are some of the most common reasons why people thought this was a good idea: ● Leads to trustworthiness and reliability. ● Picks off fraudsters and scammers and gives business to those who earn it. ● Reputation is everything. ● Values someone’s worth rather than their financial assets. ● Encourages people to work together. ● May help to solve problems in the world. ● Legacy is better than currency.
● Lack of physical ownership through Collaborative Consumption will necessitate a stronger emphasis on the reputation of sellers. ● We should reward good behaviour. ● Reputations tend to be largely accurate. ● Humans judge things consciously and subconsciously, so reputation is important. ● It gives companies a reason to provide a good service. ● Whether it’s good or bad reputation, you know what you’re getting. (Primary Source. Conducted Nov/Dec 2012. Online Survey) Some people expressed their uncertainty towards the issue. Over a quarter (30%) were unsure, with an additional 8% against the idea. Even some of the respondents who said yes, still expressed their apprehension towards the idea. One person stated: ‘Yes. But who defines it, and can it be manipulated? This would have grave implications on the credibility of the idea.’ (Primary Source. Conducted Nov/Dec 2012. Online Survey) The fact that some people approached this question with a level of hesitancy is understandable. Reputation is a broad, subjective topic and there is undoubtedly a degree of stigma that surrounds it, which is evident from the results. Below is a list of key issues that people raised: ● Reputation is based on opinion. ● There is no way of quantifying an individual’s worth. ● Open to manipulation. ● Issues with defamation. ● Reputation is not everything. ● The issue of trusting and relying on strangers. ● Reputation can be fabricated.
● Established reputation can escape criticism. ● Abuse of power - who controls the reputation systems? ● Reputation is subjective. ● Accidental or innocent mistakes could tarnish reputations. ● Unsure of how it would work. (Primary Source. Conducted Nov/Dec 2012. Online Survey) Online reputation systems are still a new concept; eBay (founded in 1995) introduced one of the first feedback forums, which has typically been received well. Despite this, it has been open to extensive manipulation and malice by users and hackers. Reputation systems are continually evolving as technology advances, but as it stands, online reputation is no substitute for real-world reputation as highlighted in the 2011 study; The Reputation Society by MIT Press: In designing reputation systems, we generally use numerical scores (ratings) together with small snippets of text (evaluations). But compared to real-world reputation, these computational models are almost too simple to merit even using the same word. Real-life reputation is subtle and dynamic, with personal and cultural elements. (Massum, H. Tovey, M. 2011. Pg: 15) The results from the survey indicate that reputation systems are important to people and that they do foresee a future where they can work, highlighting some significant benefits. Nevertheless, a substantial proportion of the participants were hesitant towards the idea, identifying fundamental issues with reputation systems. If Collaborative Consumption is to reach a tipping point, online reputation systems may be the determining factor. There is still a long way to go in improving reputation technologies, and overcoming the social stigma that surrounds them.
6.4 The growth of Collaborative Consumption
Estimates vary, but according to Botsman the sharing economy is now thought to be worth around $110bn. (Fast Company. 2011. Online) The exponential growth of a phenomenon is usually an indication that it may be in the process of ‘tipping’. The growth of Collaborative Consumption can be measured using the primary data from the interviews with CollCons services, in combination with secondary growth statistics available online. [See Table 2 Appendix A for primary data from interviews.]
Secondary Collaborative Consumption industry data:
AirBnB (2008) - An online peer-to-peer social marketplace which allows people to monetise their spare rooms/space to provide unique accommodation to its users.
Figure 14. (10 Million Guest Nights Booked. 19 June 2012. Infographic)
Carpooling.com (International launch 2009) - The largest online carpooling network.
Figure 15. (Excuse me, may I rent your car?. 2012. Online Video - Screenshot)
Fiverr (2010) - The world’s largest peer-to-peer marketplace for small services starting at $5.
Figure 16. (Excuse me, may I rent your car?. 2012. Online Video - Screenshot)
TaskRabbit (2008) - A peer-to-peer marketplace where tasks can be listed.
Figure 17. (The Big Picture. Accessed 29 Dec 2012. Infographic)
It is important to emphasise that these organisations range in size and maturity, but what is clear is that for the most part, growth appears to be rapid and exponential. The data shows that none of the businesses existed before 2001, and that 11 out of the 16 organisations launched after 2008. In the book Post-consumerist Sharing, the 2008 global recession is identified as one of the key drivers of Collaborative Consumption [see page 15]. This along with the other factors identified in the book, might explain why so many of these businesses were founded around this time. The results confirm that this is a new, active and expanding marketplace. The rapid growth of Collaborative Consumption means that a tipping point may well be in sight. However, there are still many hurdles to overcome before the movement is to reach critical mass. In many ways, these patterns in growth are comparable to the ‘dot-com bubble’ in the early 00s, where the explosive growth of Internet startups climaxed in spectacular economic bust. That being said, the conditions highlighted in the key drivers of Collaborative Consumption [see page 15], are very different from a decade ago. Craig Shapiro, Founder of the Collaborative Fund, expresses his concerns with the long-term growth of CollCons businesses stating: ‘platforms that facilitate opportunity to create wealth must be built to last. Otherwise their impact is nominal, if not damaging to the ecosystem long-term.’ (Shapiro, C. 2012. Online)
6.5 SWOT analysis of Collaborative Consumption
The primary and secondary data acquired in this investigation has been summarised and consolidated into a SWOT analysis of Collaborative Consumption. This will help to further illustrate where CollCons currently stands as a movement and what needs to happen in order to facilitate a tipping point.
SWOT Analysis of Collaborative Consumption Strengths ● ● ● ● ● ● ● ● ● ● ● ● Reduces consumption Consumer Empowerment Personal monetisation More effective utilisation of resources Positive environmental impact Reduces waste Sustainability Highly economical Exponential growth of the marketplace Job creation Builds communities and relationships Several key drivers causing people to use CollCons services - not reliant on one ● Removal of the ‘middle-man’ ● Altruistic ● Fresh thinking/new ideas Weaknesses ● Stigma surrounding reputation systems ● Issues with trusting strangers online ● A wide acceptance of sharing is yet to exist ● Lack of awareness ● Lack of consistency in the product or service ● Lack of understanding of CollCons amongst consumers ● People don’t need the services yet ● Removal of the middle-man ● Legal issues i.e. insurance policies, taxation loopholes ● Less effective in low populated areas ● Less appealing to a younger audience ● May require time before people become accustomed to the idea ● Lifestyle changes Opportunities ● Increasing publicity of the Collaborative Consumption movement - specifically amongst young consumers to help reach critical mass ● Business opportunities to create improved and more advanced reputation systems ● Developing technologies which will enable peer-production ● Untapped markets ● Advertising opportunities ● Regulation of the market ● Improvements to current legislation
Threats ● Rapid economic recovery ● Explosive, unsustainable growth of CollCons businesses ● Inertia amongst consumers ● Lack of funding for CollCons startups ● Increased competition as more entrepreneurs enter the market
The SWOT analysis confirms that Collaborative Consumption currently sits in a relatively strong position. Despite this, there are several obstacles highlighted in the weaknesses,
which need to be overcome if a tipping point is to be reached. Many of these are likely to occur in due course, such as increasing awareness and improving people’s understanding of the movement. However, refining reputation systems, addressing the legal issues and conquering consumer inertia, are all significant factors which could prevent or slow CollCon’s ascent to a tipping point. The SWOT reveals a number of threats, however none appear to be imminent or unique to this particular marketplace. Consumer inertia may be CollCon’s biggest short-term threat. The findings from this investigation will help to form conclusions as to whether the Collaborative Consumption movement can reach a tipping point.
7. Conclusion & Recommendations
7.1 Conclusions of Findings
This study asks whether the recent phenomenon of Collaborative Consumption can reach a tipping point. In this essay, a careful review of the available literature was conducted to further understand Collaborative Consumption in context, and help form a theoretical framework from which the findings could be analysed. An independent empirical investigation in the form of a consumer survey was carried out, in addition to a collection of interviews with Collaborative Consumption businesses. These helped to measure: ● The awareness of CollCons. ● People’s perceptions of CollCons. ● Perceptions towards reputations systems. ● The growth of CollCons. ● The strengths, weaknesses, opportunities and threats of CollCons through a SWOT analysis. The findings from each of these sections will help to form conclusions as to whether Collaborative Consumption can reach a tipping point. This research may be helpful to others who are investigating the area of social commerce. The results on awareness identified that Collaborative Consumption is a viral movement, growing predominantly through word of mouth, publicity from technology websites, and organic web searches. Furthermore, the data showed that people’s knowledge of the movement was relatively low, with only 20% awareness. This was especially true for younger consumers under
the age of 21, who were less aware about Collaborative Consumption, with some stating that the services did not apply to them yet. Only 9 out of the 100 participants had used any CollCons services, suggesting that the movement is active amongst the innovators and the early adopters, but is yet to reach the early majority. If CollCons is to reach a tipping point, this research suggests that awareness of the movement needs to increase across a broader range of ages. Raising the profile of the movement within younger age groups may help the long-term growth of Collaborative Consumption. The lack of awareness might also suggest that The Law of The Few [see pages 17-18] is an aspect of Collaborative Consumption which is lacking. Do there need to be more people like Botsman spreading the movement? The findings showed that an overwhelming 87% of the participants liked the idea of Collaborative Consumption. The responses from the questions on perception highlighted that the movement has a high Stickiness Factor, which is crucial to forcing a tipping point. Furthermore, many of the reasons why people liked the idea of CollCons, corresponded with the five key drivers behind Collaborative Consumption, which suggests that the Power of Context is present within the movement. Further findings on people’s perceptions of Collaborative Consumption, showed that 62% liked reputation systems, whilst 30% were undecided, and another 8% were against them. Although many people were positive towards reputation systems, a substantial proportion of the respondents raised their concerns about a variety of issues such as the abuse of power, and potential issues with defamation [see question 21 – Appendix C for full list]. Despite some of the participant’s hesitancy towards reputation systems, 90% of the respondents stated that the reputation of a product or service was important to them when making a purchase online. The findings showed that online reputation is vitally important to people, but also highlighted a
degree of uncertainty in some people’s minds about how more advanced reputation systems would work. It may be some time before online reputation systems reach a stage in development where they become widely accepted through a mainstream audience, which could be a factor in whether Collaborative Consumption reaches the tipping point. The data gathered on the growth of CollCons indicated that the movement is increasing exponentially in the area of social commerce. This level of growth is often a signifier of a tipping point. Taking into consideration the rate at which the marketplace is increasing, it becomes evident that Collaborative Consumption is not just a fad, but also a movement that is advancing ever closer to a tipping point. It is important to note that this growth has occurred over the last ten years, and accelerated in the last five as result of the key drivers behind CollCons. [See page 15]. The SWOT Analysis of Collaborative Consumption highlights a number of strengths including: the reduction of consumption, consumer empowerment and a positive environmental impact. Above all, it shows how CollCons is making intrinsic and meaningful connections with people all over the Western world, adding value to their lives and offering a way out of frivolous consumerist behaviours. In addition, the SWOT Analysis revealed various weak points to CollCons, such as a lack of awareness, stigma surrounding reputation systems and legal issues. Although these weaknesses present a variety of challenges, factors such as awareness will become less significant overtime as more people learn about the movement. The SWOT Analysis identified several opportunities within CollCons, which could help to facilitate a tipping point, such as: increasing publicity of Collaborative Consumption (especially amongst a younger demographic), business opportunities to develop reputation
systems; and exploiting untapped markets. Many of these factors may be crucial if CollCons is to gain a wider audience, and reach out to the late majority. Some of the issues that threaten Collaborative Consumption may be unavoidable. For instance, if Western nations were to experience a rapid economic recovery, people might revert back to their old consumerist behaviours. Although an unlikely scenario, it could prevent or slow down CollCons ascent to a tipping point. Other threats include unsustainable growth, consumer inertia and lack of funding for Collaborative Consumption startups. These are all significant factors which could affect a tipping point. On the contrary, if the market is regulated effectively, and continues to experience exponential growth, it is more than likely that new businesses operating with a CollCons model will attract increasing investment. Overcoming consumer inertia may be one of the greatest challenges the movement faces. Some people may consider the lifestyle change too great or invasive, and may never adopt a more collaborative way of living.
7.2 The tipping point
The findings from this investigation suggest that Collaborative Consumption comprises the right elements to facilitate a tipping point and become a global phenomenon. However, this study raises key issues which have the potential to slow or prevent critical mass from occurring. Malcolm Gladwell says: “in order to create one contagious movement, you often have to create many small movements first.” (GoodReads. Accessed 2 Jan 13. Online) Collaborative Consumption may represent the tip of the iceberg in a series of movements which could lead to a more sustainable form of consumerism. At the heart of this zeitgeist, people are calling for a transition from top-down power to ‘peer-power’, the implications of which may be far reaching.
Movements like Collaborative Consumption could lead society into a post-capitalist era within the next century. Furthermore, future technologies may allow the peer-production of goods on mass scale, but from the comfort of people’s homes. Whilst intellectual property could become the most prized asset in a society based around sharing and collaboration. This is consumerism with a conscience.
An interesting extension to this study might involve exploring how far reaching this movement could be. For instance, it would be fascinating to discover whether this phenomenon has the potential to spread beyond the realms of commerce and into other areas such as politics, healthcare and education. Another compelling topic could discuss what influence future technologies are going to have on the Collaborative Consumption movement.
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1. Primary Data. (2012). Online Survey. Created using: http://www.surveygizmo.com [Gathered Nov/Dec 2012].
2. Primary Data. (2012). Interviews with Collaborative Consumption businesses. [Gathered Nov/Dec 2012].
Important research sources that were not referenced in this document:
1. Gansky, L. (2010). The Mesh, 2nd Edition, New York, USA: Penguin Group
2. Lanier, J. (2011). You Are Not A Gadget, 2nd Edition, London, UK: Penguin Group
3. http://www.triplepundit.com/2012/05/access-economy-comes-washing-machine/ [Accessed Nov 2012]
4. http://www.forbes.com/sites/oreillymedia/2012/04/18/zipcars-tech-is-saving-citygovernments-millions-of-dollars/ [Accessed Nov 2012]
5. http://www.sfbg.com/2012/05/01/problem-sharing-economy [Accessed Nov 2012]
6. http://www.huffingtonpost.com/rachel-botsman/goodbye-hyperconsumption_b_716107.html [Accessed Nov 2012]
7. http://www.latimes.com/business/technology/la-fi-tn-sandy-airbnb20121107,0,2590481.story [Accessed Dec 2012]
8. http://trendwatch.sustainableindustries.com/legitimization-of-the-access-economy/ [Accessed Dec 2012]
9. http://techcrunch.com/2011/11/14/why-the-collaborative-consumption-revolution-mightbe-as-significant-as-the-industrial-revolution-tctv/ [Accessed Dec 2012]
10. http://www.opendemocracy.net/ourkingdom/tess-riley/rise-of-sharing-economy [Accessed Dec 2012]
11. http://technode.com/2012/01/13/would-collaborative-consumption-work-in-china-notyet/ [Accessed Dec 2012]
Appendix A – Tables
Table 1. Measuring the Stickiness Factor from the survey responses Ten aspects of the Stickiness Factor: Survey responses: People expressed their opinions about some of the unique aspects of Collaborative Consumption, such as access over ownership, a versatile range of products and services, and forming bonds and connections with strangers: ● ‘It makes a lot more sense than owning things outright and helps people to collaborate and get more out of life in general, rather than cookiecutter experiences that have become the norm.’ ● ‘I can now access a greater range of products, services and information through a small but increasing number of portals and contribute my own underutilized equipment, time and accumulated knowledge to a community of like-minded individuals, and that makes me happy.’ ● ‘Forming bonds with people you wouldn’t usually, sharing skills and resources would usually produce a better product/service etc.’ ● ‘Modern, everything can be done with a computer.’ ● ‘I like the philosophy of everyone sharing.’ ● ‘Cool.’ ● ‘I like the idea of sharing with other people in a global community which therefore helps to protect the planet and save everybody’s time and
Uniqueness: clear one-of-a-kind differentiation
Aesthetics: perceived aesthetic appeal
Association: generates positive associations
resources.’ ● ‘The community aspect (global village), everyone working together to create a better world.’ ● ‘The fact that it connects so many people, it has been going on for years and years already, but it’s allowing people from all over the world to collaborate.’ ● ‘More efficient and personal.’ ● ‘What do I LOVE about it, you mean? I like that it challenges conventional wisdom of how to provide products and services. It’s a change, and change is good.’ ● ‘It helps the environment and brings communities together.’ Participants expressed what they thought made Collaborative Consumption an exceptional idea.
Engagement: fosters emotional involvement
Excellence: perceived as best of breed
● ‘More social than anything before.’ ● ‘That it enables people to share and collaborate with one another instead of letting space etc go to waste, other people can make use of it. Win win.’ ● ‘Sounds like an excellent idea that is eco-friendly.’ ● ‘It values the role of the consumer a lot more.’ ● ‘More inclusive, more equal.’ ● ‘Naturalistic. Direct. Efficient.’ ● ‘I like that I can get rid of unwanted goods easily to those that want/need them, and that I can acquire things I want for free when they are on offer.’ ● ‘It allows me the option of using something I need (tools or machinery) without having to own it. I can also get second hand items others don’t need.’ ● ‘Business prospects, pushing to be more eco-friendly, opportunities to save money.’
Expressive value: visible sign of user values
Functional value: helps goal attainment
Nostalgic value: evokes sentimental linkages
● ‘Sense of community, trust in strangers, communicating with strangers who have similar interests.’ ● ‘Saving the planet and helping one another.’ ● ‘Sustainability, sharing as the world depletes resources. More Christian.’ ● ‘It cuts out the big corporate money makers and takes things back to basics.’ ● ‘It’s non-corporation mentality; Society is the custodian of its products and services.’ ● ‘The idea that you can go to a far away land and not have to stay in a hotel, or go through a rental agency for transportation.’ ● ‘Saves money and is innovative.’ ● ‘Economical, cost effective and brings people together.’ ● ‘It would save me money and help others.’ (Primary data. Gathered Nov/Dec 2012. Online Survey)
Personification: has character, personality
Cost: perceived value for money
(Brand Genetics. Accessed 3 Jan 12. Online)
Table 2. Primary Data from Interviews
Name of organisation Zimride.com
Year of inception 2007
Projected growth ● Partnered with over 120 Universities. ● Expected growth in private networks all over US. ● Expected growth of Zimride into public system in populated urban areas. ● 50% growth expected in 2013 ● Anticipates strong growth. ● Currently has 1,200 of 2,100 co-working spaces listed on its site, making it the largest co-working focused search portal. ● Growth from 1 million to 4 million in under 3 years. ● 1 million people transported each month. ● Available in more than 40 countries. ● 100% increase in site traffic over the last 3-4 months. ● Still in early stages of growth. ● Over 9 million members globally. ● Adding 20K members
2001 in Germany (International launch 2009)
Came out of beta in 2012
per week. ● Largest non-profit environmental website on the planet. Bedandfed.co.uk Pozible.com 2010 2010 ● Steady growth due to lack of resources. ● $1m worth of pledges in 2010. ● $5m worth of pledges in 2012. ● Similar growth expected in 2013. ● Currently has 250,000 users. ● Expected to hit over 1 million in the next few years. ● Currently expanding in USA. ● Experiencing rapid growth. ● Active in 127 locations globally. ● 70,000 members. ● 10-20,000 new members each year. ● Currently experiencing steady growth. ● Foresees major growth as the business expands. ● High growth expected. ● 16,000 users. ● 3,000 in peak months.
(Primary data. Gathered Nov/Dec 2012. Online Survey)
Appendix B – Survey Questions (Structure)
Survey Title: Consumerism With A Conscience?
Note: Questions marked in blue represent that they were visible to all of the participants. Other colours are used in the structure to help distinguish between the different answers that people selected.
1. Please select which age range you fall under. *This question is required. ● ● ● ● ● ● 21 and Under 22 - 34 35 - 44 45 - 54 55 - 64 65 and Over
2. Had you heard of Collaborative Consumption before watching the video? *This question is required. ● ● Yes No
[People who selected yes on question 2]
3. Where did you hear about it?
(This question is multiple choice) *This question is required.
● ● ● ● ● ● ●
Whilst searching the web Technology websites (i.e. Digg, TechCrunch, TED etc) Books Newspapers / Magazines TV Word of Mouth Other
4. Have you used any websites that follow a Collaborative Consumption model i.e. AirBnB, ZipCar, Zopa, SkillShare etc... (Here is a more extensive list: http://www.collaborativeconsumption.com/the-movement/snapshot-ofexamples.php) *This question is required. ● ● Yes No
[People who selected no on question 4.] 5. Why haven't you used any Collaborative Consumption websites? *
[People who selected no on question 2]
6. Now that you know what it is, had you heard of any websites that follow a Collaborative Consumption model before watching this video i.e. AirBnB, ZipCar, Zopa, SkillShare etc...
(Here is a more extensive list: http://www.collaborativeconsumption.com/the-movement/snapshot-ofexamples.php) *This question is required. ● ● Yes No
[At this point in the survey, all of the participants found themselves at question 7.]
7. Do you like the idea of Collaborative Consumption? *This question is required. ● ● ● Yes No Undecided
[Question 7. was followed by a series of sub-questions depending on which answer was clicked. It allowed for the respondents to elaborate]
8. What do you like about it? *
9. What don't you like about it? * 10. What are aspects of Collaborative Consumption are you undecided about? Please elaborate. *
11. Would you say that you are now purchasing more online than you were 5 years ago? * ● ● Yes No
[People who selected no on question 11.]
12. Why is this? *
13. On balance, would you say that you shop more online or in-store? *This question is required. ● ● Online In-Store
14. Why do you shop more online as opposed to in-store? * 15. Why do you shop more in-store as opposed to online? *
16. Does the reputation of a service online influence whether or not you make a transaction? *This question is required.
[People who selected no on question 16.]
17. Why not? *
18. Rachel Botsman came up with the idea of Collaborative Consumption, she talks about a world based around reputation. Do you think this is a good idea? *This question is required. ● ● ● Yes No Unsure
[Question 18. was followed by a series of sub-questions depending on which answer was clicked. It allowed for respondents to elaborate]
19. Why do you think this is a good idea? * 20. Why don't you think this is a good idea? * 21. What are you unsure about? *
22. Collaborative Consumption was included within Time Magazines '10 Ideas That Will Change the World'.
Do you think Collaborative Consumption will change the world?
● ● ●
Yes No Undecided
Appendix C – Survey Gizmo Auto-Summary Report (Online Survey)
Appendix D – List of contacted Collaborative Consumption businesses
Below is a list of all of the businesses and organisations (107) that were contacted for the empirical study in this investigation. 21 responded and 8 declined to take part. 13 interviews were carried out in total.
This list of organisations contacted, was sourced from the Collaborative Consumption Hub directory page: [http://www.collaborativeconsumption.com/the-movement/snapshot-of-examples.php]
Note: The organisations marked in bold are the ones which took part in the interview.
Product service systems:
Car sharing: Zipcar WhizzCar Autoshare Car sharing (big auto brands): BMW DriveNow Daimler Car2Go Peer-to-Peer Car Sharing: Whipcar RelayRides Getaround Buzzcar Bike Sharing: BCycle Niceride Social Bicycles Spinlister Ride sharing:
Zimride Nuride Liftshare GoCarShare carpooling.com tickengo Solar Power: SolarCity 1BOG Textbook rental: Zookal BookRenter Art Rental: Art.sy artisicle TurningArt Fashion rental: Bag, Borrow & Steal FashionHire General online rental: Getable P2P rental: Rentoid Ecomodo RentStuff Open Shed Neighborhood Rental: Neighborrow The Sharehood Friendwiththings Hey Neighbor!
Free / Gift Exchanges: Freecycle Giftflow Ziilch Exchango Freally Swap sites for books: Bookmooch eBook Fling Swap sites for baby goods/toys: thredUp Clothing swaps: Swapstyle, Clothing Exchange 99 Dresses i-ella Swap sites for media (DVDs etc): Swap Dig N'Swap Netcycler Neighbourhood Marketplaces: Zaarly
Coworking spaces: Citizen Space Hub Culture Vibewire Tech Hub NewWorkCity Coloft
Co-working space finders: DesksNearMe DeskWanted OpenDesks Social Lending: Zopa Lending Club Social currencies: TimeBanks SPICE Timebank P2P Travel: Couchsurfing AirBnB Roomorama One Fine Stay Bed And Fed 9Flats (iStopOver acquired 9Flats) Taxi Sharing: Taxi2 Weeels Bartering: OurGoods Tourboarding CrowdFunding: IndieGoGo KickStarter StartSomeGood Pozible Crowdcube Catarse Gardens: UrbanGardenShare Landshare SharedEarth 90
YardShare Skill Sharing: Brooklyn Skill Share SkillShare Skillio WeTeachMe Parking Spots: Parkatmyhouse ParkCirca Neighborhood Support: StreetBank GoodGym (Not included in the directory.) Errand & Task Networks: EasyBring (Not included in the directory.) TaskRabbit MyTaskAngel Gigwalk AirTasker Unique Experience Marketplaces: Vayable Gidsy SideTour Arribaa Social Food Networks: GrubWithUs EatWithMe Storage Networks: StorPod sharemystorage
Appendix E – Email sent to Collaborative Consumption businesses Below is a copy of the email sent out to 107 Collaborative Consumption businesses and organisations:
Hi there, My name is Josh Alidina, I’m a Level 3 BA (Hons) Advertising student from University College Falmouth writing a dissertation on Collaborative Consumption. My thesis is exploring the ‘CollCons’ groundswell and discussing if, when and how it will reach a tipping point. As part of my primary research I have prepared 7 simple questions which will be put forward to a variety of different Collaborative Consumption businesses operating within different market sectors. Questions: 1. What year did you set up your business? 2. What were the key factors that inspired you launch a Collaborative Consumption business? 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? 4. What have you found to be the most effective way of marketing/advertising your service? 5. Typically, which demographic is the most common user of your service and why? 6. What would you say are the greatest threats to your Collaborative Consumption business? 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? I appreciate you that you are under time constraints, and would appreciate any answers that you can give. Kind regards, Josh Alidina
Appendix F – Interviews with Collaborative Consumption businesses
Imran Azam, Founder & CEO of ShareMyStorage.com
(Interview conducted via Skype) - www.sharemystorage.com Recording of interview: http://vimeo.com/55849062 Josh: Hi, my name is Josh Alidina. I'm currently writing a thesis surrounding the collaborative consumption movement, investigating if, when, and how it will reach a tipping point. I'm joined today by Imran Azam, the founder of ShareMyStorage.com. Imran, thanks for joining me. When you're ready, we'll kick off with the questions. Imran: Yeah, thanks for having me, Josh. Go ahead, in your own time. Josh: (Qu1) Sure. So, in what year did you set up your business? Imran: Well, the idea of ShareMyStorage.com was borne a couple of years ago, but it has taken us a little bit of time to plan and to build the site. We went live in Beta in September 2011, and we came out of Beta in February 2012. Josh: (Qu2) Okay. And can you tell me some of the key factors that inspired you to launch a collaborative consumption venture? Imran: Well that's a question that can take us back all the way to my childhood, really. I grew up in West London, and my father had a grocery store, and I distinctly remember the time during Thatcher era--I'm not sure you remember, but during that time there was a deregulation of markets which, essentially, allowed large supermarkets to open up. To cut a long story short, it wiped out my father's business. And obviously, it was a difficult time, and that stuck with me: the power of big businesses and the power of finance. And all the way throughout my career, I suppose I've been looking for an opportunity to express this, and the groundswell with collaborative consumption, new sharing economy, is meant that the opportunity has now presented itself, especially within a staid industry such as self-storage. Josh: (Qu3) What levels of growth have you experience since your inception, and what is your projected growth over the next few years? Imran: Yeah, I'd have to say that's the kind of "How long is a piece of string?" question, and my answer is going to be along the lines of, "Twice the distance from the middle to the end." What I can tell you is in the last few months,
we've seen a significant increase in traffic to the site; that's been borne out of the fact that we've won an award for the best social website of the year, according to The Good Web Guide. We've been shortlisted for another in February, so there's been a lot of good press activity. And so we've seen about 100% increase in site traffic over the last three to four months, and that's resulted in a lot more data for us to work with, and obviously we can then analyse in order to improve what it is we do. The initial stages, admittedly, were slow, but it's mainly because we've got a very, very new concept and it's not a conventional marketplace; you know, with a conventional marketplace you can predict both sides, both supply and demand. But as this is unconventional, it means a lot of research needs to go in actually attracting what we would term the inventory on the site, i.e., people with space. And that's what we're doing at the moment. We're in marketing R&D and testing lots of little bits and pieces everywhere, with a view to working out what works for us. Josh: (Qu4) And so to drive all of this growth, what have you found to be the most effective way of marketing and advertising your service? Imran: Well we subscribe to the lean start-up model, which effectively means really, really focusing on a particular geographic region (or part of it means that) testing what it is that works for us from a marketing perspective, both online and offline. I mean, I'll give you a flavour of that: about a month ago, I was up at 6:00 in the morning; we were working with six students at Manchester Metropolitan University, who all drove down at 6:00AM to Cambridge. We prepared 2,000 cardboard boxes with our message printed on the inside, which were hand-printed, and then we delivered these to 2,000 dressers across Cambridge. Now, the response wasn't as great as we wanted it to be (by the way, we finished at 8:00 in the evening that day, totally knackered). But it's something that we had to do in order to test how to get our message across. And so we're trying out, you know, numerous things that are both offline and online, and slowly honing in on those things which are going to work for us. So, whether they be, you know, affiliate marketing, blogging, posting, social media, it is all up in the air at the moment. Unfortunately, I can't give you too much in the way of specifics. Josh: (Qu5) Typically, which demographic is the most common user of your service, and why? Imran: There is a general opinion that the younger generation (those who we'll call ‘Millennials’) and the older generation (those who are, say, 50+) absolutely get what this kind of new sharing economy is about. On the older side, you've got people who always used to share. They understand the value of community. And if they're digitally enabled, as they increasingly are, then it's like a duck to water. So we're seeing a lot of traction with people within that age range. The younger generation also are what we consider open-minded about the possibilities that the net offers, and hence, we get a lot of people who are, say, around 20 to 25, maybe 20 to 30, who also absolutely get what it is we are trying to do and are used to sharing online as well. I suppose the difficulty is in those people who are kind of the ‘analog’ generation, between the ages of, say, 30 and 50, who have kind of grown up with this kind of "Don't trust strangers" mentality, which has been drummed into them by government in the late 80's, especially
here in the UK. But even so, people are ultimately driven by need, and whilst there are the purists out there who want to do things because it is the new sharing economy, there are basically out there people who need storage. So we're finding traction across the board. Josh: (Qu6) And what would you say are the greatest threats to your collaborative consumption business? Imran: I would suggest that anybody who's started up in this particular era is ahead of the curve. And that's good news, but it's only good news if you can sustain being ahead of the curve, so that you're at the right place at the right time when the tipping point arrives. So running out of finance, that's a consideration, that's something that needs to be borne in mind. Anybody who's in this space who's looking to build a marketplace really needs to get to the point where they have a scalable model extremely quickly. By "extremely quickly," that's subjective; you're talking about how long until you run out of funds where you can't run your venture anymore. And once you get to that scalable point, you are going to have to consider external investment. And through my conversations with other people who are in this space who are founders, it's not something that they readily want to accept, but it's, I think it's just a practical consideration. Without the finance, somebody with the finance is going to come in and do what you do and probably do it a lot better. Josh: (Qu7) What do you think needs to happen in order for collaborative consumption to reach the tipping point or to reach critical mass? Imran: I would say, I mean, there's two main factors. It's obviously public opinion is critical. We need collaborative consumption or the new sharing economy to be considered part of the mainstream sooner rather than later. And that would be an ever-increasing circle. You know, the more people come on board--if you go back to, if I give you the classic example of eBay, if I said to you, let's say, forget eBay exists; if I said to you now, "Let's set up a website whereby you can sell something to anyone and they'll buy it. You won't even use your real name in the process, and you'll actually pay for it before you've received it, and you'll never have seen or touched it before that point," it would seem rather absolutely crazy idea. Josh: Yeah. So there's a certain amount of stigma that surrounds it… Imran: There's stigma. I'd suggest that there's a fear of the unknown. And it's the same with, say, using credit cards online. There are people who, "They'll never take off, nobody will ever do it," and now we all do. So the question for me isn't if it's going to happen; it's when it's going to happen. And that's a really difficult question to answer, but the second factor I think's really important is government. Government needs to send out a very, very strong message, and enable institutions to get involved with collaborative consumption so that big business, as well as public institutions, are absolutely on the same page and see this as an opportunity and not a threat; because it is absolutely an opportunity. You know, the idea of, say; a business being threatened by car sharing is nonsense, really.
There's an opportunity for those businesses to enhance their brands, they're actually providing an offering within the space. So, big business on board, local government, and the industry needs to go mainstream. So I said two; there's actually three. Josh: Well Imran, thank you very much for taking part in this interview, it's been an absolute pleasure talking to you. Best of luck with ShareMyStorage.com. Imran: Okay. Great, thanks very much, Josh. Josh: Thanks a lot.
Alex Stephany, COO at Parkatmyhouse.com
(Interview conducted via phone) - www.parkatmyhouse.com Recording of interview: http://www.youtube.com/watch?v=tiXU86jMs1s&feature=youtu.be Josh: (Qu1) In what year did you set up your business? Alex: 2006. Josh: (Qu2) And can you tell me some of the key factors that inspired you to launch a collaborative consumption venture? Alex: I didn’t found the company, but I think the main thing is you have the ability to really scale marketplace projections online, so bartering when shopping for things is kind of the most fundamental form of capitalism really, something that pre-dates money, so again being able to do those kinds of win-win-win transactions at scale is really exciting… Josh: (Qu3) And what levels of growth have you experienced since your inception and what is your projected growth over the next few years? Alex: Certainly now we’ve got over 250 thousand users, and certainly we need to hit over a million users in the next few years which would be a fairly conservative aim given the rates at which we’re growing. That can lead to expanding in to other countries as well…We’ve kind of got a foothold in the United states, but we’re already a house-hold name in the U.K. Josh: (Extension of question) Okay, so you are looking to expand globally then? Alex: Its something starting to think about now, we’ve done a bit of it in the states, we have quite a good foundation there, about 10,000 registered users. But yeah, certainly increasing that more… Josh: (Qu4) Okay and what have you found to be the most effective way of marketing or advertising your service? Alex: It’s mostly PR and word of mouth. Josh: (Qu5) And typically which demographic is the most common user of your service and why?
Alex: Cities, we have two types of customers, we have drivers and we have property owners, the drivers are a little bit younger on average, our demographic would be anything from 20 to 45, probably being about 7 to 12 years older on the property owner side. All kinds of socio-economic classes, but I think what unites them is the interest in using technology smartly to help them save money. They are typically a quite savvy on the ball bunch. Josh: (Qu6) And what would you say is the greatest threat to your collaborative consumption business? Alex: I think it is probably unit economics and customer acquisition – these are our two biggest challenges. Josh: (Spontaneous question - not included within original set of questions) And just on a side note, do you think that if for example a large corporate was to come and take over the company, they could pose as a threat in terms of staying true to the collaborative consumption principles? Alex: Not really, I mean, this term Collaborative Consumption came about a few years after we started…The way we operate is not like a politically ideological, socialistic or communistic business...We’re saving people money, we are making people millions of pounds a year. What we are doing is not ideologically driven, I mean its -- we think it is quite beneficial for property owners and drivers and the cities as well, because we’re doing a lot to reduce the traffic and pollution caused by people circling for parking, I think it is great for cities and great for society that…But it doesn’t have any Collaborative Consumption ideology per se. Josh: (Qu7) And what do you think needs to happen in order for the collaborative consumption phenomenon to reach a tipping point, or to reach critical mass? Alex: I think that people need to -- consumers need to slightly change their expectations for a predictable consumer experience and by that I mean that inventory is non-standard on AirBnB or Parkatmyhouse or TaskRabbit. And at the moment, or historically, consumers have liked things that have been saying that they know what they’re getting. You know, one of the reasons why Coke [Coca Cola] is a very successful company is because you as a consumer know that every can of Coke will taste the same. And if every can of Coke might be a little bit different then i.e. some might be nicer than others, then that’s something that you as a consumer need to change. So that’s maybe the big question mark at the moment. Will this ever be a mass-market thing, or is the consumer experience is going to be non-standard or different. Josh: That’s brilliant Alex, thanks very much for taking part in the interview and best of luck with Parkatmyhouse.com. Alex: Thank you Josh and good luck with your dissertation.
Curtis Rogers, National Account Manager at Zimride.com
(Interview conducted via email) - www.zimride.com 1. What year did you set up your business? 2007 2. What were the key factors that inspired you to launch a Collaborative Consumption business? On American roads, over 80% of the seats in cars are unoccupied. At a time of high fuel costs, traffic jams, and polluted air, we thought this would be a great way to utilize existing technology with the resources available now (no need to invent something new). 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? Zimride has partnered with over 120 universities and companies to create private networks all over the US. We expect growth will continue with private networks, and we also expect the Zimride public system to continue to grow in more populated areas of the country. 4. What have you found to be the most effective way of marketing/advertising your service? It's hard to measure, but word of mouth is certainly the best way to educate people. 5. Typically, which demographic is the most common user of your service and why? Young adults. They are used to using new technology to think outside the box. 6. What would you say are the greatest threats to your Collaborative Consumption business? The negative associations people have with hitch-hiking and meeting strangers. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? Delivering or altering the product so that it appeals to a larger audience. The technology is available, and I think certain industries are there, but some will need to make a case that appeals to a larger audience (not just the early 100
adopters). I think Couch Surfing was good with the early adopters, but Airbnb made the concept cross the tipping point.
Darryl Aken, Founder & President of RentStuff.com
(Interview conducted via email) - www.rentstuff.com 1. What year did you set up your business? 2009 2. What were the key factors that inspired you to launch a Collaborative Consumption business? I owned a rental company and observed there was no major web marketplace for rentals. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? We have grown way over 100% each year (but that is starting from zero), and next year we hope to grow 50%. 4. What have you found to be the most effective way of marketing/advertising your service? Web entirely, and Google organic search. 5. Typically, which demographic is the most common user of your service and why? Event professionals and general contractors. 6. What would you say are the greatest threats to your Collaborative Consumption business? There won’t be a faster website, but one could have deeper pockets.
7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? There is a solid acceptance of this concept; have no idea of the next tipping point.
Lisa Fox, Co-Founder & CEO of Open Shed
(Interview conducted via email) - www.openshed.com.au 1. What year did you set up your business? My partner and I started working on Open Shed in April 2011 and the site went live in October 2011. 2. What were the key factors that inspired you to launch a Collaborative Consumption business? In late 2010 Rachel Botsman’s TED talk and book really inspired me to find ways that I could be involved in collaborative consumption in Australia. Stuff sharing was the first vertical I wanted to get involved in because it just made perfect sense given we lived in a one bedroom apartment in a large block. I started researching Australian sites, but wasn’t able to find a peer-to-peer rental site with trust and safety features similar to what other overseas sites had. I just couldn’t see myself calling up a random stranger’s mobile and asking to rent their pressure cleaner! The Australian sites also didn’t have any community feel to them, which I thought was also important. At the time I saw it as an opportunity because I could see it was happening overseas and I thought Australians should have the same opportunities to engage in this behaviour. In terms of motivations, what first captured my imagination was the idea of just accessing what you need, when you need it. It just made perfect sense. But over time the ability to connect and empower individuals has also become an important factor. Here’s a little of what I recently said at a Conference, which pretty much sums it up: “But, what I see as the ‘secret sauce’ of collaborative consumption businesses and why I believe they have the potential to play a transformational roles in our communities, is that their very basis is people, and the primary purpose of these platforms (and the hallmark of whether they are a successful business or not) is to connect people so that their needs can be meet in an efficient way. And I believe this flows directly into some of the elements that I think are crucial to a thriving community - connectedness and collaboration. As a social movement I believe Collaborative consumption has the potential to change the way we live offering us greater flexibility, a great sense of empowerment over our own lives and far more daily connections.”
3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? Open Shed has been steadily growing over the last 12 months. We still aren’t talking huge numbers, but the number of members and rentals does continue to rise. It is difficult for us to project growth over the next couple of years. But we definitely foresee major growth, as we seek out partners to help us reach our target market. 4. What have you found to be the most effective way of marketing/advertising your service? We started blogging (http://inside.openshed.com.au/) about Open Shed a number of months before we launched and this helped build our community before we were already live. We have also found that SEO has also been very useful. Because we have a diverse range of items that you usually may not be able to rent, we tend to rank quite highly in Google search. 5. Typically, which demographic is the most common user of your service and why? This still is not a 100% clear. Our members are motivated to use Open Shed for a range of reasons (save money / make money, just makes them feel better about all the stuff they have, environmental, community minded thing to do etc). If I was to be very general our most active age group is under 40, both as renters and owners. However, we do have a number of owners over the age of 50, which have listed their entire sheds! 6. What would you say are the greatest threats to your Collaborative Consumption business? The biggest issue we currently have is raising awareness of this “new” behaviour. A great deal of marketing and education is crucial, which takes lots of time. We believe that Open Shed will be eventually successful mainstream, but until then we are self funding Open Shed. Our other challenges include: 1) Disconnected communities - you need to build community (or tap into existing communities) before you can gain traction. 2) Little financial incentive to share low-value items. 3) Getting to critical mass in a two-sided market place, which caters for a broad range of items.
We believe that if we focus on the first two issues the third can also be achieved. We plan to do this through partnering with existing trusted networks and channels and tapping into the other reasons why people will share these types of items, such as supporting favourite charities, fundraising for their schools and social status. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? Reaching a ‘tipping point’ or ‘critical mass’ is the holy grail for Collcons [Collaborative Consumption] businesses. For a business like Open Shed we may not reach an Australia-wide “tipping point”, but we may do so in certain geographic areas. If there is not enough people or enough stuff to rent in a particular area, the site just won’t be effective. To become a viable alternative to current consumption behaviours we need to build a marketplace with a critical mass of members and items within reasonable geographical vicinity. This will make it convenient and reliable to use.
Anna Cashman, Marketing & Communications officer at DeskWanted
(Interview conducted via email) - www.deskwanted.com 1. What year did you set up your business? 2010 2. What were the key factors that inspired you to launch a Collaborative Consumption business? Deskwanted was created after realising that the coworkig movement was growing at an incredible pace with more and more spaces popping up all over the world, but that there was no platform on which to look for these new types of workspaces. Deskwanted was created to fulfill this need. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? Deskwanted has 1,200 of 2,100 co-working spaces listed on its site, making it the largest co-working focused search portal. Since launching as a directory, the platform has expanded to included a booking function, a includes backend management tools for co-working spaces to organise their members. We have continued to host and sponsor events. Given the incredible growth of the co-working movement, whose growth rate sits at around 100% per year, coupled with the rise in contractual and freelance workers world-wide, we anticipate strong growth. 4. What have you found to be the most effective way of marketing/advertising your service? Deskwanted, through its sister site Deskmag, monitors the industry and conducts the only in-depth, international and statistically significant on co-working. Through our research and constant coverage of the trend, Deskwanted has become a widely known name. Both hosting and sponsoring events have also been effective ways of promoting and marketing Deskwanted. We organise the largest web-conference in Germany, Social Media Week, have coorganised the Co-working Conference Europe, and are organising the 1st Co-working Conference in Australia. 5. Typically, which demographic is the most common user of your service and why? We have two target markets: space operators, who provide desk/meeting room space and membership to co-working communities, and mobile workers, who are in need of a flexible workplace, mostly geared towards community. The following is a paragraph from a Deskmag article describing the coworker demographic: 'Most coworkers are in their mid twenties to late thirties, with an average age of 34. Two-thirds are men, one third are women. The same ratio of men to women is generally found in the wider entrepreneurial and small business statistics across Europe 106
and the U.S. Slightly more than half of all coworkers are freelancers (54%). Almost 20% are entrepreneurs who employ others. Similarly, one in five work as a permanent employee, most of them in very small companies with less than five workers. And four in five coworkers start their career with a university education.' Educated and business-orientated because they are those in need of workspace, freelance because they are in the workforce, but don't have a traditional workplace, young because GenYs are more likely to start a startup or small business, especially in the tech industry. 6. What would you say are the greatest threats to your Collaborative Consumption business? Improvement of the economy, before Collcons [Collaborative Consumption] becomes normal practice, is the biggest threat. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? If Collcons is firmly established as a consumer alternative, and, in turn, the additional benefits of workspace sharing (increase in productivity, expanded businesses networks) are widely experienced and thus widely known, we will be able to achieve collaborative economies of scale, where traditional consumer behaviour and collaborative behaviours co-exist.
Clea Baker, International PR Manager at Carpooling.com
(Interview conducted via email) - www.carpooling.com
1. What year did you set up your business? Launched in Germany in 2001. International launch in 2009. Today we transport more than 1 million people each month. Rides now available in more than 40 countries. 2. What were the key factors that inspired you to launch a Collaborative Consumption business? Rising gas and transport prices mean that many people are looking for solutions to reduce their transport budget and many are also concerned about our planet and how they can contribute to reducing their carbon footprint. We wanted to provide a service that is easy to use and that addresses both these concerns. With more than 1 billion cars in the world, the empty seats in people’s cars represent an extensive (and largely untapped) transportation network. By sharing a car people save gas and money, make new friends and reduce their carbon footprint. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? User base has seen explosive growth from 1 million to 4 million in less than 3 years. We expect this to continue over the next few years as ridesharing gains traction in newer markets like the UK, Italy, Spain and Poland. 4. What have you found to be the most effective way of marketing/advertising your service? What’s interesting is that we have only had a marketing/PR team for 1 year so the explosive growth of our platform was driven primarily by the word-of-mouth of our users. That said, today we promote our service heavily through online advertising, social media, PR and affiliate marketing. 5. Typically, which demographic is the most common user of your service and why? See User Profile here. [Provided link to User Profile infographic which can be found at: http://www.carpooling.com/fileadmin/images/infographic_carpooling_user_profile.pdf - It shows that 53% are women and 47% are men. The majority are well educated and 45% are between the ages of 25 and 39.]
6. What would you say are the greatest threats to your Collaborative Consumption business? Trust is one of the biggest barriers. People often say: “How do you get into a car with a complete stranger?” I always find this question a bit of a misnomer because, today, when you step into a car through carpooling.com, you already have a lot of information about that person with whom you will be sharing a ride. You certainly don’t have that same level of information when you step onto train or bus, or even climb into a taxi. You can see this person’s picture. You know the make and color of the car. You can see the star rating of the user and what other people said about them. Are they a good driver? Did they make frequent stops? Was it a pleasant ride? These are all things that you will know before even meeting them. Users can also choose to only search rides from authenticated users (those who have sent a copy of their ID); and women can choose to only travel with other women. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? We need to build awareness. In order for collaborative consumption companies to work they need to reach critical mass. i.e. Renting a power drill off someone in the US is not going to help you if you are in Brighton. This is true for ridesharing as well. The more rides you have the more likely it is that a user will have a good experience and find the trip that they are looking for. Many people today still don’t realize that ridesharing is actually a viable option for both short commutes and long distance international trips.
Deron Beal, Founder & Executive Director of Freecycle
(Interview conducted via email) - www.freecycle.org
1. What year did you set up your business? 1st May, 2003. 2. What were the key factors that inspired you to launch a Collaborative Consumption business? Worked for nonprofit recycling group: had lots of non-recyclable but perfectly re-usable stuff donated and needed to figure out a way to give stuff away easily. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? Over 9 million members globally: latest number on our main page. Adding about 20K members a week. Largest nonprofit enviro website on planet. 4. What have you found to be the most effective way of marketing/advertising your service? We have one staff member and 7,000 volunteers but no advertising budget unfortunately. Could stand to do some. No money though. 5. Typically, which demographic is the most common user of your service and why? Probably 2/3rds female. You tell me why. 6. What would you say are the greatest threats to your Collaborative Consumption business? Lack of funds. We are a nonprofit, not a business. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? Most coll consumption stuff tends to be low-cost or free. This limits ad reach. People can want collcons, but it probably won't get bigger until they need it. 110
Annabella Forbes, Founder of Bedandfed.co.uk
(Interview conducted via email) - www.bedandfed.co.uk
1. What year did you set up your business? In January 2010. 2. What were the key factors that inspired you to launch a Collaborative Consumption business? I really felt there was no middle market in terms of accommodation in the UK. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? Hard to tell - I have experienced relative growth but have hardly any budget to spend on advertising so it is really organic growth rather than fast sadly! Projected growth is looking positive however with a few new marketing ideas. 4. What have you found to be the most effective way of marketing/advertising your service? Newspapers - because Bed&Fed is a concept that needs explaining properly, I have found this to be the best way (better than online ads for example). 5. Typically, which demographic is the most common user of your service and why? Probably middle class people who want to maintain a certain type of life style in terms of Hosts. The Guests: I can't say as I do not monitor them - they can use the director for free without any type of lock in or sign in. Much more user friendly for them and I don't capture any data on them. 6. What would you say are the greatest threats to your Collaborative Consumption business? Probably the costs of advertising - it's so expensive and competitive that even proven ideas find it hard to stand out on the internet amongst the millions and millions of website. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’?
More people to use it and like it, and not be scared of sharing and being open to new ideas and experiences.
Katie Parker, Pozible.com
(Interview conducted via email) - www.pozible.com
1. What year did you set up your business? 2010 2. What were the key factors that inspired you to launch a Collaborative Consumption business? To provide a service to give creative practitioners and innovators the chance to gain much needed funds in order to financially back their ideas through practical community support and audience participation.
3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? In 2010 we hit $1million worth of pledges, which grew, to $5million in 2012. We are expecting the same kind of growth in 2013. 4. What have you found to be the most effective way of marketing/advertising your service? Building the Pozible community begins with our consolidation to centralised points of contact through social media. As more and more people use Pozible, word of mouth becomes extremely important and effective. 5. Typically, which demographic is the most common user of your service and why? As a platform focusing on creative projects, we have a large contingency of younger, independent creatives. HOwever, as we want to add value to the Pozible experience and process, we also encourage interest in projects from the business world, which we are seeing more and more of. We are lucky to have a wide variety of people creating projects on Pozible. 6. What would you say are the greatest threats to your Collaborative Consumption business? We find there are a few entry level crowd funding platforms, that are not very "responsible" or are perhaps, are a little bit under prepared to launch a crowd funding website. Due to accessibility to the technology and the nature of an online business, it is very easy for people to start up online operations like crowd funding platforms. So, our biggest threat is not just specific to Pozible, but the crowd funding model as a whole, where particular platforms are 113
popping up that are driven by profit and do not place enough emphasis on the crowd funding process and purpose, and thus can be damaging to the reputation of the global crowd funding community. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? We don't foresee a 'tipping point' as such, only that we will see the crowd funding model evolve.
Stan Stalnaker Founder & Director of HubCulture
(Email response) - www.hubculture.com 1. What year did you set up your business? 2002 2. What were the key factors that inspired you to launch a Collaborative Consumption business? When we started, the term did not exist. We simply wanted to connect a likeminded community and offer new ways for them to share value and resources with each other. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? The business is growing rapidly, and because it’s global, has a long ways to go to reach its full potential. 4. What have you found to be the most effective way of marketing/advertising your service? We do everything through word of mouth, invitation, and by trying to take a leadership voice in the conversation online about areas relevant to us. 5. Typically, which demographic is the most common user of your service and why? We tend to appeal most to global urban influentials, but the scope of interest in hub culture and the Ven digital currency has grown far beyond that, we get signups every day from all over the planet. 6. What would you say are the greatest threats to your Collaborative Consumption business? Losing focus on the big mission we've set out to accomplish and expanding in a sustainable way are probably the biggest challenges. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’?
CC [Collaborative Consumption] needs to be more efficient and easier than the old ways of doing things. In many cases it is, and it’s tipping. As technology increases our ability to drive efficiency to new levels, better use of resources is a key component - CC definitely implies better use of resources, making it a natural eventual outcome.
Jake, Support Team at Landshare.net
(Email response) - www.landshare.net
1. What year did you set up your business? 2009 2. What were the key factors that inspired you to launch a Collaborative Consumption business? We saw a need and thought we could fill it with a relatively simple idea. We had experience in the area which spurred us on and we had the backing of a major broadcasting company. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? We have steadily risen to over 70,000 members on our site. The biggest influxes of users have come from when we are mentioned on television, aside from that we get around 10-20,000 new users each year. 4. What have you found to be the most effective way of marketing/advertising your service? Definitely appearing on television. After that we communicate with our users through social media, this leads to lots of recommendations. Finally people hear about us through local press and news coverage. 5. Typically, which demographic is the most common user of your service and why? Our biggest demographic is the middle-aged - these are the most prominent gardeners and also internet-savvy users. 6. What would you say are the greatest threats to your Collaborative Consumption business? We are not a profit-making business so perceive no threats. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’?
Wide acceptance of local sharing. Once all areas of life have these collaborative consumption options available we will see more people turning to them. I believe that a shift in personal lifestyle needs to occur before we actually see phenomenal change.
Drummond Gilbert, Founder of GoCarShare.com
(Email response) - www.gocarshare.com
1. What year did you set up your business? 2010 2. What were the key factors that inspired you to launch a Collaborative Consumption business? Excited about it, wanted to change the world to make it a better place. 3. What levels of growth have you experienced since your inception and what is your projected growth over the next few years? 16,000 users now, 3,000 in peak months. Projected growth is difficult to forecast, but a lot expected. 4. What have you found to be the most effective way of marketing/advertising your service? Partnerships with major festivals and events, PR has played a big part too. 5. Typically, which demographic is the most common user of your service and why? Generation Y, because we are actively targeting universities and festivals, and they are more open to trying different things. 6. What would you say are the greatest threats to your Collaborative Consumption business? Inertia. 7. What do you think needs to happen in order for the Collaborative Consumption phenomenon to reach a ‘tipping point’? Need to obtain critical mass in defined areas, and for users to be personally recommending you to their friends and connections. Above, all, it needs to be doing something that people love.
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