September 1, 2010

Almost every company's web presence is dotted with icons and links encouraging people to "share this!" But what they usually mean is, "share my marketing message." 

When it comes to actual products and services, the message is "consume this and don't share it!" But what if we encouraged people to consume less and share more? That goes against many business instincts, but it is the way most people consume, thanks in part to the social web and technology. 

We're in the age of Collaborative Consumption, owning less and sharing more. It's not just limited to music, television shows and movies either. If you're selling power drills, accounting services or designer handbags, your sales could go up if people shared more.

Think about ZipCar. You don't need to own a car, you can just use one as needed, 24/7, wherever you are. This isn't the same as a rental car agency intended for out of town jaunts. You are skipping out on buying your own car and instead sharing one with your neighbors -- it's just that a company manages the sharing schedule for you and takes on the burden of car maintenance... for a fee. There's also AirBnB, which allows you to rent out all or part of your home to travelers looking for an alternative to hotels. Like ZipCar, there are fees involved, but what about sites like NeighborGoods that let you share the power drill you bought and only used once, or borrow a DVD you only want to watch and don't really need to own? How can that NOT hurt sales?

As a designer myself, and someone who cover incredible design, often of products, I couldn't help but be concerned that quality and great ideas could get pushed aside or products could become even more expensive if consumption drops too much. Yes, as a consumer it is awesome that you can save money by buying less, possibly even earn some money from sharing your goods, and help create less waste in the world. But what if someone trying to break into the power drill industry with an amazing new design couldn't because the cost of design, and development couldn't be recouped if they were only able to sell one in each city because everyone was sharing? (Yes, that's an extreme example, but you get the idea!) Would this mean some gorgeous, innovative designs may not happen?

But here are three reasons that a culture of Collaborative Consumption helps small business overall:

1. When people own less of what they don't need, it frees up more money to buy the things from businesses they might otherwise never have been able to support. A family that doesn't need to buy its own power drill because they can share one can buy local art, hand-crafted designs, or accounting services they never would have been able to consider before.

2. People will hold the things they buy for themselves that are not shareable in higher esteem. The value of a painting goes up if people stop comparing it directly with less-subjectively valued goods like a washing machine. Small businesses are more direct and personal and can benefit from a culture that prizes that uniqueness over price.

3. If people know that an item won't go to waste, they'll be more likely to get it. Even the most whimsical person feels a little guilty about the awesome toy they bought that they only use three times a year. Most will just not buy that item in the first place. So you can have 999 people who don't buy a product and one person who does and uses it twice, or you can have 1,000 people who collectively buy one product, use it once happily, pass it on, and repeat that process with other things.

Now you must watch the amazing (and gorgeous!) video that inspired these thoughts. Sadly, I can't embed the goodness here, but you can watch it here! These videos are part of Rachel Botsman and Roo Rodger's lead ups to their new book What's Mine Is Yours: The Rise of Collaborative Consumption. And if you don't have time to get to the video now, here are a few of my favorite moments to get your juices flowing!

Join the conversation ( 4 )

• Bob Haan 1 year 5 months and 8 days ago

  

  I think that short term rentals are becoming more popular for just the reasons stated in the article. People can save money and test out new things without having to make a large investment. I don't know if short term rentals fall within the definition of "collaborative sharing", but they are definitely one way that people can share the things that they only need once or twice a year.
  
  I founded TechRentfor just this reason. TechRent offers short term rentals of computers, projectors, video cameras, and other electronics. Technology becomes obsolete in a few years, so why buy something that you will only use once or twice?

• Julie Rains 1 year 5 months and 8 days ago

  

  Collaborative consumption has a lot of interesting uses: I might try someone's gear and then either borrow rather than buy or I might decide that the item is worth having myself so that I can use and lend out to another circle of friends. Will this item be sold at a higher price point b/c fewer are manufactured and available?
  
  In some ways, though, we've seen some reversals: books for example may be downloaded and not easily lent in digital form; whereas those who have books in paper form can lend multiple times.
  
  Figuring out where your product or service fits within this model of sharing seems very useful.

• Paul Gordon 1 year 5 months and 14 days ago

  

  Really great article. Perhaps the term should be Collaborative Re-consumption?

• Neal Gorenflo 1 year 5 months and 15 days ago

  

  Glad to see the Collaborative Consumption and Shareable.net trends gain momentum.