Collaborative Consumption: Changing Business, Lives and Education

In the 20th century, consumer goods became key focal points for every Western economy. From televisions to cell phones, computers, luxury cars, entertainment, travel, and leisure, the concept of private ownership – especially in the United States—was entwined with prosperity.

Today, however, the buzz around private ownership is moving towards a peer-to-peer model that encourages consumers to share and trade with one another. Known as collaborative consumption, the trend is generating new standards for cost-effective living and environmental sustainability. Last year, Time magazine highlighted the idea as one of 10 new concepts that will change the world. How? Here are four reasons:

1. It’s Turning Consumerism on Its Axis

Thanks in part to refined high-tech platforms, close-knit social media communities, and the economic downturn, peer-to-peer markets are emerging in key sectors including travel (AirBnB), transportation (Getaround, Relay Rides, Zipcar, Zimride), fashion (Rent the Runway, 99Dresses), skills (TaskRabbit, Zaarly), and even kids’ clothing (thredUP).

Beyond consumer goods and crowdsourced services, the trend has made its way into investment and entrepreneurial communities through services for crowdfunding (RocketHub, Kickstarter), peer lending (Prosper), collaborative inventing (Quirky), and shared office space (co-working).

At Wired 2011, social innovator, TED speaker, and author Rachel Botsman described collaborative consumption as the preeminent social movement of the 21st century. “We are in the nascent stages of a collaborative revolution that is going to be as big as the Industrial Revolution,” Botman says.

In her talk, she elaborates that in the sharing and trading of assets, “trust between strangers is the key ingredient that community-driven marketplaces must get right.” Through the movement, according to Botsman, reputation will evolve into a “crucial metric” that will outweigh others such as credit history.

2. It’s About More Than Money

As both a concept and trend, collaborative consumption is evolving beyond material and financial capital. We’re sharing more than our cars and living spaces – we’re exchanging knowledge and creating information-based niche communities.

Without a doubt, knowledge is a high-demand commodity with clear-cut value. Businesses hire specialized consultants at high premiums, and professionals will grow their knowledge-bases to increase their market worth. Even the cost of becoming an expert – through on-the-job experience, training programs, and education – is expensive. From high-tech to education, healthcare, and entrepreneurship, information is in demand.

3. There Is a Need For Emerging Markets for High-Value Knowledge

As one example of a high-value, peer-to-peer knowledge marketplace, consider HealthTap, an online question and answer (Q&A) platform that connects doctors with patients. Based in Silicon Valley, the company has raised approximately $14M in venture funding from key sources including Eric Schmidt. As of April 2012, the network includes more than 10,000 licensed U.S. physicians.

Through the platform, anyone can post a health-related question for doctors to answer. Physicians can answer questions and vote on one another’s answers. Based on these metrics, HealthTap will rate physicians to create a reputation-based community of trust.

As a marketplace, HealthTap is invaluable for healthcare consumers who are otherwise restricted by strict insurance plans and managed care providers to obtain basic advice. For doctors, HealthTap provides two value propositions: (1) an online platform for a doctor to establish his or her reputation and (2) a social community for physicians to learn from one another’s styles, thought processes, and suggestions.

In the business, entrepreneur, and VC community, collaborative consumption has taken shape in the form of Q&A engine Quora. Established in 2009 by two former Facebook employees, the platform attracts users ranging from thought leaders to journalists, engineers, consultants, lawyers, and executives. Underlying the heart of the platform is a desire to exchange knowledge about anything and everything ranging from marketing strategies to specialized technical procedures.

For someone who is working on a time-sensitive project on a shoestring budget, collective intellectual capital is invaluable. Beyond asking and finding answers to questions, the community –through quantifiable metrics like answer votes and user followership—helps professionals network and establish reputations. As of April 2012, Quora has raised $11M in venture funding.

In contrast with newcomers like Quora and HealthTap, StackExchange has been around since 2008. With 24 employees and $18M in venture funding, the company operates a network of niche-specific Q&A sites in disciplines ranging from programming to statistics, bicycles, linguistics, and travel.

Especially for technical disciplines, finding an answer to procedural questions like “How Do I Loop Through File Names in Statistical Software” have tremendous ROI, especially when compared to the cost of paid consulting. We give knowledge to get knowledge, and as we share value-driven information, we become trusted experts.

4. It’s Effecting The Social Landscape

As with any sociological shift, collaborative consumption is a process that takes time. According to Time, it’s the “young who are leading the way.” What about other generations who have lived their lives prioritizing private ownership? To them, collaborative consumption is still valuable but may take a different form.

Still, companies like Zipcar –with its $174M IPO in April 2011—reveal that the movement is transforming how we do business. It’s going to become the new norm and underscore consumerism’s next generation.

Want to learn more about collaborative consumption? We recommend the following experts:

Jason Shen – Co-founder of Ridejoy
Luke Bornheimer – Google UX designer
Fred Caballero – Co-founder of StartupStay

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