Motives of investing in collaborative consumption
As I already wrote about Collaborative Consumption in one of my last blog posts, I am now trying to find out what economic potential really is behind it and why so many start-ups join this movement of sharing.
“The main point is: we are students and we need the money and it is always nice to get to know different people.” – that is what I´ve found out when talking to my 2 passengers on a tour which I offered on Mitfahrgelegenheit.de, the German Arbnb. However, this is only one reason in the opinion of consumers, but I asked me the Question: Why do companys install platforms and offer sharing opportunities? What are their motives?
Money, Money, Money
While I did my research I always came across with reasons like “cost savings, generating money, filling up your pocket”. Is this really the reason why we share? And where are the values of a paradigm shift, getting together and the reduction of consumption? Was it all a big lie?
I was really shocked while reading the article on Mashable which mentions opinions about collaborative consumption and its motives.
“No one is denying that the idea of accessing rather than owning is controversial”
The author clearly identifies the motive by saying: “The common theme […] is that collaborative consumption is, for the most part, about value. While there are a number of non-financial reasons for participating in the sharing economy, most of the people I spoke with agreed that the number one driver is cost savings.”
He underlines his assumption with the example of the real estate expert Roberto Gonzalez who he cites in his article with : “Airbnb is a “better and much more profitable way” to rent out his extra bedroom than the old Craigslist go-to. He’s definitely on to something — Airbnb hosts in New York City make an average of $21,000 annually through the system, according to Airbnb CEO Brian Chesky.”
In my opinion these numbers speak for themselves. $21,000 per year with just renting your room to strangers? – unbelievable and I guess nobody would ever have expected something like that.
Hints for young start-ups
Today I talked with Tizian, a fellow student of mine, about this entire sharing thing and he gave me the idea of figuring out the potential of collaborative consumption for young start-ups since he is very into this topic.
Ron J. Williams founder of Knodes and SnapGoods advises other startup founders to: “focus on value when marketing peer-to-peer marketplaces” Besides that, he says he “would prioritize more if he were to launch SnapGoods again.” “[Peer-to-peer marketplaces] are not driven by the ethos of sharing, but by the fact that people are making real money,” he explained, warning startup founders from hyping the “hippy-dippy movement message”. “Most people are talking about this as a movement, but most people don’t care about movements. They care about convenience — people use ZipCar because it’s convenient.” this is something every start-up has to be aware of, in the eyes of Mr. Williams.
There are still the “good” ones
I was very confused by the opinion of Ron J. Williams, because I always thought that Collaborative Consumption really tries to realize a paradigm shift and bring together people who have a common opinion on consumption.
However, I also found an example that supports the idea that not only money is the plain incentive to offer peer-to-peer opportunities:
“People renting out their cars on WhipCar do this, because “it’s less about needing the money and more about being smart with what you own,” says marketing director Jonathan Clark. Moreover he argues “Collaborative consumption is common sense. A car can cost almost £7,000 a year to run, and the majority of car owners don’t drive their car every day. WhipCar enables them to earn money during this idletime — it’s even possible to totally offset the cost of owning a car by renting it to neighbors when it’s not being used.”
The difference among the sharers
Adrian Manzano a photographer, who is using sharing platform, like SnapGoods, Couchsurfing, Airbnb and Craigslist, himself, offered his thoughts abiut the difference between couchsurfer and users of Airbnb: “People on Couchsurfing tend to be very open-minded, hippy, free,Burning Man type of people. With Airbnb, you get more ‘regular’ people, just looking to make a buck or save a buck. So, ‘normal,’ whatever normal means.”
Nevertheless, as far as I can say, the members of collaborative consumption have one big similarity: The majority of them is young and it will be interesting to get to know if this will change in the future when peer-to-peer marketplaces are probably more established.
The problem of finding interested people
It is the same as in almost every branch: collaborative consumer do not grow on trees. One of the difficulties of kickstarting a P2P – company is, that you need a more or less huge base of people who are interested in sharing their washing machine, their house or whatsoever, to be profitable in the end.
Park Circa´s, a private network of micro-shared parking spaces, Co-founder Chadwick Meyer mentions:” that for its relaunch, the Park Circa will target neighborhoods one by one to get entire localities signed up. As we build up enough inventory, we’ll then have a launch party in that neighborhood to release it,” Entrepreneurs should think about this, in my opinion, very important hint and plan accordingly, because not every collaborative idea, as much potential this area has, will turn out to be a money machine.
So either you are the one who supports the movement and its message or you, as the majority, make a lot of money with it. However, both do not exclude each other.