The case for collaborative consumption | Rachel Botsman | TEDxSydney

Rachel Botsman says we're "wired to share" - and shows how websites like Zipcar and Swaptree are changing the rules of human behavior.

Thanks for setting high expectations,
always good.

So today I'm going to talk to you

about the rise
of collaborative consumption.

I'm going to explain what it is

and try and convince you
- in just 15 minutes -

that this isn't a flimsy idea,

or a short-term trend,

but a powerful cultural and economic force

reinventing not just what we consume,

but how we consume.

Now I'm going to start
with a deceptively simple example.

Hands up - how many of you

have books, CDs, DVDs, or videos

lying around your house

that you probably won't use again,

but you can't quite bring yourself
to throw away?

Can't see all the hands,

but it looks like all of you, right?

On our shelves at home,

we have a box set of the DVD series "24,"

season six to be precise.

I think it was bought for us around
three years ago for a Christmas present.

Now my husband, Chris, and I

love this show.

But let's face it, when you've watched it
once maybe, or twice,

you don't really want to watch it again,

because you know how Jack Bauer
is going to defeat the terrorists.

So there it sits on our shelves

obsolete to us,

but with immediate latent value
to someone else.

Now before we go on,
I have a confession to make.

I lived in New York for 10 years,

and I am a big fan of "Sex and the City."

Now I'd love to watch
the first movie again

as sort of a warm-up to the sequel
coming out next week.

So how easily could I swap

our unwanted copy of "24"

for a wanted copy of "Sex and the City?"

Now you may have noticed

there's a new sector emerging
called swap-trading.

Now the easiest analogy for swap-trading

is like an online dating service

for all your unwanted media.

What it does is use the Internet

to create an infinite marketplace

to match person A's "haves"

with person C's "wants,"

whatever they may be.

The other week,
I went on one of these sites,

appropriately called Swaptree,

and there were over 59,300 items

that I could instantly swap

for my copy of "24."

Lo and behold,

there in Reseda, CA was Rondoron

who wanted swap his or her

"like new" copy of "Sex and the City"

for my copy of "24."

So in other words, what's happening here

is that Swaptree

solves my carrying company's
sugar rush problem,

a problem the economists call
"the coincidence of wants,"

in approximately 60 seconds.

What's even more amazing is it will
print out a postage label on the spot,

because it knows the way of the item.

Now there are layers of technical wonder

behind sites such as Swaptree,

but that's not my interest,

and nor is swap trading, per se.

My passion, and what I've spent
the last few years

dedicated to researching,

is the collaborative behaviors
and trust-mechanics

inherent in these systems.

When you think about it,

it would have seemed like a crazy idea,
even a few years ago,

that I would swap my stuff
with a total stranger

whose real name I didn't know

and without any money changing hands.

Yet 99 percent of trades on Swaptree

happen successfully,

and the one percent
that receive a negative rating,

it's for relatively minor reasons,

like the item didn't arrive on time.

So what's happening here?

An extremely powerful dynamic

that has huge commercial
and cultural implications

is at play.

Namely, that technology

is enabling

trust between strangers.

We now live in a global village

where we can mimic the ties

that used to happen face to face,

but on a scale and in ways

that have never been possible before.

So what's actually happening

is that social networks
and real-time technologies

are taking us back.

We're bartering, trading,

swapping, sharing,

but they're being reinvented

into dynamic and appealing forms.

What I find fascinating

is that we've actually wired
our world to share,

whether that's our neighborhood,
our school,

our office, or our Facebook network,

and that's creating an economy

of "what's mine is yours."

From the mighty eBay,

the grandfather of exchange marketplaces,

to car-sharing companies such as GoGet,

where you pay a monthly fee
to rent cars by the hour,

to social lending platforms such as Zopa,

that will take anyone in this audience

with 100 dollars to lend,

and match them with a borrower
anywhere in the world,

we're sharing and collaborating again

in ways that I believe

are more hip than hippie.

I call this "groundswell
collaborative consumption."

Now before I dig
into the different systems

of collaborative consumption,

I'd like to try and answer the question

that every author rightfully gets asked,

which is, where did this idea come from?

Now I'd like to say I woke up one morning

and said, "I'm going to write
about collaborative consumption,"

but actually it was a complicated web

of seemingly disconnected ideas.

Over the next minute,

you're going to see a bit like
a conceptual fireworks display

of all the dots that went on in my head.

The first thing I began to notice:

- a few years ago -

how many big concepts were emerging -

from the wisdom of crowds to smart mobs -

around how ridiculously easy it is

to form groups for a purpose.

And linked to this crowd mania

were examples all around the world -

from the election of a president

to the infamous Wikipedia,
and everything in between -

on what the power of numbers
could achieve.

Now, you know when you learn a new word,

and then you start to see
that word everywhere?

That's what happened to me

when I noticed that we are moving

from passive consumers

to creators,

to highly enabled collaborators.

What's happening

is the Internet is removing the middleman,

so that anyone from a T-shirt designer

to a knitter

can make a living selling peer-to-peer.

And the ubiquitous force

of this peer-to-peer revolution

means that sharing is happening
at phenomenal rates.

I mean, it's amazing to think

that, in every single minute
of this speech,

25 hours

of YouTube video will be loaded.

Now what I find fascinating
about these examples

is how they're actually tapping into
our primate instincts.

I mean, we're monkeys,

and we're born and bred
to share and cooperate.

And we were doing so
for thousands of years,

whether it's when we hunted in packs,

or farmed in cooperatives,

before this big system called
hyper-consumption came along

and we built these fences

and created out own little fiefdoms.

But things are changing,

and one of the reasons why

is the digital natives, or Gen-Y.

They're growing up sharing -

files, video games, knowledge.

It's second nature to them.

So we, the millennials -
I am just a millennial -

are like foot soldiers,

moving us from a culture
of "me" to a culture of "we."

Now, all of this
was flying through my head,

around the end of 2008.

Sorry -

The reason why it's happening so fast

is because of mobile collaboration.

We now live in a connected age

where we can locate anyone,
anytime, in real-time,

from a small device in our hands.

All of this was going through my head

towards the end of 2008,

when, of course,
the great financial crash happened.

Thomas Friedman is one of my favorite
New York Times columnists,

and he poignantly commented

that 2008 is when we hit a wall,

when Mother Nature and the market

both said, "No more."

Now we rationally know

that an economy built on hyper-consumption

is a Ponzi scheme.
It's a house of cards.

Yet, it's hard for us
to individually know what to do.

So all of this is a lot of twittering,
right?

Well it was a lot of noise
and complexity in my head,

until actually I realized it was happening

because of four key drivers.

One, a renewed belief
in the importance of community,

and a very redefinition of what
friend and neighbor really means.

A torrent of peer-to-peer social networks

and real-time technologies,

fundamentally changing the way we behave.

Three, pressing unresolved
environmental concerns.

And four, a global recession

that has fundamentally shocked

consumer behaviors.

These four drivers

are fusing together

and creating the big shift -

away from the 20th century,

defined by hyper-consumption,

towards the 21st century,

defined by collaborative consumption.

I generally believe
we're at an inflection point

where the sharing behaviors -

through sites such as Flickr and Twitter

that are becoming second nature online -

are being applied to offline areas
of our everyday lives.

From morning commutes
to the way fashion is designed

to the way we grow food,

we are consuming
and collaborating once again.

So my co-author, Roo Rogers, and I

have actually gathered
thousands of examples

from all around the world
of collaborative consumption.

And although they vary enormously

in scale, maturity and purpose,

when we dived into them,

we realized that they could actually
be organized into three clear systems.

The first is redistribution markets.

Redistribution markets,
just like Swaptree,

are when you take a used,
or pre-owned, item

and move it from where it's not needed

to somewhere, or someone, where it is.

They're increasingly thought
of as the fifth 'R' -

reduce, reuse, recycle, repair

and redistribute -

because they stretch
the life cycle of a product

and thereby reduce waste.

The second is collaborative lifestyles.

This is the sharing of resources

of things like money, skills and time.

I bet, in a couple of years,

that phrases like "coworking"

and "couchsurfing" and "time banks"

are going to become a part
of everyday vernacular.

One of my favorite examples
of collaborative lifestyles

is called Landshare.

It's a scheme in the U.K.

that matches Mr. Jones,

with some spare space in his back garden,

with Mrs. Smith, a would-be grower.

Together they grow their own food.

It's one of those ideas
that's so simple, yet brilliant,

you wonder why
it's never been done before.

Now, the third system

is product-service systems.

This is where you pay
for the benefit of the product -

what it does for you -

without needing to own
the product outright.

This idea is particularly powerful

for things that have

high-idling capacity.

And that can be anything from baby goods

to fashions to -

how many of you have a power drill,

own a power drill? Right.

That power drill will be used
around 12 to 13 minutes

in its entire lifetime.

(Laughter)

It's kind of ridiculous, right?

Because what you need is the hole,
not the drill.

(Laughter)

(Applause)

So why don't you rent the drill,

or, even better,
rent out your own drill to other people

and make some money from it?

These three systems are coming together,

allowing people to share resources

without sacrificing their lifestyles,

or their cherished personal freedoms.

I'm not asking people

to share nicely in the sandpit.

So I want to just give you an example

of how powerful
collaborative consumption can be

to change behaviors.

The average car

costs 8,000 dollars a year to run.

Yet, that car sits idle

for 23 hours a day.

So when you consider these two facts,

it starts to make a little less sense

that we have to own one outright.

So this is where car-sharing companies

such as Zipcar and GoGet come in.

In 2009,

Zipcar took 250 participants

from across 13 cities -

and they're all self-confessed car addicts

and car-sharing rookies -

and got them to surrender
their keys for a month.

Instead, these people had to walk,

bike, take the train,

or other forms of public transport.

They could only use
their Zipcar membership

when absolutely necessary.

The results of this challenge
after just one month

was staggering.

It's amazing that 413 lbs were lost

just from the extra exercise.

But my favorite statistic

is that 100

out of the 250 participants

did not want their keys back.

In other words, the car addicts

had lost their urge to own.

Now products-service systems
have been around for years.

Just think of libraries and laundrettes.

But I think they're entering a new age,

because technology
makes sharing frictionless and fun.

There's a great quote
that was written in the New York Times

that said, "Sharing is to ownership

what the iPod is to the 8-track,

what solar power is to the coal mine."

I believe also, our generation,

our relationship to satisfying
what we want

is far less tangible

than any other previous generation.

I don't want the DVD;
I want the movie it carries.

I don't want a clunky answering machine;

I want the message it saves.

I don't want a CD;
I want the music it plays.

In other words, I don't want stuff;

I want the needs
or experiences it fulfills.

This is fueling a massive shift

from where usage trumps possessions -

or as Kevin Kelly,
the editor of Wired magazine, puts it,

"where access is better than ownership."

Now as our possessions

dematerialize into the cloud,

a blurry line is appearing

between what's mine, what's yours,

and what's ours.

I want to give you one example

that shows how fast
this evolution is happening.

This represents an eight-year time span.

We've gone from traditional car-ownership

to car-sharing companies,
such as Zipcar and GoGet,

to ride-sharing platforms that match rides

to the newest entry,
which is peer-to-peer car rental,

where you can actually make money

out of renting that car
that sits idle for 23 hours a day

to your neighbor.

Now all of these systems

require a degree of trust,

and the cornerstone to this working

is reputation.

Now in the old consumer system,

our reputation didn't matter so much,

because our credit history
was far more important

that any kind of peer-to-peer review.

But now with the Web, we leave a trail.

With every spammer we flag,

with every idea we post, comment we share,

we're actually signaling
how well we collaborate,

and whether we can or can't be trusted.

Let's go back to my first example,

Swaptree.

I can see that Rondoron

has completed 553 trades

with a 100 percent success rate.

In other words, I can trust him or her.

Now mark my words,

it's only a matter of time

before we're going to be able
to perform a Google-like search

and see a cumulative picture

of our reputation capital.

And this reputation capital

will determine our access
to collaborative consumption.

It's a new social currency, so to speak,

that could become as powerful
as our credit rating.

Now as a closing thought,

I believe we're actually in a period

where we're waking up

from this humongous hangover

of emptiness and waste,

and we're taking a leap

to create a more sustainable system

built to serve our innate needs

for community and individual identity.

I believe it will be referred to

as a revolution, so to speak -

when society, faced with great challenges,

made a seismic shift

from individual getting and spending

towards a rediscovery of collective good.

Now, I know I've thrown a lot at you,

so I've made a quick,
2 minute recap video,

that's going to summarize
everything I just condensed

and I'll be back for one short sentence.

(Video) (Music)

[What's mine is yours
the rise of collaborative consumtion]

[Redistribution markets]

[Product service systems]

[Collaborative lifestyles]

[Collaborative consumption]

[Traditional sharing, bartering, lending
trading, renting, gifting and swapping]

[Redefined through technology
and peer communities]

[To reinvent not just what we consume
but how we consume]

[But just how large and far-reaching
is this groundswell?]

[Product service systems
pay for the benefit of a product]

[what it does for you - without needing
to own the product outright]

[Bike sharing is the fastest growing form
of transportation in the world]

[Every major city in the US is developing
a bike-share program]

[and it is a global phenomenon]

[Estimated worth
of car sharing market by 2015]

[12.5 billion USD]

[When the big 3 car companies
were being bailed out]

[there was a 35.5% increase
in car sharing membership]

[When Zipcar released its iPhone app
it had 100.000 downloads]

[within the first week alone]

[Peer-to-peer rental of items
from buggies to bulldozers is booming]

[36 billion USD = current estimated size]

[Redistribution markets]

[Used or pre-owned good are redistributed]

[from where they are not needed]

[to somewhere
or someone where they are]

[500 billion USD = estimated market for
the exchange of secondary goods (2009)]

[Freecycle is the third most searched
environmental term after]

[1. global warming 2. recycling
but ahead of 'Earth']

[Over 9.1 million iteams are gifted
every year through freecycle]

[If you piled them in a garbage truck]

[they would reach
7x the height of Mount Everest]

[On April 2nd 2010. 23,000 books
were swapped on BookMooch alone]

[Collaborative lifestyles
the sharing and exchange of resources]

[and assets such as time, food,
space, skills and money]

[The growth of local farmer's markets
in the US]

[1994 = 1775 markets
2006 = 4,385 2009 = 5,274]

[There are now 1000 more
farmer's markets than Walmarts in the USA]

[$10 bln = amount of goods and services
bartered by business in 2008]

[The amount of land posted
on 'garden dating site' Sharedearth]

[within just 3 months of launch -
29 million sq feet]

[expected to increase to 1,000 million
square feet by end of 2010]

[Peer-to-peer lending is predicted
to reach $5.8 bln by the end of 2010]

[10% of the total personal loan market,
including the big banks]

[The most visited
hospitality service on the internet]

[Couchsurfing, averaging 40 million
page views per day

[Think strangers can't trust one another?]

[4,725,624 couchsurfing stays
have been rated a positive experience]

[that's a staggering 99.797% of all stays]

[this socioeconomic groundswell
is really big]

[and it's only just getting started]

[20 century = hyper-consumption
21 century = collaborative consumption]

(Applause)
Rachel Botsman: Thank you.

I'm on a mission
to make sharing cool and hip.

Because I really believe

it can disrupt outdated modes of business,

help us leapfrog

over wasteful forms of hyper-consumption

and teach us when enough really is enough.

Thank you very much.
(Applause)