From consumption to production, here comes the collaborative economy
Internet is now shaping the real, material goods economy. Welcome to the era of Internet 3.0: a collaborative life, an age where access trumps ownership, an age where openness becomes the norm.
Since its creation, the exponential growth of the Internet has been transforming our economy deeply, mostly through value chain disruption in industries such as retail, media or communications. But after the information age (connecting people to content) and the social age (connecting people together online), we are now at the dawn of a third age of the internet, where people connect online to share (stuff, experiences) and collaborate offline.
The launch of the OuiShare magazine today is the opportunity to specify our topic of exploration further: the collaborative economy (and the growth of Collaborative Consumption, Distribution and Production).
The continued growth of collaborative consumption
The Internet: the (other) mother of collaboration
Collaborative dynamics deeply impact the way we consume and live. The collaborative consumption economy (or sharing economy) is an economy of fast-growing and highly valued startups, with one thing in common: the Internet, which is not only used to connect users online but also to share either material goods, services, experiences or knowledge in real life. Robin Chase coined the term Peers Incorporated:
Corporations create a platform for peers to do what they are best at: bringing an incredible diversity and the possibility to do things very locally and in a personalized way. This results in an impressive innovation that would otherwise be very costly for traditional companies.
Here are a few numbers to illustrate the recent growth of the collaborative consumption movement and its impact on several industries.
Industries to be disrupted: hotels, transportation, retail
The Airbnb economy: a booming industry (disrupted sector: the hotel industry)
Airbnb, the reference website for short-term rent of individual spaces, reached 10 million nights booked and may soon provide more available beds than the Hilton hotel chain (600 000). Airbnb has several competitors: 9 flats, Wimdu, Roomsurfer, Bedycasa, Sejourning (France) and Sinbad Travel (South America) just to name a few. But none of them seems to be able to compete with the eBay of Spaces (which is said to earn $183 M this year).
Couchsurfing, launched in 2004, is less impressive in its financial potential as its transactions are non-monetary, but its statistics are as impressive as AirBnB’s: 4,5 million Couchsurfers, 15,3 million “connexions” made possible.
Ridesharing (and P2P Carsharing): an impressive growth (disrupted sector: transportation)
BlaBlaCar (a.k.a. covoiturage.fr in France) is the unchallenged leader of ridesharing in France, and should soon claim 2 million registered users. With 3,000 new users every day, a business model now based on online booking, and $10M raised, BlaBlaCar will probably experience a strong international growth. Carpooling.com, its main competitor in Europe , claims 3, 500, 000 registered users and helps 1 million people to travel every month. For Frédéric Mazzella, founder of BlaBlaCar, these numbers are far from the true market’s potential. Here is what he told me:
I am convinced that in a few years we can serve 5 to 10 million users. We believe that ride sharing will play a significant role in the future of the car industry. Ride sharing is the entry door into the collaborative consumption world. You can begin with sharing a car, and then sharing a house or renting your car to your neighbours.
The disruption of the transportation sector due to the the rise of peer-to-peer carsharing (now 9 startups operating in a single country as France) and the recent announcement by Citroën to enter the market (video in French) are also strong signals of this trend.
Community food distribution (disrupted sector: food retail)
On another topic, Laruchequiditoui.fr (the French Farmigo) allows users to “gather to buy direct from the farmer”. Although the service was launched a year ago, there are already 400 food communities (8 asking to join every day) deliver throughout the entire France to more than 50.000 consumers.
Finance and education are to be disrupted by the collaborative storm
Crowdfunding through platforms like Kickstarter (12 000 funded projects, 200 million dollars collected in 2011), Ulule (1000 funded projects, 2,5 million Euros collected), KissKissBankBank, Goteo (“crowdfunding the commons”), Catarse (Open Source platform) and many others is no longer a niche phenomenon. Crowdfunding has become the best funding option for creative industries (are there any others?).
Another sector being disrupted: education. Through initiatives such as SkillShare (launched in New York, raised 3,1 million), Gidsy (launched in Berlin, raised 1,2 million), Trade School, Cupofteach, Leeaarn, UniShared and Floqq, collaborative universities are spreading everywhere in the world.
From collaborative consumption to collaborative distribution
Beyond consumption itself, it is the entire distribution chain that is being disrupted by peer collaboration and crowdsourcing.
It is not a good time to be the middle-man: traditional distribution is being entirely transformed by the integration of (previously) end-consumers in the distribution processes.
Two phenomena can be observed within this collaborative distribution. First, the new role played by individuals micro-distributing their own possessions via peer rental services, either in a generalist manner such as Zilok, specifically to a vertical sector (cars, holiday rent) or in real time (TaskRabbit, Zaarly, Stootie etc).
We see here the beginnings of a radical change. What will happen when all of us will be permanently connected via our smart devices, allowing us to respond in real time to close-by peer demands? Asking for the services of an ordinary individual will become more convenient than walking to the store.
Secondly, the growing contribution of end-users to distribution logistics. In this way, La Ruche Qui Dit Oui is probably a case-study of this. The company trains community leaders who organize the distribution of fresh products. In return, this occupation provides community leaders with a complementary income.
The rise of collaborative (or peer) production
As consumption and distribution are becoming more and more collaborative, the cases of collaborative (informational and physical) production are also numerous and interesting. As we perceive it, Collaborative production has two main characteristics: it is peer-to-peer (horizontal network of producing peers who don’t belong to the same company or institution) and open (outputs can be copied and/or modified without excessive restrictions). By enabling us to switch from the digital sphere to the physical world, the potential of collaborative production is astonishing. Here is what Christian Siefkes writes about it:
Commons-based peer production has produced astonishing amounts of freely usable and shareable information. While that is amazing in itself, many people think that it is all, arguing that peer production flourishes in the digital realms of the Internet—and only there. This would mean that peer production could never be more than a niche phenomenon, since nobody can survive on information alone. We argue that the potential of peer production extends far beyond the digital sphere into the sphere of physical production and that corresponding developments are already under way.
Regarding collaborative production, we picked two cases we found particularly illustrative:
The first one is the Wikispeed SGT01, a super-efficient car prototype that exceeds usual security norms, produced in 3 months by a team of voluntary engineers with no financial input, using design methods inspired from software development (Agile, Lean, Extreme Programming and Scrum) and collaborating with international teams. Funds were granted through donations and regular campaigns on crowdfunding platforms.
Another proof of concept is the iPhone tripod Glif, conceived, funded, produced and distributed without ever using conventional production methods. It was funded via the crowdfunding platform Kickstarter, co-conceived by 3D design community Shapeways, sold through CMS online commerce Shopify using online payment solution Braintree, produced on demand by Premier Source… all the steps in the development of the project having been managed through social networks.
For Marcin Jakubowski, founder of Open Source Ecology and passionate advocate of the movement:
Collaborative production is an emerging market force. It has social benefit. It is growing – as openness, transparency, lowered barriers of entry, social responsibility, and therefore ecological responsibility are all natural by-products – and no sane economic agent can resist these values.
It is probably within the collaborative production movement that the most disruptive models are emerging. Massimo Banzi, founder of the Open-Source electronic prototyping platform Arduino is confident of this:
The sector of open-source and collaborative production of objects is similar to the one of the personal computer in the 1980s, when Apple and a few others were fighting to become the market leaders. Within a few years, we will see an Apple of open-source production taking over the industry.
How far are we from reaching this point? The dynamics of contribution and collaboration at stake in the free-software and open-source worlds have just started transforming the production of objects and manufactured goods, but the examples are multiplying at an impressive pace.
Wikipedia is the most famous example of a distributed organization for the production of ‘knowledge commons’, resembling a Linux of collaborative production for free Operating Systems. We now witness at an unprecedented scale the development of distributed infrastructures for the physical production of material goods.
Wikispeed and Glif are just two examples chosen among many others of collaborative conception, fabrication, and distribution. This evolution has been made possible through the joint disruptions of:
Financing models: emergence of collaborative fundraising platforms (crowdfunding, social lending, etc.);
Production tools: emerging physical infrastructure for distributed design (using online design depositories), expected democratization of 3D printing;
Online and offline collaboration: microtasking platforms, skillsharing, new working models (coworking spaces, FabLabs, etc.);
- Traditional metrics and accounting systems: new indicators and scales to measure social impact of community-focused initiatives.
OuiShare: understanding the Collaborative Economy
We think that the dynamics of collaboration and of cutting-out the ‘middle-men’ are impacting the economy as a whole and are giving birth to a new collaborative economy, a new paradigm in which internet-enabled collaboration transforms the way we produce and distribute goods and knowledge, as well as services, through new value creation mechanisms based on peer-to-peer transactions and communities. The impact of this economy will be significant. The motive of OuiShare is to understand, anticipate and accelerate the shift towards a collaborative economy.
OuiShare is a global community of entrepreneurs, journalists, scholars, designers, activists and citizens working to accelerate the shift towards a Collaborative Economy. It functions as both a Think Tank (analysis and foresight) and a Do Tank (projects, network and raising awareness). We are just starting.
Interested in getting involved? Here we tell you how to.
Picture Credit jonathan mcintosh