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TEDxSydney

Rachel Botsman: The case for collaborative consumption

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

- Trust researcher
Rachel Botsman is a recognized expert on how collaboration and trust enabled by digital technologies will change the way we live, work, bank and consume. Full bio

So today I'm going to talk to you
00:15
about the rise of collaborative consumption.
00:17
I'm going to explain what it is
00:20
and try and convince you -- in just 15 minutes --
00:22
that this isn't a flimsy idea,
00:25
or a short-term trend,
00:27
but a powerful cultural and economic force
00:29
reinventing not just what we consume,
00:32
but how we consume.
00:34
Now I'm going to start with a deceptively simple example.
00:36
Hands up -- how many of you
00:39
have books, CDs, DVDs, or videos
00:42
lying around your house
00:45
that you probably won't use again,
00:47
but you can't quite bring yourself to throw away?
00:49
Can't see all the hands,
00:52
but it looks like all of you, right?
00:54
On our shelves at home,
00:56
we have a box set of the DVD series "24,"
00:58
season six to be precise.
01:01
I think it was bought for us around three years ago for a Christmas present.
01:03
Now my husband, Chris, and I
01:06
love this show.
01:08
But let's face it, when you've watched it once maybe, or twice,
01:10
you don't really want to watch it again,
01:13
because you know how Jack Bauer is going to defeat the terrorists.
01:15
So there it sits on our shelves
01:18
obsolete to us,
01:20
but with immediate latent value to someone else.
01:22
Now before we go on, I have a confession to make.
01:25
I lived in New York for 10 years,
01:28
and I am a big fan of "Sex and the City."
01:30
Now I'd love to watch the first movie again
01:33
as sort of a warm-up to the sequel coming out next week.
01:35
So how easily could I swap
01:38
our unwanted copy of "24"
01:40
for a wanted copy of "Sex and the City?"
01:42
Now you may have noticed
01:45
there's a new sector emerging called swap-trading.
01:47
Now the easiest analogy for swap-trading
01:49
is like an online dating service
01:52
for all your unwanted media.
01:54
What it does is use the Internet
01:56
to create an infinite marketplace
01:58
to match person A's "haves"
02:00
with person C's "wants,"
02:02
whatever they may be.
02:04
The other week, I went on one of these sites,
02:06
appropriately called Swaptree,
02:09
and there were over 59,300 items
02:12
that I could instantly swap
02:15
for my copy of "24."
02:17
Lo and behold,
02:20
there in Reseda, CA was Rondoron
02:22
who wanted swap his or her
02:24
"like new" copy of "Sex and the City"
02:26
for my copy of "24."
02:28
So in other words, what's happening here
02:31
is that Swaptree
02:33
solves my carrying company's sugar rush problem,
02:35
a problem the economists call "the coincidence of wants,"
02:37
in approximately 60 seconds.
02:40
What's even more amazing is it will print out a purchase label on the spot,
02:43
because it knows the weight of the item.
02:46
Now there are layers of technical wonder
02:48
behind sites such as Swaptree,
02:50
but that's not my interest,
02:53
and nor is swap trading, per se.
02:55
My passion, and what I've spent the last few years
02:58
dedicated to researching,
03:00
is the collaborative behaviors and trust-mechanics
03:02
inherent in these systems.
03:05
When you think about it,
03:08
it would have seemed like a crazy idea, even a few years ago,
03:10
that I would swap my stuff with a total stranger
03:13
whose real name I didn't know
03:16
and without any money changing hands.
03:18
Yet 99 percent of trades on Swaptree
03:21
happen successfully,
03:23
and the one percent that receive a negative rating,
03:25
it's for relatively minor reasons,
03:27
like the item didn't arrive on time.
03:29
So what's happening here?
03:32
An extremely powerful dynamic
03:35
that has huge commercial and cultural implications
03:37
is at play.
03:40
Namely, that technology
03:42
is enabling
03:44
trust between strangers.
03:46
We now live in a global village
03:48
where we can mimic the ties
03:50
that used to happen face to face,
03:52
but on a scale and in ways
03:55
that have never been possible before.
03:57
So what's actually happening
03:59
is that social networks and real-time technologies
04:01
are taking us back.
04:03
We're bartering, trading,
04:05
swapping, sharing,
04:07
but they're being reinvented
04:09
into dynamic and appealing forms.
04:11
What I find fascinating
04:13
is that we've actually wired our world to share,
04:15
whether that's our neighborhood, our school,
04:18
our office, or our Facebook network,
04:20
and that's creating an economy
04:23
of "what's mine is yours."
04:25
From the mighty eBay,
04:27
the grandfather of exchange marketplaces,
04:29
to car-sharing companies such as GoGet,
04:31
where you pay a monthly fee to rent cars by the hour,
04:34
to social lending platforms such as Zopa,
04:37
that will take anyone in this audience
04:40
with 100 dollars to lend,
04:42
and match them with a borrower anywhere in the world,
04:44
we're sharing and collaborating again
04:47
in ways that I believe
04:50
are more hip than hippie.
04:52
I call this "groundswell collaborative consumption."
04:55
Now before I dig into the different systems
04:58
of collaborative consumption,
05:00
I'd like to try and answer the question
05:02
that every author rightfully gets asked,
05:04
which is, where did this idea come from?
05:07
Now I'd like to say I woke up one morning
05:10
and said, "I'm going to write about collaborative consumption,"
05:12
but actually it was a complicated web
05:15
of seemingly disconnected ideas.
05:17
Over the next minute,
05:20
you're going to see a bit like a conceptual fireworks display
05:22
of all the dots that went on in my head.
05:24
The first thing I began to notice:
05:28
how many big concepts were emerging --
05:30
from the wisdom of crowds to smart mobs --
05:32
around how ridiculously easy it is
05:35
to form groups for a purpose.
05:37
And linked to this crowd mania
05:39
were examples all around the world --
05:41
from the election of a president
05:43
to the infamous Wikipedia, and everything in between --
05:45
on what the power of numbers could achieve.
05:47
Now, you know when you learn a new word,
05:50
and then you start to see that word everywhere?
05:53
That's what happened to me
05:56
when I noticed that we are moving
05:58
from passive consumers
06:00
to creators,
06:02
to highly enabled collaborators.
06:04
What's happening
06:07
is the Internet is removing the middleman,
06:09
so that anyone from a T-shirt designer
06:11
to a knitter
06:13
can make a living selling peer-to-peer.
06:15
And the ubiquitous force
06:17
of this peer-to-peer revolution
06:19
means that sharing is happening at phenomenal rates.
06:21
I mean, it's amazing to think
06:24
that, in every single minute of this speech,
06:26
25 hours
06:29
of YouTube video will be loaded.
06:31
Now what I find fascinating about these examples
06:34
is how they're actually tapping into
06:37
our primate instincts.
06:39
I mean, we're monkeys,
06:41
and we're born and bred to share and cooperate.
06:43
And we were doing so for thousands of years,
06:45
whether it's when we hunted in packs,
06:48
or farmed in cooperatives,
06:50
before this big system called hyper-consumption came along
06:53
and we built these fences
06:56
and created out own little fiefdoms.
06:58
But things are changing,
07:00
and one of the reasons why
07:02
is the digital natives, or Gen-Y.
07:04
They're growing up sharing --
07:07
files, video games, knowledge.
07:09
It's second nature to them.
07:11
So we, the millennials -- I am just a millennial --
07:13
are like foot soldiers,
07:16
moving us from a culture of "me" to a culture of "we."
07:19
The reason why it's happening so fast
07:21
is because of mobile collaboration.
07:23
We now live in a connected age
07:25
where we can locate anyone, anytime, in real-time,
07:28
from a small device in our hands.
07:31
All of this was going through my head
07:34
towards the end of 2008,
07:36
when, of course, the great financial crash happened.
07:38
Thomas Friedman is one of my favorite New York Times columnists,
07:41
and he poignantly commented
07:44
that 2008 is when we hit a wall,
07:46
when Mother Nature and the market
07:49
both said, "No more."
07:52
Now we rationally know
07:54
that an economy built on hyper-consumption
07:56
is a Ponzi scheme. It's a house of cards.
07:59
Yet, it's hard for us to individually know what to do.
08:02
So all of this is a lot of twittering, right?
08:05
Well it was a lot of noise and complexity in my head,
08:08
until actually I realized it was happening
08:10
because of four key drivers.
08:12
One, a renewed belief in the importance of community,
08:14
and a very redefinition of what friend and neighbor really means.
08:17
A torrent of peer-to-peer social networks
08:20
and real-time technologies,
08:23
fundamentally changing the way we behave.
08:25
Three, pressing unresolved environmental concerns.
08:28
And four, a global recession
08:31
that has fundamentally shocked
08:33
consumer behaviors.
08:35
These four drivers
08:37
are fusing together
08:39
and creating the big shift --
08:41
away from the 20th century,
08:43
defined by hyper-consumption,
08:45
towards the 21st century,
08:47
defined by collaborative consumption.
08:49
I generally believe we're at an inflection point
08:52
where the sharing behaviors --
08:55
through sites such as Flickr and Twitter
08:57
that are becoming second nature online --
08:59
are being applied to offline areas of our everyday lives.
09:01
From morning commutes to the way fashion is designed
09:04
to the way we grow food,
09:07
we are consuming and collaborating once again.
09:09
So my co-author, Roo Rogers, and I
09:14
have actually gathered thousands of examples
09:17
from all around the world of collaborative consumption.
09:19
And although they vary enormously
09:21
in scale, maturity and purpose,
09:23
when we dived into them,
09:25
we realized that they could actually be organized into three clear systems.
09:27
The first is redistribution markets.
09:30
Redistribution markets, just like Swaptree,
09:33
are when you take a used, or pre-owned, item
09:36
and move it from where it's not needed
09:38
to somewhere, or someone, where it is.
09:40
They're increasingly thought of as the fifth 'R' --
09:43
reduce, reuse, recycle, repair
09:45
and redistribute --
09:47
because they stretch the life cycle of a product
09:49
and thereby reduce waste.
09:51
The second is collaborative lifestyles.
09:53
This is the sharing of resources
09:56
of things like money, skills and time.
09:58
I bet, in a couple of years,
10:01
that phrases like "coworking"
10:03
and "couchsurfing" and "time banks"
10:05
are going to become a part of everyday vernacular.
10:08
One of my favorite examples of collaborative lifestyles
10:11
is called Landshare.
10:14
It's a scheme in the U.K.
10:16
that matches Mr. Jones,
10:18
with some spare space in his back garden,
10:20
with Mrs. Smith, a would-be grower.
10:23
Together they grow their own food.
10:26
It's one of those ideas that's so simple, yet brilliant,
10:28
you wonder why it's never been done before.
10:31
Now, the third system
10:34
is product-service systems.
10:36
This is where you pay for the benefit of the product --
10:38
what it does for you --
10:40
without needing to own the product outright.
10:42
This idea is particularly powerful
10:44
for things that have
10:47
high-idling capacity.
10:49
And that can be anything from baby goods
10:51
to fashions to --
10:53
how many of you have a power drill,
10:55
own a power drill? Right.
10:57
That power drill will be used around 12 to 13 minutes
10:59
in its entire lifetime.
11:02
(Laughter)
11:04
It's kind of ridiculous, right?
11:06
Because what you need is the hole, not the drill.
11:08
(Laughter)
11:10
(Applause)
11:12
So why don't you rent the drill,
11:14
or, even better, rent out your own drill to other people
11:16
and make some money from it?
11:18
These three systems are coming together,
11:20
allowing people to share resources
11:23
without sacrificing their lifestyles,
11:25
or their cherished personal freedoms.
11:27
I'm not asking people
11:29
to share nicely in the sandpit.
11:31
So I want to just give you an example
11:35
of how powerful collaborative consumption can be
11:37
to change behaviors.
11:39
The average car
11:41
costs 8,000 dollars a year to run.
11:43
Yet, that car sits idle
11:46
for 23 hours a day.
11:48
So when you consider these two facts,
11:50
it starts to make a little less sense
11:52
that we have to own one outright.
11:54
So this is where car-sharing companies
11:57
such as Zipcar and GoGet come in.
11:59
In 2009,
12:01
Zipcar took 250 participants
12:03
from across 13 cities --
12:05
and they're all self-confessed car addicts
12:08
and car-sharing rookies --
12:10
and got them to surrender their keys for a month.
12:12
Instead, these people had to walk,
12:15
bike, take the train,
12:17
or other forms of public transport.
12:19
They could only use their Zipcar membership
12:21
when absolutely necessary.
12:23
The results of this challenge after just one month
12:25
was staggering.
12:28
It's amazing that 413 lbs were lost
12:30
just from the extra exercise.
12:32
But my favorite statistic
12:35
is that 100
12:37
out of the 250 participants
12:39
did not want their keys back.
12:42
In other words, the car addicts
12:45
had lost their urge to own.
12:47
Now products-service systems have been around for years.
12:49
Just think of libraries and laundrettes.
12:52
But I think they're entering a new age,
12:54
because technology makes sharing
12:56
frictionless and fun.
12:58
There's a great quote that was written in the New York Times
13:00
that said, "Sharing is to ownership
13:03
what the iPod is to the 8-track,
13:05
what solar power is to the coal mine."
13:08
I believe also, our generation,
13:11
our relationship to satisfying what we want
13:14
is far less tangible
13:17
than any other previous generation.
13:19
I don't want the DVD; I want the movie it carries.
13:21
I don't want a clunky answering machine;
13:24
I want the message it saves.
13:26
I don't want a CD; I want the music it plays.
13:28
In other words, I don't want stuff;
13:31
I want the needs or experiences it fulfills.
13:34
This is fueling a massive shift
13:37
from where usage trumps possessions --
13:40
or as Kevin Kelly, the editor of Wired magazine, puts it,
13:42
"where access is better than ownership."
13:45
Now as our possessions
13:48
dematerialize into the cloud,
13:50
a blurry line is appearing
13:52
between what's mine, what's yours,
13:54
and what's ours.
13:56
I want to give you one example
13:58
that shows how fast this evolution is happening.
14:00
This represents an eight-year time span.
14:03
We've gone from traditional car-ownership
14:06
to car-sharing companies, such as Zipcar and GoGet,
14:09
to ride-sharing platforms that match rides
14:12
to the newest entry, which is peer-to-peer car rental,
14:15
where you can actually make money
14:18
out of renting that car that sits idle for 23 hours a day
14:21
to your neighbor.
14:24
Now all of these systems
14:26
require a degree of trust,
14:28
and the cornerstone to this working
14:30
is reputation.
14:32
Now in the old consumer system,
14:34
our reputation didn't matter so much,
14:36
because our credit history was far more important
14:38
that any kind of peer-to-peer review.
14:40
But now with the Web, we leave a trail.
14:43
With every spammer we flag,
14:46
with every idea we post, comment we share,
14:49
we're actually signaling how well we collaborate,
14:52
and whether we can or can't be trusted.
14:54
Let's go back to my first example,
14:57
Swaptree.
14:59
I can see that Rondoron
15:01
has completed 553 trades
15:03
with a 100 percent success rate.
15:06
In other words, I can trust him or her.
15:09
Now mark my words,
15:13
it's only a matter of time
15:15
before we're going to be able to perform a Google-like search
15:17
and see a cumulative picture
15:20
of our reputation capital.
15:22
And this reputation capital
15:24
will determine our access to collaborative consumption.
15:26
It's a new social currency, so to speak,
15:29
that could become as powerful as our credit rating.
15:31
Now as a closing thought,
15:35
I believe we're actually in a period
15:37
where we're waking up
15:40
from this humongous hangover
15:42
of emptiness and waste,
15:44
and we're taking a leap
15:46
to create a more sustainable system
15:48
built to serve our innate needs
15:50
for community and individual identity.
15:52
I believe it will be referred to
15:55
as a revolution, so to speak --
15:57
when society, faced with great challenges,
15:59
made a seismic shift
16:02
from individual getting and spending
16:04
towards a rediscovery of collective good.
16:06
I'm on a mission to make sharing cool.
16:09
I'm on a mission to make sharing hip.
16:12
Because I really believe
16:14
it can disrupt outdated modes of business,
16:16
help us leapfrog
16:18
over wasteful forms of hyper-consumption
16:20
and teach us when enough really is enough.
16:22
Thank you very much.
16:25
(Applause)
16:27

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About the speaker:

Rachel Botsman - Trust researcher
Rachel Botsman is a recognized expert on how collaboration and trust enabled by digital technologies will change the way we live, work, bank and consume.

Why you should listen

Rachel Botsman is the co-author, with Roo Rogers, of the book What's Mine Is Yours (2010). In it, they developed the concept of "collaborative consumption", which was recognized by Time magazine as one of the "10 ideas that will change the world" and by Thinkers 50 as a Breakthrough Idea. Her newest work focuses on trust, which is the topic of her next book. In 2015, she designed the world’s first MBA course on the collaborative economy, which she teaches at Oxford University’s Saïd School of Business.

Named a "Young Global Leader" by the World Economic Forum, Botsman examines the growth and challenges of startups such as Airbnb, Taskrabbit and Uber, with a focus on technology's impact on trust and relationships, providing context for how and why the world is changing and the broader implications of this new economy.  

More profile about the speaker
Rachel Botsman | Speaker | TED.com