1. Sustainability through Collaboration:
New Consumption Models in the Collaborative Economy
Leadership in
Sustainability Management
Capstone Project
Presented by :
Alix Omori
2. Objectives
To align on a standardized definition of the
collaborative economy and differentiate it
from related models
To identify successful value propositions
and review key business models in the
collaborative economy
To envision how the collaborative
economy can advance more sustainable
consumption
2
Sustainability through Collaboration:
New Consumption Models in the Collaborative Economy
3. Introduction
Define the collaborative economy and understand its significance in today’s
society
History & Background
Examine existing thought leadership and historical context of the collaborative
economy
Terminology & Taxonomy
Differentiate the collaborative economy from related concepts and review key
business models
Challenges & Critiques
Confront the legality of ‘sharing’ and negotiate its place in a traditional capitalist
society
Next Steps
Identify how the collaborative economy can cultivate sustainable consumption
habits
Agenda
Sustainability through Collaboration: New Consumption Models in the Collaborative Economy
3
5. The projected worth of the collaborative economy is
$26.2B in 2014
An economy built on distributed networks of
connected individuals and communities, as opposed
to centralized institutions, transforming how we can
produce, consume, finance, and learn.
”
Sources:
1 Rachel Botsman, “The Sharing Economy Lacks a Shared Definition: Giving Meaning to the Terms,” Collaborative Labs, 2013.
2 Rachel Botsman and Roo Rogers, What’s Mine Is Yours: The Rise of Collaborative Consumption. New York: HarperCollins, 2010.
“
5
1
2
What is the collaborative economy?
6. 6
2
Why does the collaborative economy matter?
6Source: “The Power of Collaboration,” Visual.ly, December 2013.
Video: http://youtu.be/0qWdmZnXpN0
8. 8
The collaborative economy is a cross-disciplinary
movement rooted in socioeconomics
2008
Smith’s
‘invisible hand’
Marx’s
commodity fetishism
Veblen’s
conspicuous consumption
Hardin’s
‘tragedy of the commons’
Sources:
1 Andrew Smith and Ruth Potts, The New Materialism. London: Bread, Print, and Roses, 2012.
2 “Towards the Circular Economy: Volume 1: Economic and Business Rationale for an Accelerated Transition,” Ellen MacArthur
Foundation, 2013.
1776
1867
1899
1968
McDonough & Braungart’s
Cradle to Cradle™ framework
2002
Collaborative consumption in
TIME’s ’10 ideas that will
change the world’
2011
9. 9
Converging social, economic, and technological
trends have accelerated this new economy
Source: Jeremiah Owyang, “The Collaborative Economy,” Altimeter Group, 2013.
• Increased urbanization
& population density
• Voluntary simplicity
& sustainability
• Desire for community
• Generational altruism
• Monetize excess or
idle goods
• Increase financial
stability
• Access over ownership
• Influx of VC funding
($2B to date)
• Social networks &
constant connection
• Mobile devices &
platforms
• New payment systems
10. 10
There are 3 main systems for consumption within
the collaborative economy
All of these systems require an element of trust
in order to facilitate successful transactions
Source: Rachel Botsman, “The Case for Collaborative Consumption.” Presentation at TEDxSydney, Sydney, Australia, May 2010.
11. 11
Market relationships have shifted due to new channels and technologies:
Source: Jeremiah Owyang, “The Collaborative Economy,” Altimeter Group, 2013.
These systems empower customers by allowing
them to transact directly with one another
Companies speak ‘at’
consumers via online
corporate presence
Consumers share
content & opinions,
requiring brands to listen
and speak ‘with’
consumers
Consumers empowered
to share goods &
services;
power shifts to the
consumer
12. Traditional Capitalist Economy New Collaborative Economy
12
Manufacturer as Producer Consumer as Producer
Bank as Lender Consumer as Lender
Retailer as Seller & Distributor Consumer as Seller & Distributor
Retailer as Service Provider Consumer as Service Provider
This consumer-centric economy threatens to
make traditional market players obsolete
14. 14
It is important to differentiate the collaborative
economy from several related concepts
Source: Rachel Botsman, “The Sharing Economy Lacks a Shared Definition: Giving Meaning to the Terms,” Collaborative Labs, 2013.
15. 15
For example, peer-to-peer sharing is one type of
collaborative consumption within this economy
These concepts share
common values & drivers,
including:
• Distributed power:
Power shifts from centralized
institutions to networks of
consumers
• Optimal asset utilization:
Social & mobile technologies
allow consumers to unlock idle
resources
• Efficient supply & demand:
System built on peer trust
matches ‘haves’ & ‘wants’
Source: Rachel Botsman, “The Sharing Economy Lacks a Shared Definition: Giving Meaning to the Terms,” Collaborative Labs, 2013.
16. 16
Others argue this movement must be segregated
into different types of collaborative economies
Source: “The Sharing Economy: Where We Go from Here,” Leo Burnett Company, Inc., 2014. n = 4,404
17. Collaborative businesses can be categorized
based on their products and value proposition
Sources: Jeremiah Owyang, “Collaborative Economy Honeycomb, Version 1.0,” Crowd Companies, 2014.
Rachel Botsman, “Purpose with Profits: Collaborative Consumption Business Models,” Nesta, 2012.
17
< Maker movement >
Types of collaborative
business models:
• Service fee
• Freemium
• Tiered subscription plans
• On-sale
• White label
• Flat membership
• Membership plus usage
18. 18
Collaborative consumers can be segmented
based on their stage of adoption
Source: “Sharing is The New Buying: How to Win in The Collaborative Economy,” Vision Critical and Crowd Companies, 2014.
n = 90,112
Not yet engaged in the collaborative economy;
however, many intend to try these services in the next 12 months,
making them a key target audience for collaborative businesses
Buy and/or sell preowned goods online using well-established
collaborative services like eBay or Craigslist, but have not used any
emergent ‘neo-sharing’ services like Etsy or Uber
Already using the latest generation of collaborative services like
Airbnb, TaskRabbit, or Kickstarter
61%
16%
23%
In the US, there are roughly 80MM consumers engaged in collaborative consumption
19. 19
Alternatively, consumers can be segmented
based on their reasons for collaborating
Source: “The Sharing Economy: Where We Go from Here,” Leo Burnett Company, Inc., 2014. n = 4,404
21. 21
For some consumers, barriers to collaboration
frequently outweigh the benefits of sharing
Source: “The Sharing Economy: Where We Go from Here,” Leo Burnett Company, Inc., 2014. n = 4,404
• Americans’ primary reason to engage in collaboration is decidedly altruistic
(53% agree ‘helping the needy’ is a top motive)
» Other motives are collective (sustainability) or personal (convenience)
• There is no consensus on barriers to collaboration, but top reasons include:
• Risks of scams, privacy, and safety
• Pro-consumption attitude & benefits of ownership
22. 22
Critics claim ‘sharing’ is just a new form of
privileged commoditization
Sources: Susie Cagle, “The Case against Sharing,” Medium, 2014.
“Sharing is The New Buying: How to Win in The Collaborative Economy,” Vision Critical and Crowd Companies, 2014.
• Collaborative consumption touts access over ownership, but how is this different than
renting?
» ‘Sharing’ as ‘enlightened capitalism’
• Sharing is not new, and has been practiced out of necessity for ages
• Collaborative businesses don’t create trust, they reinforce homogeneity & privilege
» Participation requires access to expensive new technologies
23. 23
Some feel lack of legal protection is at odds with
‘for the people’ ethos
Sources: Susie Cagle, “The Case against Sharing,” Medium, 2014.
Andy Kessler, “Brian Chesky: The Sharing Economy and Its Enemies,” The Wall Street Journal, 2014.
• In the collaborative economy, individual consumers act as businesses
• Currently few regulations covering issues such as:
• Lack of consumer protection as barrier to entry
• Peer reviews ≠ legal protection
» Contradictory to consumer-centric ideals
• To be accepted as mainstream, the collaborative economy needs its own laws
» Traditional laws not easily enforceable on collaborative businesses
» Ownership
» Consumer protection
» Taxation
» Insurance
» Liability
» Zoning
» Licenses & permits
» Workers’ rights
24. 24
Tensions also stem from differing values between
‘old’ and ‘new’ powers
Source: Jeremy Heimens and Henry Timms, “Understanding ‘New Power’,” Harvard Business Review, December 2014.
Old power:
limited, inaccessible, leader-driven,
transactional in nature
New power:
participatory, distributed, peer-driven,
beyond passive consumption
25. 25
The intersection of new and old models and
values demonstrate opportunity for change
Source: Jeremy Heimens and Henry Timms, “Understanding ‘New Power’,” Harvard Business Review, December 2014.
27. 27
Most Americans recognize the need for a major
change in consumption habits…
Source: “Analysis Report: New American Dream Survey 2014,” The Center for a New American Dream, 2014.
n = 1,812
28. 28
…and many see collaboration as a potential
solution to the environmental crisis
Source: “Analysis Report: New American Dream Survey 2014,” The Center for a New American Dream, 2014.
n = 1,812
29. 29
The answer is smarter consumption, not just less, to
support the economy and the planet
Source: “The New Consumer and The Sharing Economy,” Havas Worldwide Prosumer Report, Volume 18, 2014.
n = 10,574
• Americans still see consumption as necessary ‘patriotic duty’
• By consuming smarter, we can replace guilt with purpose via:
» Mindful purchase decisions—local makers, products with a story
» Consuming only what’s needed—quality over quantity
» Obtaining full product value—extending product lifecycle, sharing/reusing
30. Businesses can respond to consumer needs by
solving key problems of traditional consumption
Source: Rachel Botsman, “Sharing’s Not Just for Start-Ups,” Harvard Business Review, September 2014.
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31. Role Action Brand
Guarantor Facilitate peer-to-peer transactions
Sustainability partner Foster sustainable consumption
Proponent of reuse Create secondary markets
‘Lending library’ Offer access, not just ownership
Connector Cultivate relationships
Curator Provide ‘thrill of the hunt’ experience
Employer & partner Develop new consumer relationships
Maker champion Act as intermediary for artisans
31
Brands must adapt to a less transactional retail
model where companies play more passive roles
Source: “The New Consumer and The Sharing Economy,” Havas Worldwide Prosumer Report, Volume 18, 2014. n = 10,574
+
+
32. 32
Services and less tangible assets remain prime
opportunities for market entry
Source: “The New Sharing Economy,” Latitude in Collaboration with Sharable Magazine, 2013.
33. 33
Economists predict the value of the collaborative
economy will jump to $110B in the next 12 months
Source: “The Sharing Economy: Where We Go from Here,” Leo Burnett Company, Inc., 2014.
36. 36
Convenience and price trump sustainability as
motivators for collaborative consumption
Source: “Sharing is The New Buying: How to Win in The Collaborative Economy,” Vision Critical and Crowd Companies, 2014.
Top reasons to engage with collaborative business:
n = 90,112
