September 22, 2010

Q&A with Rachel Botsman, co-author of ‘What’s Mine Is Yours’

Posted by: in North America

RACHEL_BOTSMANIn her new book What’s Mine Is Yours: The Rise of Collaborative Consumption, co-written with Roo Rodgers, Rachel Botsman outlines “a quiet but powerful revolution of collaboration” that’s part of what she sees as a major shift away from hyper-consumption. Driving this are digital tools, environmental consciousness, the downturn and “a renewed belief in the importance of community.” Collaborative Consumption is flourishing online with companies like Zipcar and Netflix (what the book terms “producer service systems”), eBay and Craigslist (“redistribution markets”) and “collaborative lifestyle” sites like CouchSurfing. For more, see Collaborative Consumption (where visitors can practice this themselves by swapping, bartering or gifting their copy of the book and tracking where it travels).

From her home base in Sydney, Botsman talked with us about what this mega-trend means for brands and marketers.

What’s your elevator pitch for this book?

The way I describe Collaborative Consumption has two parts. First, a “big shift” from the 20th century, a time defined by hyper-consumption, to a 21st-century age of Collaborative Consumption is under way. Second, we are entering a new era of consumerism that is marked by trust between strangers, access over ownership and the primacy of experience over more stuff.

Collaborative Consumption itself is about how technology is taking us back or enabling very old market behaviors, like swapping and trading and bartering and lending, but they’re being reinvented in ways and on a scale that’s never been possible before. In the same way that we used to be able to stand in a village square and shake hands and form trust face to face, we’re mimicking the same behaviors in the virtual world, because we now live in a global village, so to speak.

What do you do outside of the book?

My background was in brand and social innovation, but I was, like many people, going through a crisis of conscience because I essentially was just helping companies sell “more.” I tried to have 50 percent of my work be about how we could use sophisticated brand thinking to make socially driven ideas appealing. I’m now focused on helping startups in the Collaborative Consumption space, as well as big brands. The big brands are starting to change the way they talk to people, so that they’re no longer thinking about big campaigns with one monolithic message, but “How do we really understand what it means to build a community and engage with that community, and let that community drive our business and become brand advocates for us?”

You say in the book that Collaborative Consumption is by no means anti-consumer or anti-product. How can companies with a 20th century model of hyper-consumerism adapt?

There are a couple of easy ways. Big companies are going to have to shift from a mind-set of selling more and selling units to selling units of usage and offering shared experiences. If you look at Nike, for example, they still sell products, but they are starting to sell products through shared experiences. Nike Plus is not a form of Collaborative Consumption, but actually it’s a community of runners sharing. So the Nike brand is starting to stand for a lot more than the swoosh on your sneaker—it’s about becoming part of a community of similar athletes. The journey with the consumer no longer finishes at the point of purchase—it starts there.

The other sector you can look to is the car sector, which is transitioning from the business of selling cars to the business of mobility. You can even see the traditional carmakers like Daimler, with car2go, and Peugeot trying to enter the car-sharing market. There’ll be a whole breed of new consumers coming up—for them it’s not about owning the physical car; that’s not how they express their identity. Their identity will be shaped by how they get around. When I’m at a party sometimes, I see people take out their Zipcar membership and their iPhone, and both those things carry a cachet about who they are.

Do you see other major brands moving in this direction?

To be honest, I see very few big brands adapting to the model of Collaborative Consumption yet. What’s happening is a new entrant is coming in and reinventing or disrupting a sector, and then, like most things, the bigger players rush in to adapt. A good example is Airbnb—it matches people looking for rooms with locals who want to rent out space. Time magazine called it “eBay for travel.” It’s reinventing the entire travel industry process, from the booking to the accommodation itself. I believe in the same way that, say, technology changed the way we shared and accessed music, from Napster to iTunes, Airbnb is using social technologies to reinvent the way people access travel experiences.

I think you’ll see, say, Expedia try and build a similar idea into their model as an experiment. And it might work, but I’m not sure it will because these [peer-to-peer travel] companies, this is what they set out to be, and that’s part of what makes them appealing. But you do have the traditional car-hire companies moving into car sharing and you’ve got health insurance brands trying to start bike sharing—so they are trying to do it, but they’re coming at it from an outsider’s perspective.

Are there categories that aren’t really conducive to this? Can any brand be a collaborative brand?

There’s a difference between the brand and the business model. So I think there are certain models, and certain sectors, where the model of sharing and swapping and lending stuff does not work—personal hygiene, for example. But even with food, you see examples like Landshare where, let’s say Mr. Jones has some garden to spare and Mrs. Smith wants to grow food. Landshare matches them, and together they grow their own food.

I would say all brands should be moving to a model of shared experiences and community of some shape and size, and those that don’t will seem like dinosaurs—and become old, stodgy brands.

Your book says that while this trend will mean fewer products are consumed, it doesn’t necessarily mean lower revenue—if a brand can sell ancillary services to its community. Will that be crucial for many businesses?

Absolutely. Again, it comes back down to, in order to commercialize those ancillary services, you have to have a very tight relationship with your—I don’t think people will think of them as consumers—with your members. In the same way that people had loyalty and attachment to the thing, they have to have trust in the relationships and the experience you can provide. You look at the companies that are starting to make money, and they’re building platforms that enable people to be entrepreneurs themselves.

Etsy is a great example. They have a traditional marketplace product model. But then they have a whole additional revenue stream with the likes of Etsy Labs and community support schemes. When you talk to people about Etsy, it’s in their hearts and it’s so much a part of their lives. If Walmart said, “Let’s do Meetups and you can come here and learn how to be a great shopper,” people aren’t going to have the same reaction. I know Walmart and Etsy are extreme ends, but that’s what I’m talking about: You’ve got to build brands with a heart and soul and a purpose. They’re very different types of brands from brands whose purpose was about the next shiny gadget or the latest glossy ad campaign.

Do you think most brands are capable of that kind of change?

I’m an optimist. I think some companies have an entrenched hyper-consumption culture that will be tricky to change. But if they brought in fresh talent and outside perspective, absolutely they could change. We’ve seen how massive companies have repositioned themselves. IBM went from technology to business services; Xerox went from being about copiers and printers to office solutions.

So there’s already a precedent of big companies shifting to a service-led brand. But I think there are very few agencies out there that are giving them the right advice in this space. I think agencies are still very much focused on the frills and fancies of social media as tools versus really understanding how they change behaviors and perceptions.

Your books says, “It takes a community, not a campaign, to build a collaborative brand”—what is the role of the ad agency in a world of collaborative brands?

Agencies are part curator—they have to be extremely creative in the partnerships they help bring together and be the unifying creative voice across those different channels or partners. And at the heart of the community there has to be a very clear north star, an identity. People are still forming a relationship to those [collaborative] brands in a similar way that they formed a relationship to product brands. So the basic function of advertising doesn’t change—but the whole idea of sitting in a room and coming up with an idea and pushing it out is dead. It’s a bottom-up world, that’s the reality.

You’ve got to have people that fundamentally think in an interconnected way and look at a problem in a whole new light. I think that needs a different breed of agencies, a different breed of creative people.

When people talk about Airbnb, it’s like Harley-Davidson; they’ll tattoo it! They are evangelists. And that’s essentially what brands and advertising people have always tried to do—create a heart and soul, create evangelists. It’s just that the way of going about it is fundamentally different.

Does Collaborative Consumption differ between markets and from the developed to the developing world? We’re seeing a lot of conspicuous consumption in China and other emerging markets.

We intentionally did not cover the developing world because I think it’s a whole other book. We focused on countries where hyper-consumption has become the fabric of society over the past 50-plus years. These countries are all experiencing the same convergence of a global financial crisis, environmental awareness and social technologies. So I couldn’t comment because the models of Collaborative Consumption would be totally different in the developing world.

But across the U.S., the U.K., New Zealand and everywhere else we looked at, they are surprisingly similar. There are different sectors that are taking off. For example, the U.K. is leading the way on social lending. If I have $100 to lend and you’ve got $100 to borrow, [a social lending service] will match me, like Zopa. You could say it’s really exploding there because everyone got beaten by the traditional banks and there was so much bad media that the market’s really ripe for it. Then there’s countries like Japan, where bike sharing’s going through the roof. And you could say that’s because of congestion and traffic.

You recently Tweeted from Auckland that you were surprised by how many Collaborative Consumption examples you were seeing. Do you find this a lot when you travel?

It’s a bit like learning a new word—you start to see that word absolutely everywhere. But the wonderful thing is that now people  send me examples from all around the world, from Brazil to Dubai to Tokyo. And I am blown away by how much is going on. When we started the book we had approximately 500 examples. When we finished we had 1,500, and I think now I have more than 5,000. The growth is insane.

One aspect that’s so powerful about Collaborative Consumption is you’ve got hyper-local examples of things that people are doing in their community. That can be as simple as starting a tool-sharing library. And then what you see happen is that tool-sharing library has this ripple effect. There was one that was built in Santa Rosa [California] that I wrote about on this wonderful site called Shareble.net, where the neighborhood’s actually changing. Because people are doing garden projects, they’re renovating their houses, and they’re coming together as a community. And then you start to see a food-sharing project emerge, you start to see a carpool emerge. So I like to think sharing is contagious. You’ve got this groundswell at the local level, and then you’ve got this massive interest at the business/venture capital level. And that’s when change happens, when both the macro and micro come together.

Have you been surprised by how mainstream anti-consumption sentiments have become?

I think the financial crash fundamentally shocked consumer behaviors and did a few things. On the negative side, it created a huge level of distrust towards big business and big government. But the flip side of that is, it’s actually pushing us back together. If you think of an elastic band, big business, big government and big consumerism pushed us further and further apart, and then that snapped and suddenly we’re all thrown back together.

How will this movement evolve once we get into a recovery?

I think it’s only going to grow. I think people have realized we have been living in an economic, social and environmental Ponzi scheme, and when one thing collapses, the whole thing falls. So I don’t think we’re going back in terms of consumer behaviors. And we’re only just beginning to see how technology is enabling us to share. So you can start to look at frictionless payment systems and augmented reality and social tagging and real-time technologies—and all that stuff is going to enable hyper-local sharing.

I honestly think the idea of owning certain things and holding onto them while they just become dead objects with no in-built intelligence is going to seem like an obsolete idea. The reason we’re not going back is, the last 50 years or 60 years, we’ve been treated as dumb consumers and we’ve built quite dumb objects. A lot of them are built to break—planned obsolescence is no secret. As objects like phones get smarter with their in-built intelligence, we’re becoming smarter around our own behaviors—and more empowered. We’re realizing that we shouldn’t just let big business and big brands tell us what we should buy and how we should live and how we should define ourselves. And that has nothing to do with the recession.

So post-recession, these new behaviors will remain as habits?

Well, they’re not new behaviors, that’s the thing. What the financial crash has done is brought back very old behaviors, very intrinsic behaviors. We’re born and bred to share and cooperate. But we were told to build our own little fiefdoms; we were told to live in an age of hyper-individualism. I think what the financial crash has done is start a massive global debate on the culture and the economy around consumerism: Is it healthy, and does it make you happy? And is it healthy on a personal level but also on an economic level? It’s almost like the genie’s out of the bottle.

Stay tuned for more material from our interview with Rachel Botsman next month.

3 Responses to "Q&A with Rachel Botsman, co-author of ‘What’s Mine Is Yours’"

1 | Kat Gordon

September 27th, 2010 at 7:50 pm

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Excellent interview! I am picking up Rachel’s book on my way home…from the library (in the spirit of shared local resources). As a mom-marketing expert, this is a trend I have been watching explode in recent years. Moms are natural sharers and there is so much wastefulness in the “stuff” of childhood. It’s the perfect storm for sharing sites like Zwaggle, ThredUP, and ShareSomeSugar. As geo-local features of smart phones become more advanced, I can only imagine how pervasive collaborative consumption will become.

2 | Pokerspiel

September 30th, 2010 at 8:36 am

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I must digg your post so other folks can see it, very useful, I had a hard time finding the results searching on the web, thanks.

- Murk

3 | Leonor Samperi

October 28th, 2010 at 7:21 am

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Interesting article and one which should be more widely known about in my view. Your level of detail is good and the clarity of writing is excellent. I have bookmarked it for you so that others will be able to see what you have to say.

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