January 9, 2013

Q&A with Lisa Gansky, author of ‘The Mesh: Why the Future of Business is Sharing’

Posted by: in North America

As the peer-to-peer marketplace expands in size and scope—moving beyond goods to a wide range of services—it will increasingly upend major industries, from hospitality and education to tourism and transportation. In researching Peer Power, one of our 10 Trends for 2013, we talked with Lisa Gansky, author of The Mesh: Why the Future of Business Is Sharing. Gansky focuses on the design of products, services, partnerships and business models in which “access to goods, services and talent triumphs over the ownership of them”; find her at Meshing.it. She talked to us about hidden value and “meanwhile use,” how P2P services can build community and how they benefit cities.

You talk a lot about how hidden value is crucial to the peer-to-peer economy, or what you call the shared economy. Can you explain what you mean?

A lot of things we consider trash have a lot of value. For example, a ton of cell phones recovered has more gold in it than a ton of gold ore. There are new industries that will be making a lot of money from waste and actually building products and upcycling all sorts of things. That’s one way waste has value.

The other way is that there are people and talents that aren’t being used. Hence, for example, TaskRabbit or TradeSchool [a barter-for-instruction company]. You’re also seeing that with Airbnb and a lot of these kinds of services that are networking things that have value. Like a taxi: It’s off-duty when you don’t want it in your network, and it’s on-duty when you want it in the network. These services actually convert the waste of what we own that’s not being used into real value. In the U.K. they have a term for it that I love: They call it “meanwhile use.”

What are some good examples of companies built on “meanwhile use”?

There’s an organization in the U.K., for example, called 3Space that converts wasted space, commercial space, into something that’s valuable to the community. We saw GE a little while ago launch GE Garages, which is turning some of their factories into supportive communities where there’s wasted talent, factory use or material.

There’s something the city of San Francisco launched in conjunction with a couple of organizations locally that’s called SQFT. It takes these spaces and basically considers them in increments, whereas there used to be maybe 10-year leases. This is much more of a pooled-access model, where you can use something incrementally from a time perspective, where it’s available for this half hour or at least three days.

Is this new economic model especially suited to cities?

Richard Florida and a lot of other people have talked about, from an urban development perspective, artists and entrepreneurs, people who are part of what I call the instigator economy—the instigators go in and start to make something interesting. When you overlay that with the new kinds of access to services that we’re seeing, there’s an opportunity to create these little surprises or this kind of serendipity-around-the-corner sensation, even in a neighborhood where you know the place well, or you think you do. Now there are levels of things that are happening, many of which you may be unaware of.

How are cities benefiting from peer-to-peer services?

I’m a big encourager of cities and big established companies playing together. At the same time that cities are getting a huge influx of humans, cities are getting huge budget cuts. When companies partner with a city, since most of us are running around with mobile devices and cameras, it allows us to be citizen reporters and give attention to things that aren’t working or provide ideas for planning that allow the city to provide better services with a lot less cost.

In New York City they have this Big Apps business, lots of applications that help find farmers markets and subways and all sorts of things. But it’s also happening all around the world, the London Datastore and in Vancouver and Seattle and Portland and in Sao Paolo, Brazil. Cities are liberating their data and enabling all sorts of characters to contribute by making interesting products and services.

There’s an old-fashioned quality to the kind of community experience you’re describing. Is there a historical precedent for peer-to-peer services?

This all harkens back to guilds. And I think we’re moving more toward guilds again. Say you’re a great woodworker and you take pride in your brand. I am a woodworker on the other side of the country; you don’t know me from Adam. I may have faked my portfolio that’s up on my website. So how do you know that if you let me build one of your tables here, I’m not going to diminish your brand? And is it still Alec’s design if I build it here? A lot of why guilds were created had to do with keeping the integrity and improving the quality of the craftsmanship, whether it was plumbing or woodworking or boat making.

The reputation system was managed by people who were part of the guild, which is how the reputation system should be managed. … My point is about having the integrity of you certifying me because you’re a master woodworker. That is really meaningful. The value of the profession hangs in the balance of all the parties who are participating and caring about who else comes in and what level of status they have. It’s so much like the old days in many interesting ways, but it’s even better. We’re allowing ourselves to create this type of local, livable life that uses technology for the things it’s wonderful at but doesn’t separate us in the ways technology has historically or that we’ve allowed it to.

Yet with peer-to-peer services, the community is generally a virtual one, right?

The community can be a physical place, but it can also look like Kickstarter or Spacehive or SmallKnot, even, I would say, TaskRabbit. TaskRabbit has done an incredibly fabulous job at creating a lot of reverse work around trust and safety so people have a lot of confidence in the service.

Do these businesses change the mainstream concept of what constitutes a professional service and a career?

They create a sense of what Leah Busque [founder of TaskRabbit] likes to call the micro-entrepreneur, or the micropreneur. I was in Portland last week and I asked some people what do they do for a living. Somebody put their arm around me and said, “Look, Lisa, nobody I know has a full-time job. It’s just a collection of really interesting projects.”

People are seeing that the time they have between working on a project and life is really quite interesting. Then aligning that with the amount of money you really need to make, as opposed to necessarily trying to make the most money possible, is a real shift. It’s a huge shift from 10 years ago, when the goal was to aim for the biggest amount of income you could have. I think the value has shifted to aim for an enjoyable, relatively stress-free life in which you’re enriched with a lot of experience. And so that shift means a lot when you translate that into what it will look like when it plays out in the economy.

Do you think that’s a generational trend?

No. It’s not just Millennial. The recession and people being unemployed has invited a kind of reinventing of the self from a career perspective. And instead of it being, “My career is equal to the string of jobs I have,” people are seeing their lives as kind of cocktail of projects and experiences. I don’t even hear the word “career” being used that much anymore.

Is that new perspective changing how consumers view what they buy?

There’s a lot of interesting things that are taking place. People want to buy things that originate from where they are. A lot of these peer-to-peer companies are showing us that the sriracha sauce was made two blocks away from me, and it’s made in small batches. The value of that is pretty compelling, especially if it’s affordable.

There are a lot more people who are becoming entrepreneurs, possibly out of necessity, but it’s not tech entrepreneurs. It’s people who are creating salsas, sriracha, interesting little programs or service bureaus or things that they can do based on what they know but using the technology as an under-support for what they’re doing.

So Peer Power is not just about technology?

That’s right. It’s also about community. There’s a guy I’ve known for years who lives on the coast outside San Francisco. For many years he’s been an oyster farmer. Two or three years ago, the company he was working for started to bump along, so he took a little piece of land on the water for himself and started to farm oysters. You can look at his website, it’s very cute. He has taken that and created a lovely little restaurant in a small town on the coast, and he’s financing himself.

He did it by creating a couple of parties and writing people and using Facebook and a couple other tools. He built a community of people who care deeply about his success. And so now it’s part of the constellation of things I care about, where the things are people and experiences that I want to conserve, preserve and support. It could be also about sharing it with other people. It could also be about harvesting oysters and doing some things with it that are fun for me because they’re weird and unusual for me and they’re hugely helpful for him.

Once people sign on to one peer-to-peer service, does it seem like they become more open to others as well?

There’s a way to see these things where there’s one star at a time and suddenly, when we squint, we start to realize they are actually part of a constellation or an ecosystem. Meaning that somebody who’s interested in putting their house up on One Fine Stay or Roomorama or Airbnb or VRBO or any of these things is also likely to use coworking spaces or to be interested in making a really cool dinner party experience.

From a marketing perspective, we in the sharing economy can share customers, because the customers will view it as a benefit. As an entrepreneur, I’ll tell you that the three things we spend the most money on are talent, infrastructures and customers, customer acquisition in particular. So this trend is a huge help to entrepreneurs.

How can something that starts out as a novelty become a key part of the economy?

Because if you take things and upcycle them, or you shrink things together in interesting ways, or you don’t build a new building but you create different experiences within a building or an underground space or a rooftop that was never used, suddenly you’re creating this new kind of revenue that you didn’t see before.

How can we quantify this new kind of revenue?

I’m going to suggest we don’t know yet how to measure it. Airbnb hired a third party to look at how much money from July 2011 through June 2012 went into the city of San Francisco’s economy due to Airbnb. The answer was $56 million. But the interesting part isn’t that $56 million was taken in by Airbnb; the $56 million figure was the amount contributed to the city of San Francisco by Airbnb customers, which is not surprising when you think about it.

Airbnb and similar services allow for a native experience where you’re in the fabric of the city in a way that you’re not when you’re in a hotel. When you’re staying at someone’s home, you’ve gone native. So people who stayed at Airbnb rentals, for example, spent a lot more money in the local community than people who stayed at hotels. It’s kind of like the difference between taking a plane and taking a train. The train brings you right into the heart of the city, and the plane puts you into the ugliest parts of the city, just because they put an airport there.

Most countries and cities are still paying a lot of attention to GDP. I’m pretty confident that’s exactly the wrong measurement.

So what is the right measurement?

It’s a complicated answer. I think it has to do with value creation and redefining value. And so if a new mom took a maternity leave or a dad took a paternity leave, and they’re not going to go back to their old job but instead they’re going to do some project with Elance and some project with TaskRabbit and part-time guidework via Vayable and rent out a studio and rent out their car—suddenly you have somebody making more money than they probably need, maintaining a lifestyle and staying home more. They need less money because they don’t need to commute and spend on daycare and dress up so much. So that’s how the complexion of where the money’s made and how it’s spent changes. It’s global in the way that the change is happening, and it’s universal.

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