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Lessons From Craigslist, eBay, & Kickstarter

So-called collaborative consumption is changing the way we buy just about everything. What you can learn from this still-growing trend.

Looking to get more done, faster? Of course. Most entrepreneurs are. And collaborative consumption—a movement that is reinventing sharing, swapping, bartering, and trading, all through social networks—has much to teach us about building a businesses fast, faster, fastest.

EBay, Craiglist and Kickstarter are all examples of companies founded on the idea of collaborative consumption. Their business models areanchored by our connections to each other, rather than to they way we traditionally exchange goods and services.

Here are three lessons the rest of us can take from this new model:

1. Establish a trust framework

Since the ‘collaborative’ in collaborative consumption is powered by strangers, middlemen need to guarantee peace of mind between everyone else. Brands are worth much more if they offer some way to measure and review business transactions, and if they are able to leverage reputational ratings and social capital to keep users in line.

Airbnb, which helps homeowners rent their spaces to travelers around the world, is a prime example. Airbnb users can tailor their experience to fit their needs, from managing listings to researching reservations to pre-approving guests. Hosts are even protected from theft and vandalism with $50,000 worth of insurance coverage. 

2. It's time to connect fragmented markets

Collaborative consumption is all about networking around offers and needs. So you need a niche. Look at your market and examine the pieces that don’t fit together as well as they could. Ask yourself: “Could there be a meaningful connection between fragmented parties? Could I facilitate a transaction that would be complementary to their core product or service?”

Innovators who identify the missing links can take advantage of service gaps with long-tail business strategies, the way Netflix and Amazon have done. There may only be a few people who want to rent a particular obscure film, but if you find a way to serve everyone who wants to rent every obscure film, suddenly, you’ve got a business that can scale.

Zipcar is another example of collaborative consumption in action. Its founder, Robin Chase, recognized a need for on-demand vehicles that are billable by the hour, particularly in major cities and college campuses. Chase introduced an affordable alternative to traditional car ownership, providing people with shared wheels at a fraction of the cost of a long-term purchase.

3. Geography matters less and less

Technology reduces geographic boundaries to commerce, opening the door to ventures such as Freecycle, a global grassroots network with almost nine million members who swap unwanted items free of charge. Members not only get free stuff, whether they’re in Tucson, Arizona or New Delhi, India, but also help reduce waste and save resources. 

Collaborative consumption can be good for consumers, for business and for the community at large. So what are you waiting for? It’s time to think outside the box.

Last updated: Mar 2, 2012


Benjamin Wald is a successful technology entrepreneur and investor. Ben?s passion for social impact, software and education support his ambition to change the world through technology. He is now the Managing Partner of Spartan Systems.

The opinions expressed here by columnists are their own, not those of

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