Swap! Rent! Share! The Growing Drumbeat of the Share Economy

Speakers

• Lisa Gansky, Author, The Mesh: Why the Future of Business Is Sharing
• Virginia Terry, Director, Advisory Services, BSR (Moderator)

Highlights

• The rise of the shared economy is the result of a number of factors including urbanization, a loss of trust in big business, and a desire to capture the true cost of products and services.
• The assumption that we need to make and sell more things to create more value is in the past. In today’s shared economy, businesses will succeed by maximizing the utility of things and converting waste—whether it is time, talent, or products—into value.
• Mesh companies create, share, and use platforms, networks, data, and talent to provide people with goods and services quickly, conveniently, and at a lower price than what they would pay for outright ownership.

Memorable Quotes

“Sharing is less costly, more compelling, and more convenient than ownership.” —Lisa Gansky, The Mesh

“The fact that we need to make and sell more things to make more value just isn’t true.” —Lisa Gansky, The Mesh

“Pretending the world isn’t changing is a high-risk strategy. The best thing is to test stuff and see whether it works in your community.” —Lisa Gansky, The Mesh

Overview

Building on the key Conference themes of leadership, collaboration, and relationships, Terry opened the session by introducing Gansky, author of The Mesh, and a “successful serial internet entrepreneur.” Gansky explained that the Mesh is about a fundamental shift in our relationships with things in our lives—where access triumphs over ownership. Simply put, “It is about the pursuit of better things easily shared.” While we have a long history of mesh or sharing in our lives, Gansky believes that the fundamental shift toward the shared economy is driven by a number of factors including urbanization, climate change, distrust of large corporations, and a rethinking of cost and value. This shift represents a historic moment when we are connected to more people and things than ever before in our lives.

Zipcar, the car-sharing service launched in 2000, is a good success story of the shared economy. Gansky asserted that Zipcar “is not in the business of transportation; they are in the business of information.” The company and concept succeeded by targeting students in a high-density area with compelling marketing. A decade later, a new model, WhipCar, emerged to take advantage of the fact that 92 percent of the time cars are not being used, and they developed a peer-to-peer car-sharing system.

This example highlights one of the key tenets of the Mesh: Value unused equals waste. She argued that there is an opportunity in converting waste that is temporal into something that is valuable. Another key tenet of the Mesh is building trust and loyalty by making sharing irresistible. Gansky explained that companies try to control the messages they send customers, but in our hypertransparent world, the only way to control the message is to have the largest number of people you trust speak on your behalf. She argued: “What a company says about itself isn’t trusted the way what a friend says about the company is trusted.”

Other key tenets of the Mesh include building platforms that invite people and encourage engagement such as Kickstarter, which connects artists who need funding with small donors. Other examples include Quirky, a platform for product developers to use the support of people with business, marketing, and packaging-design expertise to sell an idea. She explained that governments are also jumping on board, with a city in Spain offering up free lifetime public transportation passes to residents who were willing to trade in their cars. With all of these platforms and opportunities to swap, share, and rent, Gansky said that the business she started a number of years ago with US$60 million in investments, Ofoto, would probably only require an investment of around US$3 to 5 million today.

When asked by Terry about whether we can share our way to a sustainable economy, Gansky replied that the last century’s business model was about making a lot of stuff, making it fast, and making it cheap. “The way we thought we were winning was if we had a lot of factories making stuff. This required a lot of capital.” In today’s economy, where we don’t need the same level of capital as before, we are moving from a metric like GDP to measuring the utility of things. Gansky said, “If we can convert waste into value, maybe the world won’t look so bad.” She also shared the example of Electrolux’s Vac From the Sea program, which removes plastic from the ocean to make various plastic products. Patagonia’s Common Threads Initiative is another example that is encouraging customers to shift from buying more to getting more out of the products they buy.

In response to a question about how to balance the supply and demand dilemma for many of the shared models, Gansky said that the key is starting with one neighborhood or one market segment to ensure you can build the critical mass for success. She called this approach targeting a hyperlocal market and offered an example of a new business called thredUP, which is using this strategy to sell nearly new kids’ clothes online.

Gansky encouraged participants to experiment and share both mistakes and failures. In the words of novelist William Gibson, “The future is already here; it’s just not very evenly distributed.”