What does the Sharing Economy have to do with sharing?

On Thursday I went to the screening of “Compartir Mola” (“Sharing is Good”, in Spanish), a short documentary about the sharing economy in Spain produced by Tutellus and AlfaZulú. An impressive film, very well done, dynamic, informative, thoughtful…. It’s in Spanish, but if you would like to see it, and I do recommend it, you can sign up on the Tutellus web (UPDATE: now it’s open, you don’t need to sign to see it!).

Compartir Mola

Yet, the title annoyed me. Sharing is good, yes. But I don’t see what sharing has to do with most of the businesses springing up in this sector. “Sharing” for me is more “Would you like some of my sandwich?” or “Sure, you can borrow my coat any time you want”, than “Would you like me to help you with this in exchange for money?”. In what way is “please use my empty apartment for €120 per day” not “renting”?

The round table debate after the screening focussed mainly on the fiscal aspects of the companies in the sector, whether they pay tax or not. Everyone agrees that of course they should, the obstacle is that the systems are not yet in place here in Spain to ensure that that happens efficiently and fairly. However, I don’t want to get into that debate today, as I am sure that it will get sorted out by the tax experts (and I so hope that they actually consult with the entrepreneurs, for a change). I would like to talk more about the misconception that the label “sharing economy” helps to propagate, a misconception that hinders the concept’s acceptance by the consuming public.

One of the protagonists of the film, Rafael Martínez-Cortiña (@rafaelmcortina) of Peers.org, mentioned the true nature of the concept, and a much better name, in my opinion: Peer to Peer. P2P. Similar to B2B (business to business), only much bigger, and more charming. And not at all similar to B2C, or business to consumer. Please notice the absence of a “C”. We are no longer just consumers, we are peers.

Many of the new platforms in this space are two-way, bi-directional. WeSwap and Moniefy, for example, pair up travellers wanting to buy a currency with travellers wanting to sell. Homeexchange facilitates home swaps. With Zilok, you can be both a renter and a rentee.

Moniefy

But even if the roles of supplier and consumer are interchangeable, is that sharing? To me, it sounds like a marketer’s hype, up there with “gluten-free” and “organic”. It sounds lovely, but let’s get real. We’re taught to share, not to share-in-exchange-for-some-material-good-or-service. Sure, there’s some playground negotiation along the lines of “If I let you use my iPod, can I play on your PSP?”. But that’s not usually how kids understand sharing. And it’s not a business model.

What is a business model, and a very exciting one, is the “democratizing” of supply. We can all be suppliers, now, of our services, expertise, time, household appliances, unwanted clothing, extra space, cars, pet care, cooking… Whatever you have or can do, there’s probably a platform that lets you offer that, for money. Many people even make a living from offering their services or products on these platforms. Etsy gives artists and craftsmen access to a large enough market to make their niche products economically viable. O-desk and similar give freelancers a relatively steady stream of potential work. FarmDrop gives me a chance to sell the fresh mint I grow on my balcony (or it would if I grew mint and lived in North or South London).

Farmdrop

Labelling all such platforms part of the “sharing economy” is confusing, and as such, actually delays its mass adoption. When it comes to commerce, we’re not hard-wired to share. I want to own or rent my own place precisely because I don’t want to share my space with anyone. I would rather own a KitchenAid and be able to use it whenever I want, than have to wait for availability to make my chocolate chip cookies. You know the saying “Good fences make good neighbours?”. Sharing is fine within the playground and within families, everyone can get on board with that. But as an economic principle? Not in our capitalist societies. And the longer we call it “sharing”, the longer the mainstream consumers will consider it a “hippy” new technology thing that’s not worth spending the time to understand.

Another term used for this concept is “Collaborative Economy”. That is also not the best label. Collaborate in what? Generating traffic and profits for the platform? Didn’t we always collaborate in generating profits for the companies we bought from? In the Peer to Peer models, we are working more closely with each other, but we don’t generally have a common aim. Yes, recycling is a worthy aim, and we are collaborating on that, I suppose. But basically, we want an income.

There is a Collaborative Economy, but it’s not the Airbnbs and the Muncherys that populate it. It’s the crowdsourcing platforms such as Quirky or the crowdfunding platforms such as Kickstarter, in which participants supply their ideas or their funds to achieve a common aim. I’ll talk about them another time, because the concept is fascinating, and does reveal a significant shift in the supplier/customer relationship.

bondsy

And there is a Sharing Economy, but it’s not the Ubers or the Rent the Runways that fill its ranks. Its platforms like Bondsy, which allows users to swap unwanted items, or GoodGym which pairs runners with elderly people who need companionship. Neighborgoods.net connects neighbours with goods to lend or borrow. Again, we’ll talk about that later on, too, because the creativity and spirit is inspiring.

I would like to propose a new name for the concept, that encompasses every company that I’ve looked at so far in the sector: the Connecting Economy. You could argue that even in the era of Big Business, we connected with… well, with Big Business. But the communication technologies that make the new businesses possible are all about connectivity. They allow you and me to connect with a vast number of people simultaneously, something that previously only mass media could do. The fact that I can efficiently connect with a potter in Australia or a translator in Iceland, opens up huge marketplaces for me and for them. The fact that I can make something – a scarf, a song, a tutorial – and with a few clicks put it out there for people to hopefully buy, opens up a world of marketing and business opportunities.

But we’re not sharing. We’re connecting. When I participate in your crowdfunding, we’re connecting. When you download my pdfs, we’re connecting. It’s more than just peer-to-peer. Its me-to-the-world, but at the same time it’s intimate. It’s big business, but it’s about relationships. These businesses are more than just marketplaces, they are connectors and relationship-generators. Inventory is distributed, transaction friction is eliminated, and it’s changing the way we think about our role in society. While there are many issues that still need to be worked out, and while not all of the companies currently operating in the sector will survive, this business concept is not going to go away. We do need, however, to tone down the hype, stop pretending it’s all altruistic, and look at the important part of this disruption: connections.

(I’m working on a “map” of the sector. It’s fascinating. I’ll keep you posted.)

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If you’re interested in more stuff about the Sharing Economy, check out my Flipboard (and yes, I did, I called it “Sharing Economy”):

Flipboard magazine on the Sharing Economy

 

And, if you’d like more about crowdfunding, I have a Flipboard magazine on that, too:

flipboard crowdfunding

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