Sustainability Through Collaboration, Alix Omori
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Transcript of Sustainability Through Collaboration, Alix Omori
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Sustainability through Collaboration: New Consumption Models in the Collaborative Economy
Leadership in Sustainability Management Capstone Project
Presented by :
Alix Omori
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Objectives
To align on a standardized definition of the collaborative economy and differentiate it from related models
To identify successful value propositions and review key business models in the collaborative economy
To envision how the collaborative economy can advance more sustainable consumption
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Sustainability through Collaboration: New Consumption Models in the Collaborative Economy
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Introduction
Define the collaborative economy and understand its significance in todays society
History & Background
Examine existing thought leadership and historical context of the collaborative economy
Terminology & Taxonomy
Differentiate the collaborative economy from related concepts and review key business models
Challenges & Critiques
Confront the legality of sharing and negotiate its place in a traditional capitalist society
Next Steps
Identify how the collaborative economy can cultivate sustainable consumption habits
Agenda Sustainability through Collaboration: New Consumption Models in the Collaborative Economy
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INTRODUCTION
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The projected worth of the collaborative economy is
$26.2B in 2014
An economy built on distributed networks of
connected individuals and communities, as opposed
to centralized institutions, transforming how we can
produce, consume, finance, and learn.
Sources: 1 Rachel Botsman, The Sharing Economy Lacks a Shared Definition: Giving Meaning to the Terms, Collaborative Labs, 2013. 2 Rachel Botsman and Roo Rogers, Whats Mine Is Yours: The Rise of Collaborative Consumption. New York: HarperCollins, 2010.
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What is the collaborative economy?
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Why does the collaborative economy matter?
6 Source: The Power of Collaboration, Visual.ly, December 2013.
Video: http://youtu.be/0qWdmZnXpN0
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HISTORY & BACKGROUND
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The collaborative economy is a cross-disciplinary movement rooted in socioeconomics
2008
Smiths invisible hand
Marxs commodity fetishism
Veblens conspicuous consumption
Hardins tragedy of the commons
Sources: 1 Andrew Smith and Ruth Potts, The New Materialism. London: Bread, Print, and Roses, 2012. 2 Towards the Circular Economy: Volume 1: Economic and Business Rationale for an Accelerated Transition, Ellen MacArthur Foundation, 2013.
1776 1867
1899 1968
McDonough & Braungarts Cradle to Cradle framework
2002
Collaborative consumption in TIMEs 10 ideas that will
change the world
2011
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Converging social, economic, and technological trends have accelerated this new economy
Source: Jeremiah Owyang, The Collaborative Economy, Altimeter Group, 2013.
Increased urbanization & population density
Voluntary simplicity & sustainability
Desire for community Generational altruism
Monetize excess or idle goods
Increase financial stability
Access over ownership Influx of VC funding
($2B to date)
Social networks & constant connection
Mobile devices & platforms
New payment systems
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There are 3 main systems for consumption within the collaborative economy
All of these systems require an element of trust in order to facilitate successful transactions
Source: Rachel Botsman, The Case for Collaborative Consumption. Presentation at TEDxSydney, Sydney, Australia, May 2010.
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Market relationships have shifted due to new channels and technologies:
Source: Jeremiah Owyang, The Collaborative Economy, Altimeter Group, 2013.
These systems empower customers by allowing them to transact directly with one another
Companies speak at consumers via online corporate presence
Consumers share content & opinions,
requiring brands to listen and speak with
consumers
Consumers empowered to share goods &
services; power shifts to the
consumer
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Traditional Capitalist Economy New Collaborative Economy
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Manufacturer as Producer Consumer as Producer
Bank as Lender Consumer as Lender
Retailer as Seller & Distributor Consumer as Seller & Distributor
Retailer as Service Provider Consumer as Service Provider
This consumer-centric economy threatens to make traditional market players obsolete
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TERMINOLOGY & TAXONOMY
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It is important to differentiate the collaborative economy from several related concepts
Source: Rachel Botsman, The Sharing Economy Lacks a Shared Definition: Giving Meaning to the Terms, Collaborative Labs, 2013.
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For example, peer-to-peer sharing is one type of collaborative consumption within this economy
These concepts share common values & drivers, including:
Distributed power: Power shifts from centralized institutions to networks of consumers
Optimal asset utilization: Social & mobile technologies allow consumers to unlock idle resources
Efficient supply & demand: System built on peer trust matches haves & wants
Source: Rachel Botsman, The Sharing Economy Lacks a Shared Definition: Giving Meaning to the Terms, Collaborative Labs, 2013.
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Others argue this movement must be segregated into different types of collaborative economies
Source: The Sharing Economy: Where We Go from Here, Leo Burnett Company, Inc., 2014. n = 4,404
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Collaborative businesses can be categorized based on their products and value proposition
Sources: Jeremiah Owyang, Collaborative Economy Honeycomb, Version 1.0, Crowd Companies, 2014. Rachel Botsman, Purpose with Profits: Collaborative Consumption Business Models, Nesta, 2012.
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< Maker movement >
Types of collaborative business models:
Service fee Freemium Tiered subscription plans On-sale White label Flat membership Membership plus usage
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Collaborative consumers can be segmented based on their stage of adoption
Source: Sharing is The New Buying: How to Win in The Collaborative Economy, Vision Critical and Crowd Companies, 2014.
n = 90,112
Not yet engaged in the collaborative economy; however, many intend to try these services in the next 12 months, making them a key target audience for collaborative businesses
Buy and/or sell preowned goods online using well-established collaborative services like eBay or Craigslist, but have not used any emergent neo-sharing services like Etsy or Uber
Already using the latest generation of collaborative services like Airbnb, TaskRabbit, or Kickstarter
61%
16%
23%
In the US, there are roughly 80MM consumers engaged in collaborative consumption
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Alternatively, consumers can be segmented based on their reasons for collaborating
Source: The Sharing Economy: Where We Go from Here, Leo Burnett Company, Inc., 2014. n = 4,404
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CHALLENGES & CRITIQUES
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For some consumers, barriers to collaboration frequently outweigh the benefits of sharing
Source: The Sharing Economy: Where We Go from Here, Leo Burnett Company, Inc., 2014. n = 4,404
Americans primary reason to engage in collaboration is decidedly altruistic (53% agree helping the needy is a top motive)
Other motives are collective (sustainability) or personal (convenience) There is no consensus on barriers to collaboration, but top reasons include: Risks of scams, privacy, and safety Pro-consumption attitude & benefits of ownership
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Critics claim sharing is just a new form of privileged commoditization
Sources: Susie Cagle, The Case against Sharing, Medium, 2014. Sharing is The New Buying: How to Win in The Collaborative Economy, Vision Critical and Crowd Companies, 2014.
Collaborative consumption touts access over ownership, but how is this different than renting?
Sharing as enlightened capitalism Sharing is not new, and has been practiced out of necessity for ages Collaborative businesses dont create trust, they reinforce homogeneity & privilege Participation requires access to expensive new technologies
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Some feel lack of legal protection is at odds with for the people ethos
Sources: Susie Cagle, The Case against Sharing, Medium, 2014. Andy Kessler, Brian Chesky: The Sharing Economy and Its Enemies, The Wall Street Journal, 2014.
In the collaborative economy, individual consumers act as businesses Currently few regulations covering issues such as:
Lack of consumer protection as barrier to entry Peer reviews legal protection Contradictory to consumer-centric ideals
To be accepted as mainstream, the collaborative economy needs its own laws Traditional laws not easily enforceable on collaborative businesses
Ownership Consumer protection Taxation Insurance
Liability Zoning Licenses & permits Workers rights
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Tensions also stem from differing values between old and new powers
Source: Jeremy Heimens and Henry Timms, Understanding New Power, Harvard Business Review, December 2014.
Old power: limited, inaccessible, leader-driven, transactional in nature
New power: participatory, distributed, peer-driven,
beyond passive consumption
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The intersection of new and old models and values demonstrate opportunity for change
Source: Jeremy Heimens and Henry Timms, Understanding New Power, Harvard Business Review, December 2014.
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NEXT STEPS
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Most Americans recognize the need for a major change in consumption habits
Source: Analysis Report: New American Dream Survey 2014, The Center for a New American Dream, 2014.
n = 1,812
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and many see collaboration as a potential solution to the environmental crisis
Source: Analysis Report: New American Dream Survey 2014, The Center for a New American Dream, 2014.
n = 1,812
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The answer is smarter consumption, not just less, to support the economy and the planet
Source: The New Consumer and The Sharing Economy, Havas Worldwide Prosumer Report, Volume 18, 2014.
n = 10,574
Americans still see consumption as necessary patriotic duty By consuming smarter, we can replace guilt with purpose via:
Mindful purchase decisionslocal makers, products with a story Consuming only whats neededquality over quantity Obtaining full product valueextending product lifecycle, sharing/reusing
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Businesses can respond to consumer needs by solving key problems of traditional consumption
Source: Rachel Botsman, Sharings Not Just for Start-Ups, Harvard Business Review, September 2014. 30
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Role Action Brand
Guarantor Facilitate peer-to-peer transactions
Sustainability partner Foster sustainable consumption
Proponent of reuse Create secondary markets
Lending library Offer access, not just ownership
Connector Cultivate relationships
Curator Provide thrill of the hunt experience
Employer & partner Develop new consumer relationships
Maker champion Act as intermediary for artisans 31
Brands must adapt to a less transactional retail model where companies play more passive roles
Source: The New Consumer and The Sharing Economy, Havas Worldwide Prosumer Report, Volume 18, 2014. n = 10,574
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Services and less tangible assets remain prime opportunities for market entry
Source: The New Sharing Economy, Latitude in Collaboration with Sharable Magazine, 2013.
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Economists predict the value of the collaborative economy will jump to $110B in the next 12 months
Source: The Sharing Economy: Where We Go from Here, Leo Burnett Company, Inc., 2014.
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QUESTIONS?
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APPENDIX
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Convenience and price trump sustainability as motivators for collaborative consumption
Source: Sharing is The New Buying: How to Win in The Collaborative Economy, Vision Critical and Crowd Companies, 2014.
Top reasons to engage with collaborative business:
n = 90,112