Collaborative consumption seems like a late hype though it's probably not. The first academic paper traces back as far as 1978, way before Rachel Botsman and Roo Rogers (co-authors of "what's mine is yours : The Rise of Collaborative Consumption") tackled the subject. But the reason why CC has been so discrete for so long and has only emerged around 2005 with its full strength is because the two problems undermining it hadn't been solved. Problem #1 : Trust Well first of all, trust is very difficult to define. Here's an attempt though :) Right ... Now that this is out of the way, let's try and tackle the real problem : how do you develop trust ? And thinking about it, trust has a 5-part nature :
- The closer the referee, the more you trust (if it's your best friend telling you X is a good bargain, you' ll buy into it faster than if some blogger says he is)
- There's an exception though : The more knowledgeable the referee, the more you trust (if your friend knows jack s**t about what you're seeking and tells you X is trust-worthy, you won't buy into his advice as much as some blogger whose an expert on what you're seeking; typical example : nutrition and weight training; don't trust your friends; period)
- When there is no referee and the only reference is a bunch of strangers, trust needs critical mass to get in place (you're much more likely to buy a toothbrush that's been reviewed by 50 persons than another that's got 2 reviews on Amazon)
- Trust is viral (once you're convinced, you want to convince)
(5. ? Later). So of course, you might think "it's obvious ! Look at number 1" and deduce that the way to go about implementing and developing trust in a collective consumption marketplace is through social mechanisms. Make sure people's friends join in too and you'll develop trust faster. Maybe. Only there's this ... other thing that's there to stay even if all my friends are part of the marketplace : "I don't know who the other people are !" There's this great post by Charles Hudson back at his Weblog about his experience with Taskrabbit. Taskrabbit presents itself as a CC website. It really is a marketplace for people trying to get small tasks done (fold your laundry, wash your car, water your plants, pick up the dry cleaning). But as he puts it, it's hard to, personally, find a task that sits at the intersection of the three circles below (hope Charles doesn't mind) : It's true. I don't want a stranger folding my laundry, or coming to my house to water my plants (and I'm not likely to pay for that ... and I don't have plants ... but assume, assume) ... Now Charles ended up finding the one situation where he could use the service : asking strangers to put up IKEA furniture when he moved to his new house (new house, so no stuff to fret over). But this is such a specific situation that might lead Charles to use Taskrabbit more in the future. The problem is here to stay though : Trusting strangers. And it is a function of personal preferences, probably until you try it. It's the case with first time couch surfers. Until they realize people are ... actually nice ! Actually, most people are. Non-couch surfers just don't know it. And I'm not talking about this : So here's the problem then : How do you get people to try for the first time ? I finally found my answer on a SXSW panel featured on triplepundit. It's actually a four-step process :
- Set up a good vetting process. TaskRabbit, a peer-to-peer marketplace for personal services, has a four-step vetting process for its new “Rabbits.” There’s a social security check, a background check, and various quizzes and training.
- Allow people to build a reputation. Ideally, you want many of the market participants to be repeat players, who can build a reputation over time. Options here include ratings, reviews, social proof, and gamification. And it’s important to consider both recent and historical reputation. At thredUP, a marketplace for used kids’ clothes, for example, users receive an overall rating and a separate rating for the three most recent transactions.
- Tap into existing social information. As sites begin to integrate with Facebook, they’re finding that users who connect up their “real life” Facebook profile are more trusted, and ultimately make more money.
- Don’t be afraid to enforce norms. TaskRabbit has a “two strikes and you’re out” policy, whereby users are banned from the site for two instances of bad behavior (not showing up on time, doing a lousy job on a task, etc.). Airbnb has a team of customer service people and a community on the ground to enforce cooperative norms.
In other words (my own) : Checking, Promotion, Feedback, Response. Do I need to go further ? Any reader of this blog will have remembered by now all these natural systems I've talked about for so long : Bacteria, bees, brains ... All of it. Control the entities coming into the system, let the other entities promote them if they're efficient through feedback, react to that feedback. Rinse, Repeat. It's beautiful. And Taskrabbit isn't alone. Airbnb, Thredup and all CC marketplaces are facing the same problematic. And another one ... Problem #2 : Inventory No one's going to visit your shop if it's empty. So you'd better get the supply and demand going. But this one's an easy one actually : Expansion. Once trust is in place, geographic expansion but also platform expansion (Social, Location, Mobile ... SoLoMo as the industry calls it but I tend to see each as a platform) will do the trick. Problems solved ? Botsman's idea is that new technology has made Collaborative Consumption easier. It's probably because it's made it easier to put the trust development mechanisms in place. It's easy to hide your reputation in the real world. You don't walk around with 2 stars on your forehead on a 5-star scale. It's harder to do so online. Unless you mes up the feedback mechanism which in turn messes up the whole system's reliability. A personal story: I bought a shaver on Amazon a year ago which turned out to be Very bad. Left a single star on Amazon. with a bad comment. Two days later, the seller contacted me offering me a reimbursement and a new, free, shaver. So I change my comment (though Amazon said "beware !") and wait ... to no avail. The seller never sent anything back. And I can't change my comment anymore. The system is only as reliable as its members. I believe CC marketplaces today learned a lot from Couchsurfing.com. Hypothetically speaking, there's nothing more risky than letting a complete stranger sleep at your place for the night. Millions of people do exactly that though. And it's partly because of the reviews, the detailed profile. People sleep at a host's place because he's verified, or has badges. The equation is simple : the more thorough the entry check, the easier it is to leave a feedback, the more efficient the promotion mechanism and the stricter the rules, the better the system. Because here's the 5th feature about trust I still haven't put up: 5. Trust is fragile