I headed to Sydney yesterday to participate in the first Australian Collaborative Consumption Founders gathering. It was a pretty cool event, over 60 people representing over 30 #collcon companies, all geared towards using peer to peer marketplaces to help drive new business models.
It kicked off with a really interesting Q&A session with Rachel Botsman, the author and speaker behind Collaborative Consumption, which I have summarised a few points from below.
Being in the pet care business, I asked a question around how other collcons have managed to get 3rd party liability and risk insurance (pretty critical for us as we have distributed pet care).
Tom – Given that we are creating new verticals and markets, and there is no historical data, how have CollCons in other countries been able to manage liability, risk and insurance when starting out?
Rachel – Really the only way to do this is to form as large a business case as you can and use parallel verticals to illustrate potential growth. Insurance companies do want to insure people, but they will need facts on which to make their decision. You have to use established trendsetters like Airbnb or car sharing and apply it to your verticals.
Whilst I got the gist of this point, I still feel it leaves a really big risk hole for Collcons starting up – essentially you either have to wing it until you get numbers big enough to make someone care, or find a really innovative insurance company who sees the bigger picture. Or just self insure and hope you don’t get a run of bad luck too early?
Other Key Points of Interest
However social your business is, someone needs to be making or saving money somewhere.
This is an often overlooked point in CollCon business models – in order to drive people repeatedly to use your products or service, they have to have a financial gain. Not to say you cant get a little traction by getting people to be charitable, but they wont keep coming back. This can be realised in a few different forms (for example, getting something done quicker leads to a time/cost saving for you).
If you do not have a financial return in the model somewhere, there is very little incentive for people to continue to use the service.
Turn your best examples of the above into fantastic use cases & stories
This really is about making it real and helping people to visualise the service. Stories stick much better in people’s minds, and people will understand your value proposition much clearer.
Curate your marketplace well in the early days
Curation is really important at the beginning of the marketplace. Peer policing does work in later stages once people are vested in the system, however your early work will set the tone, atmosphere and attitude of your respondents.
Company and Community goes together…
…but you need to decide how much. There is a spectrum which at one end, you are 100% involved and everyone on the site represents you, and you will get involved every time, and at the other end you are completely hands off and never get involved in any transaction at all. Every company is different and you need to set policy around the extent of your involvement and be consistent.
Having said that, you need to understand that your community reflects on your brand, so some form of involvement is probably required if only to retain standards and trust in the marketplace.
How do you protect against larger American companies?
No one can take away your customers loyalty. They can have better systems, or more investment, but if your customers believe what you stand for you will stand a better chance. Figure out how to build loyalty into your system, and protect your niche.
What opportunities do you see for Australia in the Collcon space?
Australia isn’t being innovative enough in the peer to peer marketplace. We are still seeing what America is doing, then copying them over here. I would like to see more models being created here and adapted overseas.
What’s the biggest problem that you see for growth in CollCons?
A common issue is the challenge of changing behaviour or mindset of people to use a new service. For something new to succeed, you need to figure out how to change or switch people’s established behaviour to use you instead. Often the best way to do this is to partner with established partners who can offer access to target audiences. For example Liquid Space have partnered with Microsoft so that when you book a meeting room, it will bring up all of their shared co-working spaces in between your locations.
These are all great lessons and don’t have to apply to Collcon companies – I think many of them translate well into almost any business, especially the user stories and customer loyalty points.
If you have a Collcon business (or an ordinary business) which of the above resonates with you and why? Do you have any insights specifically for CollCons?