Sunday, December 23, 2012

It's not about FREE, it's about FREEquency

Many people believe that borrowing is synonymous with free. I believe borrowing has more to do with the temporary nature of the use, and less to do with the price of access.

I believe that systems like neighborrow are a success when they increase the velocity of turnover and overall frequency of use -- especially for items whose marginal cost of additional uses per lifetime is near zero.

Therefore, our job is to identify the items themselves where high velocity is desirable -then create and design systems, infrastructures, and business models to facilitate high frequency turnover.

There are a ton of smart people trying to solve this problem, with limited success: here's what I think the next phase should look like. It has nothing to do with p2p trust, or existing (free) supply- like many of us thought in the beginning...

  1. NOT FREE - the point is to get HIGH QUALITY, DURABLE GOODS, that have enough demand to be used over and over again... these items cost money to introduce to the system. Someone (either the individual owner, or the site) needs to be motivated to purchase, maintain, and deliver these items. Business models that create a hot potato effect will work best. Users should be motivated to use the item and pass it on as quickly as possible. Some bike sharing systems are doing this well, making the first hour relatively cheap and extra time is disproportionally more expensive. This pricing model runs counter to the buy in bulk dynamics we are used to- but it makes sense. It provides incentive for the rider to put the bike back and re-borrow another one on the ride home. This model maximizes exposure. 
  2. CONVENIENCE IS KEY - the model above only works if is incredibly easy to access the items in need at exactly the right times and exactly the right places. Cameras for rent at airports and tourist attractions and in Airbnb houses. Drills and other tools in member only lockers at Whole Foods. 
  3. THE ITEMS THEMSELVES must be designed better. More durable. More flexible. One size fits all. Built in accessories. 

When we start solving these problems, and stop trying to build systems to help people share things no one wants for free- or stop thinking trust is the issue when people on Craigslist meet strangers EVERY day when it's worth it to sell a concert ticket... we will be one step closer to solving this important problem!

1 comment:

Maggie MacVenn said...

These are great tips!! And if followed and others are motivated should be great for things to start flowing!!