The Sharing Economy

There's a piece in the NY Times this weekend about Lyft and Sidecar changing the dynamics in the Los Angeles taxi market. Get ready to read lots more pieces like this in the coming years.

The internet, mobile phones, native transaction systems, and a global network that connects billions of people in real time are changing a lot of things and assets that sat wasting are now going to get activated.

None of this is news for readers of this blog. In fact, this is all old news. But I think we are just seeing the start of this trend.

Let's look at self driving cars, another topic that the NY Times wrote about recently. Maybe we won't all own one of them. Maybe investors will own them and put them into networks like Lyft and Sidecar which will then dispatch them to pick us up and take us where we want to go. Self driving cars may turn out to be more like income producing homes, apartments, and oil wells than something that sits in your garage.

Investing in the networks that light up the sharing economy, like Airbnb, Lyft, Sidecar, and many others certainly looks like a good idea. But they may just be opening up a massive new investment market in physical assets that produce income. We are seeing lenders move their money from banks and bonds to peer lending markets like our portfolio companies Lending Club, Funding Circle, and Auxmoney. I think in time investors will move their capital into the assets that power the sharing economy as well. And that may turn into a very large capital asset class.

#hacking finance

Comments (Archived):

  1. tyronerubin

    What would you say are the key things to focus on in starting something like this up in a place like South Africa?

    1. fredwilson

      the fact that airbnb, lyft, sidecar, and the rest of them will eventually get there

  2. Leigh Drogen

    I really do wish that everyone would stop using the term “sharing economy” which is such a misnomer and does a disservice both to the amazing companies and the entire ecosystem. There is no sharing taking place, these are excess capacity utilization markets. Obviously that’s not a good branding tag line for this ecosystem but using the word “sharing” will not do any good either. People are naturally weary of sharing things, because there’s not much economic benefit to simply sharing. But renting out the excess capacity in your assets in order to generate cash flow, people inherently understand and buy into that. If we want to grow this ecosystem we need to brand it the way it should be branded to attract the largest number of people.

    1. danielharan

      It still doesn’t capture the trust metrics that the facilitators are accumulating. Lyft and Airbnb know a whole lot more about you, which makes it easier for 2 unknown people to trust each other.Many assets are also underused, yet we only realize they are once technology makes sharing easier. Short-term rental of private parking garages due to RFID, or Breather renting rooms by the hour because your phone can unlock it.”Excess capacity utilization markets created by technology and enabled by trust brokers” is a bit of a mouthful ๐Ÿ™‚

      1. Richard

        This is the discritization economy.

    2. Richard

      The first lesson we get from our parents is to “share”.

      1. JLM

        .The first lesson we get from our parents is not to put strange shit in our mouths.This is a family joke in my family.Sorry.JLM.

        1. JamesHRH

          The Minch clan is inquisitive & tactile!

        2. robertdesideri

          Too clever by half?Given: Increasing utility and productivity is the grail.Given: Lots of startups innovating secret grail sauce with relatively small investment.Given: Grail drives margins towards zero.Question: What happens to pension funding, where do the investment returns come from in this new world? Do we ditch the pension fund concept, how can it be reinvented?The system, our society, has to work as a whole. Are we forgetting the bigger picture, making a problem because we’re forgetting a) the unemployed, b) the retired?Not my responsibility, someone else is our society should take of that, we’re here to break things fast. Right? It appears the shit may be closing in on our mouths.

          1. JLM

            .Love the rant and you get the annual award for the most extreme segway but I was really talking my propensity to put strange shit in my mouth when I just learned to walk.My older sister used to rat me out: “The little doophous is putting strange stuff in his mouth again. Do we have to keep him or can we trade him in on another?”JLM.

      2. JamesHRH

        Rich your comment made me think if the only Robert Munsch title I like –…It’s a gooder.

    3. Matt A. Myers

      Sharing space, albeit excess, is still sharing it. Sharing transportation, albeit vacant, is still sharing it. It’s increasing its utility, thereby reducing the cost per unit of use.

    4. LE

      “I really do wish that everyone would stop using””Obviously that’s not a good branding tag line”The (only) way to change this is to make up a new word, get interviewed by major media and have that word repeated and echoed by other media. Someone with a major blog could also do the same of course.Consequently any time you are going to get interviewed by major media [1] you should be prepared with a bunch of words that are cute short and memorable and you will see how you to can become the inventor of a new word for an old concept or a new word for a new concept.[1] Back when I spent my time thinking about this and a reporter wanted my thoughts on something that I knew about I would always prepare by coming up with the sound bites that I knew they would repeat. They like and need this and they love when it’s organic. Of course to do this you have to be creative with words.

    5. muratcannoyan

      Point taken, but Sharing Economy sounds cool.

    6. pointsnfigures

      maybe “asset utilization economy” is a better description.

  3. danielharan

    The sharing economy has impacts on consumption, production and investment in those assets.Consumption: Airbnb has changed the way I go looking for an apartment. It’s easier for me to consider adding an extra bedroom if I think it will more than pay for itself, just as it’s easier for me to buy a car if it pays for 80% of its costs when I’m not using it.Production: If enough people think like me, smart landlords may be able to consider sharing-friendly infrastructure. Your phone should be able to open my front door; the camera should go to my phone even if I’m not home.Competition: Self-driving cars also put Zipcar in competition with Lyft and Uber.

  4. Tyler Hayes

    What if self-driving cars…Are really just businesses run by humans?

    1. Matt A. Myers

      I believe 20% of the population in the future will have their own private vehicle or perhaps semi-shared in there, and 80% will have fully shared vehicles and/or use mass transportation (depending on the distance being traveled).

      1. LE

        “I believe 20% of the population in the future”If you lived in the suburbs you would realize that that’s probably not going to happen.You need a car period.Not only that but having public transportation, even if available, would cause other unintended consequences and economic activity would drop and people would lose their jobs (just like has happened with Walmart and Amazon).Why? Because you are putting friction into the system. And friction makes things less desirable. (Like the difference between the laser printer in your office and the laser printer in the next building.)I live and work near an Apple store which is maybe 5 minutes from my office. I can get in my car and go there whenever I want. If I had to take a bus I would never just drop in and go there. Or I can drive from home in the morning to the Panera, get a bagel and coffee and then drive to the office. That would simply never happen if I had to take a bus or public transportation first. (Or get a lyft whatever).The city is a different animal entirely in the way it is setup and the density and for that matter occupants. And guess what we are not all going to live in cities there isn’t enough space for everyone.One other point of friction: Cost. Knowing that you are paying each time you do something (a variable cost) is not the same as paying even much more as a fixed cost where you aren’t justifying each dollar spent. If I didn’t have a car and even saved tons of money but had to pay someone $10 to drive me to the Apple store and $10 to drive me back I probably would skip that “whim” visit.If you want proof of this ask anyone with a vacation home how much they use it (or a boat) and you will find out that they could probably save money by using hotel rooms instead.

        1. Tyler Hayes

          Interesting. I totally agree that’s how it all works, and yet I have the opposite experience when in a scenario where I don’t have access to a car but could take a cab to go do something I want.It’s because I no longer own a car and realize I’m now saving thousands a year that I have no problems taking a cab, grabbing a Zipcar for a day for fun, or renting a car when traveling. Still a huge net win.

          1. LE

            Where do you live Tyler? Also are you married with kids and if so how many and what are their ages?My brother in law is much much younger than I am (he just got married he’s an opera singer as is his wife) and he lives in Manhattan and rents his place out on airbnb when not using it. When he has to come to family functions he gets a zip car as well. Or he has his parents pick him up (which to me is totally odd he’s 28 or 29) or borrows their car.One thing though about my brother in law that seems to mimic people in that age group.They grew up with many things and aren’t as possessive of what they have from what I can tell.As a result they don’t have the same fear of loss that I have because I worked so fucking hard for everything I have and nothing was given to me or came easy. And as JLM or Arnold would probably attest if you broke that one toy you got for your birthday you parents told you you were SOL be careful next time.About the only thing I care about that I share is my brain come to think of it.

          2. muratcannoyan

            Great points.”They grew up with many things and aren’t as possessive of what they have from what I can tell.”There certainly seems to be a cultural shift that should push, or should I say pull, the sharing economy forward. Even in the scenarios you describe it would not be surprising given the shift that people will continue to seek out services that serve this trend.Will take time for sure but the technical and cultural foundation is there.

          3. Tyler Hayes

            Until my mid-20s I shared much of the same fear of loss, same cause (how I was raised). I consciously chose to shed those fears and beliefs when I was 24. I’ve been told this is not normal and that seems generally true. I sold everything I owned and hopped on a one-way flight to SF with only carry-ons. I haven’t owned a car since then, hold people and experiences close, treasure them, and am very purposeful about not getting too attached to what I own.Many of my college friends back home in the Midwest immediately bought homes, cars, and started families when we graduated.What I see is a trend: your experience -> my experience -> our children’s experience. I own less than you, my children will own less than I do.

          4. LE

            Many of my college friends back home in the Midwest immediately bought homes, cars, and started families when we graduated.Usually the bell curve of people that move such as you did falls into several distinct categories. One is someone who had a perhaps not so good home life or situation (and has no loss for leaving they are simply looking for something better) and the other is someone raised in a way that allows and encourages them to take chances and explore. Perhaps others just think “it’s boring here I have to get out”. Will call the former “strict” and the middle “hippie” and the last “motivated”.Do you fall into any of these categories? I’m only asking because I’m always curious about people who leave towns in the midwest for big city type excitement and opportunity.

          5. Tyler Hayes

            Bit of each. Mostly motivated.I guess I’ll expand: Wanting to achieve more is part of who I’ve always been, but some trends converged in my life and then a few sharp moments of extreme loss catalyzed the change I mentioned earlier. I literally would get physically antsy after that if I wasn’t filling up every day to the brim. I would run my company all day and then run 7 miles and then meet other companies for consulting and then work out, etc. I don’t have that problem in SF. I always feel challenged but still encouraged.I want to make a dent in the universe. People where I grew up would look at me like I was speaking Chinese if I said that.EDIT: I should be clear that my family, or at least part of it, did not look at me like I was speaking Chinese. Some were 100% supportive, even if they didn’t fully get it. That made all the difference.

          6. CJ

            “my children will own less than I do.” — Maybe. In any case, count me as inspired. I’d love to do this with the wife after the kids go to college.

          7. kidmercury

            “the things you own, end up owning you.” — tyler durden

          8. ShanaC

            we also earn less as a group. and what we have that is valuable tends to be a loss commidity – the things that aren’t tend to be shared in groups, because they aren’t affordable at all

          9. CJ

            I just don’t think that humans are net animals. We’re into the gross, put $400/mo as a line item rather than $1000/yr in one-off expenses. Sure you save money but it doesn’t FEEL like it. That and the burbs are too far apart.

          10. Tyler Hayes

            Completely agree that that’s how most people are. But I can tell you that at least one, me, is conscious enough of that to actually operate the opposite way. And so it makes me curious about and open to more people becoming this way as well.

        2. fredwilson

          true, but there is a shift toward urban living going on. i think the prediction is that 2/3 of the inhabitants of earth will live in cities by the end of this century

          1. awaldstein

            If you know where that data is, i’m interested.

          2. LE

            Forgetting the data I’d love to know the model.I mean making some prediction as far as “end of the century” what does that mean anyway?Land is land. No more in Manhattan or Philly SF etc.While there are I’m sure examples worldwide where this has happened (new cities) one that comes to mind is Orlando which got built up after Disney came to town. (Or anaheim). But even in Orlando you still need a car. So that doesn’t even count.Also there is a direct tie in with where people will live once they have kids and where they will live when they don’t have kids (or the kids are grown up). You are well aware of in the race to get into the best schools in NYC the same is the case in the suburbs. You choose where you live based on the school district and how it rates.Anything can change of course so I’d love to know the assumptions.Look the saying “you can name the price if I can name the terms” perhaps applies here.Hundreds of years ago it probably would have been laughable for rich people to want to have a tan because being lilly white was what the typical high class person had vs. a worker, right? So who could predict that beach front property would be valuable? And in the 70’s I can assure you that the vast majority of people did not predict bankrupt NYC real estate would be valuable one day (my father included much to my dismay).

          3. george

            If the rest of the country was populated at the density of Brooklyn, the entire U.S. population would fit in New Hampshire. You could give every man, woman and child in the U.S. 0.25 acres of land and it would only fill up half of Texas. Lack of land is not a real problem in the U.S..

          4. LE

            Lack of land in existing cities. You just can’t build cities and expect people will live their. Cities have already expanded. That’s what suburbia and metro areas are.

          5. george

            Population density. It allows you to walk to Apple store, Panera and all your other boring suburban tropes.

          6. AgeOfSophizm

            you can build upward though. false scarcity abounds in cities. controlled by the government mafia.

          7. ShanaC

            upward has architectural and social issuesx

          8. AgeOfSophizm

            If you raise a 4 story warehouse and build 40 stories, what are the architectural issues? Curious as to the social issues you are referencing?

          9. ShanaC

            if you have people live there: large buildings tend to be un-neighbor/random person bumping into forming. In theory you could build the building around this issue (mixed used throughout a skyscraper) – in practice no one does which is why wall st can feel like a ghost town even though people live there

          10. george

            Sorry if I’m being too literal but aren’t large buildings, by definition, more likely to produce random interaction than small buildings? Replace building with city if it helps.Ngs

          11. ShanaC

            Nope – turns out one of the things Jane Jacobs is right about is that you need to have some things at human scale for people to interact with. Ginourmous buildings aren’t. (though if we treated each as a large neighborhood contained in itself, it might)

          12. Pete Griffiths

            That’s kind of true. We have a relatively low population density. But it is perhaps worth pointing out that land is used for more than just living on. Some is fundamentally inhospitable and lots is needed for agriculture.

          13. Matt A. Myers

            Example, “Russia considers biggest population redistribution since Stalin” –

          14. Pete Griffiths

            Great article. Thanks for the link.

          15. falicon

            I’ve heard this stat or a version of it in various documentaries as well…the logic/reason is basically that it’s where the work is (in or near the cities) as we continue to shift to a dominate ‘information’ society. China is prob. the best place to see this happening en mass right now…most of the kids are moving off the farms and into the cities/suburbs to try and make their way (and provide for their families that remain back on the farms)…

          16. Pete Griffiths

            China is actually urbanizing much more slowly than a lot of other countries have done due to explicit state policy. You can’t just move to the city. You need papers without which you are technically an ‘illegal.’ The leadership is acutely aware of the problems that many developing economies ran into with unchecked migration to the cities.

          17. awaldstein

            Sounds like a movie that has played many times before.I believe the stat. I’m wondering then what is different today then when this happened in other places in other times as truly, times and culture have changed.

          18. Matt A. Myers

            The internet exists and we’re getting good at harnessing it – overall connectivity increased compared to past.

          19. Dave W Baldwin

            Fred referred to end of century. All production will have changed so much from interface to tool to sustenance that using the rules of herding population to where industry is will not apply.

          20. Sean Weinstock

            A good source:…Main points: Cities classified as areas with 100k – 500k in population. Megacities = 10m+. 50%+ currently live in urban areas (cities all the way up through megacities). 10% live in megacities.By 2030, expecting 6/10 people on earth to live in city+. By 2050, 7/10.Most of the growth expected to come in newer urban areas in developing countries. Africa and Asia especially.In high-income (not sure on the definition, but likely including the US and Europe) countries, urban growth is expected to come from immigration, not so much reallocation of current populations. And it’s expected to be much slower than in developing countries – from 920m today to just over 1b in 2025 (<1%/year compared with 1.5%+ in developing countries).

          21. awaldstein

            Thank you!

          22. jason wright

            there has been a move toward urban living, which continues, but the web and ubiquitous connectivity could halt it in time, and possibly even reverse it.

          23. Matt A. Myers

            This exactly. It’s cheaper to live in cities.City design is extremely important too, of course. An area of interest of mine, too, along with everything else wellness-health-related and that influences health..

          24. MikeSchinkel

            “It’s cheaper to live in cities.”You obviously are not considering the cost to rent or own city dwellings…

          25. Matt A. Myers

            If economies of scale are applied properly and you’re not having costs being inflated for higher than necessary profits, then it is cheaper. There is benefit to being closer to others, at least when in a productive-hyperconnectivity state, although a lot of the time currently in society (and I see this changing) those benefit gains are removed by for-profit driven systems. Once new viable systems and structures and processes are learned and integrated into societies then the gains will be substantial.

          26. MikeSchinkel

            In a perfect world, yes, it would be cheaper. But we don’t live in a perfect world and in cities especially there are always those in a position of ownership and/or power to take advantage of the laws of limited supply.

          27. Matt A. Myers

            We can change that – it just takes time, awareness building / education.

          28. MikeSchinkel

            Sweeping cultural change is always theoretically possible. Actually making it happen, therein lies the rub.

          29. Matt A. Myers


          30. Matt A. Myers

            It may look like sweeping change – though there’s always going to be a lot of work done prior to the tipping point being reached.

          31. ShanaC

            i’m not finding it cheaper – I find my costs are shifted and I earn more than I would doing the same job elsewhere

          32. Matt A. Myers

            There are reasons it’s not cheaper yet, where you’re not gaining the benefit – others are taking it from you. Old profit-driven systems that need to change. We have the organizational and crowd-creation capabilities these days for them to change.

          33. MikeSchinkel

            Interesting. I wonder if that will be true. There are many people whose personal identities and value systems are “anti-city”; I really wonder if new generations can change that.

          34. todd

            Yes, those many people are colloquially referred to as Republicans, losers of 5 of the last 6 popular vote counts for U.S. president.the chickens have come home to roost and old generations are being blind sided. god bless america!

          35. MikeSchinkel

            Todd: Aside from your explicitly naming them, it would be interesting to know what your actual point is.

          36. todd

            Likewise, it would be interesting to know what your actual point was.

          37. Dave W Baldwin

            Don’t know. The Singularity will have happened and the home, neighborhood, work, transportation will be so different from what people think of currently.I know that means the densely populated areas will be nicer from the standpoint of those that like a little bit of the organic, but there will not be the same need to house however many thousands for the factory since that will be totally different via the nano and thinking machine perspective.

          38. Pete Griffiths

            We’ll be lucky if we get to the end of the century. The projected global population is currently 11bn with population growth exploding faster than previous estimates.

          39. pointsnfigures

            It is happening-but one thing that could keep people in the suburbs is the violence from gangs etc in the cities.

          40. kidmercury


        3. Matt A. Myers

          Economic activity, based on current methods of measuring would drop. Methods like GPI / CIW that take into account qualitative values (not just per dollar spent) – meaning quality of life increases – will lead to more jobs, just in different areas – primarily health services, servicing others, learning, food systems, etc..We don’t need people over-producing in manufacturing – that is wasteful, and costly.

        4. ShanaC

          do you think density in suburbs will go up as gas prices (and therefore, car sharing) goes up

      2. Richard

        Correlation / Causation continues to confuse

        1. Matt A. Myers

          In what sense?Correlation could actually be causation though only for a more narrow context of what’s being looked at – however scientific integrity doesn’t allow for that view. It’s similar to having a ‘hunch’ on what a leading metric is. In science though they want you to be able to define very specific controls – however in reality there are thousands of controls that would matter, yet that’s impossible to track or even accurately. Patterns however do show themselves, even if many of the variables that lead to instances being included in a pattern are somewhat different. Once you know the pattern though you can use a Venn diagram type idea to see what the similarities are between situations.

    2. ShanaC

      ha. what if ownership turns out to be too culturally important?

  5. Avi Deitcher

    Definition of asset (from Investopedia): “A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.”The more assets are shared (i.e. used), the less downtime, the greater the “future benefit” from those same assets, the higher the value of those assets, hence better ROA and ROCE.

  6. Jorge M. Torres

    Businesses operating in the sharing economy are disrupting entrenched laws and regulations that made sense at one time but now seem to protect the narrow interests of various groups. Airbnb has had to deal with occupancy laws (hotel operators), Uber, Hailo, Lyft, Sidecar have had to deal with the TLC (medallion owners), and the lending startups have to deal with consumer finance protection and the retail lending regulations (banks). I think these startups are as interesting because of the way they’re forcing the regulatory environment to change as they are for the ways they are changing consumer behavior and making money.

    1. Avi Deitcher

      Jorge, *all* laws and regulations that seem to make sense at the time they are adopted, are adopted, at least partially, to protect the narrow interests of various groups. They may also have a benefit to society, or they may only support interests of narrow groups. But they are always adopted at the behest of and in the interest of narrow groups who wish to protect their interests. The only question is if the possible societal benefit remains over time or disappears as well.

      1. Jorge M. Torres

        Really, *all* laws? Whether or not what you said is true, my point was about the startups I named, not the nature of law or regulation itself. Most companies are happy to just disrupt a particular industry or displace an incumbent. The startups I named are doing that and reshaping regulatory regimes in the process. That makes them super interesting to me.

        1. Avi Deitcher

          Yes, all. Sometimes, “what’s good for General Motors is good for America,” sometimes it isn’t.My point, though, is that it is far easier to disrupt TV manufacturers or database vendors, where regulation is light to non-existent, than regulated industries, since the regulations are there (to some extent) to protect incumbents against competition.

        2. kidmercury

          i think it remains to be seen whether they are reshaping the regulatory environment or if the regulatory environment is reshaping them to be just like the incumbents they are trying to disrupt.

  7. William Mougayar

    There’s nothing stopping the sharing and peer-to-peer economy train.Interesting this was a theme of Alvin & Heidi Toffler’s book in 2006, Revolutionary Wealth, where they called “The Collapse of Hierarchy”, and “The Superabundance of Selves”. Put these 2 trends together, and you’ve got the perfect storm for economic renewal.

    1. pointsnfigures

      Government regulation could derail it. or criminalize it.

      1. John Rhoads

        And general attitudes … In Europe the population is much more dense than the US.I think Americans are less willing, on the whole, than other cultures to explore sharing physical assets.I can imagine other cultures (east Asia, developing Africa) where this really could take root and oust traditional ownership models though.

  8. Richard

    The sharing economy increases the numerator and lowers the denominator of all the important productivity ratios. Productivity is the secret sauce of prosperity. Believe in Innovation.

    1. Avi Deitcher

      The Bible (in Hebrew) starts with the second letter of the alphabet (Bet / Beta, hence the term “alphabet”). Lots of ink spilled over why it doesn’t start with the first one, “Alef” / Alpha. My take? Total Factor Productivity:y = A * ka * LbA = productivity. It is the single reason standard of living has increased so rapidly for the last two hundred years.God’s work started at the second letter. But fixing the world? That’s man’s work. That is our job. That starts at “A”.

      1. life of pi

        Huh? Don’t know what the fuck you’re saying, but hopefully you’ve seen all of Darren Aronofsky’s greatest hits.

        1. ShanaC

          old jewish folk stuff

      2. ShanaC

        ah, a new spin on gematria

    2. fredwilson

      that’s my view as well

    3. MikeSchinkel

      Nice analysis.

    4. mmflint

      Except since the 70s in the U.S., where productivity has increased but real wages for all but essentially the top 1/10 of the 1 percent has remained the same. It is a good slogan though.

    5. Jason Fiedler

      Would love to explore the economics behind this further…

  9. aminTorres

    The problem with the aspect of sharing is people’s attitude and position: “Why pay for something when I can get it for free?” Sharing may be just be too broad of a concept (or perhaps too narrow?) but what has made these companies successful is that they operate in-between established spaces, meaning, they start fulfilling a need that is not there with assets and systems that _are_ there.An in-between from renters and hotels: Airbnb.An in-between from banks and borrowers: Lending Club.An then they grow and become providers of original services and experiences.The citibikes project – whether one agrees to be successful or not – the reason people are using them and signing up is because it provides an in-between, between, walking and taking a cab.So sharing if done the right way, and in an in-between, between established spaces. (I know that sounded awkward) … were people already know how a system works, renting, borrowing, transportation, I think is fertile grounds for new markets.Two things need to be in place however. A craving from people for an alternative and the assets to be shared, extra cash, spare rooms to enable the in-between.

    1. Richard

      Yep, we are smoothing the supply curve from discrete to a continuous supply.

  10. takingpitches

    Labor needs to think of itself as capital in this world.Former taxi drivers own their vehicles or a fleet. Hotel workers own places to rent out.Perhaps a crowdfunding business that makes money and does good in providing the capital for displaced workers to transition to the sharing economy!

    1. LE

      “Hotel workers own places to rent out.”How do you figure that is going to happen exactly? Specifics and circumstances?What makes a particular individual hotel worker able to do any more than rent out their own place? I’m thinking of the various people that work in hotels and I’m not seeing the various participants being any more qualified for individual room renting. And if you are talking about a group of hotel workers getting together what group would that be? If I’m a general manager of a hotel and I want to put together a deal to manage a hotel why would I cut the maids into the action when I can just hire them?I’ll tell you something. When I started my first business (out of college in something I knew nothing about) my fear was that the people working for me would go off and compete with me. The vast majority already had experience in the industry and I thought if it was so easy for me they were surely going to go off and do the same.But they didn’t. With the exception of 1 guy who did after I sold the business and 1 girl who simply went on her own and did graphic design and perhaps 1 other person a similar thing happened iirc.Most people aren’t capable, motivated, intelligent, confident (or stupid) enough to go out on their own and take chances which is why it doesn’t happen most of the time.If you are the type of person who is always encouraging and offering to help people go out on their own (I am) and you see how they don’t want to do that (even if they are out of work and/or they have the money) you will see what I mean. A total lead a horse to water type thing.

    2. fredwilson


  11. Simon Edhouse

    The ‘sharing economy’ could get a lot more disruptive and powerful if serious internet investment moved away from web-centric SAAS models and more toward processing collaborative filtering & collaboration at the locus of the user’s device rather than on servers, and sharing bandwidth & processing power for privacy protective user-powered services. That’s where the bleeding edge of this meme/trend really is. But its all too easy to just roll out another efficiency creating web service, nes pas?

  12. JLM

    .What everyone is calling the “sharing” economy is really the age old “excess capacity expiring worthless” economy.When assets sit idle and their value is lost by a failure to use them this excess capacity is an investment opportunity.This is true whether the excess capacity is “accidental” or “purposeful” — excess capacity is available to be bartered or otherwise tapped into by others.Excess capacity can be accidental — renting out your resort real estate when you do not use it yourself.Excess capacity can be purposeful — stationing a supply of bikes or cars in places where folks can use them thereby delivering point targeted purposeful excess capacity.The professional use of barter was first triggered by such excess capacity and it continues to drive potentially huge industries.A great example of such a powerful industry is the creation of resort property communities which are simply fractional ownership on steroids and highly transportable.An artificial currency is used to allow one to contribute a property in Steamboat Springs and to use that currency to occupy a property in Key West.In both instances, the owner of the property was bartering excess capacity.The principle is huge and its application will be as broad as the collective imagination of the entrepreneurial class.Not to get too weird on you — I do live in Austin where weird is an art form — aren’t we all bartering our excess intellectual capacity to share ideas here on And you thought we were just talking. Hell, you’re that good.JLM.

    1. Richard

      It much more than utilizing excess capacity….manufacturing bicycles for the purpose of creating a rental company is creating new output and additional wealth. We are discretizing capacity and shifting the demand and supply curves.

      1. JLM

        .That’s the purposeful creation of excess capacity of which I wrote. Every rental company is simply a font of excess capacity available for rent.JLM.

        1. pointsnfigures

          capital convenience. why do I want to buy a chain saw when I need to use it once?

          1. JLM

            .There are some things that a guy has to own even if they are used sparingly. Guy things.A P-38 pistol. A Sako hunting rifle with a Zeiss scope. A Husqvarna Rancher chain saw. An old classic convertible. A K bar knife. A 4000 psi power washer.Better yet, know someone who owns a Husky and will let you use it.JLM.

    2. William Mougayar

      It’s more than sharing excess. It’s making it available, visible, distributed, transactional. And it’s enabling new services that didn’t exist before.But I agree that it’s rooted in the “sharing” part, e.g. Condos/Vacation properties Time Shares have been around for a while.

      1. JLM

        .I think that everything you describe is subsumed and has been subsumed in the sharing of excess capacity going back to the days when barter was thought of as a tax efficient way to conduct business.The tax laws caught up quickly.It is also the “purposeful” excess capacity that I wrote of wherein folks create the excess capacity to be used in exactly the manner you describe.The big idea is the sharing of luxurious and discretionary things. Folks who are exchanging multi-million dollar properties through a virtual currency are tapping into an entirely different vein than swapping a week here for a week there.The virtual currency is the first application of the monetizing of excess capacity and the swapping of that virtual currency is the second step in monetizing it — spending it.One element is the creation and the second element is the spending.JLM.

        1. William Mougayar

          Sharing/Renting luxury items is a good trend, like Le Tote which GG wrote about

          1. LE

            I really like the letote idea.I made a comment on gg blog as to why the founders didn’t have an “about us” page showing who they were. [1] GG said she didn’t know why and that they were a great team etc.I guess because Joanne invested and wrote about them, and because they were an idea for women, I assumed the founders were two cute young girls in their 20’s or 30’s and I thought why wouldn’t you say that then? My mistake.So I looked further into letote and it turns out that the founders are two guys and that doesn’t really make the story better (especially when you see that Brett isn’t exactly hipster David Karp but has a financial background):…So it makes perfect sense now why they aren’t putting up the about us page with info on them (I think that’s a good move).[1] Chalk this one up to “if something doesn’t make sense there is probably something you don’t know about it” (which is why research is so key..)

          2. William Mougayar

            Yup, they’ll need to up their marketing, but they are probably barely keeping-up with their growth possibly. Typical of a startup that mistakes growth with success and ignores how to capitalize on that growth, via marketing, etc…”Short term owning” is a market of itself. My friend Daniel Nissanoff wrote a book n 2006 called Future Shop (I helped him a tiny bit), and he described that exact same thing. You can take it further and extend it to other products like smartphone for example. Forget the stupid contracts. What if you’re able to trade on a peer-to-peer basis your old phone and get a new one every year without paying full price each time. And doing so without the vagueries of Craigslist.

          3. LE

            “What if you’re able to trade on a peer-to-peer basis your old phone”Middlemen insure the worthiness of the goods and provide a level of “insurance” spread among many participants.. If you are dealing with a random person on your own, unless that person has been vetted, you could end up with something where the buyer and seller don’t agree that the condition is what they say it is. Same thing with two different opinions leading to a bad outcome.You see this on ebay where people sell things and are all hyper in describing that the monitor they are selling has a single scratch pointing that out so nobody jumps on them and says they didn’t fully disclose. One of the reasons I don’t bother to sell much on ebay. Of course not an issue for volume sellers statistically since the random nut case doesn’t change their rating or costs.By the way all of this rating and disclosure drives up the cost of goods for smaller type sellers because the squeaky wheel are the 1% outliers that make trouble for merchants, restaurants and resorts that add cost and make them cater to people’s differing perceptions of perfection.

          4. William Mougayar

            If there was an exchange that you could trust, then that’s a different ball game. I’ve never bought or sold a single item on eBay either. It’s too chaotic for me. It’s tough to clearly see the good from the bad. Contrast with Amazon where you know what to expect.

          5. ShanaC

            i’m in the target demo – I didn’t like it. I felt the clothing wa too on trend in a sorority girl go e graduated into business sort of way. No quirks in the system that actually equalled real style.I Wouldn’t want most things shipped to me

      2. Girish Mehta

        Maybe a good descriptor would be “The Access Economy” rather than “The Sharing Economy” ? That includes sharing..

    3. LE

      A great example of such a powerful industry is the creation of resort property communities which are simply fractional ownership on steroids and highly transportable.I’m a believer that the way timesharing is sold (the hard sell) is prima facie evidence that something is, in general, rotten in Denmark for the vast majority of people who are sucked into buying a time share that is. And without those people being sucked into something that they shouldn’t be doing timeshare resorts couldn’t exist. (We can call this a cousin of my “only as honest as your competitors” theory I will have to come up with a name for it.)I’ve never sat through a time share presentation (have been offered free things all the time to do so) and the only reason I would ever do so is to learn the various “compliance” techniques that they use to suck people in.(By the way I’m all ears from anyone who wants to tell me that my snap judgement on this is wrong and why.)

    4. fredwilson

      correct. but the four factors i outlined at the start of this post make this phenomenon way more possible and powerful

      1. JLM

        .Old wine, new bottles. Better bottles.I agree more with you than you do with yourself.JLM.

  13. jason wright

    are we talking about collaborative consumption, or is sharing economy a macro dynamic?

    1. fredwilson

      it’s all the same thing in my mind

  14. LIAD

    heard commercials on UK radio this week from a car leasing company looking for investors to pay for the cars they would then lease out to customers. offering 8%-10% p.a

    1. JLM

      .The separation of service and capital is the hallmark of a more sophisticated economic embrace of an idea.JLM.

  15. PhilipSugar

    I think of it as the frictionless economy.As everybody has pointed out that you aren’t sharing.This to me is the biggest transformational concept of the Smart Phone.The internet was going to make things frictionless. I.e. if I know everything, brokers are obsolete. If I know all of the excess capacity out there then I can buy it from the owner at a low price.That was true except you didn’t have it with you all of the time. Now you do.However, I think the concept of making money by setting up these transactions is going to be tough as margins will drive to zero. Short term yes. But long term it is those that own the assets that will make the most money.

    1. LE

      The internet was going to make things frictionless. I.e. if I know everything, brokers are obsolete. If I know all of the excess capacity out there then I can buy it from the owner at a low price.As I have pointed out before I am generally in the camp of the middleman having value in the equation.Right now I am pricing a backup generator for my house. I’m glad that someone came out and sized everything up and I’m quite willing to pay them money to put together the whole thing and install so I don’t have to do as much legwork. Of course I could easily now research this (and I’m good at this) on the internet and instantly find the best pricing and do the whole thing but there is a value to me paying someone else to do this for me.Buying direct from the source requires taking all the available sources and figuring out who to buy from. While there are ways to do this now (say ratings on Amazon) there are also cases where the system breaks down (app store at apple) and there is so much information that it becomes useless you get paralysis.Younger people of course have more time on their hands and less money and older people also have more time on their hands (and more or less money) so it makes sense that they would embrace this more than people in the middle.

      1. PhilipSugar

        My definition of a “middleman” is somebody that provides no value.The person you describe provides a TON of value.No different than Avis that has a car at the airport when I want how I want for damn sure.That is what people forget. What is the value I get for what I deliver. If you deliver no value you are going away. If you deliver a ton of value, you will make a ton of money. That is why income disparity has happened.

    2. awaldstein

      All true.Technology aside (which is a nonsensical statement) there is no way that any of the solutions would have been possible 20 years ago.Culture itself has evolved. Letting strangers in your house. Taking responsibility for cleaning your own rental car in a world where we threw garbage on the street and didn’t pick up after our dogs–just not possible.

      1. MikeSchinkel

        Agreed. Just yesterday I was talking to a friend about how much we collectively as a society have evolved over the past 20 years. Specifically we were discussing downtown Atlanta and how it’s now a great place to live but because of urban blight it was a scary place 20 years ago. I think that has a lot to do with a lot more enlightened municipal planning compared with in the past.

        1. awaldstein

          I think about this a lot and blog on this a bit.I’m really a market side, behavioral marketer and the changes in consumer and peoples behavior as we connected to the web is something that intrigues me.

  16. Yishai

    When I try to fit this element into our humble 3 Sharing-Economy Must-Have’s of human protocol, infrastructure, and incentives (a-la “Shtetl” Sharing Economy, I come to realize that these three are indeed Must-Have’s for sharing economy networks to succeed, while this fourth element is merely a “bonus points” externality and is not mandatory for a network to succeed.However, I’d like to challenge the assumption we’re making here, that sharing economy networks must be vertical (and therefore must employ a specific underlying asset: cars, apartments, etc.)Just like Facebook beat all other vertical social networks, I think there’s room for a the Facebook or eBay of Asset Sharing to emerge, since the underlying human needs are the same.

    1. fredwilson

      trust may be something that is easier to establish in verticalsand facebook did not run the table in socialwe made huge gains in non-facebook social platformsand facebook itself is faltering but instagram is holding it up, which was and still is a different social network

      1. Yishai

        Re: Trust, it may be *easier* to establish in verticals but better ways to generate trust have been overlooked. Feels like there’s a huge opportunity in leveraging the social graph for generating trust in sharing economy networks. Would you agree?

      2. kidmercury

        people made huge gains on making huge gains is not necessarily indicative of a valid product/market fit.facebook’s profits are still growing.

        1. fredwilson

          True. But I don’t think any of the large social platforms we invested in can be compared to

          1. kidmercury

            i suppose i have a rather binary view:1. stuff that generates profits and users2. everything elsemost stuff falls into #2., many small businesses that don’t get bubble-ized, acqui-hires, etc.

  17. andrewparker

    I went to LA on Friday. I took a taxi from the airport to Santa Monica. Fare was $54 with tip. It was a fast, fine ride with reasonable service. The driver and I did not talk at all, but it was relaxing and easy.I took a Lyft from Santa Monica back to the airport. Fare was $39 with tip. It was a slow trip in heavy traffic. My driver was a total character. I self-identify as a geek… and this guy was geekier than me. We talked about Magic: The Gathering, thrift store shopping, Moog synthesizers. He had a good, dry sense of humor. I walked out of the car delighted to have met such an interesting character, but more tired than when I had entered because keeping with this the conversation for an hour after a day full of meetings can be tiring.Oh, and my driver had removed his pink mustache. He said it was because they ran out, but after reading this NYT article, it seems likely he removed it to stay under the police radar.In the end, each of these things are very different from one-another. I would not describe one experience as “better.” My Lyft was cheaper, but I think that’s because I didn’t start my journey during their peak “surge pricing” hours. Had I started an hour later, I think it might have been the same price (or more) than a cab.

    1. William Mougayar

      True as you thought of it from your perspective. But if you look at it from the Lyft driver’s perspective, you helped his income, and that’s the significant novelty here.

      1. andrewparker

        He seemed much more into the Lyft “mission” than the cash. Spent a bunch of time talking about how Lyft is going to change the world. But I’m sure he actually likes the cash too.

        1. William Mougayar

          Multiply that by all the others like him, and we’ve got a significant thing going on.

    2. fredwilson

      i totally agree Andrew. i think Uber, Hailo, Lyft, and Sidecar (which is even more of a peer network than Lyft) all have a place in the market and offer different things

    3. JamesHRH

      There is another major asset class coming- shared assets sercices.When we left Calgary, we sold a vehicle 2 months before leaving & joined Car2Go: .For 80% of our needs, it worked. It is likely that the future is using a portfolio of assets classes & services.

  18. Matt A. Myers

    “I think in time investors will move their capital into the assets that power the sharing economy as well. “This. People don’t realize how quickly the world will start to become a much better place for everyone.The next step, which can go in parallel, is teaching everyone – facilitating their learning – on how to be compassionate, tolerant, understanding – meanwhile teaching them how to take care of themselves.

  19. andyswan

    All free economies are sharing economies. Isn’t Saudi Arabia “sharing” its excess oil with the world? Isn’t Amazon sharing its servers with EC2?This is what happens naturally. It’s beautiful. It’s exactly why central planning and State-run economies of “forced sharing” fail so gloriously.Another exciting phase of the same old story of wealth creation.

    1. tony

      There’s never been a bigger centrally-planned, state-run economy in world history as the U.S. military. And as you imply, it constantly fails gloriously. You’re on to something here.

    2. kidmercury

      i wanted to us reply with the hashtag #truth, but i already did that elsewhere in this thread, so disqus is telling me i’m putting in a duplicate message. so now i had to type this longer message.

  20. BillMcNeely

    If it were not for the sharing economy I could not afford to travel to Washington DC this week for TechStars Patriot Boot Camp. I booked someone’s couch in an upscale apartment in Arlington, VA originally for $132 for 4 days. When I told the person the purpose of my trip, turned out they were in the tech scene and they cut the price to $67 FOR THE COMPLETE 4 DAY STAY. If I had to book a hotel I am probably looking at a minimum of $179 a night for a total of $716 for the 4 day stay. I saved $649. In my world that’s two month’s of car payments.

    1. fredwilson


      1. LE

        “TechStars Patriot Boot Camp. I booked someone’s couch”Question is why isn’t the boot camp facilitating this instead of serendipity? From what I can tell not even a hotel negotiated rate and they could also line up the airbnb’s in advance (so what Bill was able to receive was available to many people). Although I am a big supporter of the initiative that Bill took (it’s a differentiator since things in life are never on a silver platter and you might as well learn that early on “the early bird worm”) why weren’t details like this thought out especially for this target group?

        1. Matt A. Myers

          Because no one’s built a “whitelabel” version yet, which will compete and probably beat out AirBnb; AirBnb won’t likely want to do this and “share” and dilute their revenues.

          1. BillMcNeely

            To get to the event I crowdfunded $790 A large majority of this came from SendGrid via Tim Falls and Brandon West. So thanks goes out to them for supporting this veteran event!I am just glad I am getting the opportunity to go to this event and get my foot in the tech community. No complaints on my part. In typical small unit leader fashion I will make the rest happen :

          2. markslater

            some one will build the kayak of sharing services – aggregate these apps…

          3. Matt A. Myers

            It’ll be interesting to see if this can happen anytime soon.

  21. MikeSchinkel

    In that case would be really be “The Sharing Economy” or would it not instead be “The Rental Economy?” :)BTW, it will be interesting to see how this negatively affects incumbent industries and potentially depresses GDP in much the same way that Amazon selling used-books was able to depress sales of new books (I’m assuming that is what happened, I don’t know for fact.)Not that I think this is a bad thing per se, just that there will be winners and there will be losers and neither the unintended consequences nor any potential upheaval in the economy, government and/or social order can yet be known.

    1. Matt A. Myers

      Money is bartering. You’re sharing, indirectly, but it’s still sharing IMHO.I think there is a large fear of sharing directly – at least if not utilizing our own brain pathways for using money.The value that comes with ‘sharing more’ is the lower cost per use. Everyone doesn’t need to own a lawn mower – though it needs to be stored somewhere, and people would have to be better at planning and more comfortable with it – deciding when something will be done – to be more comfortable to know when you’ll want to use a lawn mower. Or there could be a service that just stores and delivers / picks up the lawn mower when you’re needing / wanting it. Similarly with shovels, you don’t need to have a snow shovel at your place during the summer, so it wouldn’t need to take up room. You of course need a place to store these items, however in my mind it would be much better space use – and better for removing mental clutter and physical clutter at your home, etc..Sharing costs of roads where ‘everyone’ benefits is easier for people to consume, especially since it comes from taxes that we’re all used to paying for. Systems could potentially be government run for necessities such as lawn mowers or snow shovels, however the manufacturers wouldn’t like this because they’d sell less lawn mowers and shovels – which the point would be to make those freed up profits / monies be able to go somewhere else to benefit the individual and society even further.Another issue is people like to illusion of choice – really to feel like they have control over what they buy and use – and for entertainment and distraction value. However you can get entertainment and distraction in so many other ways in life – or not need it at all if your life is fulfilled in other ways, by the people in your life, what work you’re doing in life, etc..

      1. MikeSchinkel

        Sharing on a broad scale is egalitarian in nature. That’s not what this is, it is what many others here are saying; the redeployment for income of previously non-income producing assets. In general I think it’s a great thing but that doesn’t mean it won’t have a dark underbelly.

        1. Matt A. Myers

          It would or could mimic egalitarianism if income distribution with a minimum livable income existed for everyone – where everyone would have the ‘funds’ or credit to use / purchase some ride-sharing; Not saying that this is necessarily the solution that would be best to implement.

          1. MikeSchinkel

            But “minimum livable income” does not exist, especially not in the USA where it is political anathema.

          2. Matt A. Myers

            It will likely move to that within 50 years. It makes for a much more vibrant and robust society. There was a study done in Canada where a town was given a livable wage. That data was only released more recently though – there should be some interesting in-depth insights from it in the next short while though.Edit: The study was called MinCome

          3. MikeSchinkel

            It might happen in Canada, but I doubt it can happen in the USA in my lifetime. Not that I wouldn’t support a reasonable proposal of that nature, but too many Americans have read Atlas Shrugged and think it’s based on fact.

    2. JLM

      .Love your observation about Amazon and used books. A very interesting comment indeed.I wonder if the unlocking of the equity stored in used books balances the impact on book sales?JLM.

      1. MikeSchinkel

        Being able to resell items certainly modifies the initial cost analysis and I think ultimately creates more total value/unit cost; I just sold a MacBook Pro and an iMac on eBay for pretty much exactly what my new Mac Mini cost, configured as I wanted it, that is.But I’m sure this additional economic life of items can also depress initial demand and thus make previously precarious business models no longer valid.Speaking of which, has anyone here seen Sugru before? I just ordered some; seems like it’s going to be the next “miracle product” like duct tape and JB Weld.

        1. LE

          “I’m sure this additional economic life of items can also depress initial demand”In once sense I could argue that the certainty increases demand.This is one of the strong points about leasing (a car say) to many people. I never lease but obviously it’s big. The reason is that not only does it lower your cash outlay but you have certainty (at the expense of a fixed lock in period and additional requirements as to condition and usage) as far as the end value.I look at it differently. I like to own, not lease (and not for example rent real estate) because I am not locked in by arbitrary time periods “must keep car 3 years must only drive x miles”. I like to do what I want when I want make changes and not have to rely on someone else. (To me the list is endless others might not care about the same things of course.)The leasing company is simply making a bet to the end price of the asset and also has an economy of scale in marketing. That said I don’t know exactly what that advantage is. Anyone who says “it pays to lease” is not looking at a) other factors and b) what “it pays” means. Could be $30 cheaper per month would still qualify for “it pays” to an accountant.

          1. MikeSchinkel

            Leasing is not an appropriate analogy here. Leasing is an innovation in financing, not in market participation. The same companies that benefitted from sales simply made more sales when they started leasing, and if they opened a leasing division they just captured more revenue. Used car sales had existed for decades before leasing emerged so sales of used leased cars did not change the market dynamics at that point.What this post is about is enabling new participants to enter the market and my comments were to say that it is possible we will see significant economic, political and/or social upheavals because of these changes.I’m not arguing against these innovations; on the contrary. I’m simply saying that with the good is likely to also come some bad and we’ll be better of in this brave new world if we are not blind to those facts.Here, read this to get a better understanding of the types of issues I’m referring to:-

    3. fredwilson

      yes, that seems to be the dominant point of this comment thread

      1. LE

        While sharing isn’t the perhaps the best word it is much better than “rental” as far as a word goes. “Sharing” is a baked in positive word. “Rental” really is way below on the emotional scale.

        1. MikeSchinkel

          I wasn’t going for brandability; that takes more time to hash out than the time I had to make the comment. Connotation notwithstanding, it’s not really “sharing”, its more like renting. I’ll leave it to others who have a dog in the hunt to coin the new term that has the positive spin. ๐Ÿ™‚



      1. John Rhoads

        I think the sharing economy is about of a shift towards services and away from core product sales. So less goods are bought, but that wouldn’t necessarily mean less money is exchanged.I’d agree with your observation as to it applying to cars in the US, but at a global scale I’m not sure I agree.In other parts of the world where capital costs prohibit access to a car and car services, decreasing the cost of access might actually provide access to markets that aren’t viable with the traditional ownership models.



    1. Techman

      Hopefully in the future all cars will have navigation systems that will prevent rashes because cars communicate with each other.

    2. fake leghorn foghorn

      If you’re a real entrepreneur you’d never be driving in rush hour.



    3. ShanaC

      it is like buses. There will be surpluses on hand for high demand periods, and you would have to share and carpool

  23. Statspotting

    This is just the bright side of the share economy, It is actually shaded in grey – we wrote an article about this some time back -…Here is the summary: Both from a regulatory standpoint and personal risk standpoint, the list of things you own that you can share, is full of grey areas. You can try to polish it up, call it unstoppable, and even make billions from it โ€“ but the undeniable fact is this: The โ€˜Share Economyโ€™ is actually shaded in grey.

  24. jseliger

    We are seeing lenders move their money from banks and bonds to peer lending markets like our portfolio companies Lending Club, Funding Circle, and AuxmoneyFundrise and Fundrise-style efforts are worth mentioning too, since they offer a new route to raising money for physical infrastructure. This is one good take on Fundrise itself.

  25. panterosa,

    As JLM pointed out, activating your vacation home, etc, and Charlie Crystle calls using excess capacity, or examples of car sharing.I have always called this animating “dead capital”. I was taught capital is supposed to work for a living, just like me. When its not working it’s sleeping, or worse dead. Waking it is another way of saying ‘make me a sandwich b*&^h’, but to your assets. Why should I work harder than they do?

    1. JLM

      .Haha, one of the best comments ever. EVERWell played x 1000.”Make me a sandwich, bitch.”JLM.

      1. panterosa,

        I expect your capital to make you lots of sandwiches!! Like Subway.

  26. ShanaC

    I think this sort of thing may pull cash accentally out of places that it shouldn’t, and cause an overvalue of certain item (especially real estate in urban areas to a point)See:…While this is a story about regulation, I’d like to remind you that larry lessig once said: “code is law” – and I could see any number of sharing economy services that have rental basises sucking value from a person and item.

  27. Pete Griffiths

    Very cool observation about self driving cars – thanks.

  28. howardlindzon

    Open crowdfunding will help this as eventually vanguard has 3-4 maybe 5 percent allocations to angel or early stage investing and this investng in shareable assets than grows fast as income comes to forefront.

  29. kidmercury

    the sharing economy is running headfirst into a battle with the nation-state system. this battle will need to be consciously addressed in order for the sharing economy to win. i highly doubt both the sharing economy and the nation-state system can peacefully co-exist, as they are both fighting for the same thing: the right to tax collective endeavors.

  30. Sean Hull

    Just noticed the topic “hacking finance”. I will follow this one more closely in the future. Very much agree. These types of busineses are all enabled by the internet, so it’s opened up a whole new realm of possibilities.

  31. Pascal-Emmanuel Gobry

    What this entails is interesting, which is the possible rise of financial intermediaries that power this new asset class. This looks like an interesting opportunity for a startup and/or fund: buy a bunch of self-driving cars/Airbnb apartments/etc. and then sell shares into their operations.

    1. ShanaC

      long time no see you Pascal-Emmanuel

      1. Pascal-Emmanuel Gobry

        Yeah I’ve been derelict in my duties around here since I stopped using RSS & checking in daily. Making a conscious effort to come back. I love this community.

    2. fredwilson


      1. Pascal-Emmanuel Gobry

        :)))Founder, Noosphere

    3. jimmystone

      agree. but i’d rather be the broker. that said, some exchanges will have to start owning assets in order to prove their biz model and may choose to continue doing so (ie rent the runway).

  32. laurie kalmanson

    maybe in the future, suburbs will go away. more urban; more mass transit; cars are occasional items for trips, moves; not everyday albatrosses slung around the necks of people who have to sit in them three hours a day to get to their jobs to pay for their cars

    1. fredwilson

      I have not but I should be!

      1. Gint Rudis

        I’ve noticed that the P2P economy is becoming more and more “infiltrated” by bigger, traditionally B2C or even B2B businesses. Best example being hedge funds making investments in loan portfolios on P2P lending sites like zopa. Good to see the “validation” from “legitimate” entities and the more sophisticated finance/capital markets-type people, but it makes me just a touch wary.

  33. Guest

    Sharing may work for cars, however I’m unconvinced about the idea of sharing what’s in my shed.Peerby won a prize in the green challenge last year, benefits from nice design, but is yet to see good uptake (in my opinion)Ecomodo benefits from fantastic design, I love their lending circles concept, they get constant and great press, yet after 3 years there are only 1900 items on their site, mostly in London.Werbach from Yirdle talks about how giving works and lending doesn’t in this video…It’s near the end, so you’ll have to skip through.The problem is that lending requires a person to find something stuffed in the shed, list it, then take on the management burden associated with lending it, often for no or little money. I don’t buy that model.What’s required are easier ways to get rid of stuff.

  34. StartupBook

    Interesting post — has anyone heard of the theory of the ‘locust economy?’ It basically says that humans are like hypernetworked locusts who ravage local resources (i.e. Groupon deals), and then cannibalize each other (i.e. Lyft, Airbnb, etc.) Sort of an interesting counterpoint to all the rosy ‘sharing economy’ talk.

  35. jimmystone

    Interested to see whether this can be applied to royalty assets. Bid/ask spread in oil and gas royalties is apt to be shrunk in my opinion.

  36. PhilipSugar

    But somebody has to buy them…..

  37. MikeSchinkel

    Agreed. But as I just mentioned in another comment, none of the examples Fred gave are actually “sharing” either. Wikipedia and GitHub are sharing, Airbnb, Lyft and Sidecar are not. (And I’m just stating the obvious.)

  38. andyswan

    That’s what this post was about too

  39. PhilipSugar

    I love the concept. But it always seems you get that “one guy” that abuses the hell out of the system.

  40. LE

    “In 1971, the two original owners sold their business to their employees and created a 100% worker owned business of which they remained a part.”A couple of west coast earthy crunchies decide to do this not representative of society in general.Worker owned businesses nothing new at a larger scale but I suspect the reason they haven’t taken off at a small scale is because it’s not a idea that can be done frequently for merely practical reasons. (Same with musical acts that generally don’t appear to have much staying power when they are more or less equal (you know more than I do so please correct me if you don’t agree).Gains in business (and society) are generally the result of greedy people who want for themselves and are motivated by power, control and making money. Not by mother teresa types who want for the betterment of others.If stuff like this worked by the way human nature works it would have become ubiquitous.Look my neighbor growing up was the head of a union. He had a really nice house and a brand new Mercedes (back when that was a big deal and was starting to replace Cadillac as the rich guy car of choice.) He cared about his workers but also saw it as a means to an end for himself.

  41. ShanaC

    sharing I take to be renting

  42. kidmercury

    same difference. i go to a restaurant and eat by myself. i share the cost of supporting the restaurant’s existence with other customers who went there. the sharing economy is nothing new. everything is old and boring.

  43. fredwilson

    I don’t mind getting old but i do mind getting boring

  44. kidmercury

    no need to give more than what’s needed! ๐Ÿ™‚