Rant: A Deconstruction of “Sharing Economy”

Every time I hear or read something that uses the term “sharing economy” there’s this little tattle-tail voice in my head that says “actually, the sharing economy has little or nothing to do with sharing – bring your wallet.” While slightly annoying and sometimes counter productive, the voice does make a valuable distinction. There is a significant amount of juxtaposition going on that dilutes the clarity of meaning and intention behind the word “sharing.” Now, the noteworthy thing here is that the resulting confusion works in favor of the concept – meaning that your mind automatically opts (defaults really) for the simplest, truest, and most direct interpretation of the word “sharing” (granting temporary use of something to another who needs it).

But let’s be honest, that isn’t what is happening. Is there a burgeoning new economic model that is based on the childlike simplicity of granting others temporary use of our things – like the name implies? No. Of course not. We want them to pay us to use our stuff. Just like the unwitting and seemingly gullible rabbit in the commercial, this fundamental and “irresolvable inauthenticity” results in a fairly deep bias in me caused by the misdirection and subsequent unrealistic expectations set by the name.

I think it would help everyone (especially DMBA’s who are tasked with innumerable innovation challenges and strategic analysis that require us to get that the “beating heart” of this emergent phenomena) if we simply ditched the subterfuge of “sharing” in favor of something more direct and accurate. It would eliminate this underlying inauthenticity (for me) and make the not insignificant sustainable intent and market mechanics and value so much more transparent for everyone. That would be a good thing. From my perspective, when it comes to sustainability, we need to make the actual “working guts” – the innovative stuff that actually make products or services sustainable (or regenerative) — as simple, open, and transparent as possible.

To me, what gets at the core of what we’re talking about (and remember, I think sustainability is about efficacy and efficiency) is the idea of eliminating waste (e.g. C2C or waste as food). But to get at the truest and most direct, and most productive meaning, I think we need to use the word “surplus” rather than “sharing.” Surplus captures the unrealized potential upon which the entire economic misnomer of “sharing economy” rests. Again, if we’re honest, we’re not actually talking about sharing. We’re talking about leveraging an asset, and in most cases, leasing. So, consider surplus.

Let’s shift gears and look at the word “economy” for a minute. The notion of “economy” implies that there are lots of people who are innovating successfully (predominantly with internet-based technology) to discover and scale ingenious new market-driven solutions to leverage surplus value. Aside from lowering transactions costs and facilitating trust between potentially remote and unknown buyers and sellers, these new solutions enable a broad spectrum of distributed parties to monetize the surplus value (unrealized potential) contained within privately owned assets. Because the bulk of the assets’ value has already been covered (the risk and cost associated with the asset have already been assumed by the owner), there is a significant amount of flexibility in how the remaining surplus value can be leveraged.

Essentially, the surplus value can be liquidated at a price point that does not need to consider cost of goods or acquisition of the original asset. This flexibility enables a “pay for what you need” pricing structure that enables the surplus value to compete as a more cost effective and substitutes for commercially available assets. This dramatically impacts that cost/benefit trade-off assessment in the mind of consumers – do I buy (assume the risk and costs of the entire asset) or do I lease (assume dramatically lower risk and costs for the use of only a percentage of the asset)?

At the end of the day, if we are trying to be specific about what we say in order to provide clarity as design strategists, what we are actually talking about is “surplus innovation:” finding previously unavailable ways of connecting underutilized resources with unanswered need. The terms “sharing” and “economy” don’t really help us get to the core value that we are all driving at as innovators in the Anthropocene. They invoke the wrong meaning and send us down the wrong path. To me, surplus innovation points us in the direction of biomimicry, waste as food, symbiosis, sustainable business and a regenerative economy.

So the next time someone starts talking about “Uberizing” something, the next time someone wants to debate or discuss “disruption”, the next time you’re sitting around wondering where that “social venture” will come from that will enable you to change the world, I hope this post will provide you with a valuable reframe and more productive approach.

As always, if you have thoughts, please share them. I’m also always happy to connect in person and generate some creative friction around new perspectives and ideas related to this post.

“All is connected… no one thing can change by itself.”
– Paul Hawken

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