Tag Archives: calculus

Your “stuff” isn’t real. (Part 2 of Calculus of Collaboration)

6 Feb

This is the second part in a series called The Calculus of Collaboration. Check out Part 1

Sorry it took me so long to continue writing this piece! HT to Katie Carroll for calling me out and getting my fingers tip-tapping away. We’ve spent the last couple of months doing some exciting stuff that we’re almost ready to reveal. And ALL of it is based on our learning and a lot of the thinking underpinning this series. Namely, identifying the real power in a people-powered network.

And just to be unequivocally clear it isn’t the “stuff.” It’s you. And me. And our friends. And our neighbors. In fact from the perspective of a peer-to-peer system, particularly before it’s gotten big enough to declare “traction”, the “stuff” in the system isn’t inventory at all. It isn’t even real.

Male bovine excrement you say? Well, in the immortal words of Samuel L. Jackson in Pulp Fiction, “allow me to retort”

Look over here!

Startups, mature companies and even community driven initiatives who are focused on better putting to work the “stuff” around us tend to call that “stuff” by a particular name: inventory. Certainly we, ourselves have talked about the growing inventory in the SnapGoods community and the Access Economy as a whole. So have tons of other Collaborative Consumption founders. In fact thought leaders like Lisa Gansky, author of The Mesh and Rachel Botsman/Roo Rogers, co-authors of What’s Mine is Yours: The Rise of Collaborative Consumption have encouraged us to think creatively about the nearly limitless inventory on our shelves, in our garages, at our offices and everywhere else we have idling “stuff”. So why am I waxing poetic about the use of the word inventory? Because the word is actually misleading at this nascent stage in the evolution of this new kind of economy.

Merriam webster first defines inventory as:

“an itemized list of current assets: as (1) : a catalog of the property of an individual or estate (2) : a list of goods on hand

So in the most literal sense, inventory seems like a perfect word to describe how I should be thinking about the snowboard, food processor, longboard, and other gear I have listed on SnapGoods. Except the that I don’t manage that list, that inventory, the way a business does. When we think of transactions, we think of businesses and a  business thinks of inventory  or “stock” (also according to merriam webster) as

“a store or supply accumulated or available; especially : the inventory of goods of a merchant or manufacturer

And a business manages its inventory. And therein lies the rub. Even though I care about my neighbors and users, I don’t actively manage my inventory like a commercial asset. Any one of you could borrow my Droid, iPad, longboard and more, but when I went up to Stratton to go riding last weekend I didn’t update the status of my board as being used. Why? First off, because I need ginko biloba to help with my aged brain. Second, because I’m not managing my snowboard to maximize a profit outcome. It is NOT a commercial asset. It is not commercial inventory. What the picture of a snowboard in my SnapGoods account actually represents is a propensity or likelihood that I can help you out with snowboard stuff. It suggests domain knowledge. Why?

  • I probably own a snowboard  or have owned a snowboard even if the listing is old
  • I probably therefore have been snowboarding. Probably with real-live friends who have boards
  • Even if I don’t have that specific board anymore or am out-of-town with it, the very act of posting it suggests I have some leads for a person looking to go snowboarding.

This such a subtle but crucial distinction to make. A hotel manages its rooms the way a an airline manages its seats; to maximize profitability. This means constant updating and managing the tension between demand for a room and the status of that commercial asset. Reserved? Purchased? Empty? Full? In use? Users posting in peer-to-peer communities SOMETIMES generate enough income from the asset they share (a la airbnb’s inventory of homes) that users DO manage their assets like commercial inventory but that is the exception NOT the rule.

‘So what?’ you ask. Here’s the money shot: if we focus on “stuff”, we are waiting for a tipping point in inventory. We are waiting for critical mass of a bunch of people posting pictures of enough random stuff that the system makes sense from an inventory perspective. But who knows how long that takes in each local community? Instead, what if we focused on the most powerful assets of all: a person, their passion and their network. I may not have music or dj gear inventory posted in Los Angeles and I may live in Brooklyn, but I’ve got a crew out there. I can hook you up in LA even though I live in Brooklyn. How do we leverage THAT?

This is what we’ve been cooking up over at Knodes (pronounced “nodes” as in Knodes Knows) a system that understands who in your network can and will help with something. A system that creates more opportunities for collaboration and successful calls-to-action. People. Passion. Data. That’s the realest thing out there.

NEXT UP: Where’s the network effect for things?

If you want early access to the API, drop a note (developers@knod.es).

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The Calculus of Collaboration (Intro): What we didn’t tell you.

7 Nov

Our math was wrong.

As I once talked about in front of a crowd of smart ny tech and design folks, humans keep reproducing.  There are more people every day (what up 7 Billi??) and those people (that’d be you and me and us) produce more waste, manufacture and consume more durables and more rapidly diminish our dwindling resources. But you already knew that.

In fact here at SnapGoods HQ we’ve been tackling this challenge in a specific way. We’ve been making it easy and safe for people to rent the things they need from people nearby. You’ve got a scooter and aren’t using it. I need to run errands for the day, and I’d happily pay $50 for a scooter to speed things up. You make money, I make my life easier and a little bit funner (yup, funner). SnapGoods keeps everything safe. But you already knew that too.

At first glance it sounds like what we’ve built is a way to manage, track and transact around inventory. In fact it sounds like that should be our focus. That’s what we, like many of the other services in the P2P, collaborative consumption, access economy space thought when we started. Meh.

PLOT SPOILER: a focus on static supply (“inventory”) or demand is incomplete and pretty close to incorrect. We have to be more than the sum total of growing “inventory” (more on the air quotes in a second). We have to be more than matching and listing. It turns out the entire fate of the Access Economy rests on re-arranging the variables into the right equation.

If a system focuses solely on inventory, it optimizes for ‘1+1 equals 2’ math. However, when it prioritizes people, it changes the math. In actuality, 1+1 should equal 2000 or more. This is the promise of people and the calculus of collaboration.

In order for Collaborative Consumption to become a standard consumer option, systems like SnapGoods have to build around the true wealth of the system: not the supply (“inventory”) or demand but rather the people and the networks those people bring. Is Jim’s scooter as valuable to the SnapGoods community as Jim and his knowledge of where to find a scooter and what to do with it? Hint: people beat stuff every time…plus people are better for conversation. And beers.

Here are three big things worth re-thinking that we’ll explore: Inventory, Networks, People.

  1. Inventory – “Inventory” isn’t real in a peer-2-peer system. (in the way it is be for hotel rooms or rental cars. That explains the air quotes)

  2. Network – There is no such thing as network effect for inventory. (I.e. linear growth for inventory, not exponential)

  3. People – It’s always about people. Their lives, their passions, their data, their behavior, their problems, their solutions.

    Boom. I just amazed your mind. Do NOT miss the next installment.
NEXT UP: Inventory: Why the stuff in your house isn’t real…