Sharing has been around since the beginning of time. If I trust you (i.e. you are a family member, friend or perhaps a neighbor) and I have something you need - say a hammer - chances are I will lend it to you. But over the last 10-15 years, several companies have discovered that sharing and trading can be scaled way beyond our closest circles of friends. What's more, these companies found that people are willing to pay good money to those who make sharing easier.
This relatively new trend is called collaborative consumption. It manifests itself as individuals renting their cars to perfect strangers through companies like RelayRides; hosting travelers in their spare bedroom through sites like Couchsurfing and Airbnb; and sharing skills and knowledge thanks to platforms such as P2PU, Skillshare and, of course, Wikipedia.
All of these companies have figured out how to create economies of scale by pooling unused or underused resources. As a result, they are able to deliver services at much cheaper prices than traditional car-rental companies, hotels, universities and encyclopedias. What is most impressive, however, is that these companies have convinced us that we can trust complete strangers.
How have they managed to manufacture trust? A partial answer lies in reputation systems governed by complex algorithms and peer-ratings. Rachel Botsman, a leading researcher on collaborative consumption, argues that we will soon enter an era when our online reputation will become more important than our credit score.
The question then becomes: who gets to decide how someone's reputation should be calculated? Today, the dominant model for platforms like Facebook or Klout is to equate reputation with influence, based on how many friends I have, or how often other users like or share information I post. What if instead, reputation scores took into account people's social/emotional intelligence and the overall value they contribute to their communities?
Several emerging organizations use crowd-sourcing principles to turn businesses into drivers of social good. They would be well-suited to build the parameters for a reputation system based on civic engagement. Take Carrotmob, for example. The San Francisco-based organization founded by Brent Schulkin organizes campaigns that harness the collective purchasing power of consumers to incentivize companies, big and small, to become more socially responsibile. Instead of boycotting businesses because of their poor social or environmental practices, Carrotmobbers reward them with mass purchases if they promise to use the money to improve their track record (i.e. invest in energy efficient retrofits or in better benefits for employees). Carrotmob has already organized more than 250 small campaigns on five continents, and just launched its first global campaign.
The great news is that Carrotmob is not the only civically minded, tech savvy organization that understands the power of data and collective purchasing power.
With the advent of collaborative consumption, the rules for sharing are beginning to change from being governed by trust to being determined by reputation. If reputation indeed becomes more important than a credit score, how can social entrepreneurs begin to shape how it is calculated? Could changemaking become one of its indicators?
Post written by Hanae Baruchel, who has been looking into new online business models this past year as a part of her work to find the next Ashoka Fellows in the US.
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