3 key success factors for sharing platforms

by Lucy on April 30, 2013

We’ve taken points from Rachel Botsman’s book What’s Mine is Yours and articles from Fast Company and Shareable to consolidate what we believe to be the most important factors for a successful sharing platform:
  1. Value for the user | The user has to derive value from the platform and be willing to pay for the service. The platform should provide a practical and convenient solution for a reasonable price. On the other side of this, for platforms that allow users to make profit off their assets, the profit must outweigh the effort involved.  As well, the items most worth sharing have lots of idling capacity, as the ownership of a product that is used for a just a few minutes makes little rational sense.
  2. Trust between strangers | An environment that facilitates reputation-building allows for trust to be developed between strangers, an important buy-in when getting new users to use the platform. This also helps to build “belief in the commons,” aka a communal give-and-take where every person’s participation creates value for another. Finally, the best platforms feel more like a community than simply a marketplace.
  3. Critical mass | There must be variety in selection and easy accessibility, providing the user with enough choice so that he/she is satisfied with what’s available. This is specially important for P2P marketplaces to ensure that users are able to find what they need. To reach this tipping point, marketing to the right channels, word of mouth and community advocates/leaders can help substantially. Critical mass also helps in getting potential users to make the switch over from shopping to sharing.
We believe that 1 is the most important, as a platform may have a great reputation system and lots of interested people, but if it’s not solving a problem that people are willing to pay for, it won’t succeed. See Adam Berk’s article on this for more insights. 2 and 3 kind of come as a package, as they both facilitate a well-developed system of getting what you need from people you can trust. Let us know your thoughts and other factors we may have missed.

 

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6 comments

{ 4 comments… read them below or add one }

Shaff April 30, 2013 at 4:54 pm

Great summary. We used your 3 points when setting up our storage sharing platform storemates.co.uk last year and its proved to work really well.

You mentioned in your second point ” best platforms feel more like a community than simply a marketplace.” It would be good to compile a few examples where this has been done well. Our brand is friendly and community focussed with a strong visual facebook embedded presence so people can see if they are connected to anyone using our site. But I’m sure we could do more, I wonder if there were any top tips out there for making yoru platform look more like a community than simply a market place..??

Lucy May 1, 2013 at 2:41 pm

Hey Shaff,

You bring up a great point about community building and web development/features that facilitate that. We’ll definitely do some research and compile a list.

Thanks!

Adam Berk May 2, 2013 at 12:07 am

Great post… you took the words right out of my mouth… Going to say that if you really have #1 that 2 won’t matter as much and 3 is bound to happen naturally… keep up the good work!

Marco June 1, 2013 at 4:29 pm

Thank you for this very spot on article. We are currently doing some researches on the sharing economy / collaborative consumption with a specific focus on the drawbacks of these concepts from a sustainability point of view. I am analysing the following points:

• Rebound effects (e.g. money saved from car sharing is invested in long distance travel)
• Vast increase of logistics and related CO2 emissions (e.g. delivery of goods from home to home)
• Can trigger more consumption, if lending is used as “test phase” for new products
• Quicker “dumping” of old products in exchange of the newest versions, if product is lend instead of owned

If anyone had evidence to provide or any other input to give in relation to the points above, I would be grateful. I recently delivered a presentation on this topic that can be viewed here: http://www.euro-freelancers.eu/marco-torregrossa-presentation-on-the-sharing-economy/

Marco (marco.torregrossa@euro-freelancers.eu)

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