Blog Post

Summer is for swapping: startups boost the barter economy

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

We’ve spilled a lot of virtual ink recently on the peer-to-peer marketplaces that want to update Craigslist for the Facebook era. But a crop of new exchange-oriented startups are reviving something else too: bartering.

Thanks to the rise of online communities – and the declining economy – it’s never been easier for individuals and businesses trade unwanted and unused goods and spaces for things that they value. (Even cable network A&E seems to have picked up on a trend with its series “Barter Kings,” launched last month.)

“I believe that we are living through a collaborative revolution as significant as the industrial revolution,” said author and collaborative consumption guru Rachel Botsman, at the TEDGlobal conference in Edinburgh last week. “It is taking us back to the old market principles of sharing swapping, bartering.”

Driven by an interest in authenticity and community, she said people are gravitating to services like Airbnb, TaskRabbit and Liquidspace that let people more efficiently exchange goods and services.

To be fair, most collaborative consumption startups are not based on bartering, even if they employ the same principles of trust and reputation. But it seems like a growing number of recently launched companies do indeed rely on old-fashioned in-kind exchange or support a form of it on their platforms. Here are five new startups that are part of the nostalgic trend.

Inspired by founder Diego Zambrano’s own experience of needing to get rid of stuff when he moved from Brazil to the U.S. years ago, Bondsy connects people to share and exchange their things. The mobile app lets people take photos of their stuff and then send them out to social networking friends, who can simply interact with the images Instagram-style or make an offer for an exchange. What’s really interesting is at this point, Zambrano wants to build the community around non-financial transactions. So instead of offering a friend $50 for an old chair, you could offer to take them to dinner. Bondsy was one of the most recent startups to graduate from the NYC TechStars program, and when I met Zambrano, he told me that things should either be beautiful or useful to people. If not, there’s Bondsy. The app won’t be released until later this summer, but people can sign up for the launch here.

Launched last month by former Huffinngton Post CTO Paul Berry, the Airbnb-ish site lets people swap homes and apartments with friends for free. “Airbnb is more about making yourself a mini-landlord and finding a way to monetize your home. CasaHop is much more about communities and clubs and people exchanging and trading,” Berry told my colleague Ryan Kim. People can use the site for free but the company could make money by charging existing clubs and other communities to allow their members to exchange homes among themselves. Many college and university listservs already serve this function for members, so it makes plenty of sense for them to go after that opportunity.

The crowdfunding startup, which was also part of the recent NYC TechStars class, lets people invest in the businesses closest to their homes. But instead of forcing borrowers to repay lenders in cash, they can return the investment in kind, with special goods, perks or private parties (even an oil painting, in one case). The average loan size for Smallknot tends to be under $15,000, but they fund specific projects, such as a new oven for a local restaurant. The startup grew out of Greenville, S.C. but has launched a couple of pilots in Brooklyn, so far.

Launched in March, the Y Combinator startup promises an “infinite closet of free clothes.” Through the online platform, users upload pictures of unwanted clothes, which others on the site can buy with virtual currency. If people don’t have enough “buttons,” they can purchase them for $1 but, in theory, someone could trade their way to a whole new closet. New York-based Refashioner employed a similar concept until its relaunch last week. Now, users can also buy and sell items. But the swapping philosophy is still alive and well in that users can use credit from sales to purchase other items on the site.

One of the several startups aiming to topple Craigslist and eBay as a new and improved peer-to-peer marketplace, HipSwap mostly gives users a platform for buying and selling secondhand and vintage goods. But the company, which launched its platform in March, said a large percentage of its users also use the platform to trade specific goods with each other. While the marketplace wasn’t build to be bartering network, HipSwap said it’s an open platform that people can use in the ways that are most convenient and safe for them.

6 Responses to “Summer is for swapping: startups boost the barter economy”

  1. Selina Markham

    Barter via formal barter exchange networks is a growing phenomenon. The UK and French Governments both recently published research reports, announcing that barter was an effective method for businesses trying to alleviate cashflow issues, access interest free credit and offset their existing cash expenses.

    To date much of the trade involving barter is done as large countertrades (government to government and/or government to corporation), with the second biggest type of trades being media barter. There are new and emerging technologies as well in this sector but both individuals and business owners need to be careful that in the more formal, mutual credit, reciprocal trade and barter networks that the exchange operators are not running a deficit (spending barter credits and never repaying them); otherwise it can be just as bad – or worse – than a bank (and potentially a higher risk of collapse). There are some good networks out there though such as the Ormita Commerce Network – and there are good resource centres providing neutral barter information online (such as the Complimentary Currency Resource Centre – run solely on donations – or the Mutual Credit Library – run as a resource centre for businesses interested in barter –

    Both are worth checking out for neutral information on the barter segment. Just make sure that the barter exchange network you are dealing with has no “owner” deficits in it (where the owner spends and never repays). Be careful out there! Use a trusted network and ask for their policy on deficit spending. Do your home work.

  2. Love these new startups! Also check out very similar to TaskRabbit and Zaarly – over 7,000 nationwide agents are ready to be dispatched by the consumer, property owner, business professional and online daters.