Session name: How the Collaborative Consumption Economy has changed E-Commerce and M-Commerce
Thank you, guys. All right, coming up next we have How The Collaborative Consumption Economy Has Changed E-Commerce And M-Commerce. That’s going to be a discussion moderated by Kevin Fitchard, my colleague at GigaOM, and he’s going to be speaking with Aunkur Arya, the GM of Mobile at Braintree, and Mike Curtis, VP of Engineering at Airbnb. Please welcome our collaborative consumption panel.
Kevin Fitchard 00:36
Hello, everybody, and welcome Mike, welcome Aunkur.
Aunkur Arya 00:38
Kevin Fitchard 00:37
Today’s panel is about the new collaborative consumption economy, and to start out, why don’t we explain exactly what we’re talking about. We’re going to be talking about collaborative consumption; what exactly do we mean and how is this changing the face of commerce – E-Commerce and M-Commerce specifically.
Mike Curtis 01:01
Maybe I can start out. Collaborative consumption, the way we define that and talk about it at Airbnb is, we refer to it as the “Sharing Economy”. The idea there is that ordinary people who have extra assets or extra space or extra things that they could potentially share with other people, we provide a way for them to connect with other people, to share those assets, and then maybe earn a little extra money on that which helps them enable a new way of life. Airbnb does that for space, but collaborative consumption – The Sharing Economy – expands into many other different categories; services. You could think of lots of different areas where you could expand into where people can share their capabilities beyond just space.
Aunkur Arya 01:48
Yeah, I would agree with that. It’s a fundamentally efficient allocation of inventory; whether it’s goods – and eBay was the first example of efficient allocation of physical goods – services, peoples’ time, real estate and property – like in the case of Airbnb. We have sort of the benefit of being able to look at a 35,000 level at a bunch of different marketplaces out in the ecosystem that we sort of help power. Airbnb is a great partner of ours, as well as Uber, TaskRabbit. When we look at growth, particularly on mobile, those businesses that are sort of marketplaces and in collaborative consumption are the fastest growing businesses. We’ll talk further about product and how we evolve product. We’re trying to keep up with how fast these guys are growing, and make sure that we’re building the right product.
Mike Curtis 02:38
I think another point I might add on that is that, it’s always represents a shift from this idea of ownership to one of access. So, instead of people going out and consuming and needing to buy new things all the time, they can think about just having access to those things, and more of a sharing mentality than in a “go purchase something new”, which is kind of a more efficient way to think about using resources in general, beyond accommodation to things.
Kevin Fitchard 03:02
Are you guys saying that this is producing a new type of economy? Are these transactions that just would not happen? Are these transactions that just would not happen? Are these experiences that would not happen if you didn’t have these models in place? Or would they just be provided by the big companies, like the direct sale retailer, the travel agent, the taxi company?
Aunkur Arya 03:26
I think most of these transactions would not be happening without folks like Airbnb and Uber and TaskRabbit. If you think of what Airbnb does – how can you have an entity in one country and another country transacting over living space in a home or an apartment? That’s next to impossible to do if these guys weren’t wrapping up trust and support and security and convenience on both ends; I think that transaction would be near impossible. Think about the example of TaskRabbit. TaskRabbit is essentially aggregating peoples’ free time, your neighbor’s free time. I need someone to go pick up dry cleaning for me before I get home; how would I have that interaction without someone like TaskRabbit? I think the majority of those transactions would not be happening unless it was for some of these great start ups.
Mike Curtis 04:14
I agree with that point, but I also think that the behavior is fundamentally human and real. The idea of sharing your space or sharing your things is something that people have been doing forever, but what we do – Airbnb and these other companies in the space – is, we find a way to really scale that behavior in a way that a lot more people can participate in it. So, I agree with the point that the majority of this wouldn’t be happening if it weren’t for companies like this, but the fundamental underlying behavior is very natural for all of us.
Kevin Fitchard 04:48
An easier way of creating that behavior is, we call it a transaction, but really you’re just saying that it’s just basically human interaction that–
Mike Curtis 04:55
Yeah, sharing is as old as time.
Kevin Fitchard 04:57
I don’t want to focus too much about the nitty gritty of payments tech, but I think we should talk about it just a little bit. How have the payments technology and the business models that enable these collaborative consumption companies, how have they had to evolve? How have they had to change? Airbnb is a very good example of a company that has grown incredibly quickly, and you’ve had to build a lot of this infrastructure yourself, but Braintree has the product that’s called Marketplace, or a market that is designed to make these transactions between multiple buyers and multiple sellers easier.
Aunkur Arya 05:30
The first leap the payment space made was that they just made it very easy to integrate payments into your app or your site. I always give the example of, several years ago, if you wanted to build an app, you has iOS. If you you wanted to not have to invest in infrastructure, you had Amazon Web Services, but if you wanted to sell something in your mobile app or on your site, or build an E-Commerce business, you really didn’t have anything. So, the idea behind Braintree was, “Let’s build the OS of payments”. I think that was step one. I think a further step is what you mentioned, which is our Marketplace product. Essentially, it’s just a product that off the shelf lets entities split payments between each other and then the Marketplace can take a piece of that transaction and pay out to other entities. Actually, in our case, it’s fully mobile end to end.
Aunkur Arya 06:15
I’ll give the example of TaskRabbit that uses our Marketplace product. As a consumer, I can use one-touch click with Venmo inside of TaskRabbit to buy a service, and it goes through the TaskRabbit Marketplace, and then it gets paid literally by an e-mail address to the Rabbit. So, there’s no interaction, no one’s writing a check, no one’s taking their wallet out, none of that stuff; it’s a fully end to end marketplace. I think certainly building a Marketplace product that can deal with holding funds and escrow and things like that is very critical.
Aunkur Arya 06:44
I think the two other pieces that don’t get talked about a lot are, for Marketplaces to work, you need a great consumer experience. So, tokenization of payment information is very important for that so that you can do repeat purchases that are seamless, as well as creating a one-click checkout. So, I think those are all the pieces that we’re trying to evolve constantly to keep up with these guys.
Kevin Fitchard 07:06
We were talking a little bit backstage about some of the complexities of these transactions, and I really had no idea how crazy they can get. Mike, can you talk a little bit about how complex these transactions get? It’s not just going to a new country, setting up a back account, and you’re online. You’re dealing not only with different currencies, but culture in many cases.
Mike Curtis 07:27
Yeah, totally. Actually, just to go all the way back to the beginning, it’s a little funny, but when Airbnb first started, we didn’t even handle payments. It was this thing where you would get connected with somebody, you’d go to their house, and then there would be this awkward moment halfway into your stay, or a day into your stay where the host starts going, “Hey man, where’s my money?”