We spoke to Rachel Botsman while pulling together our Social Innovators Guide to Open State. This is a longer version of the interview that appears there.

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Rachel Botsman is an author, academic and speaker known around the world for her visionary thinking on how the power of collaboration and trust, enabled by technologies, will change the way we live, work, bank and consume. She defined the theory of ‘collaborative consumption’ in her first book What’s Mine is Yours.

We caught up with Rachel prior to her talk at Future Money: Exploring opportunity in the collaborative economy, one of the featured events our Social Innovators Guide to Open State, and asked her about the relevance of the collaborative consumption movement for those interested in improving the world. She explained that at the core of collaborative consumption is the idea of ‘idling capacity’, unlocking the value of underutilised assets. “These assets could be ‘stuff’ like the car that sits in the garage for 23 hours a day on average or ‘spaces’ such as the empty spare room in someone’s house. But they can also be people’s time, skills and money. We are living in an age where we can use technology to unlock idling capacity and make it liquid through networks and marketplaces. This can have enormous social and environmental impact. For instance, through the long distance ridesharing platform, BlaBlaCar, the average car occupancy reaches 2.8 people per car versus 1.7 people per car in Europe. Airbnb has shown how it can transform the way people travel.”

But Rachel was quick to reassure the socially-minded amongst us that these ideas do not need to be multi-billion dollar startups. For instance, Somewhereto, a not-for-profit that started in the United Kingdom, matches young people who want to do something – make music, do sport, have an art exhibition – with idle spaces they can use.

“The key thing for social innovators to know is that collaborative consumption is not a technology trend; it’s a transformative lens on how people view assets and how people trust one another. And this way of thinking can be applied to lots of problems and opportunities that can make a positive impact on the world.”

I asked Rachel how new “collaborative consumption” actually was. Isn’t it just a fancy new word for an old practice? Isn’t collaborative consumption just what we used to call being part of a community?

“That’s the beauty and power of the idea!” she exclaimed. “It is based on old market behaviours – swapping, sharing, lending, renting, bartering – reinvented through technology.  The idea of collaborating and sharing is innate to us. We traded and exchanged in villages and market squares based on our reputations for thousands of years. Instinctively we know how to collaborate and trust ‘strangers’, technology is merely accelerating and scaling the ways in which we can do so.”

What other traditions could be similarly re-invited thanks to technology I wondered? Rachel’s answer: Insurance. When people lived in small villages she explained, insurance used to be as simple as pooling resources to cover expenses if someone gets sick or injured. Now of course insurance has become a giant and complicate industry, with multiple intermediaries taking their cut and policies we can’t read. Trust is a huge issue.

Warming to this topic, Rachel also pointed out that the time bands of insurance policies don’t really make sense. “Who wants insurance for a year when everything is becoming real-time? And critically, insurance is for the most part based on insuring assets not behaviours. It is in other words a sector waiting to be disrupted.”

What could replace it? “Person-to-person models can decentralise and democratise insurance, distributing the risk among the people in the group but also spreading the gains. Emerging examples include Lemonade, Guevara and PeerCover. German-based Friendsurance pools its users into small groups and gives its customers a cash-back bonus if they remain claimless. It aims to strengthen the sense of accountability towards the group while minimising the number of fraudulent cases. Bigger picture, I think will see a wave of innovation that reimagines what risk means and the role insurance can play in people’s lives. It shouldn’t be a grudge product based on fear.”

Trust has come up a few times I realised. Why is this so important?

“Trust is the social glue of society. Trust is the conduit through which ideas travel. It enables people to place their faith in strangers, to take risks, to keep moving forward.”

See Rachel at Future Money: Exploring opportunity in the collaborative economy, October 20 (that’s tomorrow!), part of Open State.