Collaborative Consumption Leader And Unlikely VC Rachel Botsman Will Convince Us All To Share

How do you score a job at a buzz-worthy new venture fund if you don't have a background in finance, you're not an engineer, and never ran a venture-backed company? Be a muse, an authority, and maintain a serious network—that was the answer for Rachel Botsman, now a partner at Collaborative Fund.

Truly, Botsman admits, she wasn’t even trying to become a venture capitalist—a job coveted by many in an industry still dominated by men. A researcher and creative at heart, Botsman imagined herself as the next Malcolm Gladwell, or Chris Anderson. But the job found her. Here's how...

The Plan: Botsman wanted to start a movement, more than a fund, a tech venture, or anything else. After working for nearly a decade in brand consulting—including at the agency Prophet, and as an early employee of the Clinton Global Health initiative to combat childhood obesity—Botsman she says she wanted take the best ideas she saw in business much further and faster.

"I got to this point in my early 30s where I said 'I have incredible experiences, how do I take a leap of faith to make a much bigger difference?'," Botsman says. She left the nest of her day job to generate good data, and a common vernacular about something she was observing in her travels around the world: collaborative consumption.

Sharing 101: Sharing is caring, but it’s so much more, Botsman realized years ago. Businesses using a collaborative consumption model—from Airbnb to ThredUp today, or eBay and Zipcar, going back—promote sharing and services rather than the production or ownership of physical goods.

Botsman believes the collaborative consumption business model can help companies better provide services and goods to people wherever and whenever they need them, at a price they can afford, and allow businesses to profit and thrive, without draining our natural resources.

Claim To Fame: By 2010, having left behind her consulting work, Botsman had steeped herself in research about the sharing economy. She co-authored a book with fellow investor, Roo Rogers, What’s Mine Is Yours…that helped take the concept of the sharing economy mainstream.

Botsman, who also maintains a website and research about these businesses, quickly became a voice for the rising industry, TED talk and all. She also became a bit of a Kevin Bacon, or a central figure, in the growing network of collaborative consumption businesses.

She has been an adviser formally and informally to countless startups in the sharing economy, including: Skillshare, Kickstarter, Taskrabbit, Rentcycle, and CultureKitchen.

Going Viral: What made her book take off? Botsman says, "There’s real value in it. You try to churn out 80,000 words—simplifying the complex is complex. And that’s what happens when you write a book. You distill things down in such ways that they become understandable to people. That was my intent. These things existed, but people didn’t have a common vernacular to describe how Airbnb, Zipcar, and others were tied together. If you combine authenticity with passion and knowledge you can really take people along and do some incredible things."

Near Miss: When the founder of Collaborative Fund, Craig Shapiro, approached Botsman to see if she might be interested in the job, she told him: "I don’t do finance. I don’t know a lot about the ins and outs of venture capital, but I know a lot about this space you’re investing in. He said 'Other brilliant people on our team know the venture side, and it will be a brilliant combination.' He convinced me to give this a try."

The Deals: Collaborative Fund has been operational for less than a year, but is investing in some of the hottest startups that use a collaborative consumption business model, including most recently, RentCycle. Companies come to Collaborative Fund, Botsman notes, because they want to be part of a community and portfolio that believes in the same business approach.

A depth of market knowledge among the investors and advisers at Collaborative Fund—their advisers include founding team members of Kiva, Meetup, OpenTable, and YouTube—makes it distinct from traditional VC firms, she says. Entrepreneurs know they can rely on Collaborative Fund for help in understanding competition and market opportunities, but also feel that backing from this fund is a seal of approval in their industry.

Words To Live By: "This quote from Gary Player sums up my advice for entrepreneurs: 'The harder I practice, the luckier I get.' But I think he stole it from Seneca," Botsman quips. She also frequently repeats this mantra: "The 20th century was about hyper-consumption, but the 21st century will be defined by collaborative consumption. It’s that transformative. People are just now beginning to connect the dots."

Just Deserts: "People used to look at me a few years ago like I was crazy. Now everybody comes to ask me 'What’s the next Airbnb?' in this space?" When she says everybody, she means everybody—including high-profile investors and entrepreneurs from accelerators like YCombinator and 500Startups, to traditional VCs who are getting interested in collaborative consumption, and co-investing with her fund.

The Company She Keeps: Botsman advises and through Collaborative Fund invests in companies like...

  • Skillshare, a marketplace that helps people share and make money from whatever they do best by teaching it to others; the platform also helps people learn things you simply can’t learn in school.
  • Taskrabbit, which lets individuals run errands, just about anywhere and at any time, for others in need at a rate they’ve negotiated beforehand. It’s like time-sharing a personal assistant in a way, and it’s growing rapidly, Botsman says, in terms of the number of tasks being paid for, and people joining the community.
  • Rentcycle, the online marketplace that helps people find rental goods, of any kind, near where they need them. Users can find some way and some place to rent just about anything through the site, from a tent and cross country skis, to projectors, cars and kitchen appliances.
  • And more recently, CultureKitchen (which Collaborative Fund is backing with a seed round), a Bay Area-based culinary school where people can share family recipes and insight into their cultural backgrounds.

What She Won't Share: "Knowing where to draw the line is important. We don’t have a car anymore at home. My husband and I are both fine with that. He’s also fine with relying on Airbnb when we travel. And we just rented all this baby stuff for our newborn, and swapped baby stuff, too.

He doesn’t own a lot of things himself, really. But the things he owns he really loves, like books and clothes. He wants to keep that stuff to himself. So, when I was like trying everything under the sun in collaborative consumption, he said hands off these.

I’ll be really honest, there’s lots of things that I find very easy to buy secondhand, or to share, like the kids stuff, and the car. But I find swapping my own adult clothes very strange. I don’t know why that is. Everyone has their thing, and their limit. That’s mine." 

Her Next Act: Botsman reveals that she's mulling her next book. "I don’t want to say exactly what it is but it will look into reputation, trust, and what’s happening with money. How we exchange money is changing. What will that look like in 15 years time? How will banks be reinvented? How will payment systems and currency be changed? The big idea is around all those fragments."

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3 Comments

  • ericabz

    Love Rachel and what she has to say. We're definitely moving from a culture of individual consumption to one where we consume less, share more, and get more value from what we do have. My company, SittingAround (http://sittingaround.com), is collaborative consumption for childcare -- parents trading care with other parents.

  • Lynn

    I love this article! I have always been a fan of thrift and barter. Sites like skillshare and taskrabbit make me giddy and I can't wait to check them out. If you like the idea of re-purposing, another great resource is Storkbrokers.com. It's a great buy/sell marketplace for outgrown kids clothes and gear. I've been very happy with my experiences there thus far. Keep up the great work!

  • John Boyd

    There's a lot of waste still.  The same tools in most garages, the same books on shelves (although ebooks are gaining), usable stuff dumped in the trash...etc.  

    Airbnb, Guestvessel, Neighborrow, Zipcar, ridesharing, etc.  Society needs a massive dose of liposuction when it comes to consumption.   There's definitely momentum in this space.  We hope http://vrfy.me makes people feel a little safer and transactions more reliable for those willing to share and loan.