Will Territory Play a Part in the Success of a Coll Cons Start Up?

Collaborative consumption, the idea of consumers having access to products as opposed to ownership, is big. It’s a growing movement that has the potential to define this century and for entrepreneurs, now is the time to get in.

As an Australian watching this space evolve, I have always wondered whether territory will impact on the different category segments. Will “collcons” businesses be global? Or will the location based nature and the “community” ethos limit international expansion? Sure this depends on the segment. AirBnB for instance, where your spare bed is rented to travellers, will obviously be more efficient if there is one global hub. So too will swap networks like swap.com dealing in small, easy to mail goods like DVD’s and books. 

But what about businesses that rely on neighbourhood proximity? 

Take the household goods sharing segment for example. Neighborgoods  is a leader in the US where you can rent or borrow a lawnmower/drill/vacuum/whatever from your neighbour. If they expand to Australia, how will consumers choose between them and locally run offerings like RentWant, or Open Shed? Will the “community” nature of these businesses give Australian based operations an advantage? Will search results yielding listings in San Fransisco discourage a user?

The answer:  Not really.

When businesses rely on social networks to facilitate their offerings, the only thing that truly matters is whether or not they have a critical mass of users. A Melbournian wanting access to a vacuum cleaner only cares about two things. 1) Whether or not there is a vacuum listed on the site and 2) Whether it’s listed close to him.

For Australian start ups their advantage lies in being a first mover.  And in the race towards critical mass, this is big. There’s huge potential out there but like all social networks there’s only room for one or two segment leaders. The race is on.