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Definitions, disruption and trust – Rachel Botsman discusses the collaborative economy

Earlier this week Zopa was lucky enough to receive a visit from Rachel Botsman, a global expert on the sharing economy who defined the theory of collaborative consumption. She has published and spoken widely on the topic, including on TED, and is currently teaching the first ever MBA course on collaborative consumption at Said Business School at Oxford.

As a peer-to-peer lending pioneer, Zopa is part of the new type of economy that Rachel talks about, so it was interesting to hear her perspective on the industry. Here are some of the key things we talked about:

Sharing a definition

One key theme of Rachel’s work is defining the area she is working on. Should we call it the collaborative economy? The sharing economy? The circular economy? Can operations as diverse as Borrowmydoggy, Zopa and Taskrabbit really sit under one heading? Are services like Washio really part of the sharing economy?

Zopa’s many hats illustrate how hard finding definitions can be. As a loan company, we are part of the financial services sector, sharing a space with traditional banking operations. The new platform we created to share assets marks us out as part of the collaborative economy. The redeployment of underutilised assets (lenders’ money) to more useful purposes (borrowers’ loans) marks us out as a sharing economy operation. And we are, obviously, peer-to-peer, the particular subset that provides a platform for individuals to trade with each other.

Perhaps this just isn’t the sector for definitive definitions?

Trust is everything

Another key area that Rachel works on is trust, something which is at the core of Zopa’s values.

When people started talking about these tech-based businesses, everyone was obsessed with the efficiencies that they create. What interested Rachel was how it changed the mechanics of trust, and facilitated the creation of trust between total strangers. This idea is vital for peer-to-peer lending. We rely on our lenders being happy for their money to go to total strangers.

Here’s the Zopa lender process illustrating her idea of a ‘trust stack’:

  • Firstly, people must trust the idea of peer-to-peer lending
  • Secondly, they must trust Zopa
  • Finally, they will trust the stranger


We also touched on the threats to this, notably the recent BBC expose on scam reviews (Rachel described that as a ‘burning’ issue that challenges the foundation of the sharing economy) and the need to understand and adopt different trust mechanisms when working in different areas of the world, like China or India.

Disrupting the disruptors – where next for the collaborative economy?

Rachel told us that the next big issue is going to be the relationship between the providers of value and the facilitators of value. Will another step of decentralisation follow, with more emphasis going to the providers? Business models do not stay disruptive long, she said, but customer-focussed innovations and new distribution channels have much greater potential to cause long-term change.

Rachel Botsman’s visit was part of a series of lunchtime talks Zopa is organising for staff. Last month Labour mayoral hopeful Sadiq Khan spoke about Fintech in London and his plans for the capital if he’s elected.