Many ask how the idea for Rentcycle came to be. I’m not from the rental industry. I’ve never started an Internet company before. So, how is it that I got here? Although a combination of factors truly helped the stars align for Rentcycle, there’s one major influence that planted the seed for the idea — my first job out of college at Red Hat, the open-source technology company.
For those who don’t know, Red Hat is the world’s leading provider of open-source technology, namely the Linux operating system. The idea behind open source is that source code is shared among a community of developers so that anyone can contribute to its advancement. The technology is provided for free with paid subscriptions to high-quality support. This contrasts against proprietary technologies where development happens in a closed environment behind corporate firewalls, and customers are charged per license with limited access to support. The idea is that open source offers choice and access. It invites participation and thrives on it. And everyone who participates reaps the rewards.
Working on the brand communications team at Red Hat, I was tasked with telling this story of shared access to the masses. Their brand story was one of the strongest I’ve seen — you might enjoy taking a peek at Red Hat’s Brand Book or watching the video version. Red Hat was all about creating a movement, using the principles of open source to inspire change beyond technology. Red Hat’s efforts with the GPL, Creative Commons, and The One Laptop Per Child initiative are great examples of such impact. It didn’t take long until I adopted a spirit of openness and sharing into my own personal brand.
After three wonderful years evangelizing Red Hat’s mission and values, I moved cross-country to San Francisco. The values of open source stuck with me. Two years later, I drafted a business plan based on sharing resources through renting — Rentcycle was born. Simultaneously, another movement started getting attention. It wasn’t open source, but it was strikingly similar. Principles were built around a similar dedication to transparency, community, and trust. Access was praised over ownership. Though I didn’t fully realize it at the time, the Collaborative Consumption movement mirrored the values behind open source in more ways than one. I've written extensively about Collaborative Consumption (CC) in previous blog posts which you can found here and here. Although each has its own missions and goals, you can’t deny the overlap between Collaborative Consumption and open source. Below are five shared principles between open-source technology and Collaborative Consumption. Without such inspiration, who knows where Rentcycle would be.
1. It’s better to share.
Red Hat always preaches, “Your mother was right. It’s better to share.” This simple lesson is at the core of open source since the source code is distributed and shared among a community. Sharing means doing more and accomplishing more as a community versus individuals.
Collaborative Consumption takes a similar stance by promoting access to shared resources. The resources of a community are stronger than those of any individual. By sharing the resources of many, each individual benefits. And everyone who participates reaps the rewards.
2. Bring together a global community.
The open-source movement is based on a community of contributors. The more contributions, the stronger the community becomes. All are welcome to participate. In fact, the more perspectives, the better. Because diversity of perspective is what makes the code stronger.
Community is the corner stone of Collaborative Consumption. A resurgence of community is one of the driving forces behind the movement. But, like any community, it is only as strong as its contributors. A network effect can only be achieved through collaborative participation. Diversity of participation offers diversity of choice, which is vital for CC communities.
3. Respect is earned.
Red Hat talks about a dedication to meritocracy where recognition is given to those with the greatest ability and talent. Performance is tied to action and has nothing to do with names or titles. As they always say, “May the best idea win!”
This idea of meritocracy and earned respect is in keeping with CC’s concept of “reputation capital.” This term was coined by Rachel Botsman to describe the aggregation of one’s online activities in order to build a trust index for an individual within collaborative communities.
4. Release early, release often.
The beauty of open-source technology is that it inspires innovation. We all know that three heads are better than one. By sharing tasks among a community of developers, open-source software can be developed at a faster rate than any individual. Mistakes are made faster, and corrected by the community faster, which allows innovation to happen faster.
Elements of the ‘release early and often’ mantra are built into CC since Collaborative Consumption is all about using technology to catalyze widespread change. CC companies are pioneering new ways of exchange through communal technologies. It may take a few attempts to perfect the best model, but progress can’t happen without taking a first step. This is how CC is innovating and disrupting mindsets.
5. Don’t sell a product, deliver a service instead.
People often ask, “How does Red Hat make money selling free software?” The truth is, they aren’t selling software. That part is free. Rather, Red Hat delivers a service in the form of a subscription. Customers pay for access via subscription.
The Collaborative Consumption movement evangelizes “Access instead of ownership.” Rather than own a car, rent one when you need it or borrow one from your neighbor. Pay for access when you need something; don’t pay for it when you don’t. This is the service promised by CC companies and it’s starting to catch on.