2013-07-30

Co.Exist

What Happens Now That Sharing Economy Pioneer NeighborGoods Has Been Acquired?

The popular lending platform almost shut down last year, despite having over 30,000 users. Now it has been acquired by a shadowy Brooklyn-based incubator—can it be kept alive, and what does this mean for the sharing economy?

In its four-year history, sharing economy pioneer NeighborGoods has been simultaneously anointed with awards and recognition and beset by struggles to keep the lights on.

A little less than a year ago, the platform—which makes it easy for neighbors to lend one another tools and other things your neighbors probably have lying around—was on the verge of shutting down because of a lack of funding. But on Tuesday, founder Micki Krimmel sent an email to her entire listserv with an important announcement: NeighborGoods has been acquired by the Brooklyn-based incubator Socius Labs.

Beyond that, the announcement was a bit mysterious. The website for Socius Labs is nothing but a place-holder; it’s hard to tell from the site what they do or who they represent. It was also unclear how—or if—the change would affect NeighborGoods’ community of more than 30,000 users. The announcement only said the site now has the "additional financial and human resources to put toward building the safest, most efficient, and most fun sharing platform for friends and neighbors." Does that mean wrapping it up into a different package? Or combining the technology with some other site?

And finally, it was unclear what this means for the larger sharing economy. Is the acquisition a sign that investors see future value in unmonetized sharing platforms? Or that startup founders would rather get out while they can rather than deal with the constant struggle to fundraise?

Perhaps a bit of both.

On Wednesday I caught up with Krimmel over the phone to find out more about the acquisiton. Krimmel says she and Socius Labs founder Michael Urh, a young entrepreneur and investor, had been in conversation for months about ways to collaborate. "He had been working with his team to build an app very similar to NeighborGoods," she says. "In the end we decided that an acquisition made the most sense."

Krimmel says the business move means that she won’t have to spend time raising money and can instead focus on the product. But the product won’t be her chief concern anymore, either: Day-to-day operations and development will be handled by the Socius Labs team in New York. Krimmel’s role will morph into "more of an advisory one."

Does Socius Labs think NeighborGoods can make money some day? "Absolutely," asserts Krimmel. She calls the service more "advantageous than most networks in that we’re talking about transactions of physical goods. So you can bring in rental companies. If you can’t find something you can suggest a local company where you can buy. There’s all kinds of ways to add financial transactions amongst the sharing that’s happening in a really organic way that doesn’t take away from that social sharing. But you need scale.

The team will use additional funding to pursue that scale—in part by focusing on a mobile application, and also by building out a community in specific cities. Krimmel says there’s an interest in developing an alternative currency for transactions that feel more social than financial, like lending someone a video game. There’s a "big difference between Couchsurfing and Airbnb and both are successful," Krimmel notes. "Applying those learnings now to the product is our job."

The future of NeighborGoods is still murky. Sometimes acquisitions lead to websites disappearing and brands changing in ways their community may not like. Sometimes nothing happens at all.

For Krimmel, there’s a sense of both relief (that the staff will continue getting paid) and hope. "I honestly think we’re at the beginning phases of this movement," she says. "I still feel like there’s huge potential in this." She also can experience something she hasn’t in a while: "For the first time in the last four years I’ve had some time to think about putting [energy] towards new projects."

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1 Comments

  • Gregory Heller

    You have a typo before the first pull quote "neighborhoods" rather than "Neighborgoods"
    and you refer to Kimmel sending an email to her entire "Listserv" (see http://en.wikipedia.org/wiki/L.... "Listserv" has become the "kleenex" or "bandaid" of the tech world: a brand name used generically, but it should be used as such. "Email list" or "mailing list" is more accurate and less jargony.