Baby Clothes, Sharing, Paradigm Shifts & Collaborative Consumption (with addendum, 2/17/12)

(9/12: UPDATE. Great things have happened for Good Karma over the last six months, including a residency at the Excelerate Labs accelerator program and a reincarnation as Moxie Jean, an online consignment business.)

There are plenty of inspired ideas swirling around, but only occasionally does one come across an idea that also charms. Good Karma, a new web-based subscription service for used baby clothes, manages to mix bargain-hunting and environmental responsibility with the irresistible adorable-ness of small-fry fashion. Really, what’s not to love?

The service, still in beta, offers “bundles” priced from $19.99 to $69.99 per month. Each includes seven freshly washed and inspected outfits, which can be returned  in a postage pre-paid bag once outgrown. According to the website, babies typically burst through 6 or 7 sizes in a fleeting 24 months, so the clothes are useful for just a matter of weeks. 

Subscriptions for “wardrobes”—options include either 21 or 28 outfits—top out at $97.99 per month, still just a small fraction of what the clothes would cost brand new.

Good Karma builds on—and dramatically expands—the time-honored tradition of passing along used but still usable baby clothes to family and friends. In fact, co-founder Sharon Schneider’s entrepreneurial epiphany came while packing up her 18 month-old daughter’s outgrown outfits to ship to a sister who had just had a baby.

Now, though, there is no need to actually have any baby clothes stashed away to share: Anyone can buy a gift subscription. In the 21st century, it doesn’t take a village to raise a child, but a network.

Good Karma is part of the growing trend of “collaborative consumption” (though in this case, serial consumption might be a more apt term), where value shifts from product to function, i.e., it’s not the drill you need, but the hole; it’s not the CD, but the music.

"Technology makes sharing frictionless and fun," notes innovation strategist Rachel Botsman, who not only coined the term “collaborative consumption,” but also co-wrote a book explaining it.

"Reputational capital" is the grease that makes the system run. In an economy based on sharing, swapping and peer-to-peer (P2P) sales, it is the equivalent of a credit score. Every transaction leaves a digital trail, grading the participants: Were the goods delivered? Was payment made? Was the service worthwhile? 

Botsman’s colleague, Lauren Anderson, recently went toe to toe with a somewhat skeptical Andrew Keen for TechCrunch, who wondered what will happen to people (such as himself) who don’t particularly care to share. How much of this is breathy hype? Although the numbers have grown dramatically for car-sharing over the last decade, for example, it remains a marginal player.

Yet despite Keen’s spot on curmudgeonous concerns, this grassroots, tech-enabled trend is fast becoming part of the mainstream mix.

… More interesting will be the incumbent retailers and manufacturers’ response to successful P2P markets. I wouldn’t be surprised to find automobile dealers offering their cars for rental on collaborative consumption market places. Or hotel chains acquiring apartments to rent them on P2P exchanges.

The ultimate beneficiaries of this competition and additional selection will be the consumer and the environment. Optimizing our resources will change the way we live. In 1900, 41% of the natural resources entering the US economy were recycled. Today, that figure is 13% [2]. Meanwhile, the US population has increased 357%. We simply cannot continue on this path.

One of the best ways to return to a sustainable way of life is to maximize asset use through collaborative consumption market places. By providing economic incentives to maximize efficiency, binding large communities to shared causes and decreasing total consumption, collaborative consumption will become a keystone of a sustainable American society.

Tomasz Tunguz, MIT Entrepreneurship Review

Certainly a keystone for baby fashionistas…

ADDENDUM (2/17/12)

Good Karma’s good karma was in full force the other night, winning a literal “sack of cash” (three thousand one dollar bills…) at Common Pitch, a competition for collaborative consumption start-ups, which was held in conjunction with Social Media Week—New York. The beer-buzzed hipster-heavy crowd at Brooklyn Bowl was as taken as the panel of judges with GK’s clever dovetailing of social goodness (e.g. sourcing clothes donated to school fundraising drives, re-purposing worn out clothes into bibs and quilts) and bargain-hunter’s bounty (saving parents over $1,000 on clothes over baby’s first two years). Virtuous circles rock.

Several entrants focused on monetizing access through P2P networks (bicycles via Spinlister, car-pooling via Zimride and wifi access via KeyWifi). Others, including WebThriftStore, Itemology and fashion site UNUM, riffed on developing marketplaces. And then there was Zoko, billed as a “Kickstarter for parties,” founded by a bunch of party-hearty Yalies for whom the collective good means a collective good time. Laissez les bons temps rouler

Speaking of which, the evening also included a nod to Sir Richard’s, the Tom’s Shoes of condoms, offering a buy-one / give-one model designed to improve birth control access in the developing world. Beyond its “SNL” skit first impression, this is a clever melding of marketing and mission that could actually make a difference, both in terms of public health and preventing unwanted pregnancies.

The two-and-a-half year old Boulder, Colorado-based company just announced its first major donation: a half million condoms to Haiti distributed through Paul Farmer’s organization, Partners In Health. Renamed “KORE”—local slang for “I’ve got your back”—the packaging includes Haitian Kréyòl messaging and visual instructions.

“Within the last year, Partners In Health has treated more than 6,300 HIV-positive patients in Haiti. Reinforcing the importance of condom use and ensuring that condoms are available and accessible is key in our battle against the spread of HIV/AIDS. PIH is deeply grateful for Sir Richard’s partnership in this mission,“ said Christopher Hamon, Haiti Procurement Coordinator for Partners In Health…

…According to data released by the United Nations Population Fund (UNFPA), Haiti has seen a spike in pregnancies following the 2009 earthquake. In the study, conducted in July 2010 of 2391 women in 120 camps, almost 12 percent reported being pregnant. Unfortunately, two thirds of the pregnancies were unwanted.

Collaborative smarts.

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— J. A. Ginsburg / @TrackerNews