The “cheap mooch” effect

Why people don’t borrow

James Dong
Mar 7, 2014 · 4 min read

This artiblog will be dedicating to discussing the insights from the month of consumer research in December. Per the hypothesis driven approach, there were three key assumptions I wanted to test, each with its own sub-assumptions (ordered by most important to prove to least):


Detailed results for each sub-assumption are at the end of this post. At a high level:

The first assumption, that consumers value borrowing in some way, was “half-proved.” What I thought was important was not (reduce storage/ownership), what I thought was unimportant was (save money, “feel-good” aspects of sharing). Next step: further validate the save money & “feel-good” aspects in product testing.

The second assumption, that borrowing could be better facilitated online proved true, enough that I do not need to devote more resources to validating this.

The third assumption, that borrowing among friends is easier than among strangers, on paper looked to be true, but in fact, wasn’t. I had critically missed a sub-assumption that there were no natural barriers to borrowing among friends, when in fact, there was a big one.


The “cheap mooch” effect

People have a strong desire to not appear a “cheap mooch” with their friends & acquaintances (especially in an individualistic culture):

  1. People tend to only ask “near family” (roommates and partners) despite limited inventory in these 2-3 connections.
  2. People tend to not ask to borrow occasional-use items until the price becomes prohibitively high, roughly ~$150-200, even though they start thinking about borrowing at around ~$50. (This is roughly similar for a middle bulk of income bands.)

In this gap lies the opportunity—there is a world of products in this price range!

This effect also creates a unique, demand-constrained marketplace. one of the only marketplaces that is demand-constrained. Therefore, the major next step is to test how to create a product that breaks through the “cheap mooch” effect. If this is possible, then the assumption that borrowing is easier among friends does hold true. (Think of it this way, if a friend asked you to borrow something, would you say no? Now try to think of the last time a friend asked you to borrow something.)

There are 2 main ideas I would like to test:

  1. Very clear communication to borrowers that their item request will only be sent to friends who have the item (i.e., remove risk of spamming a large audience, remove risk of appearing cheap since those friends have already agreed in advance to give you the item)
  2. Mandatory transaction fee ($1) to borrow something. This one is interesting because I’d want to set a price that balances:
  • Reduction in “cheap mooch” effect that arises when borrowers feel like they’re paying for access => more people may be willing to borrow (will not completely absolve the effect since borrowers are not paying full market price as they would in a rental economy like AirBnB)
  • Reduction in community building that arises when sense of obligation is tied to finite payment => borrowers may not proactively become lenders (plenty of AirBnB users are just renters; and part of my success depends on the demand side evolving to become supply side)

Of course, if you have other ideas I’d love to hear them!

Per an earlier post, I’m juggling these tests with finding early users, but I will be sure to update with results!


This blarticle was written in the context of building a product that helps people borrow occasional-use items (e.g., camping tents, electric drills) from their friends & neighbors. Check out the prototype here.


Detailed results from interviews on each sub-assumption

    James Dong

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    Rent camping gear & snowsports apparel up to 1 hour before your trip! (https://www.lastmingear.com ). Formerly @BainandCompany & @Cal