Shared economy practice (not sharing economy!): how to do it, and not to do it.
In a recent blog, Lisa Gill, mentioned Shared Economy as an Art of Hosting (AoH) practice. Indeed, we started thinking about a more fair system regarding payments and compensation than our mainstream habitual system within the frame of the Learning Villages of 2012 and 2013, within the global AoH network. We wanted to figure out “how to price the gathering to both make sure everyone who wants to attend can do so regardless of their financial situation, and at the same time making sure that the ones organizing and hosting are paid well”. In the meantime it started spreading, but so far, it is not a practice that is used by all practitioners in this global network.
Since a long time I have been looking for a way to price workshops, gatherings or retreats in a way that felt balanced on all sides. Coming from a working class background I am, since long, painfully aware of the difference of what is seen as a ‘normal’ price depending on which social class you live your life in. For a single parent keeping the household floating through making ends meet, a set price can be way over the top, while the same price, seen through the eyes of a business person gives the impression the program isn’t even worth looking at.
Wake up: Art of Hosting Learning Village ‘13
For the Learning Village gathering, in Slovenia in ‘13, we made sure that we could offer different accommodations (from tent, to sleeping room, to private room) and also the opportunity that people could decide for themselves how much they would contribute. Still, two weeks before the actual gathering, we heard that for people in the neighboring (East-European) countries the price was too high. Initially, I felt kind of defeated… we took the effort to what was in my eyes a good and even cheap price and still this was the reality for these people! I didn’t know what to do about it.
From transaction to relationship: Art of Hosting Learning Village ‘14
Organising the next village a year later, a couple of us stepped into the deeper inquiry of how we could make this work, — finding a system that could balance many different financial backgrounds and creating an honourable living for the organising team — knowing quite well the difference in living standards within Europe, let alone across the globe. We could offer a gliding scale of course, as we had done before. But then, you never know how many participants will show up and having 20 or 35 participants makes a lot of difference in the final budget. How can you ever know the average cost per person before people have signed up and you actually know the number of participants? Many times the final result is that the ‘hard costs’ get paid (transport, accommodation, meals etc.) and only the left-over can be divided amongst the different members of the team. Sometimes good, but mostly not so good.
Then there was the proposal to use official rating scores of the different countries. Seems good at first, but just looking at the participants’ list we realized that the student living in London (within the strong economic power of the UK) or for the international consultant working from Slovenia this would not really be fair. Then what?
Diving into this deep inquiry with a couple of mates we realized that we were operating from the assumption that it is all ‘a transaction’. The organizers set a price, — or even different price levels — and the participants are paying. Transactions at the core. Not dialogue, not relationship, not connection.
The light began to shine when we saw a new principle: what if it is not the organizing team that holds the overall financials, but instead we put the responsibility in the middle of the ‘village’ — or the group of participants. Hallelujah! I felt relieved!
Different experiments, the essence
Since then we applied this model in different settings: workshops with open registrations, gatherings of networks… we adapted, we learned, we tried some more…
The ‘shared’ in Shared Economy means: shared responsibility. The essential point in this model/practice is to put ‘the fees of the organising and hosting team’ in the middle of the participants group (and not in the organising team). Using shared economy, as a host and organiser, means that you ‘risk’ not to be paid at all. Indeed. You trust in the collective; and you are willing to earn less — or even nothing at all — if the participants all have bad financial situations. That’s real sharing.
In case you want to try it out your self, below follows a description of how it can work.
How it works
Before the event you can offer people a choice: either they register within the traditional economy (with full ‘business’ price and a reduced ‘NGO’ price) or either they choose to engage with the shared economy (with an initial payment as registration, that covers expenses of venue, lodging, food and a second payment to be decided during the gathering)
We realized that stepping into the Shared Economy practice might be one step too far for people, especially as they need to deal with a boss or some other financial administration that would not understand why there isn’t a fixed price set from the beginning. So, we offered the options of choosing the typical transaction-style or choosing the experiment of shared economy.
Here is a description in an invitation (for our AoH training in 2016) in case you want to know how to describe it to future participants.
During the event — how to host this process in the workshop:
(thanks to Samantha Slade (and the different Percolab teams) to continue to practice this, and for the write up!)
1. Present the notion of transparent finances and share all information: total income (clarifying numbers of traditional and shared economy participants), all costs, also team honorariums (what each person would feel good with), and current balance. Give time for clarifying questions.
2. Explain that the next exercise is ‘to do shared economy’. Those who opted for shared economy can now decide on the second installment as agreed beforehand and for those who opted for the traditional economy they have 3 options: go have a break, stay in room and observe, stay in room and participate (with real money).
3. Proceed with shared economy — introducing the notion, sharing further financial info (needed amount of money to balance, average based on number of persons); with another moment of clarification. Then a round of quick reactions to the question: how am I feeling right now?
4. Each person picks up three post-its. On the first write: how much would be too much? On the second: how much would be too little? and on the third: what is the amount that feels ok for you to pay? add your name and indicate plus or minus taxes and put it in collective pot.
5. Finish with a short sharing: how it felt to live the experience?
Share the total amount of second installment and an update of the total income and final balance.
Then give 5 minutes to share, in pairs, feelings and thoughts during the process.
Do’s and dont’s for the team
We learned the hard way that when you use this model, as the hosting and organising team, you all need to be super clear about your relationship with money.
First, in the beginning of the planning process, you need to set the fees of what you want to be paid for your organizing and hosting work. Working with Shared Economy is not going to help you when you struggle to set your price. On the contrary! If you only set the absolute minimum you want to get, that is most likely the figure you are going to receive — as we learned the hard way.
Second, you need to be able to speak the figures and the fees to all participants without holding back, without feeing ashamed, without making it too complicated etc. Your explanation should be factual, also made visual, objective.
Third, when applying this model in a workshop or retreat, you explicitly agree upfront that you share the risk (of earning enough or not) with everyone. As one of the participants in a workshop asked: What happens if none of us can actually pay the average price? The answer is: We share the risk.
This may feed the false assumption that a shared economy model is risky. But when you organize it in a traditional transaction model it might be as risky, although in a different way. You might need to cancel your event when there aren’t enough participants when the deadline for paying the venue approaches.
Some learnings from practice
In the first Learning Village, as a team, we weren’t ‘clear’ enough about the whole money issue as we didn’t ‘dare’ to state the actual fees that we wanted to get. We only named the minimum we wanted. That was actually what we got. Not more. We learned!
In the third Learning Village, which was over 5 days, we daily presented the balance with the updated amounts, and in the end got what we hoped to get! People were contributing in all kinds of ways: adding some more money to the pot, taking out some of the costs, etc. It felt really nice to hold it in the circle of the whole ‘village’.
In an early version of the Going Horizontal training we didn’t have a lot of participants; even to the point that a couple of weeks before the actual training we wondered to cancel the whole event. As it was still in prototyping phase we decided with the team to go ahead, fully knowing fees would be really, really minimal. We used the Shared Economy practice and way more came in than expected! We could pay our apprentices’ transport costs — which felt bad we couldn’t afford that from the original income — and even had some ‘leftover’ to pay for our joint dinner at the end.
One last experience: our recent Art of Hosting training some months ago. As a team we had failed to be conscious and aware about the whole topic of money. We copied the prices from a previous training, and didn’t spend time on setting our fees consciously. So, we didn’t have the number of participants as expected; and so less in the overall budget to spend on the fees.
As we could not be physically together after the training we experimented with Balancing the Budget Online. Everyone had the electronic finance sheet on their laptop, while we were connected through Zoom. We all knew we had to lower our fees to make them fit with the overall budget. We all started to lower our expected fees in the financial spreadsheet. Hmmm, still a couple of hundreds euros of the mark. Some more amounts were going down… yeah! We reached the balance!!
With thanks to the many people who were willing to step into the experiment and to Samantha Slade for writing up How it works!
Learnings from the Money inquiry, summer 2019:
Feedback from participants in the Money Inquiry:
- Maybe use Caring Economy instead of Shared Economy?
- Maybe design a process upfront that takes participants on a journey to understand this system better? (of course, more work to tend to)
- the first instalment cover the transactional costs; the second one can be named as relational maybe?
- If the participants group is around 10 people and your team is around 3 or more, then ‘the burden’ of closing the gap between what is already paid upfront and what is wished for by the team is too big!!! then this system does NOT work, we learned the hard way — unless a miracle happens! and sometimes they do!
- In your invitation make it pretty clear that this is completely different, and cannot be done on autopilot! Even add the extra question in your registration form: Are you aware this is really different and you still want to register for the Shared Economy?
Questions and answers:
This description has elicited some questions in some readers. In case they are also your questions, read my answers to them below (originally in FB exchange).
Question by Rich Bartlett: “1) Sensitivity tax. Say there’s a session at the end of a retreat where we look at the finances and agree together how much we are going to each pay. Those who are more sensitive to peer pressure / guilt / etc are likely to pay more than people who are less socially attuned. That feels like a backwards incentive.”
My answer: First of all, we don’t plan this session ‘at the end of the retreat’, but more in the middle, or towards the end — to give people time to digest it, to talk some more about it, to bring it back into the group space or … (we are very aware that the whole practice brings up a lot of ‘stuff’ for people)
We do not “agree together”. Like described in the blog post, point 4: “what is the amount that feels ok for you to pay? add your name and indicate plus or minus taxes and put it in collective pot.” This means that each person decides for themselves! and is not going to share his or her amount with the other participants.
And what I always add to my explanation: “This is the average amount per participant that is still ‘needed’, but all of us know where we sit with our own finances, as below or above average. So feel free to chose an amount that fits for your financial situation.” — I stress that quite strongly.
Question by Rich Bartlett: “2) Friend tax. If I am a nomad who joins your retreat for 3 days and then leaves town, my engagement with me is more like a transaction than a relationship. In this model, the people who want to nurture a long term relationship with you are likely to pay more than people who are just passing by: they want to maintain good relations, look good, support you over the long haul. This incentive feels backwards too. Wouldn’t a better model result in short term-ers paying more? (Your blog implies transactions are bad?)”
My answer: Transactions are not really ‘bad’, but they don’t leave enough room for diversity in payment.
It is not that the purpose of this practice is ‘to build relationships’. Rather: to finetune ‘what is paid’ in relation, at that moment. Not as a ‘take it or leave it’ approach; which I call ‘transaction’.
Once we had a totally new participant, who was used to business prices, and added a substantial amount to the pot. Was very helpful for the overall budget.
Question by Rich Bartlett: “3) Information asymmetry. As an organiser you always have much more info than the participants. You have your experience, your sense of the market, and an up-to-date daily running total of how many tickets have sold so far, so you can make an informed guess about the final numbers, weeks out from the event. As a participant, I want to pay you to hold this information and calculate the risk you are taking in offering me the course. If you don’t give me all this information, and then we get to the “shared economy” session at the end of the retreat, then it seems unfair to claim we are sharing the risk and responsibility.”
My answer: “you can make an informed guess about the final numbers, weeks out from the event.” — that is not my experience these days. People register later and later. Just recently, one month ahead of time, we weren’t sure this was a go or not… with only 8 registrations. As a team we agreed that we would go ahead anyway, even if it meant that none of us got paid. Two weeks later we have 25 registrations! So, I do think that we are sharing risk and responsibility.
In one of the original Learning Villages we did indeed share all the information upfront about the number of registrations etc. For most of participants to trainings, the Shared Economy practice is weird enough already, let alone that they would get even more information — which we would be happy to share. So we decided not to do that.
Question by Phoebe Tickell: “My main concern has been being part of organising groups where we used the ‘shared economy’ model but with very sparse education and information provided for the participants who opted in.”
My answer: This is something you would NOT do!! You need to share the full numbers, fees for trainers-hosts-facilitators included, and with a lot of grounded and centred energy, because — as mentioned — a lot of people hold a lot of tensions and emotions around money. If you do this practice with ‘sparse’ explanation, that only adds to the confusion — which is counter to what we have as purpose!
So, yes to “A full understanding of what opting into ‘shared economy’ means is basically fundamental to the practice working.“
Question by Phoebe Tickell: “Understanding the idea of shared responsibility, and maybe having a sense of the bare bone costs before committing. Otherwise it feels like going in completely blind… “
My answer: That’s what the ‘first instalment’ is always about, these “bare bone costs”. It is stated explicitly when registering. The second instalment is mainly about fees.
Some more resources:
Listen to my story (4min) about shared economy.
Here is one of the first descriptions: Learning Village 2013 in Slovenia.
Next iteration: Learning Village 2014 in Slovenia.
Description for a recent gathering Febr.’19.
Description of an experiment with the model, published earlier here in Percolab droplets