Here’s to Free Trade!

Jaspr, a new person-to-person, quid pro quo trading app, is bringing barter back.

The Sharing Economy

Benita Matofska, an authority on the sharing economy, defines it as a “socio-economic ecosystem, built around the sharing of human, physical and intellectual resources.” It’s an umbrella term for a variety of peer-to-peer, sharing-based, value exchange systems.

It’s a bit of a buzzword at the moment but, in one form or another, the sharing economy has always been around. Adam Smith, often referred to as the forefather of modern economics, was the first to make the now popularized assumption that barter had to have preceded the monetary economy. However, this article makes some good arguments disputing his logic.

Photo by Igor Ovsyannykov on Unsplash

It seems likely that pre-money cultures used a variety of different means to acquire the goods and services they needed, not necessarily just barter. Regardless of the exchange systems previously at play, it’s fair to say the advent of money really changed the game; it simplified trade in many ways, and, could be argued, allowed for the development of a more complex society. But money is just one way to obtain items and services; the sharing economy can and does run parallel to the monetary economy.

And at the moment, it’s booming. Think AirBnB and Uber. These global behemoths are shattering traditional industries and both have business models firmly rooted in the sharing economy. Other innovative but lesser-known companies worth a mention include Couchsurfing, BonAppetour and TaskRabbit.

Even if you haven’t used any of the aforementioned platforms, you’ve likely engaged in the sharing economy with some frequency throughout your life. If you ever borrowed clothes from someone, donated your time to help out a friend or gifted someone something, you’ve been active in the sharing economy.

Though the sharing economy never disappeared, it’s fair to say that it’s been underutilized until quite recently. The rise of the internet and connected devices opened up all kinds of possibilities. It has allowed us to connect at a global level, but also, perhaps even more importantly, at a local level.

Many innovative internet-based companies are now focusing on employing one or more aspects of the sharing economy to help fulfill daily needs. The platforms they are building are revitalizing the sharing economy and bringing it mainstream.

The Jaspr team in action

Trading as a Kid

During my school years, my classmates and I would spend our lunch breaks wheeling and dealing in Pogs and Pokemon cards. Money wasn’t readily available — the little I could rustle up allowed me to satiate my sweet tooth, but there was little left for anything else.

With little to no cash flow, trading was how I got my mitts on the things I wanted. Also, getting those last pesky items needed to complete a set from a randomized packet was close to impossible. Trade made sense, though, with hindsight, it was the act of trading with like-minded people that makes my memory of this time golden.

Trade is inherently social. When two people connect to exchange items or skills there’s an instant connection that goes beyond the mere substance of the trade. Unfortunately, as I grew older, and apart from my school buddies, the forum for trade was no longer available: Work replaced school and money replaced trade.

Trading as an Adult

I didn’t think there was a practical way trade would work in the real world, until recently, when I stumbled across Jaspr, an up-and-coming Berlin startup claiming to be the world’s first advanced platform for the cash-free trading of goods and services. Intrigued, I signed up as a beta user.

Since then I’ve become well acquainted with the platform, which is a real treat for the eyes and UX-wise. After creating a free account, you can easily list the items and skills you have to offer as ‘haves’, and, the items and services you would be willing to trade for them as ‘wants’. When a have aligns with a want, Voila! Matched users can then connect for a more in-depth discussion to determine whether or not the trade will go ahead.

After trying out Jaspr, it occurred to me that is was a little strange no-one else had already had a crack at the idea. Why was there no well-known example of a global, quid pro quo trading platform?

As I delved a little deeper into the topic I stumbled across some thoughts William Jevons, a 19th century economist, had on bartering (trade). In his 1876 book ‘Money and the Mechanisms of Exchange’, he highlights three key limitations of the barter economy:

1. The Want of Coincidence: describes the apparent unlikelihood that two people, who each possess an item or service wanted by the other, would be willing to trade these items or services at the same given time. According to Jevons, who uses some rather archaic examples to illustrate his points, the chances of two people wanting things from one another at a given time is highly unlikely.
2. The Want of a Measure of Value: relates to the method in which we attach worth to items or services. In the monetary economy, an amount of money is used to denote the worth of an item or service. In the barter economy, no such measure exists. According to Jevons, the absence of money as a measure of value makes it difficult to ensure that a trade is ‘equal’.
3. The Want of Means of Subdivision: addresses the indivisible nature of many items or services. Take this example: Two people each want an item from the other, lets say one has a bike and the other a simple picture frame. As the bike can’t be divided into a smaller item worthy of a picture frame, it’s an imbalanced trade and, as such, the trade is unlikely to occur.

I recently caught up with Noel, Jaspr’s resident Canadian and CEO, to talk about how Jaspr is addressing these apparent obstacles, and to learn about the app’s future road map.

Noel pitching at 12min.me

Hey Noel, jumping straight in: What makes Jaspr different to the other trading platforms that have come and gone?

There have indeed been many attempts to make barter surge with the help of digital platforms. Each attempt, though, has run up against a very important, practical problem: it’s nearly impossible to actually find a good trade. Say you want a TV and can give an iPhone and dog-sitting. To find a TV that trades for those things, before Jaspr you would search for “TV” and sort through a messy pile of listings for TV, hoping one of them trades for your iPhone or dog-sitting. And in fact, 92% of listings in our research simply said “Make me an offer”. What are the odds that someone offering a TV has a dog and wants it….sitted? What modern traders need is for the service to do the heavy lifting, and match them up with items that make sense, and are mutually appealing.

Right. So, getting matching right seems to be key to solving the so-called ‘Want of Coincidence’?

This is the second linchpin of Jaspr. When you use eBay Kleinenzeigen, for example, about 5% of users are sellers and they sell, on average, only one thing each. Jaspr makes it easy, fast, and fun to indicate that you have or want something, without necessarily going through the long process of putting a listing together for each one. The result is that an average Jaspr user has eight items offered/wanted, as opposed to the .05 that an eBay Kleinenzeigen user has.

They sound like super positive stats. And, do you have any plans on how you might solve the Want of Means of Subdivision?

Very often we’ll see two users that match with each other but have items of clearly different value. Soon, in these cases users will be able to include cash or more items to even out a trade. This will greatly increase the number of possible trades while giving the flexibility traders need to make sure both parties come out with a smile.

Sounds like a solution. What are the other key challenges to overcome?

As with every platform like Jaspr, building an excited community is tough. People are bombarded everyday with platforms trying to get their attention and support. Jaspr will have to do a great job arranging really interesting, mutually-beneficial trades that people will be eager to talk about with their friends. The good news is that we have a team passionate about trade who have seen the magic that can happen when a good trade is surfaced!

And, what are the plans for the future? How do you hope to see Jaspr a year from now?

We’re going to focus on Berlin for our first several months, building a strong community and learning from them what we have to do to really serve their needs. When we see that Jaspr is scaling in a robust, friendly way, with lots of repeat traders, we’ll turn our sights to other philosophically-aligned big cities in Europe and North America, being careful to build trade-loving communities in a grass-root way.

Sounds like a solid plan. Cheers for taking the time to chat!

Though the app is still in its infancy, the Jaspr team is hellbent on bringing barter to the adult word. If this article had you feeling a little nostalgic about trade, download the Jaspr app (Android/Apple) or visit Jaspr’s website and help bring barter to Berlin — and beyond!