Prabhav Mishra, Intern, Marketplace Risk
"I wish I could borrow a ladder from someone nearby, use it for 10 minutes, and then return it for a fraction of its actual list price", Uncle Adarsh said. Everyone laughed. Uncle Adarsh had said that in a tongue in cheek manner. I didn't find this to be humorous - rather, it got me thinking, "Why isn't there an Amazon but for renting items?"
This idea was in the back of my mind until that summer when I was selected to be a participant at Quarter Zero's Catapult Incubator. The Catapult Incubator is an intensive, 50-day program designed to help high school students create and pitch their startup venture with a team of peer entrepreneurs. There, I shared my problem statement with others and met four students who were interested. We looked at the reasons why other startups, who were trying to tackle the same problem as us, failed, and we realized that logistics was the number one issue that stopped peer-to-peer renting of everyday items from occurring.
We noticed how much debt an average student carried and how they needed to live below their means. We realized that college campuses hold a large student body in a confined space. Although campuses can span from hundreds to thousands of acres, there are certain places on campus that everyone goes to such as the library or a major auditorium. With a large population living in a confined space with a lot of interaction, we realized that college students will be the best target market for our product.
After doing live interviews with over 100 college students, about 82% said that they would borrow items from other people such as bikes or monitors. About 74% said that they would lend their personal items to others. Seeing this high demand, we co-founded Dorm Drop: a platform that helps college students rent items from one another helping them save and make money. We created a prototype website that
got over 2,000 views in a span of two weeks, and we also pitched to investors at Quarter Zero’s Demo Day.
Everything went well with our pitch until one investor asked the question that we
believe lost us our investment. "What if the person you lend your item to doesn't return it?" We had discussed this question before, but we didn't have a straightforward answer for it.
We assumed that we could take the social aspect of a college campus and use that to our advantage. For example, you will most likely not steal from a student you see often and have classes with. We also felt that sharing economy companies like ourselves would have to take this risk of trusting their users to behave in a righteous manner. For example, Bird has to assume that its users don't steal the scooters, and Airbnb has to assume that guests will not cause any damage to the host's home.
Due to Covid-19 and the lack of in-school instruction in the summertime, our startup did not decide to continue. However, one thing was for sure, I was hooked to this renting concept. After the program ended, I researched and read several books and pieces of academic work on this topic. This includes The Sharing Economy by Arun Sundararajan and Owning, Using and Renting: Some Simple Economics of the “Sharing Economy" by JJ Horton.
One day, I stumbled upon Elle Tucker's LinkedIn page and saw the work she was doing with an organization called Marketplace Risk. Immediately, I was intrigued, and I was on a phone call with the founder Jeremy Gottschalk within days. Talking to Jeremy showed me that the legal aspect might not be the fascinating aspect of the sharing economy, but it was certainly one of the most important and overlooked parts in this field. After all, I had first-hand experience facing legal issues with Dorm Drop.
This past summer, I was very fortunate to be able to pursue an internship at Marketplace Risk where I was able to learn various legal strategies that can be used to mitigate risk and avoid unnecessary distractions while also learning about and reaching out to various sharing economy startups. One of the most captivating things that Marketplace Risk does is their Sharing Economy Global Summit. The third summit is next month, at the iconic Lloyd's of London, the original insurance marketplace. What a venue! And the event itself is uniquely organized by sharing economy industry groups from around the world, the content is relevant, practical and useful for multinational startups – like the ones I hope to run!
I wish I could attend – maybe next time. Thanks, again, Marketplace Risk.