The Palmah members founding the kibbutz in 1948..
(photo credit: KIBBUTZ TZOVA)
As a tech investor, I’m often asked which kinds of businesses tend to pique my interest. Time and again I find myself drawn to those overlapping with the sharing economy. Only recently have I asked myself why I find this concept so appealing, and I believe it’s because of how I was raised.
Having been born and raised on a kibbutz, sharing is hardly a new concept to me. The stories about our cooperative lifestyle – tight communities, pooled incomes, dining halls – are all known. But an outsider may not understand how deeply those values were rooted in our lives.
As kids we all slept, ate, studied, bathed and played together with our age group in the “Children’s House.” Each season began with a walk to the clothing storage room, picking from the hand-me-downs to put together our “fashion collection.” Next season around, a younger girl would happily wear the same clothes. When my parents wanted to visit some relatives, a trip to town meant reserving a car from the pool collectively managed by the kibbutz, never knowing which one we would end up with. From infancy, we were raised to share practically everything.
Fast forward to the present, it’s not surprising that so many Israelis, many former kibbutzniks, are helping define the sharing economy, an industry that has globally attracted more than an estimated $23 billion in venture capital funding since 2010, and whose revenues by 2025 will reportedly reach $335 billion.
But why do the values of early kibbutzim resonate so closely with today’s millennials? Kibbutzim surged in popularity in the mid-1900s, when many immigrants arrived alone to a country rife with inhospitable factors and scarce in prospects. The best way to overcome this new reality was by forming cooperative communities, sharing every possible resource and supporting one another to empower the group as a whole. Keeping them together in the “Children’s House,” not only strengthened the children’s bonds, but also freed up both parents to work, thereby increasing communal productivity.
In today’s economy, millenials have their own financial hardships. With limited opportunity, lower income, soaring college debt, and rising real estate prices, it’s never been harder for people in their 20s and 30s to start a career or own a home. It set the stage for the rise of several new marketplaces that solved millennials’ challenges in innovative ways. Through collaborative economies, younger people, who are just getting started in life and with limited assets, suddenly found new ways to make extra money or access the support of a shared community. Just as the kibbutz model was to Israel’s newcomers, the sharing economy is this generation’s response, on a global scale, to economic instability. It’s the economy of the millenials.
Both generations responded to the tough economic conditions of their time by inventing a collaborative, decentralized, economic model. And this shared understanding has given Israelis a strong voice in the collaborative economies’ evolution.
There are many Israeli start-ups that support community and upward mobility among today’s millennials, such as Venn, which enables people to live a in a community while positively impacting their neighborhood. I see modern co-ops like these as the next generation of kibbutz. WeWork, which initially attracted people to its office sharing network by cutting their costs, has shown even greater appeal for the community it fosters. So much so that the idea of co-living offshoot WeLive just seemed like a natural extension. Trench, a fashion-sharing community based on digital currency, doesn’t feel much different than the kibbutz philosophy. When I use Trench, I still get to pick from a shared wardrobe, it’s just infinitely larger. Sure, the context has changed, but what I find is these concepts are just as appealing to millennials today as they were back on the kibbutz. Pool your resources and you collectively benefit – not to mention that it’s fun.
The sharing economy, is also based on sustainability and avoiding waste of resources. Few things are worse to a kibbutznik than waste, whether that involves time, energy, or money. When you think of the hard conditions our grandparents and sometimes our parents faced, it’s not hard to see why.
This is "Why buy when you can share?" attitude behind many Israeli start-ups, notably commuter superstar Via, whose on-demand shared rides remind me of the kibbutz carpools from my childhood. I see the same concept behind venue finder Splacer, which lets people rent out their apartments as office space when they’re not home and list other underutilized spaces for events. Another example is Roomer, a travel marketplace that allows people to list their non-refundable hotel reservations they can’t use and offer them to buyers at a discounted price, creating a win-win situation.
One of the first members of Qumra’s portfolio, Fiverr is the world’s largest freelance services marketplace, helping lean entrepreneurs grow their business affordably while giving freelancers global opportunities to find work. Millennials have celebrated Fiverr for helping them secure work on their own terms. They can now build a portfolio and make a living on Fiverr, even while they’re still in school, or as a supplementary income to their day job. Israeli startups such as OneHourTranslation, and Speakizi are built around the same premise that services are more accessible to small businesses when you cut out the middleman and hire freelancers directly.
As a former kibbutznik and as an Israeli, I see our sense of community and our attitude towards resources reflected in the collaborative economies across the world. It’s exciting to see how the values of one small country are creating opportunities for others to connect, to make a living on their terms, to share resources and create a more sustainable society waste less and share more. I believe that we’ll continue to see more Israeli interpretations of this concept move the sharing economy in new directions.The Author is a partner at Qumra Capital. She is also a founding leader of the Women Founders Forum, which supports women CEOs of young startups raising funds and taking key decisions for their ventures. She holds a BA in Business Administration majoring in Finance from the Israel College of Administration, and an Executive MBA from the University of London.