Retail

Fat Lama And The Airbnb Of 'Stuff'

Like so many of the innovators we talk to, the team at Fat Lama came by their signature innovation the day they ran smack into a big problem that seemed like it should have been much easier to solve than it was.

At the time, two of the co-founders, Rosie Dallas and Chaz Englander, were running a service renting out desk space a la carte to professionals.  And in the course of creating that office space, they found themselves buying ladders and painting equipment that they knew they were only ever going to use once.

“So we had to buy all this stuff and then couldn’t get rid of it, even though we tried selling it,” Englander noted.

Meanwhile, they were very familiar with sharing because the desks they were using were actually on loan from a different firm.

“The desks we used were £300-a-piece Swedish desks that were lent to us by a company because they couldn’t afford to pay the fees for storage and they had nowhere to put them.”

And from that, Englander said, an idea was born.  A sharing marketplace targeted at millennials.

Why millennials. as opposed to say everyone?

Differing generational views on acquisition, Englander noted.  Study after study seems to indicate the same set of facts about millennials: They are more motivated by experiences than by physical goods and in fact don’t seem all that invested in acquiring lots of stuff.

(Perhaps a practical outcome of not being homeowners, younger consumers also simply have less living space to put lots of “stuff” into.)

But that does not mean, Englander noted, that younger consumers have taken some sort of vow of poverty and sworn to live and use only those objects they can build with their own hands.  It’s just that millennial consumers are much more likely to gravitate toward temporary exposure or ownership of something. Why own a car when one can take an Uber? That sort of thinking.  And the business Englander and his partners formed taps into both the desire to keep the owned inventory list simple while also always having access to things they want or need.

"This is a service,” he noted “that at base serves customers who just want to have less stuff.”

“Let’s say you want to have a coffee machine because you’re on holiday and the flat you rented from Airbnb doesn’t have one and you don’t want to buy one. Or maybe you just can’t afford it or afford the type you want. And then we have the people who are going away and have a £3,000 coffee machine that isn’t being used, so they can loan it out.”

The connection is made, Englander says, and everyone gets what they want.

The lender, who gets to set the price for the loan and terms of use, gets paid for their stuff, often at a time where it was just sitting unused and unloved anyway.  The borrower gets access to something they truly want or need and at a fraction of the cost they would have otherwise paid for said access.

To make money in the middle of the transaction, Fat Lama charges both sides a 15 percent fee, giving them a total cut of 30 percent.

But more than an opportunity for goods and services to change hands, and for Fat Lama to make an interesting profit in the sharing economy by literally incentivizing people to share all their worldly goods, Englander says on a larger level, the company is also about building a community of trust in London among its users.  Fat Lama, firm believers in the principle of trust but verify, does vet every object that goes up on the site. But, Englander said, in a giant, international and often pretty anonymous city, the macro goals around community are key.

“If you say hello to people at the bus stop here in London, they’ll probably call the police,” Englander says. “If you do it in Italy, they’ll probably invite you for dinner.”

But the sharing economy, he noted, is changing not just how we spend, but also how we comfortably interact.  Taking a ride from a stranger was once the thing everyone’s mother warned them against.  These days, he noted, it is pretty much the business model behind Uber.

“People now feel comfortable with it and let strangers sleep on their sofas,” Englander says.  “It’s part of why we wanted to keep the service location-based because it is also about people meeting people, shaking their hand and looking them in the eye.”

 

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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