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Phase: Evaluation

StartBarter - A barter economy for startups - Pivoting to Advisorful.com

A bartering currency for people to barter their skills, services, products in exchange for others.

Photo of Haiyan Zhang
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Advisorful.com Advisorful.com
When two people meet, they could swap skills to benefit eachother's startups. But what if one party doesn't have the skills the other needs?

This is a points system where one party could exchange their skills for points and use those later in exchange for skills, services from other members of the platform.

The StartBarter platform would also facilitate social meetups between entrepreneurs and help people to put great teams together.

- The platform could be extended to include tradespeople like accountants or business managers who wanted to help out by offering their advice.

I was inspired by the stories coming out of Greece about local communities setting up barter currencies in order to overcome their economic crisis:  http://boingboing.net/2012/03/20/in-economically-devastated-gre.html

Update - May 10, 2012
Hi everyone, to evolve this concept further, I'm offering my own 'Virtual Office Hours' to web startups in need of UX, design & community building advice.
Signups are here: http://ohours.org/haiyan
Please help me spread the word.

This is an initial prototype to test the waters of what startups would want to get advice on, how that could be facilitated remotely and what they would be willing to exchange for the advice.

Update - May 21, 2012
Just a quick update. I had my first 'Virtual Office' call with Trevor Harwood of Postcapes last Friday.

It was a good meet-and-greet and we chatted about his plans for his startup. A learning for me is the need for an agenda of issues to tackle on these calls.

I think this idea is evolving into more of an advisory service, where experts in design/business can offer their advice to startups over virtual office hours. This could be a co-op where advisors are invited or apply to be included and startups also have to apply and get a block of mentoring time from the advisors in the group.

Update - June 22, 2012
After having done some more research and thinking on this concept. I've understood and learned a few things:

* Bartering exchanges are really difficult to set up, in both the US and UK. It seems that any exchange of a 'currency' for a service that someone would normally pay for is still considered a trade and needs to be taxed accordingly. In the US, this means the barter exchange has to issue a tax receipt for each transaction.

* Next up, I also believe that if someone delivers a service then they should be compensated for it.

* After some light research, I've settled on a platform for sharing advice. Predominantly where professionals can log on and offer advice to businesses and entrepreneurs starting up

Introducing Advisorful.com!

* I've created a very very very early beta signup at advisorful.com
* Come sign up and be the first to hear about our launch.

What kinds of resources will be needed to get this concept off the ground and scale it?

Perhaps the EC could offer this as a funding/incentive scheme, where on registration of a startup, the EC will give a number of StartBarter credits to the company to gain access to skills and services.

Evaluation results

15 evaluations so far

1. How well does this concept address a significant pain point felt by European web start-ups?

This is a major pain point for European start-ups - 60%

This is a "nice to have" but not a serious pain point - 33.3%

I really don't know - 6.7%

2. How novel do you think the concept is?

Never seen it before - very novel! - 46.7%

This is common in some places but not in many parts of Europe - 0%

This is not novel but a good iteration - 46.7%

There are already other solutions out there that address this problem - 6.7%

3. How easy is this concept to implement and maintain?

It could be implemented quickly and easily maintained - 20%

It could be implemented quickly but will require regular updates to ensure it is accurate and relevant - 53.3%

It is a big undertaking and would need a lot of support and cooperation from people and organisations to make it happen and to maintain it - 26.7%

4. What type of organisation is best placed to take this forward?

The European Commission should own this one - 14.3%

This belongs with member state governments (e.g., the UK, Belgium, etc) - 0%

This is best being owned by a private company - 28.6%

This feels like a non-profit - 7.1%

This is a start-up itself! - 50%

5. Overall, how do you feel about this concept?

It rocked my world! - 46.7%

I liked it but preferred others - 46.7%

It didn’t get me overly excited - 6.7%

Inspired by (1)

Talent Swap
Talent Swap
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This inspired (3)

Web Ventures
Web Ventures
Co-found your web startup with a Big IT firm !
Co-found your web startup with a Big IT firm !
Building a microVC Economy
Building a microVC Economy

32 comments

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Photo of Haiyan Zhang

Hi Everyone, I've pivoted this concept to a new web platform called Advisorful (http://advisorful.com)

Please come sign up to be the first to try it when we launch!

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Photo of OpenIDEO

Congratulations on sharing a winning concept! The EC is excited about helping web entrepreneurs find creative ways to access the skills they need, and is looking forward to hearing of the results of your prototype.

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Photo of Paul Reader

Congratulations again Haiyan, on another winning concept. I think this has potential to create equivalence of value across jurisdictions and contribute to harmony in exchanging skills.

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Photo of Manish K Singh

Dear Haiyan,
The plan's reads nice, but I could not relate it to the existing economic models that we have i.e. how does bartering some skill sets when a society is facing an economic crisis really help out in the overall picture.
Here is a question, sharing the *inner circle* information could always be a problem, and the participating entities be willing to part with some information that they consider is vital to their operation (concept). You mention that you had your first call on something similar on 21st May. What was their response on this front?

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Photo of Haiyan Zhang

Hi everyone, to evolve this concept further, I'm offering my own 'Virtual Office Hours' to web startups in need of UX, design & community building advice.

Signups are here: http://ohours.org/haiyan

Please help me spread the word.

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Photo of Paul Reader

Great initiative on ohours Haiyan!
Going back to the bartering component of the concept - are you proposing that the EC set up a pool of credits to start the process?
In existing barter economies like Brixton Pound or Barter Card the credits usually have a monetary equivalent and are created and issued by the originating body in exchange for real money. If the pool is to be created 'gratis' by the EC would it need to be topped up as new start-ups and service providers enter the market?

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Photo of Haiyan Zhang

Thanks for the feedback Paul.

After speaking with a few of the business designers at my office I'm not sure if a straight-up one-to-one bartering scheme is the way to go.

For example it could also be a designers co-op where startups apply and get access to the services of its members for a subscription fee, which might be barter-oriented.

With this prototype, am trying to see what sort of issues startups would want 'advice' on vs other kinds of work they might pay a freelancer for.

Will see if there are any takers! :)

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Photo of Paul Reader

Thanks for such a quick explanation Haiyan - some of the smaller barter-type arrangements had their origins in things like baby-sitting clubs where the medium of exchange is hours rather than currency. Those without children might provide 2 hours baby-sitting in exchange for 2 hours gardening or 2 hours bookkeeping - the monetary value might not be equivalent but the hours exchanged are - if the hours can be applied in otherwise unproductive time it becomes a win-win situation.

On another issue I found the http://www.hirelite.com link on the ohours site - this led me to thinking about Priyanka's match-maling concept and then I thought that perhaps a combination of your ohours initiative and StartBarter might be suitable exchange/currency for her concept too (http://www.openideo.com/open/web-start-up/concepting/connecting-entrepreneurs-and-experts/#c-825a5ff0798560e2728a0d00d8f8338a )

Cheers

Paul

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Photo of Anne-Laure Fayard

Hi Haiyan, I like the idea and I can see the tension between a complete barter type of concept and something more like a co-op with members' fees. I'm curious to know how your prototype worked. What did you learn? thanks. al

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Photo of DeletedUser

DeletedUser

Haiyan,

I really like this concept too. As a (very recent) MBA graduate with a big student loan to pay off, I know I would definitely use StartBarter to help get my business idea off the ground. I also love the idea of gameifying it by letting users accumulate points / badges to show off. I wonder could users trade time instead of a monetary value? for example if I work for 2 hours on helping a designer with their business plan, could they then offer me 2 hours design time?

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Photo of DeletedUser

DeletedUser

Haiyan,

Like the concept too. I see some synergies between a few of these concepts on this challenge. Over the years I have worked with others to try to address similar challenges. So to get experts to be willing to work with start ups for reduced payments and without necessarily giving company equity you would need a system as you describe. We came to the conclusion that you would need to provide a value to various skill sets and to authentic that a person indeed as a set skill. You then need to be able to actually track the value of what is generated. Systems like elance have methods they use for this. Then with such a system a professional could provide services at a reduced cost with a higher payout later on if the company proves to be successful. In essence as a convertible debt in exchange of company equity.

This concept also ties in with http://www.openideo.com/open/web-start-up/concepting/openfunding-platform/ for a way of funding startups by reducing the initial capital expenditure required.

It also touches with http://www.openideo.com/open/web-start-up/concepting/coalition-of-the-established/ if you consider the professionals as part of your established base.

And finally one big expense is legal so when a system like this http://www.openideo.com/open/web-start-up/concepting/eliminating-the-lawyer-with-an-intelligent-flowchart-based-legal-website/ or www.123agree.com needs review of a lawyer..... well you get the picture.
(see i4exchange.com for additional reference to where your concept is being applied)

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Photo of Amy Bonsall

Thanks for sharing your wisdom with the community, Joshua. It sounds like it can easily get quite complex! I'm wondering whether there's enthusiasm for a simple sharing of skills, with something like a design quotient as the "reward." There is a lot of value people can get from sharing skills with others - learning about other ventures, applying their skills more broadly, etc - which makes me think maybe we don't need to have a more formal return.

In a way it could be like Kickstarter - you give money and your primary return is feeling as though you've supported another company. Same thing here.

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Photo of Paul van Zoggel

An interesting note for EU : EU does not lack ideas/solutions, the problems start when you need good coders and have no budget yet because your concept is not seen before.

Giving space for the availability of coders from for example Pakistan, some payement with 'foursquaretype' badges and linkedin recommendations, is (what I was told) the zillion coders from there are first looking for. Just to stick their heads above the rest.

So in short; webentrepreneurism in EU needs external coders to grow. Go get them :)

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Photo of James McBennett

Tried to find this related startup earlier in the challenge, but struggled to convince Google to tell me where it was. http://favo.rs/ "is where founders and professionals broadcast and fulfill each other's requests for help. Requests can be as simple as a retweet or as important as an intro, and all requests are tracked to reveal who you help and who helps you the most."

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DeletedUser

When I first saw favo.rs I loved the concept but execution seems terrible. What you find is people just looking for marketing favors- hey can you like my company page on Facebook..... or get a bunch of people to look at my website.

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Photo of Paul van Zoggel

How much time does a fresh freelancer need to spend on acquisition?

About half of his time. He counts on survival with 1/3 of it's time turned into invoices/money.

That is 20 hours unpaid a week. What if I as a starter offer 10 hours a week of my skills to any startup/other freelancer to claim.

We would talk on the site in terms of real money. So my offer would be 10 hours x 50 euro = 500 euro. Somebody requests it for the startup, and I decide to sponsor that time.

This way both get a feeling on real money value for services in web business. The startup becomes also valuable and I get a 500 euro share.

No money spend, but real value created..

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Photo of Paul van Zoggel

The theory is clear, find services which function better without money.

Is it an idea to choose a theme/need to focus online dialogue on? And get domain experts in on that theme?

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DeletedUser

Great idea. I had a related idea during the concept phase were people could gather on a social media site to post their needs / ideas. I like how you utilize barting to help people achieve their goals.

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DeletedUser

Hi Haiyan - I really like this. We know that many startup folks are naturally curious and collaborative - and this provides an extra little incentive for them to support each other.

It will be especially interesting to see how much different companies "charge" for the their services. In the startup world, prices are trickier than in a Greek market square. 4 hours of work could be worth a bit of "currency," a lot of "currency," or even an equity stake. Some companies may not charge at all if they can prove that they've built up good will in the community.

In a well known example, Pogo.com, a gaming website, offered points to players that they could exchange for prizes. It turns out that few people traded in their points, preferring to show off their accumulated points and badges to other players.

Similarly, I think this system will be more successful if builds off good will (emotional drivers) first and currency (rational drivers) next.

With Starter Barter, a designer or technologist may choose to accumulate currency, but only spend a little, since their balance is a reflection of how valued they are in the community.

Rather than determining all the rules of the "marketplace" upfront, it may be enough just to launch a currency to complement natural generosity and curiosity - and see what happens. We'll learn tons as it grows!


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Photo of Haiyan Zhang

Hi James, thanks so much for your comment!

I'm really keen to prototype this idea and would love to get your input on how best to do that.

Perhaps a rough-and-ready web platform built over the weekend?

I also wonder if it would be interesting to offer a currency of 'shares'.. as in shares in starter barter. The community, by participating and collaborating with eachother is generating value for starter barter, therefore the service gives its own shares to its users. If and when the service ever IPOs, the shares can be redeemed for ownership in the company.

This incentivises users to stay on the system and is a way for individual freelancers to offer their services in exchange for some kind of 'equity'.

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Photo of DeletedUser

DeletedUser

Hmm.. So what you're saying is: Any company could translate say, 0.25% of its value to 10,000 Starter Barter "shares." As they use different services they pay these shares out.. those whom they pay can cash in at some future point..

So - very cool in some ways, but a little screwy in others. If shares are currency and companies equate shares with equity, than each bit of Starter Barter currency can have really different worth, depending on the changing value of the company that issued them - which means its stops behaving like a homogeneous currency. Imagine if my pound coin bought three bags of Monster Munch, and yours only bought two ;(

I think that one main value of this system is to create a context that helps introduce startups to new contributors - whom they pay in barter currency at first, but whom they may want to employ further and reward further (with equity?).

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Photo of DeletedUser

DeletedUser

Great concept that would also allow startups to build their network while at the same time honing their strengths (e.g. when they provide a service). In addition, pending that a startup would use this platform during multiple phases of their development, they may also receive advice as to how to move their concept forward and what is involved in taking the next steps.

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Photo of OpenIDEO

Congrats on this post being today's onsite Featured Concept!

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Photo of Paul Reader

One small cautionary point that I made in the Vibrancy challenge was that here in Australia the tax authorities insist on taxing the monetary value of services supplied (by both sides) I realise this may not be so elsewhere but any transgressions need to be avoided.

On a more positive note Brian Redondo in his Vibrancy challenge concept Barter Market posited a web-site to promote and manage barter interactions. Such a site might be a natural link from the matching concepts proposed in this challenge such as Priyanka's Connecting Entrepreneurs and Experts ( http://www.openideo.com/open/web-start-up/concepting/connecting-entrepreneurs-and-experts/
) and become an extension of other concepts like Mary Sajfar's Talent Swap ( http://www.openideo.com/open/web-start-up/concepting/talent-swap/ )

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Photo of Paul van Zoggel

in the Netherlands second currencies on county level are starting to be accepted. (benefits are more and more clear). In east europe anything which sounds like 'cooperative' is feared as the previous dictators pushed it a bit too far...

On a positive note, the global gamers generation (and my son of 3 on the ipad) doesn't know any better that there are 2 currencies next to eachother, let's get this into the real world ;)

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Photo of Paul Reader

Yes, since this is an EU specific challenge then as long as their rules are obeyed that's an important legal matter..
I think bartering is a great option. Louise's suggestion about the marketing around Brixton pound vouchers is great thinking.

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Photo of Paul van Zoggel

So cool this is working out on local markets.

In EU context and the Digital Agenda Assembly organizing this challenge. We should definitely openly 'design' a 'second currency only to be used within the city you live.

There is a nice saying;

If a drop of water falls in a desert, it's gone.
If a drop of water falls in a rain forrest, it'll keep on circulating.

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Photo of louise wilson

good thought on the currency Paul. There's something special about the 'Brixton Pound' http://brixtonpound.org/ when you see the 'we use the Brixton Pound' in a shop window. Could there be an icon that people can add to their business card/avatar/website that indicates they are part of the system?

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Photo of Paul van Zoggel

As we are designers, maybe to look at this. http://livelocalcard.com/ In a way the discount system is a second currency. An accountant would give 'discount' and earning local currency. Also a webdesigner.

Adding foursquare badges and TaDa we also have status symbolism to 'prefer' local currency!

What are the barriers still to jump?

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Photo of Haiyan Zhang

Paul and Louise, Thanks for your feedback. Really great suggestions.

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Photo of Haiyan Zhang

Wow. Thanks for all the great feedback everyone. I'm glad to see this generated a lot of discussion and obviously there are lots of issues (legislation, economics) around secondary currencies.

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Photo of Meena Kadri

Nice one Haiyan. Following though from the article you mentioned to: http://www.guardian.co.uk/world/2012/mar/16/greece-on-breadline-cashless-currency?newsfeed=true I was finding a few comments resonated with our challenge there:

""It's also a way of showing practical solidarity – of building relationships."

"You are not poor when you have no money... you are poor when you have nothing to offer..."

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