 Mickey Krill. I have run across a user on various websites for years called Wikipedia. It's one of those, you know, we just keep crossing paths and I finally ended up living in LA. I had heard about this thing she was doing called Neighbor Goods, signed up, got all my tools up there and I was like, you know what, we live in the same city and then again when it came time to find awesome women to build some of the speaker slots. The lady parts. Mickey came to mind very quickly. So I'll leave it at that. Okay, hi. All right, I have some cross. So, oh by the way if you guys aren't doing anything tonight, there's a roller derby that I'm skating in later. You should kind of stick it available at the door. That's usually not the case. It's right on Temple between Alvarado and Glendale. I'll talk about it later. Anyway, so how many of you have a power drill? Raise your hand if you own a power drill. It's like 90% of you. This is a smart crowd but there's, you might not already know this, but the average power drill gets used for approximately 12 minutes in its entire lifetime. Yeah, it's 12 minutes before it ends up in a landfill. So, so NeighborGoods is a tool that sort of helps turn that dynamic around. We connect people in local communities to share physical resources. So the idea is we give you a way to save money and resources and to meet your neighbor by sharing a power drill, sharing a lawnmower. The question that people like to ask is, you know, do you really need the power drill or do you need the hole in the wall? So we like to say that NeighborGoods helps you get the hole in the wall. So a few years ago I was actually getting ready to go to Thailand and I needed a backpack. And I was like, okay, I asked around to see if I could borrow one, you know, I do everything last minute so I wasn't able to find one. And I ended up spending, this is about $240 for this backpack and I knew I was only going to use it once. And I just felt like that was really inefficient. So I started doing research and I found out that that's true for most of the stuff we own. I ran across that video. You might have seen it, the story of stuff. Super awesome. You should look it up if you haven't seen it. I also found out that 80% of this stuff is called the story of stuff. It's really one of the best things on the internet. So I found out that 80% of the stuff we own gets used less than once a month. So if you think about your own house and like what's in your closet, what's in your garage, I'm sure you would find, except for maybe you because I heard you saying you don't want to go to the apartment earlier. Some of you probably don't own a bunch of stuff. But like 80% of the stuff you own you never use. It's just their collecting dust. So Newberg is meant to get more use out of that stuff. So that's when I started thinking about it. Oh, this is the other statistic I wanted to share with you. So according to the self-sortage association, the fact that that even exists to me is hilarious, the self-sortage association. Yeah, Americans spend $22 billion a year on self-sortage space. It's a huge industry. There's enough self-sortage space in this country for every man, woman, and child to have 7.5 square feet. That's like bigger than your arms fan for every person in the country. It's insane. So I started thinking about just the latent value hidden in all that stuff. And I started thinking about it financially. There's a lot of financial value. We buy these items and never use it again. But there's also social value in that stuff. It's an opportunity to those objects or social objects. And by sharing them, we create an opportunity to meet our neighbor to build a trusting relationship. By trusting them that they're going to return that object. That's how you build a real trusting relationship. So that's where the idea came from. We launched nationally last summer. We're now the leading online resource for this kind of thing. It's a very new emerging market, so that doesn't mean we're huge. But we're getting there. We've been featured in The New York Times, Oprah Magazine. We were in Fast Company last week. It's definitely an emerging market now that's been called collaborative consumption is sort of what this whole space has been dubbed. And that's things like Airbnb, Zipcar, now Relay Rise, which is peer-to-peer car rental, things like neighbor goods. And it's very exciting time to be in this emerging space. When we started two years ago, it didn't exist. Right now we have all these competitors and we're grateful for that because, you know, honestly, it means something's happening. So that's exciting. At this backpack, I've actually lived out three times now. The very first time someone asked for it, it was right after the earthquake in Haiti. And a friend of mine was going down there with an NGO to distribute food. And he wanted to use this backpack to carry the food around. And I was like, oh my God. This is why I made this site. He ended up actually not even being able to pick it up because he had to get on a flight sooner than he thought. But the fact that it almost went to Haiti to help food be distributed to people who need it instead of sitting in my closet collecting does. It was just like that. That was why we built neighbor goods. I need my notes. Okay. All right. So at the risk of revealing our secrets, I want to share. I don't really believe that. That's a joke. I want to share some of the things that we've learned so far with neighbor goods. The main thing is sort of the difference and the incompatibility between financial reward and social reward. So when we first launched neighbor goods, we thought, oh, this is obviously marketplace, right? There's all this wasted money. People are spending money on storage. Because when you think about launching a startup, you know, you're thinking about business, how we're going to monetize, blah, blah. And so we launched this site. I invited 1,000 friends to try it out. And you know, the site initially did lending, borrowing, renting, selling, gifting. You could do whatever you wanted with the item within a local social network. And we found that the free transactions outnumbered paid by 8 to 1. And lending and borrowing was like by far and away the most common thing that people were doing with their items. And part of that has to do with the design. I mean, that was really the action we were trying to encourage. But I think part of it is also just the incompatibility of those two reward systems. When you're trying to, you know, gain excess or earn money off of excess inventory, we have lots of tools to do that already, eBay, Craigslist. Like Craigslist works great for selling things because when you're trying to earn money, you don't really care who you're selling it to. In fact, it's better to sell it to a stranger because none of us charge full price to our friends, right? When you're trying to earn money, when that's the driver, it's actually better if you don't know the person you're interacting with. When the driver is, I want to help someone, I want to hook you up. I have this thing I'm not using anyway. Of course you can borrow my vacuum cleaner. It's actually more rewarding to do that for free than it is to earn $5. The $5 all of a sudden makes it feel like a chore, right? You're like, ah, shit, when are we going to meet? You're going to come to my house and I have to make sure I'm there. It feels like the total chore. If you're doing it because you want to help someone, that's the point. You want to be there when they come over because you want to have that conversation and you want to meet them and you want to strengthen your neighborhood. I remember my first transaction on the site was with this guy, Jory. You might know him. He's popular around the internet. He came over in L.A. in this universe and tries not to hear a name. So I borrowed a book from him and he came over and brought the book to my house. He lives in my neighborhood in Alwater Village, which I love. He brought avocados from his avocado tree along with the book. We never met before. We sat on my couch and we talked for 30 minutes about Alwater Village, about his family, the neighborhood. Since then, I'm active in the neighborhood council. I'm doing all this stuff I never thought I would do because we have this really strong network of people that met on neighborhoods. I'm trying to recreate that neighborhood everywhere else. We talked to our users over and over again. It kept coming back to us. It kept hearing that. The stories they were telling us were not, I heard in $10 today. We never hear that. They don't care. We hear from people over and over and over again. I met my neighbor. Now they're babysitting my kid. My kid met this kid because we borrowed something. Those are the stories we heard over and over again. That's what we're focusing on. You can still rent. You can still set a deposit, but it's more as a security measure. If it's someone you don't know, you don't list items for rent on neighborhoods. These are the things I'm willing to let people use, and then you decide the sort of parameters based on the conversation you have with that person. We don't see ourselves as a marketplace at all. It's very much a local community. We're actually seeing ourselves expanding into services and time sharing also because we're starting to see people use our wish list that way. You have a wish list feature so if you can't find something on the site, you can say, I'm looking for a lawnmower or whatever. We're seeing people say, I need a ride to the airport or I need a babysitter. It's sort of guiding where we're going next. It's sort of this neighborhood help center. You can log in and see, I have extra time on Saturday. Let me know if you need help with something or I'm trying to build a deck. Does anybody know how to do that? Help people complete projects together and improve their neighborhood. This is where we're going. Again, to further back that up, I'm not belaboring this point, but I've been researching the psychological research about this distinction between financial and social reward. There's a famous example of the, they did a blood donor experiment where they had group A and group B and they were all donating blood and they paid group A to give blood and they didn't pay group B. Group B gave 50% more. They did it because it felt good. As soon as they added the financial reward to the altruistic reward, it actually diminishes the feeling of having done good for somebody. There's tons of research on it. This is all philosophical, hippie stuff and we're just talking about vacuum cleaners and power drills. How can lending your lawnmower actually help build a safer, more connected community? It really does. I actually want to do an experiment and I need two volunteers, probably who don't know each other. Are there two people here who don't know each other after this whole day? Do I have a gentleman back here and do you two know each other? Awesome, come on down. And I need, well, it would be better if you had a chair. Yeah, okay. Is that why you're not looking at each other? No, it's okay because you're right now. Okay. So you guys are each going to sit down and I don't care which chair you take. All right. No one else is going to be really bummed that you didn't volunteer because they're going to have money. Cash money. All right. Seriously, at the end of this experiment, you guys get to keep whatever you're left with. So one, two, three, four, five dollars for you. One, two, three, four, five dollars for you. Welcome. Okay. You could do that. A, B. You're B. So now what's going to happen is I'm going to talk to person A over here and I'm going to tell him that he doesn't have to give me anything but whatever amount of money he gives to me, I'm going to triple it and I'm going to take it to person B. Person B then has the option of sending back however much money she wants. It could be zero, five, whatever. It could be all of it. I'm going to give that back and I'm going to take it back to person A. And then that's it. That's the end. They both keep what they end up with at the end. Right? So let's see what happens. One, two, three, four, five. He gave me five dollars. I'm going to take that over to person B. Wait, let me triple that. Wait, I'm skipping a step. Okay, I just gave her fifteen dollars. So now she has how much? Yeah. I'm going to take that over to person A and remember after that it's over. I know. Okay. She lives in Boulder. That's all of it. So now person A just left out. Okay, that's the end of the experiment. So. Thanks. You just made twenty bucks. Yay! Thank you. Okay. That person would be like, I'm going to keep half and send the other half back. That's not even the point. The point is, so this is the study. Do you guys know Paul Zach? He spoke at Mindshare recently. He does this study about oxytocin and the impact of oxytocin on our brains and how it creates a feeling of connectedness and trust. He's at Claremont University here in LA so he speaks a lot locally. I figured you might know him. So he does this experiment and the goal, basically it's meant to, they're not being watched by a bunch of people and being live streamed on the internet. It's an anonymous thing and they're doing it by a computer and so it's much more scientific than what we just did. But the point is, we're going to say, 85% of person A, the first person, sent some money to person B in their experience. 85%. You don't have to. They don't know if it's going to come back. It sort of makes more sense for person A but they don't because they trust that person B is going to send some back. They trust that person B is going to have some sense of fairness and send some of that money back and so 85% of them send it over. And then 98% of person B sends some back. 98%. That's insane. You have all the power in this seat over here, right? You just had it all. You have the most money anyone could possibly have in this experiment. 98% sends some back. I think it's amazing. So Paul's act talks about oxytocin is chemical in the brain and how that builds trust and how trust is innate and it's part of who we are. Oxytocin is the same chemical that's excreted in your brain during breastfeeding and orgasm. It literally is the bonding chemical, the love chemical, the chemical that makes us feel like tribe, right? So the whole argument from him is that trust is actually the natural state and distrust is the unnatural state that our sort of consumer culture and our individualistic culture is what has taught us not to trust and that we're actually meant to trust. And so neighbor goods is again it's just about power drills and lawn mowers but in the end it's really, I mean what we're trying to do is to connect people to rebuild that sense of trust to build a new kind of economy a new kind of you don't really need to own the power drill you need access to the power drill so that's sort of what we're working on and it's built in all of these ideals that's actually only 20 minutes but I guess if you want to ask questions or I don't know what So I have maybe a sad question which is it seems so it does seem like there is something about trust that is natural but it also seems like things like nationalism and religious enmity are they seem baked into. Sure well that's the the tribal thing taken to the extreme right? So how do you reconcile the fact that we seem to have a baked in trust instinct but also a baked in distrust instinct when it comes to tribes and dealing with that for what you're doing? That's an interesting question because we use this sort of group mentality to build more trust on the site and notice that people that were members of groups on neighbor goods were sharing more actively within that group and people would ask for private groups and that's actually our sort of premium feature is the private group I don't know that that's a problem for neighbor goods or that one that we can solve necessarily although honestly so if you come in we're working with groups and organizations that's our business model someone's going to ask how we make money and we work with groups and organizations and so they bring so if you sign up through your company's sharing group we also ask you to choose your neighborhood where you live and so we kind of show you other people and groups nearby so the hope is if you come in through your private insular group then someone else is going to have something you need and you're going to be like oh you know and sort of expand beyond that but that part we haven't really thought about philosophically as you asked that question how can we make the network grow so I live in Portland and just a few blocks from my house is the northeast Portland tool library and it's essentially the same thing but people donate their tools there and you can come it's open two days a week you can come and take stuff for a week or whatever and so what I'm wondering I guess is that with your project are there is there like the flakiness of grades list involved because like tool library it's always like open at a regular time you can go there and you have to return by this time you know what I mean you're still dependent upon the person holding up their end of the bargain though even in that scenario which is true on any of these sites and I think that's actually what makes it valuable it's the risk involved that gives you the opportunity to build a trusting relationship if there were no risk there can be no trust the whole trust fall thing that you're going to fall it doesn't mean anything when they catch you so our job is to give you the tools to mitigate the risk as much as possible so you have an automated calendar you say what time are you coming we'll send text message alerts we do everything to make the transaction as easy as possible but in the end it's fundamentally between those two people the advantage of our system then is you have the feedback and the reviews on the other end like this asshole didn't show up on time so you want other people to keep sharing with you so it just incentivizes people to do well I have kind of a two part question the first one is have you noticed that there is a difference in sharing behaviors based on the abundance or affluence of that community and then the second one is do you find that people are sharing outside of their own community of people they consider similar to themselves or are they typically staying within their own click yeah it's a really good question and so our users do skew more affluent part of that is because we're new and that's just who tries out new stuff our use base looks a lot like this crowd except we actually skew female so there's actually a lot of research that shows the communities that trust one another and that know one another actually do better economically and chicken or egg who knows but right now it's definitely we see most of our users are more in the sort of upper middle class we're doing a lot by working with cities directly to try and make it more available to others there's I don't know honestly that the lower economic there's different demographics have different different levels of comfort with technology and different levels of trust technology and so I think it might take some more time for us to be for everybody we're not for everybody obviously we want to but yeah I mean part of it is just cultural and we are seeing most people share within communities of similarity honestly again I don't know that that's a problem as we first start going you know I think as we build utility on the system and it becomes more like I really need that item and this is the only person that has it or whatever you know it broadens that a bit like I think we can help solve that problem by being really good at what we do you know we're not there yet we're just so small it's hard to tell but yeah I mean my hope is that the utility of the system will help solve that problem right so it's a totally free service you don't have to skim it off the top no we actually just won the Dust Bootstrap Startup Award at South by Southwest we've done a lot with a very little bit of money our team is really small so I have a community manager that also works here in LA she's a student I barely pay her she's amazing and then my developer is in Texas he's not full time he works on other projects and then we get additional development and design help when available and so you know we just did a kickstarter people there's an optional verification fee on the site if you guys are all there or if you're not please sign up and verify it's $4.99 items on the network we just we send a card to your house it verifies that you live in the neighborhood and then we're working with groups organizations and sponsors honestly we have really interesting opportunities coming up right now so you know we'll sell to a big organization a sort of custom group for there as sort of a company perk or whatever and then also sponsors to help us roll out into new areas okay as a follow up to the question about which you know good communities and sort of social strategy are using the service if you guys have been working at all to bring it into mobile by mobile I mean beyond just like smart phones but in like things like tech messaging support to make it easier for people who maybe don't have a smart phone who are more rely on an SMS to sort of contribute to this which would give you more of the ability to reach out to different communities certainly not yet I mean if this is going to succeed we have to focus on our target market first and our target marketer with people who are more willing to use it and the people who are more willing to use it are the more affluent people right now you know if we get to that point where we're like okay now we can expand into new markets then it makes a lot of sense to do that but what we need to do now is make this kick ass for the people who want it as opposed to trying to make people who don't don't want it want it do you know what I mean like we have to start in our target grow from there we are looking at mobile stuff obviously everybody wants to be mobile for us it's actually less about managing your inventory from your phone and it's more about you know the reminders someone's coming over to pick up the vacuum but also you know to make it easier to add items to the inventory whether it's a scanning barcode or taking a photo and uploading it I mean those are two things obviously we need to do that we don't do yet again just because we lack of resources if you want to help out what language are you what's it written in it's actually PHP so you are all going to hate it but um yeah we've had that conversation already um yeah any other questions okay thank you guys