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Businesses The Almighty Buck Technology

From Commune To Sharing Economy Startup 142

gthuang88 writes: Willy Schlacks grew up in a conservative commune in Missouri without technology like phones or computers. At age 27, he and his brother left and started a construction business. That led to their founding a Web startup called EquipmentShare that helps contractors rent and share construction machinery. The startup went through the Y Combinator program and just raised $2 million from venture capitalists. The Schlacks worldview, coming from a communal society where they never owned property, fits in an interesting way with the digital sharing economy of Uber and Airbnb that's seeping into other industries. But there's one big difference. "I appreciate capitalism," Schlacks says. "I definitely prefer it."
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From Commune To Sharing Economy Startup

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  • by Anonymous Coward

    "I appreciate capitalism," Schlacks says. "I definitely prefer it."

    He learns what it is like for the millions of others.

  • When you're on top. Let's see how you feel once the patent trolls come after you.
    • by FranTaylor ( 164577 ) on Saturday May 09, 2015 @12:24AM (#49652043)

      This EXACT business model was attempted by dirtpile.com 20 years ago

      Any patents on this sort of thing have expired long ago

      It's a CRAPPY business model, that's what to be afraid of. People don't want to rent equipment, they want to pay for the service that the equipment provides. Joe the scumbag real estate developer doesn't want to rent a bulldozer to level his lot, he wants to contract with an earth moving company to get the dirt moved. He doesn't want to hire a grunt to drive the bulldozer. He doesn't want to deal with topping off the oil and the hydraulic fluid. He wants a flat piece of land so he can call in the next set of contractors to build houses made out of ticky-tacky.

    • When you're on top. Let's see how you feel once the patent trolls come after you.

      And since when, do you think, patent trolls represent capitalism?

      • by ultranova ( 717540 ) on Saturday May 09, 2015 @01:55AM (#49652281)

        And since when, do you think, patent trolls represent capitalism?

        Ever since someone realized they can make money from patent trolling. "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."

        You don't get to pick and choose only the positive results of profit motive as representing "real" capitalism. The system works great at finding the local optimum; it's flaw is that it both calls for but can't handle clever pyschopaths. And that flaw turns to a fatal one when people fall in love with capitalism and refuse any attempts to mitigate less desirable effects in the name of economic efficiency - or religious orthodoxy, which is what I suspect it really is for a lot of people.

        • Ever since someone realized they can make money from patent trolling.

          - sure, but that's not failure of capitalism, it's failure of having government that is not capitalist but centrally planning instead. In a free society there shouldn't be such a concept as patents and copyrights that are protected in any way by any government body.

        • You don't get to pick and choose only the positive results of profit motive as representing "real" capitalism.

          Of course not. But that's not what I was doing, so the rest of your comment is moot.

          Abuse of a system that was intended to be used differently in capitalist America is no different from abuse of a system that was intended to be used differently in formerly "communist" Russia, or China. The economic system has no bearing on it whatever: it's still just abuse of the system.

          People have abused laws in all socioeconomic systems and they almost invariably do it for their own interests. You don't get to blam

  • by Okian Warrior ( 537106 ) on Friday May 08, 2015 @10:33PM (#49651793) Homepage Journal

    As nice as communism sounds, there's an inherent problem with rentals.

    Anyone who's been a landlord knows that people don't take care stuff they don't own. Rental cars are abused, apartments are damaged and left uncleaned, taxis are smelly, public toilets are filthy and broken down.

    I can't think of any rental system off the top that consistently presents clean and well-maintained equipment without enormous amounts of time and effort.

    There's a thing in economics called "unequal knowledge" which explains why used cars have little value. The seller knows whether the vehicle is robust, but the buyer has no realistic way to tell. You can't tell whether the transmission needs replacing or the engine oil was ever changed or if other expensive repairs are needed. Because the buyer can't verify whether the vehicle is good, he will only pay "average" price. Because buyers will only pay average price, sellers won't sell vehicles which have above-average value. This in turn drives down the average price and eventually the expectation drops to zero.

    Rentals are the same. You can never know whether someone damaged the rental until it's too late, and renters have no incentive to tell.

    Construction equipment costs upwards of hundreds of thousands of dollars. I can't see someone renting out a bulldozer and taking a chance that the renter didn't run it without oil for a weekend.

    • by TuballoyThunder ( 534063 ) on Friday May 08, 2015 @11:24PM (#49651913)
      Construction equipment is rented out all the time. For many construction firms it does not make economic sense to own a full complement of heavy construction equipment.
      • https://www.sunbeltrentals.com/equipment/subcat/766/dozers-and-crawler-loaders/
      • http://www.hertzequip.com/herc/rental-equipment-industrial-equipment/earthmoving-equipment+dozers
      • http://www.unitedrentals.com/en/catalog/dozer-70-hp
      • But there's a difference between a specialized rental such as construction equipment and a common rental. When someone is renting a specialized tool that is used in their industry and they know they will need to rent it again, there is a underlying incentive to not treat it as complete crap.

      • rent versus own is not the question

        the problem with renting special equipment is you also have to have the trained personnel to operate it

        mostly you are better off contracting the service of having the earth moved instead of renting the equipment to do it yourself

        between liability insurance, government paperwork, dig safe permits etc. you are better off paying a pro to dig your hole for you

        • "the problem with renting special equipment is you also have to have the trained personnel to operate it. mostly you are better off contracting the service of having the earth moved instead of renting the equipment to do it yourself"

          This business is NOT about renting bulldozers to homeowners digging a basement. It's about renting bulldozers to a contractor who already knows how to operate them and has all the licensing (or has an employee who does), but doesn't have enough jobs that need dozers to justify

    • Your argument is true quite often, but not always. But still, it is why this Airbnb failure happened, and why it will again and again: Specifically Damages could hit $150,000 in Calgary home trashed by Airbnb renters [globalnews.ca]
    • As nice as communism sounds, there's an inherent problem with rentals.

      That's the real beauty of their business model.

      They're not using their own construction equipment, that would be crazy. They're using other's people equipment. This way, there is no inventory to maintain. There is no repairs to make, since you're not the owner -- you're just the agent facilitating the transaction. You're off-loading most of the risks of the transaction unto other people.

    • As nice as communism sounds, there's an inherent problem with rentals.

      Anyone who's been a landlord knows that people don't take care stuff they don't own. Rental cars are abused, apartments are damaged and left uncleaned, taxis are smelly, public toilets are filthy and broken down.

      I don't know where you live, but here that's not the case. The last rental car I had was clean, 100% undamaged and had a full tank of fuel. They inspect rental cars quite thoroughly when you hand them back and you pay for any damage that wasn't noted when you picked up the vehicle, whether you caused it or not.
      The last rental property I lived in was also clean and tidy. I had to pay a huge amount of money for bond and once again, unless the property was in a good state when I moved out, they would have been

      • I had to pay a huge amount of money for bond

        This should have been your clue that not everyone thinks and behaves like you do, and perhaps you should not project your own values onto other people

      • If you see a clean public toilet in the US, it means someone cleans it a lot.
    • by Anonymous Coward

      You've obviously never worked in anything major, then. The Film Industry? Everything's a rental. Those beautiful $50k lenses? $300k cameras? All rentals, all the time. Yeah, we small filmmakers buy some of our gear (I've got a $400 DSLR and a $1000 lens), but we also rent the things we don't have if we have time to plan our shoots. Construction equipment? Home Depot rents a ton of equipment to contractors. Bulldozers, cranes, etc are all rented out by construction companies because it's more cost e

    • It's good that you seem to think that Communism is actually an economic system, and not just a kind of conformist dictatorship, like most people. Fun fact: Do you know who invented the term 'Capitalism' and analysed its strengths and flaws? Karl Marx. He named and defined the ideology of the basic system of 'what had always gone before'. Slavery, environmental exploitation, 'Greed Is Good', Rentiers, 'my shinies make me a better person than you', etc, etc. I rent an apartment, in a building. I keep it cle
    • These days quite a bit of the more expensive equipment comes to you on a lease and is serviced by techs in the field as part of that lease. What individuals are allowed to service on a machine is governed by contract. Large farm equipment is now handled this way in many cases. Frankly I'm not so certain that these types of situations benefit farming or the public. It is astounding to watch just how much work some of these mega machines can do but it also allows new players to get involved in food produ
    • As nice as communism sounds, there's an inherent problem with rentals.

      Yes, but I'd argue that most those problems are introduced by capitalist renting out in the first place

      Anyone who's been a landlord knows that people don't take care stuff they don't own. Rental cars are abused, apartments are damaged and left uncleaned, taxis are smelly, public toilets are filthy and broken down.

      Rental cars are abused because generally because as the renter you know you are already paying overheads and they are built into your rental fee. Rental cars are often cleaner than privately owned cars because they are cleaned between every rental, i.e. every few days. The insurance on rental cars is expensive compared to insurance I can get privately, so yeah, I'll happily leave fast food wrappers in the

    • I've rented a couple of different apartments over the years; always paid the rent on time and kept the place clean and in good repair. My ex-landlords have been happy to give me a good reference - which meant I never had trouble renting somewhere else when I needed to. I also rent cars a few times a years, the customer service rep knows me and gives me the nicest car available.

      If you rent to any John Q. Public you will have problems, and if a renter abuses the property he or she will have problems renting a

    • Then why do used goods sell for more than zero? Economists aren't scientists precisely because they fail to update their theory to account for observation. Nearly all economists fall into this trap. Fortunately, with machine learning, we now have a chance to create a theory of economics that actually matches reality.
    • I can't think of any rental system off the top that consistently presents clean and well-maintained equipment without enormous amounts of time and effort.

      Pretty much any rental system that rents to professionals and/or vetted individuals rather than to the unwashed masses.

      Construction equipment costs upwards of hundreds of thousands of dollars. I can't see someone renting out a bulldozer and taking a chance that the renter didn't run it without oil for a weekend.

      Which is why they don't rent equipmen

    • by DogDude ( 805747 )
      There's a thing in economics called "unequal knowledge" which explains why used cars have little value. The seller knows whether the vehicle is robust, but the buyer has no realistic way to tell

      Used cars have little value? What the fuck are you talking about? Of course they do. And, if you want to buy a used car and you're worried, you just bring it to a mechanic to check out first.

      With that being said, thank you, paranoid worriers for buying new things so the rest of us can get your used stuff at b
    • The management systems on some of that new construction gear is pretty substantial. Hell there is another startup in the same state that backhauls all of that real time. Now it will take decades before this stuff trickles down to low end rentals.

    • Comment removed based on user account deletion
  • by koan ( 80826 )

    But there's one big difference. "I appreciate capitalism," Schlacks says. "I definitely prefer it."

    Of course you do, capitalism appeals to basic human nature, communal sharing does not.

    • by plopez ( 54068 )

      I isagree, sharing is also basic to human nature. Look up gift societies. See also co-ops.

      • by koan ( 80826 )

        "isagree" all you want, human sharing always contains the component of return, if people never got anything for it they wouldn't "share".
        People, either consciously or not, share when they think they will get a return, which could be anything from "a good feeling" to a favor that can now be asked for because they shared something.

        Share as a display of wealth or power, sharing with the intent it will some how be returned (an investment), sharing because "God wants you to" or "good feelings".

        • Humans share because our DNA has programmed us to share, just like it programs other animals to share

          Do animals share food because they "expect a return"??? How bizarre. They share because it is in their genetic programming.

          We invented the concepts of "return" and "wealth" as ways of rationalizing our impulses to share

          • by koan ( 80826 )

            Do animals share food because they "expect a return"???

            Yes.

            Though trying to bring animal behavior into a conversation about human nature is disingenuous on your part, this is your way of creating a side argument meant to derail the original point.

            • Animals do not "expect" anything, their behavior is not driven by rational thought but by the hardwired nature of evolution.

              They share because their DNA has been hardwired that way, they don't need motivation or expectation.

          • Anecdote here. I keep 8 chickens as pets and for an egg supply. Each morning, I feed them a quantity of mixed-grains fowl feed. This is strewn on the ground, usually in a rough line or a few spots. They then proceed to peck up this feed. I started feeding them enough so that there is some left after they had finished. I then adjusted the quantity down so that there is no wastage - discouraging rodents and other birds from the area. (Chickens are left for the rest of the day to forage free range.)

            In the beg

            • by dryeo ( 100693 )

              Every animal species is different, with birds quite a bit different from mammals. In some ways the closest to humans is the grey wolf along with its close relative the domestic dog and a couple of other canine species.
              Co-operative hunting including the understanding that any member of the pack that gets injured will be cared for, food sharing, co-operative child rearing and a strong situational awareness of other members of the pack (which really helps when hunting big game) as examples.

              • Thanks for the info. Unfortunately a lot of non-specific arguments along the lines of "because animals" have been floated above and elsewhere. This was refuted with a specific counter-instance that I feel I am sufficiently knowledgeable about. Sorry, no wolves in my back yard.

                I think the take-away message is that one can not take a snapshot during certain circumstances, and only for certain species, and then take that as the be-all and end-all to model human politics on. How absurd. Then again, it seems to

                • by dryeo ( 100693 )

                  Yea, every animal species is different with even close relatives such as the various canine species varying quite a bit in their social interactions. There are some generalizations that can be made such as most all mammal mothers are protective of their young but generally you can't model our politics very much on other species. At that there is an amazing amount of variation in human societies, especially the primitive ones that developed alone.

        • by dryeo ( 100693 )

          People, either consciously or not, share when they think they will get a return, which could be anything from "a good feeling" to a favor that can now be asked for because they shared something.

          That's how instincts work, animals, including humans, do stuff because it feels good. The bird flies south because it feels good, the mother looks after the infant because it feels good, the grey wolf shares with its pack because it feels good.
          The big difference with humans is we have a large fore brain which we use to rationalize our instincts and to a degree we can over ride our instincts. Having large brains also makes us easier to condition to certain behaviour

          • by koan ( 80826 )

            That's how instincts work

            Nope.

            • by dryeo ( 100693 )

              Can you expand on that? What alternate driver of instinct do you have? Why does most every mammal care for its young? Why do you eat? Why are some people, often the opposite sex, so attractive?

    • capitalism appeals to basic human nature,

      "basic human nature" evolved to its present state without capitalism

      capitalism appeals to the powerful who want more power

      "basic human nature" wants human DNA to sustain and survive, all else is programming and brainwashing

      • by koan ( 80826 )

        "basic human nature" evolved to its present state without capitalism

        It's a basic human desire/nature to want to control the things you have earned, if the hunter kills a deer he wants to make sure his family gets the best meat and gets fed first.
        He will share the leftovers with the tribe because he gains a promise of return via the safety of the group, respect, recognition, and a bonding within said group.

        Capitalism, as an economic concept, appeals to human nature because the individual controls the "wealth" and distribution.

        Communism means that the group decides what gets

        • It's a basic human desire/nature to want to control the things you have earned,

          "Earned" is not in the human nature, everything else in your post revolves around this fallacy.

          "Capitalism, as an economic concept, appeals to human nature because the individual controls the "wealth" and distribution.

          In capitalism the individual LOSES control over their wealth, they trade actual stuff with actual value, for monetary tokens whose value is controlled by the group. If the group decides that your tokens are worthless, they are worthless.

        • It's a basic human desire/nature to want to control the things you have earned, if the hunter kills a deer he wants to make sure his family gets the best meat and gets fed first. He will share the leftovers with the tribe because he gains a promise of return via the safety of the group, respect, recognition, and a bonding within said group.

          Capitalism, as an economic concept, appeals to human nature because the individual controls the "wealth" and distribution.

          Communism means that the group decides what gets done with your deer, and your family may or may not get enough to eat. Therefore communism is an unnatural artifice the rubs human nature the wrong way, this is why communism always fails.

          Problem is, one does not always bring home a deer.

          When the prey brought home is an mammoth, there is more than what you and your family can eat before it perishes ==> Socialism is an obvious answer.

          When the prey brought home is a hare (that had to be chased for half a day), there is hardly enough for you and your spouse ==> Capitalism is an obvious answer.

        • What does "earned" mean in this context? If a hunter kills a deer, and 5 hunters all drove the deer to him, how much did the killer "earn"? What if there's only one deer in the entire forest, already claimed as owned, but unkilled by somebody.

          It's human nature to want the best meat and to get fed first regardless.

          And, in historic fact, the leader of the tribe probably gets the choice pieces off the top, before the hunter and his family. But beyond that, hunter-gatherer is practically synonymous with a "g

  • by MrKaos ( 858439 ) on Friday May 08, 2015 @10:43PM (#49651827) Journal
    However Corporatism has eaten capitalism because in capitalism there is no such thing as "Too Big To Fail".
  • by Karmashock ( 2415832 ) on Friday May 08, 2015 @11:18PM (#49651903)

    I wish more people lived in them and not for the reason some might think.

    See, people have very unrealistic notions of communism and communal living. You don't appreciate property rights, the free market, etc until it is gone. Look at eastern europe and generally you see populations that are more fanatically anti communist than pretty much any societies on earth including the US. And that is because they lived through it.

    And no, I'm not saying that all communist systems must be oppressive autocratic regimes that trample on people's rights. However, I am saying that there are a lot of aspects of that sort of system that are no advertised on the box and you don't really understand what you're buying into until you've lived in it for awhile.

    Which is why I think communes are fantastic because they give people a good first hand practical knowledge of how that system works without forcing people that don't want to live in it to join or giving said systems authority over people in a non-consensual way.

    I also think the kibbutz system is quite excellent and I really think we should try them out as an alternative to the current urban welfare systems. That is, rather than just give people EBT cards and government housing, you instead plop them in an urban commune. The concept would be that they'd self organize, have some productive businesses that they collectively ran, and generally look after each other in a supportive and helpful environment. Look at the gangs... THAT is the community self organizing to the extent it is able under those conditions. You have young men standing up saying they want to be part of something, that they want respect in their community, that they want some agency in the community... and how can they possibly get that besides going to the gangs? Sure, they could study in school and run for city council or something but that is very much divorced from the culture of those communities. And while you'll point out that the gangs are often seen in a negative light, they are respected, they do generally look after their own members, and they do give their members a sense of purpose in life.

    So the kibbutz system or some other commune system should be tried as an alternative. And you could even subsidize them to some extent with government funds. It can't be more expensive than the EBT, welfare, medicaid, etc costs.

    I am an arch capitalist radical libertarian. That is where I stand. However, above all I believe in people being able to choose how they want to live. And it seems like a lot of people want to live a more communistic life style and I'm going to practice what I preach by saying that if that is what people want... they should get it. I would say they should be limited to what they can obtain through consent. That is, you shouldn't be able to force people to join, keep people from leaving, or otherwise force people to do things. However, so long as you can get people to consent to your commune, I'm perfectly happy with it.

    Something I'd like to try for example would be giving labor unions abandoned factories. The "rust belt" is littered with abandoned industrial infrastructure and dying unemployed factory labor unions that are increasingly on federal welfare. Well, what if we took some of that welfare money and just bought the factories and then gave them to the labor unions? Doubtless they'd need to renovate and buy new equipment etc... but we could raise the money for that rather easily if it were understood that in the process we'd be taking thousands of people off the welfare rolls.

    As funny thing about Marxists is that they don't seem to understand what Marx was all about. He was about german, hard working, factory workers owning the "means of production"... the factories. He didn't envision pseudo intellectual never employed hipsters demanding government cheese so they could spend all day posting mean tweats. And he didn't envision generations of welfare families basically raising their children on the government dole to live on the government

    • > Well, what if we took some of that welfare money and just bought the factories and then gave them to the labor unions?

      Without markets and infrastructure and central planning you'd have a really enormous boondoggle

      • First off, I'm not getting rid of markets. The existing market will exist as it does now.

        Second, the infrastructure is what we're giving to the union.

        Third, central planning is what CEOs currently do and the labor union should be able to handle the administration of a single fucking factory.

        As to it being a boondoggle, I expect some of those ventures to fail. I am in fact counting on this to occasionally fail because sometimes things just fail... but more importantly some of the labor unions are run by idio

    • by dryeo ( 100693 )

      A leftist libertarian. I mostly agree with you but from experience the danger of having a commune, even a small one, is a psychopath showing up and trying to run things. Psychopaths being manipulative bastards who don't shy away from violence and are often armed are hard to deal with. You can actually find yourself considering murder but often you're left with one option, leaving.
      This seems to have happened to Russia where it went from the workers owning the means of production to an elite running things an

      • As to losing political and social control or creating micro cultures, you can't stop that from happening. Currently the areas are controlled by the gangs and they're psychopathic as anything.

        I want to stress that a very important issue here is consent. So people can leave the commune if it isn't working out for them at any time. And of course if we get any reports of violence, intimidation, or coercion in the communes then that should be investigated and dealt with.

        Are you going to be able to deal with curr

  • And, to use a quaint old phrase, 'there is more than one way to do it'. In fact in the US there are three general categories of corporations; non-profit, mutual benefit, and for profits. Mutual benefit corporations are organizations such as co-ops and credit unions, owned, and run for the benefit of their members. But within each of those categories exactly how you organize the corporation pretty free form. The corporation does not have to be public and can be employee owned.

    For profit corporations with cen

  • communism works great for every living species except human beings

    all other life manages to figure out how to feed their young and build their future without relying on currency

    but humans starve to death en masse when they fail to maintain the illusion of "value" in their currency

    humans are pretty stupid and frail, aren't they?

  • I could have sworn that the collapse and utter disaster of communist countries proved this. If you have no reason to learn things then get a good job and work hard, you're not going to. People are lazy as hell. If everyone's even and shares everything, nobody tries and your country sucks.
    • the collapse and utter disaster of communist countries proved this.

      Yeah okay, cuba has a longer life expectancy than the USA, lower infant mortality rates. Who lost the argument and gave up on the embargo? WE DID.

      Meanwhile in much of Baltimore, the average citizen doesn't live long enough to collect social security, and yet they pay into it for the future that they don't have.

      "get a good job and work hard," " If everyone's even and shares everything, nobody tries and your country sucks."

      People work like HELL in this country, much harder than just about any other country.

    • by gerddie ( 173963 )

      I could have sworn that the collapse and utter disaster of communist countries proved this. [...]

      Whoever came up with the idea that these countries were communist, doesn't know the first thing about communism [wikipedia.org]:

      "Communism (from Latin communis – common, universal) is a socioeconomic order structured upon the common ownership of the means of production and characterized by the absence of social classes, money, and the state, [...]".

      For starters, all those "communist " countries used money and were states.

      If you have no reason to learn things then get a good job and work hard, you're not going to. People are lazy as hell. If everyone's even and shares everything, nobody tries and your country sucks.

      Where I come from people generally enjoy learning things and like to do some fulfilling work. People are generally lazy when it comes to doing things tht they don't like to do. For these jobs, "that need to be done" on the other hand a five hour week (pdf) [5-stunden-woche.de] should be enough.

  • The concept of private property appears to be something quite important to human society. I went to a lecture many years ago (will try to find the guy's name) by a person who was implementing market based irrigation solutions in Africa. Basically he had visited a bunch of World Vision type projects where they would fly in and dig a water bore and setup a community pump. He said everyone would celebrate and think they were doing a wonderful thing, but in a year or two they would go back to the village and fi

    • Have you noticed that the human species thrived and grew just fine for thousands of years, but suddenly since we discovered money, now the oceans are dying, the tell tress are all cut down, the big mammals are all dying and the gulf of mexico is dead? No, because you are too busy counting the bills in your pocket.

    • by gerddie ( 173963 )

      [...] Basically he had visited a bunch of World Vision type projects where they would fly in and dig a water bore and setup a community pump. He said everyone would celebrate and think they were doing a wonderful thing, but in a year or two they would go back to the village and find the pump broken. When they inquired as to why nobody had bothered to fix it, each person would say it wasn't their responsibility, or blame someone else for breaking it.

      I'd rather say that the project was not well planned, because they didn't make sure to make someone responsible for the pump, e.g. the village council. It may also show that the pump may have been a nice addition, but not considered a necessity by the villagers. I'm quite certain that if the object in question would not have been a pump, but a bridge on the only road to the village, they would have gotten their act together and would have fixed it.

  • These guys think they invented the equipment rental business in 2010?

    Seriously, contractors have been renting and trading equipment since, forever.

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