A circular platform that enables communities, local governments and business to start and grow item sharing libraries.
01 | Brief Summary and Key Facts
Library of Things is a circular platform enabling communities, local governments and businesses globally to start and grow item sharing libraries, and spark behaviour change. They have a team of 20 staff and an annual turnover of £800,000. Library of Things first started testing in 2014, and incorporated as a mission-locked Limited Company in 2019.
Highlight of their unique approach
Library of Things (LoT) aims to make borrowing better than buying. They are challenging global retailers and drivers of over-consumption such as Amazon and Argos. LoT is offering a desirable alternative, which is not only better for people and planet, but also for local places – their service revitalises community hubs like libraries.
Highlight of their unique design
They strive for a fair exchange of value between stakeholders, and give the same consideration to the needs of all, including members, the team, partners, investors, and the planet.
Their business model is a combination of
set-up fees – organisations like local governments and social housing providers commissioning LoT to set up an item sharing library in a new neighbourhood
licensing and servicing fees – organisations paying to use our platform & additional services like item maintenance
The development of their platform and technology has been financed by a combination of patient, mission-aligned equity investment and grants. This has enabled them to design and build the software, hardware, supply chain and expertise to power any sharing library, anywhere.
02 | Founding Story
Inspired by the Toronto Tool Library and Berlin Borrowing Shop, LoT began with a group of friends and neighbours living in South London who, in 2014, established their first pilot item sharing library in West Norwood Library.
It quickly became apparent that there was a real demand from citizens and community groups for borrowing things not buying them. Library of Things became something of a flag bearer for this alternative approach, garnering lots of press and inspiring thousands of other sharing libraries to start up.
They tested several iterations of the service. In a bid to move away from too great a reliance on volunteer labour (which tends to gradually dry up over time), they created self-service lockers that can integrate into libraries, co-working spaces, reuse hubs and shopping centres. They custom-built their own digital platform, and iterated their business and governance models, to enable them to scale their own London operations, and also support other communities to establish their own sharing libraries.
03 | Industry Context
The context in which Library of Things are operating is stark: global resource use continues to rise year on year, whilst circularity is on the decline despite the rapid growth of interest in the concept of the circular economy. This has had devastating ecological and social consequences, whilst the UK remains the second largest producer of electronic waste worldwide.
Material consumption is a solid proxy for environmental damage, with material handling and use contributing 70% of global greenhouse gas emissions. In this context, LoT’s ambition of making borrowing better than buying is vital. The businesses of the future can’t just offer an alternative to destructive capitalism, they must offer something better.
04 | Regenerative & Redistributive Strategies and Ambitions
Fundamentally LoT are attempting to shift societal values around consumption, to reduce material demand and shift to a circular model for tools and electronic goods.
Through their 25,000 London members they have already prevented 350 tonnes of waste and saved 1000 tonnes of carbon emissions. They estimate that half of all rentals prevent a purchase. A member from Crystal Palace backs this up:
"Just knowing there's a Library of Things around the corner means I've stopped buying stuff from Amazon"
Their unique potential to enable this shift from linear retail models to circular processes has led them to work with suppliers such as Bosch, Karcher, Stihl and The North Face, who gain direct consumer feedback,data and practical engagement with circular business models unavailable from traditional retailers.
Unlike many sustainability initiatives which increase costs for users, LoT saves members money, with 84% of members agreeing this is true, creating a total estimated saving of over £6m.
By partnering with community facilities such as libraries, co-working spaces, community hubs and housing associations they also maintain the viability of key amenities and help reconnect local communities. The nature of their offer attracts a wide diversity of people, and gives them an opportunity to chat to others - 65% of members say LoT helps them feel proud of, and better connected to their neighbourhood. Whilst for community hubs, the increase in users and footfall can be highly significant. Kentish Town library has stated that the LoT is their best footfall driver.
Their commitment to fair exchange is evident within the organisation too, where they have redistributed power and decision making, for example by adopting consent-based decision-making practices where any team member can propose a change,, and enabling team members to recommend their own salaries through a guided peer review process.. Prioritising values like ‘joy’ means they’ve created a culture with a high degree of trust and authenticity.
05 | How the Deep Design Enables Strategy and Action
Library of Things has been through several iterations of their enterprise design before landing on a model which enabled their work.
Initially, grants and philanthropy were keeping them in a state of dependency – yet they needed to secure significant investment to build a platform and service that could compete with the likes of Amazon. Their original non-profit structure also didn’t allow for the team who created the company to own a stake, which they felt was important to such an iterative and enterprising approach, despite the Directors having no ambition to exit the company at profit, which is a key difference with many start-ups.
So the co-founders worked with the Barefoot Lawyer, Patrick Andrews, to rewire the private company for good. This is a Private Company Limited by Shares with:
A mission-lock in the articles of association, which legally requires directors and investors to prioritise the purpose of the company
A steward ownership structure, where Directors are the primary decision-makers, rather than shareholders
A ‘Guardian share’ held by non-profit company, Things Trust, which holds certain rights enabling it to hold LoT accountable to its mission and values. For example, it has the right to block changes to the company’s purpose. Its legal members represent LoT’s stakeholders – members, partners, investors and the planet
This structure allowed LoT to bring on board the investment they needed, but ensured it was mission-aligned and patient. Their relationship with investors is guided by their fair-exchange principle, with impact investors offered a minimum 2x return over 6-8 years. Through this model they were able to raise £1.2m from Angel Investors & Family Offices, and a further £350,000 via the Ethex Crowdfunding platform.
With this investment, they were able to scale their own operations across London, where they are now located in 19 diverse neighbourhoods. Meanwhile, they developed their digital platform to grow the model globally. They licence this platform to communities, local governments and businesses across Europe and the UK.
06 | Reflections and Lessons for other Businesses
Library of Things has developed regenerative business and governance models, which help make the item sharing library movement more impactful, viable and scalable.They have retained the enterprising and iterative approach of the business world, while hardwiring in their mission and values, and incorporating a deep understanding of user and stakeholder needs. They have also made effective use of digital platforms and created an investable business model. Across all this, they have attempted to ambitiously incorporate principles of a regenerative approach, transparency, fair exchange and joy, to demonstrate how we can build the new economy we need in order to have a safe and just future for all.
In doing so they are demonstrating that an equitable, regenerative circular and sharing economy is possible, in particular when it is enabled by an enterprise design that is aligned with those goals.
This case study was researched and written by Tim Frenneaux in collaboration with DEAL.
