Trust in the Next Economy

The Internet in general and the Next Economy in particular cause trust to take on a wider meaning.

Merriam-Webster defines trust as:

  1. Belief that someone or something is reliable, good, honest and effective
  2. A legal arrangement in which property or money is held or managed by a third party (such as a bank).

This basic definition has now expanded to include the reliability of information, identity management and several other areas, including reputation. It has even sparked a couple of new industries!

Reliability of information sources

Online information sources can range from completely untrustworthy to extremely reliable. You should think before trusting information from unmediated sources (like blogs, Twitter or Facebook). Sometimes, though that is the only source of fast-breaking news – still be wary! Curated forums are a moderately reliable source of information. Examples include Wikipedia and sites that specialized in specific, technical information (e.g. a Microsoft site explaining how to perform a complex function in Excel).

Some bloggers and news sites have built their reputation over time (CNN, Huffington Post, Drudge) but it is impossible to present information without a slant. This is a normal part of human nature called cognative bias.  It is the way we filter all or our sensory input into volume our brains can “digest”. Confirmation bias is one specific version where we tend to only process data that confirms what we already believe. All writers (myself included) are guilty of confirmation bias.

Identity Management

Trust is also expanded into Identity Management: How reliable is your belief that the person on the other end of an online connection is who they claim to be? People who spoof identifies can steal money and damage reputation.

Online “trust” is frequently guarded by cryptographic proof. The simplest form of proof is a user name and password.  There are more complicated forms of verification but in the end, if you pass verification, the system and other users of the system assume you are who you claim to be, an Authenticated User.

Reputation and money can be stolen and/or destroyed if your identity is stolen.  BE CAREFUL!

Building Trust

Limited collaborations build trust that can be expanded into other areas later. Collaboration (a.k.a. co-creation) forms stronger bonds than co-consumption. Trust will probably always take time to build weather in person or earning positive ratings on social media. It is a delicate thing that can be shattered easily by careless actions. 

Sharing Economy

Online trust has sparked the Sharing economy. This model uses online connections to share things in the real world. Owners rent out (share) the excess capacity of the things that you already have (cars, houses, even lawn mowers).  Trust must be created and managed between the provider and consumer by a third party. After all, providers are letting a stranger into your spare bedroom. Consumers are dropping off their dog or jumping into the car of someone they never met.

The providers broker/curate these services. They are constantly seeking ways to increase trust, encourage good behavior and weed out the untrustworthy. They do this with mechanisms like requiring a pictured Facebook profile, ratings/reviews of the participants’ past “shares” and encouraging face-to-face meet ups prior to the transaction.

Here are a few examples of the industry leaders in the Sharing Economy:

HomeAway Rent an entire house or apartment http://www.homeaway.com
AirBnB Rent out a room https://www.airbnb.com
Lyft Ride sharing with vehicle owner driving https://www.lyft.com/
RelayRides Rent out your car https://relayrides.com
DogVacay Pet Sitting http://dogvacay.com/
Zilok Power tools http://us.zilok.com/
Feastly Dining service https://www.eatfeastly.com/

 

This Sharing Economy is literally re-wiring the way we interact with each other!

How have you built trust lately?


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