Who can You Trust?

  The problem with centralized platforms

“What if trust, like energy, cannot be destroyed and instead just changes form?”
[Rachel Botsman]

Trust is on the decline, and we need to rebuild it. We keep hearing this repeated everywhere. From social networks to boardrooms, people say organizations and institutions should focus on trust. But, philosopher Onora O'Neill says we don't really understand what we're suggesting.

    There's a claim many people believe about the great decline of trust. Therefore the aim is to have more, which means the task is to rebuild trust. Baronessa O'Neill flips the question, showing how the three most common ideas about trust are misconceived.

    First the claim. Take an evidence-based approach what's your evidence? If we look at opinion polls, that's what we get, opinions. So we should ask, based on what? In fact, if you loo at the evidence of opinion polls, you will find that “the people who were mistrusted 20 years ago, principally journalists and politicians, are still mistrusted.” We still trust the same people we trusted 20 years ago, too — judges and nurses.

    There's also an issue with asking generic questions to infer deeper attitudes. Because if someone asked you if you trust your elementary school teacher, or grocer, you'd probably want to know, “to do what?” You might even say that you trust some people, but not others.

    So the evidence points to how we place trust in a differentiated way. You may trust a friend to keep the conversation going, but not to keep a secret. Why drop that intelligence when we think of “trust” in abstract? It's not a good idea to eliminate “the good judgement that goes with placing trust.”

    Then there's the aim — have more trust, which is stupid. Because we differentiate between people who are trustworthy, and people who are not. More indiscriminate trust is not an intelligent aim. Intelligently placed trust is a proper aim. 

    We judge trustworthiness based on three things:

  1. competence
  2. honesty
  3. reliability

    Is someone competent in something that is relevant and honest, but not reliable? Then we have a hard time assigning more work. Honesty is a big one. Warren Buffett says, “Honesty is a very expensive gift, Don't expect it from cheap people.”

    When he hires people, he looks for three things: “The first is personal integrity, the second is intelligence and the third is a high energy level. But if you don't have the first, the other two will kill you.” Trust is the response to trustworthiness.

    Institutions and organizations have tried to put in place systems of accountability that make it easier to judge trustworthiness, but they end up distracting the people from their difficult tasks because they need to tick boxes. O'Neill says it's hard to judge whether people are trustworthy, and even communicate that we are.

    The task is also backwards, because we can work on our trustworthiness, but in the end it's other people who give trust, we cannot rebuild it ourselves. We can create the conditions through relevant competence, honesty, and reliability.

    And we can provide evidence of trustworthiness through vulnerability — for example money back guarantees, easy returns — that shows we have confidence in what we're saying and doing. Giving people evidence is a concrete and simpler way than talking about rebuilding trust.

    In Who Can You Trust? Rachel Botsman explores the role of technology in trust, which is fundamental to society. She notes the evolution of trust from local to institutional to distributed, and how transparency is making that trust leap possible.

    Before we can trust a platform, or an individual on it, we need to trust the idea. We typically weigh the upside and downside of something new. This is the reason why skilled product managers embed some familiarity — Steve Jobs was a master of this art. We weigh the pros and cons based on what we gain from it, and look at who else is doing it, social signal.

    Many organizations optimize for efficiency, but efficiency can be the enemy of trust, says Botsman. Like relationships, trust takes consistency and constancy of effort — take away all friction, and you have no basis more making the investment.

    The report on Uber and Airbnb is quite interesting. Each organization exists without owning the assets traded under their names. They have built communities that seem to represent potential to draw out the best and worst of distributed trust/mistrust between the people involved in each transaction.

    There are important issues at stake, including reliability (fulfilling expectations), accountability (keeping promises and correcting screw ups), and protection (platforms to mitigate the risk of bad things happening).

    Says Botsman, “When it comes to trust in distributed systems, we need to know who will tell the truth about a product, service, or piece of news, and who to blame if that trust is broken. Where does the buck stop? In this new era, people are still working that out.” We are indeed as her examples illustrate.

    Technology platforms are bringing about a social and cultural revolution by creating this trust shift. This is a global phenomenon. The advice is to understand the system (critical), become more self-aware of our triggers (valuable) and create more space for thought (pause that tweet!)

     To me, communities of practice where critical thinking is welcome are one bright spot, especially when they include community managers. Expect to see a rise in niche groups that develop as a counter movement to gigs-platforms. In fact, I count on it to preserve the distributed web, and counter what Chris Dixon# illustrates as the problem with centralized platforms (image above).

    He says {h/t AVC#]:

Centralized platforms follow a predictable life cycle. When they start out, they do everything they can to recruit users and 3rd-party complements like developers, businesses, and media organizations. They do this to make their services more valuable, as platforms (by definition) are systems with multi-sided network effects. As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grows.

When they hit the top of the S-curve, their relationships with network participants change from positive-sum to zero-sum. The easiest way to continue growing lies in extracting data from users and competing with complements over audiences and profits. Historical examples of this are Microsoft vs Netscape, Google vs Yelp, Facebook vs Zynga, and Twitter vs its 3rd-party clients. Operating systems like iOS and Android have behaved better, although still take a healthy 30% tax, reject apps for seemingly arbitrary reasons, and subsume the functionality of 3rd-party apps at will.

For 3rd parties, this transition from cooperation to competition feels like a bait-and-switch. Over time, the best entrepreneurs, developers, and investors have become wary of building on top of centralized platforms. We now have decades of evidence that doing so will end in disappointment. In addition, users give up privacy, control of their data, and become vulnerable to security breaches. These problems with centralized platforms will likely become even more pronounced in the future.

     Decentralization means agency and authority over personal data and physical property. We want to have ownership, privacy, security, and control of both. Going back to niche communities, an example of this would be access based on certain criteria, and membership based on behavior. Not a single one of the popular social networks does this.

    If this topic interest you, get a copy of Who Can You Trust? It's a short, well-researched, and worthy read.

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