Image source: Virgin.com
From the times when large banks and the government machineries exuded trust and confidence in people to today’s era where renting homes and lending money to complete strangers – the trust economy has slowly but surely shifted to the side of the sharing economy.
While the likes of Uber and Airbnb are rendering ownership of objects obsolete, it’s the efforts behind the building of ‘trust’ that’s fuelling such lifestyle changes.
There’s a compelling TechCrunch article by Adriana Stan, which also mentions about the metric of trust and building up trust beyond just customer reviews. Everything about people will be measure, right from our influence, social following, work connections, etc, will also provide one with our ‘trust score’ – something like the ‘credit score’ that banks and traditional ‘trust’ institutes are built upon.
Inspired by the shares by Epi Ludvik Nekaj and his Crowdsourcing Week series where he elaborates on the 5 Ps (People, Purpose, Platform, Participation, Productivity) of the Crowd Economy.
In his piece he mentions about how the foray of the web and mobile networks, have facilitated increased collaboration and cooperation. Defining:
The crowd economy is a dynamic ecosystem of productive people who participate through a platform with a purpose to achieve mutually beneficial goals.
Based on deep dives and experiences with both forms of economies (Sharing vs Crowd), here are conclusions in 3 points:
- The sharing economy’s foundation is ‘Trust‘, while in the crowd economy, it is ‘Collaboration‘.
- The key driver of the sharing economy is availability of ‘extra Resources‘, while in the crowd economy it is availability of ‘extra Knowledge‘ that’s fuelling its growth.
- ‘Commerce‘ focused organisations have best leveraged the sharing economy, while ‘Impact‘ focused organisations have made change with the virtues of the crowd economy.
The sharing economy – where businesses leverage the use of available resources optimally through technology and by reducing wastage of resources, has been evolving constantly. These not-as-usual-businesses include, taxi-sharing startups like Uber, home/room rental companies like Airbnb as well as the many e-commerce marketplaces and crowdsourcing platforms available.
In a recent post I’d come across, it became clear that the ‘Trust economy’ is where we are headed to. Trust economy as defined by the article:
Allows individuals to provide a service, often at a cheaper rate than the standard market price, which is accessible to a large network of users through a branded platform, which acts as a vehicle for collective trust and accountability.
All models depends on trusting a virtual stranger to do what they promise, hence why it has been called the ‘trust economy’.
Startups fitting such a criteria have been disruptive, especially of the traditional players, and in effect have given consumers more value. Here’s what consumers have gained from this trust economy:
- More cost-effective solutions due to service-offerings being on-demand
- A sense of belonging as consumers too can become providers of such services
- Technology here has enabled direct engagement with the end service provider
- Digital profiles and reviews have facilitated easy validations of service providers
- More personalised experiences, with service providers turning disruptive players
Another major deliverable of the ‘Trust Economy’ that the technology-led ecosystem has enabled one to become more ‘creative’ in their businesses and solution-finding general. All one needs to do is increase their ‘reputation capital’.
Personally, I see the growth of the ‘Trust Economy’ essential to a community’s success – as it has the ability to transform mindsets and provides more room for innovative solutions to meet challenges.
Interested in the ‘Crowd, Sharing & Trust’ economies? Join me and several others at the following flagship startup conferences in Bangalore this month:
NASSCOM Product Conclave