OUTSOURCED Part 3: Peer Networks: The Currency of Trust
June 14, 2018
Outsourced
How do we decide whom and what we place our trust in? Generally, you trust your parents and family members because you were born into their lives. You typically trust your spouse because there is an underlying attraction which facilitates its development. But how do you trust a stranger? How do you develop trust in a person or company that you know nothing about and have no references for? Especially if you are looking to place faith on someone who would be in the care of a something you highly value. How can you be sure that the duty of care will be upheld when you’re handing over the keys of your house to some strangers on Airbnb, or letting someone walk your beloved dog for you? When we lived in smaller communities, trust was entrenched as we knew our community members if not by first name at least by their family. But as our community size and diversity increased, trust has become harder to achieve. Nevertheless, despite increasing cosmopolitanism, trust is beginning to be reintegrated into our communities and peer networks are giving us the ability to do it.
This is the final segment in a three-part series that will talk about the “peer to peer network”. How it has affected getting hired, choosing services (from where to eat to transportation), and how they have influenced how businesses build trust with their clients.
Peer Networks: The Currency of Trust
The trust crux has been at the centre of every heterogenous society since the dawn of human civilization. Ancient Hebrews used to recite a list of their patrimonial heritage until they found a commonly known ancestor between themselves and the stranger they wanted to do business with. Scandinavians found their work around by creating patronymic surname which announces the names or houses of their fathers or mothers (i.e. Leif, Eric’s son = Leif Ericson). Companies have followed suit, forging their own methods to establish trust. The ancient Athenian potter, Euthymides jovially etched his trademarked “hos oudepote Euphronios” to differentiate from his counterfeiters and Cadbury’s purple wrapping reassures consumers of their confectionaries that quality sweets reside inside.
These novelties worked in less crowded markets. Rarely did Cadbury ever have to worry about budding chocolatiers in East Bengal taking its market share, nor did Euthymides have to worry about Meso-American imports flooding his Delian market. A modern world as globalized and competitive as ours requires a new trust layer as our modern-day companies are discovering, so much more so when what is being exchanged is highly valued by the owner.
We have already seen how peer networks have affected modern hiring practices, and we discovered how a crowd-sourced network can make a non-existent restaurant London’s number one place to eat. Today we look at how we build trust with new companies via the peer network.
We are in the renaissance of personal data applications and services are being curated to meet the individual needs. Leading this vanguard of creative disrupters…Wag!. “Wag!” is personalized dog walking service that matches dog owners with local dog walkers and sitters. Wag! dog handlers go through extensive background checks and on top of that you can track your dog walker in real time and before you meet them you can view their profile on Wag!’s mobile app. While background checks and certifications help build trust the clincher for most Wag! users are the ratings and reviews available for each Wag! dog handler.
The reviews come from people just like you. This prompts the question, why do we put value in peer references for these service providers? The simple reason is that that they are other people, just like you. They are fellow dog owners that live in your neighbourhood and they care about their dog just as much as you. These are your people, your dog-owning peers. If they say they had a good experience with this dog walker, it must be right. People trust others that fit into their own social group and seeing reviews from these people who are similar to yourself builds the bonds of trust needed to let a stranger walk your four-legged companion. The owner of that profile has been okayed by others in the dog community and they are now allowed into your circle of trust. This phenomenon is known as “social proof” and it is the currency that propelled new economy companies like Uber, Airbnb, and Wag! to their initial success. While now you can forge Cadbury’s hue of purple or Euthymides’s signature it’s much harder to forge the identity of your neighbour or the opinion of your friend. Peer networks and social proof are the trust layer of this generation where trademarks or a leader’s word was to the last generation.
Now, like our previous two parts of this series suggests, the system itself is not infallible. The 6 references for a Wag! dog walker may not be totally authentic, and for all you know, your neighbour was paid to make a positive review. While trust can be a challenge to build, it’s easy to break and the internet offers a multitude of platforms for individuals to post online about their experience, many outside of the control of service providers. We have all seen what effect one viral negative post can do to a company in an order of minutes. We only need to recall Kylie Jenner’s infamous tweet that helped Snapchat lose $1.3 billion in stock value. This is the peril of businesses that build their livelihood on the foundation of the peer network. Positive reviews can create massive windfalls, but negative ones can decimate a company just as quickly – this is an unstable position for the businesses, employees, and customers. The speed of the fall is mainly determined by how much trust has been entrenched between users and the company.
This world is changing. Traditional gatekeepers have lost their position as venerated oracles of trust. Doctors are judged not by their degrees but what former and current patients have to say about them on Google Reviews. People are hired based on the skill set their peers have endorsed on LinkedIn, and people will choose a dog walker based on how they are reviewed by neighbours. The peer network has altered our behaviours, it has helped to build trust between strangers we want to transact with, and it has opened a new world to fraudulent representation. Like all advancements in our history, peer networks can be used for good or for bad but whatever future lies ahead one thing is for certain – it will be determined by our peers.
