Data: Enabling Trust Platforms for Today’s Digital World
The online marketplace; the sharing economy; P2P, or the gig economy; no matter what you call it, there now exist a borderless marketplace where both individuals and businesses can exchange value for money. Powering this new sector is a digital infrastructure to ease arrangements and payments, gauge reputation and quality, and transform a clunky process into a seamless experience.
Welcome to the new world of trust platforms.
The progress of commerce has parallels with the progress of trust. At first, all business was face-to-face and the parties could inspect the goods and payment personally. By establishing payment systems, third-parties (such as banks) could vouch for a party and remote transactions became a possibility. Trust platforms take commerce to the next level, not only vouching for payments but the entire value chain.
Trust platforms are made possible by the proliferation of big data and the tools to quickly share and analyze that data. Through these data analyses, patterns emerge that help uncover bad actors, or conversely, highlight trusted parties.
AI and Machine Learning
Data such as identity, payment profiles, patterns of use, feedback, reputational scores, location and numerous other data points is combined, filtered, scored, weighted and then tested and tweaked in ongoing cycles to optimize performance. AI and machine learning finds data patterns that were previously undetectable.
The impact of these developments in the trust infrastructure is enormous. Consider Airbnb; it owns no significant amount of real estate. It doesn’t employ numerous front-desk, maids, bellhops and other hotel staff. But yet, Airbnb is valued at $38 billion, which makes it one of the largest accommodation companies in the world and it’s only been in business for 10 years.
Another poster child for the sharing economy is Uber, valued at $72 billion, which is more than GM. They don’t own a fleet of vehicles (except for some self-driving cars they are testing), they don’t have production plants, but yet they are one of the biggest transportation companies in the world.
These examples demonstrate the extreme scalability of the trust platform model. The true value of these businesses is the data, the algorithms that manage that data and the resulting trust. As opposed to physical goods, scaling data and trust does not require scaling of inputs. Once the system is productive, expansion does not require re-design or rebuilding; rather, the process is additive, plugging in more value with every new element at a fractional cost.
Decreasing overhead infrastructure costs and improving scalability are not the only economic advantages of trust platforms. The ability to quickly add new service offerings or change business practices makes for a more nimble and adaptable organization. A flexible work force enables more responsive resource allocation.
A future of trust
The biggest economic impact is the leveraging of previously untapped potential. For example, before Airbnb, valuable real estate would sit unoccupied and unutilized. Now, with an effective trust model in place, owners can easily lend out their property when they want for extra income. Travelers get a larger inventory of places to stay, often at major cost savings compared with hotels.
As long as people provide service excellence, they can improve their reputational score and reap the rewards that come with it. Trust platforms promise a democratizing of service, where a world of talent is available for the next task, the winners being the ones that can provide the best service.
Note, this revolution is just starting and the tools will become increasingly sophisticated. There will be more data sources, better data analysis and more people participating in the platforms. Distributed ledger technology offers opportunities to better govern and share value. Whole new organizations can spring up that are built up as decentralized entities, not as corporate structures, and these organizations will be even more nimble, scalable and market-expanding.
Through the building of trust online, every person on the planet will have more opportunity to determine their own prosperity and more options to experience different places, people and connections. In the end, all the technology, all the systems, are secondary to the true revolution — the revolution of trust.