Over the past four quarters, over $1.4 billion has been invested in the on-demand/marketplace economy. Valuations are sizeable, user interest continues to grow, and waves of new company offerings are announced daily.
But what about the underlying fabric that will ultimately determine the future of this industry? What’s the one thing any company needs unequivocally to successfully scale?
The answer is “trust.”
Within the “on-demand” world, companies need to be able to trust that their offering is going to be delivered on as promised, and customers need to be able to trust in their experience in order to continue engaging. User ratings aren’t anything new, and any of us can go on eBay, Uber, Lyft, LinkedIn, Airbnb, etc. to check ratings, but what about an overarching level of trust?
One startup, Traity, has raised over $4.7 million, and with 4,500,000 global users (high percentage outside of North America from my experience), it is out to offer that new level of trust. Traity works as a reputation social network, aggregating multiple profiles (like Kayak for travel) for users to evaluate someone based on their overall reputation, not just on one site.
For instance, CEO and founder Juan Cartagena has information on his Traity profile from LinkedIn, eBay, and Airbnb that impact his overall rating/score. Additional profile data can include users with information on email, passport, phone, Facebook, Twitter, Google+, Amazon, PayPal, AngelList, Reddit, etc.
Why should we care about this added layer of trust within the sharing economy? Does it matter if someone has a high rated profile on eBay but not Airbnb?
While the answer to that question isn’t 100% defined just yet, what we do know is that safety is a leading concern within the sharing economy, especially when children and loved ones are involved. As we let more “strangers” into our lives via the sharing economy, marketplaces and on-demand everything from haircuts to alcohol delivery, people could benefit from more data. The more data people have, the better, as they’ll be more informed to make decisions.
For instance, I have no problem getting in an Uber or Lyft; however, when putting a loved one in a random car (or if I’m in a different country that I’m not familiar with), it would be nice to have additional data about the person driving. It’s an ambitious task for Traity, with user acquisition and engagement hurdles on both the consumer and professional side. But if it’s able to succeed, it could act as a new layer of marketplace trust.
Let’s dig in.
Traity’s mission is to build a world where we can trust one another, to enable a safer experience online. Ok, that’s a fine sales pitch, but what’s behind it?
According to Cartagena, it’s all about “reputation identity,” consisting of four subsets:
- Endorsement — You want your doctor to be from the Ivy League
- History — You want your doctor to have 10 years of successful surgeries
- Behavioral — If both you and your doctor play tennis, that commonality creates a bond and added layer of trust. Having similar friends or connections can also play a role here
- Subjective — Ratings, reviews, history, testimonials, customer experiences, pictures
While some of these elements of trust simply take time and experience to build up, others, such as behavioral commonalities and/or consumer subjective weightings like testimonials or beautiful imagery (Airbnb), can often help accelerate comfort levels.
Building an overall reputation identity
First — Building an overall reputation score could be to professionals what Klout is to social media influence. According to Cartegena, “Reputation is contextual, which makes aggregating all of these ratings difficult. We need to find intelligent ways to extrapolate reputation based on overall traits, characteristics, and tendencies, such as being “timely” or “friendly.”
Second — One of the most interesting data points that Cartagena highlights is one that we can all relate to as being somewhat irrational yet representative of human nature, and that’s how to incorporate “negative ratings.” An example here is someone on eBay with 79 ratings, with 78 of those being positive and 1 being negative. Which rating would you read first? The negative rating. While Traity’s mission is to engender “safe” experiences, it also wants to make sure that reputations are up-to-date, accurate, and presented in a balanced manner. Cartagena wonders if perhaps we should find a way to diminish the negative ratings over time to allow people to forget (just like they do in the real world) and move on, assuming it’s justifiable.
Third — Offline to online. Cartagena believes we’ll see both consumer laggards and professionals such as landscapers as an example, who may not have had a need to be “online” historically, engage more online in the coming years. From the consumer side, “the sharing economy starts with those early adopters who are willing to take risks. The key question is how we get non-early adopters like my mother to not feel scared and start engaging.” Cartagena thinks that there will be four key factors to connecting off to online:
- Reputation systems. Some platforms like Craigslist still don’t use any reputation systems. People send links to Facebook profiles for instance, which is wildly inefficient. Cartagena thinks that people should be able to port their reputation around like a passport.
- Education. People need to know in a much more digestible way the risks they’re taking, the level of publicity they’re exposing themselves to, and what privacy if any they have by participating.
- Early adopters as evangelists. Cartagena cited his grandmother as saying she doesn’t feel comfortable using Uber on her own, however he’s taken her out a few times in an Uber and each time her comfort level grows.
- Common set of rules for reputation. Think about an Uber ride. The reason you give someone a 5-star or 4-star rating will vary from someone else. Different things are important to different people so introducing ways to better “rate the rater,” as Cartagena puts it, is an interesting challenge that can help to better the experience for everyone.
Trust or value?
This might be the basis question that defines the success or failure of sharing economy and marketplace companies. Do consumers trust things they value, or do they value things they trust? Is there a difference? If so, how do we weight accordingly?
A great interview I had earlier this year in regards to trust was with Marco Zappacosta, cofounder and CEO of Thumbtack. Zappacosta reviewed data specifically from Thumbtack and highlighted that the company’s users weren’t as worried about letting people they’ve never met into their home but rather about getting a good deal.
Traity’s mission, while it certainly understands consumers gravitating towards “value,” is to look at the other side of the equation as the key to unlocking absolute user adoption (on both the supply and demand side). Cartagena often speaks of finding the “good” in people and using that as the basis to grow our global sharing economy, with or without Traity: “The more good online citizens, the better for the world, and the more Traity would not be necessary, which would be a good thing.”
Dan Slagen is a marketing executive based in Boston. A frequent speaker and guest blogger at VentureBeat, Dan has been featured in the New York Times, Bloomberg TV and the WSJ. He currently advises startups, marketplaces, and marketing departments on strategy, revenue growth, and operations. You can follow him on Twitter @DanSlagen.
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