Trust is important. I used to watch NEPA (an electricity utilities institution) workers in Nigeria mount high voltage poles to fix or install things. One of the engineers would climb the pole while another would hold the ladder. In that process, they will make sure that power was cut-off to avoid electrocuting the man on the pole. Watching the men, you will see a system that was built and designed on Trust. Without that trust, the risks the men take would not have been possible.
Trust is not just for electricity workers: in our relationships, we cherish trust. Indeed, in everything we do as humans, trust is the key. The more trust you can build, the better people can believe you. As a young banker in Lagos, they introduced us to Trust Bank. They noted that you would have to keep depositing trust in that bank in order to make progress in your career. Any day you fail in that capacity, it was as good as running away from the banking career. They trained us on decency, honor and values. They pushed us to make sure that our words mean our words, not just to your colleagues but also to the customers.
Even professors have to trust their students. You want to be assured that the papers they have drafted are not plagiarized. If they do and you do not find out, your own career could be in limbo. So, life is really about acquiring, dispensing and managing trust. In commerce, it cuts across all sizes: from big corporations to startups.
The Amazon Trust
You might have read that Amazon, the e-commerce giant, has a smart doorbell. This bell will allow you to open your door remotely for delivery people to drop items you have bought from Amazon. It seems crazy that somebody can do that. What if they hack the solution and someone enters your house? It is electronics and it is IP-controlled which means that it works through the Internet. It is a risk indeed. Yet, people will likely get the device. The technology is not really the bottleneck, the issue is this: can you trust Amazon to have the capacity to make this happen without any level of mayhem. Yes, anyone that deploys this solution in his or her home is simply trusting Amazon. From Fortune newsletter:
Amazon is pursuing something called Amazon Key, which lets its couriers unlock Prime customers’ doors and deliver packages. It’s pairing the service, which it plans to make available in 37 cities next month, with a camera so users will have intelligence inside and outside their homes, presumably boosting trust and lowering creepiness.
If one trusts Amazon, a big if, it’s a pretty cool idea. The company already might be listening to everything my family says via our Echo speaker and its Alexa voice assistant. So it knows what I want, and soon it can deliver it without my having to be home. It reminds me a bit of the Chinese startups that’ll wash your car while you work.
When a company is loved, it can use that grace to open new opportunities. Alibaba, the Chinese ecommerce pioneer, is becoming a global darling. It plans to spend $15 billion over the next three years on R&D in places like Russia, Israel, China, Singapore and U.S. When you hear that an ecommerce firm is spending $15 billion on research and development, you will ask yourself what they are researching on. How people can click faster and spend? The fact is this: Alibaba wants to penetrate markets outside China and wants to build trust by demonstrating that it can deliver the best possible experiences and products. When you spend $15 billion, new partners will come, governments will give you respect, because everyone now understands that you are for excellence. This research will cover ecommerce, logistics and cloud computing, with artificial intelligence (AI), financial technology (fintech) and quantum computing at the heart of the plan. For cloud computing which Alibaba is pushing aggressively, the imagination that it will spend this much will give many partners more comfort to work with it. It is building trust that a Chinese firm wants to invest in the future.
Besides Alibaba, Microsoft is doing well on cloud which has been a growth area for the firm, helping to boost its earning. Amazon makes most of its profits through the cloud solution named Amazon Web Services. Even companies like Intel that supply the technologies that make building those cloud systems possible have great quarters. So, this is a growth sector. Alibaba wants to come big and now everyone is thinking: what will be the next phase after this $15 billion had been spent. You trust firms better when they invest in R&D. Till today, IBM touts its R&D and patents, reminding you that it puts efforts to get the best technology. It is simply telling you that it wants your trust because it makes the best technology. And once you succeed, the trust level is elevated in the minds of customers.
Your Startup Trust
It is not only Amazon that is testing this weird solution: Walmart is working with NEST, acquired by Google, to test a similar tool. If these companies succeed, it is because customers have built trust around their products. There is no other explanation: you have to trust the brand and the company to put the trust of your safety in their hands. That level of trust is also expected from startups.
First, a startup is just coming up and does not have a history any customer can look back to. So, buying your product will be correlated in the customers’ capacities to believe that you will execute and deliver as you have promised. If you do not put that level of trust, you will struggle on customer acquisition.
Sometimes, founders simply discount their products, making them cheaper to incumbents’ so that even if customers do not trust the products, they can try them without much risk. And of course, when they do try and find that the products are good, the startup can easily upgrade pricing over time. That discount on pricing is actually a way of reducing the burden for the customer to decide to buy: you are lowering the trust barrier where even if the customer does not believe that this product will work, the cost is not that much to not take a risk. So, they take a little risk with you and their experiences will determine how far you will go.
That first experience becomes critical: they are taking many burdens, despite the reduced cost, to give you a chance in the market. If you blow it (the product is crappy), you might have lost them for a very long time. That is why you must be sure that you are ready to hit the market at your best, in terms of product quality and service support.
The biggest challenge you have as a startup at the early phase of your market introduction is trust. You have to lower that benchmark that flips the decision from not-to-buy to buy. Once you do that and then maintain that, you have a customer, not just a consumer, with a relationship that no matter what you throw at the market, most will buy. Amazon is reaping its excellence and tradition of giving customers great deals. It demonstrated that it has the ecosystem where people could buy the most affordable books and other things on America. It continues to mine that trust, utilizing it in many areas. It now plans to make its own sportswear, putting Nike and Adidas on notice. Customers will trust Amazon because it will provide the best price.
The fact is this: when a company has established that high level of trust in the minds of its customers, many good happen: Our social media destination site, Facebook, plans to get into food delivery business. The network has a feature that will make it possible for users to order meals in selected restaurants or through third-party delivery services. Facebook wants you to do more on its platform and it does not even want you to leave to order your lunch. It thinks it has earned your trust in that space. It wants to follow the path of WeChat, a WhatsApp equivalent in China, by building an ecosystem in the lives of people. From Bloomberg: “deals in China are done over WeChat. Bankers in using personal accounts on WeChat and QQ — apps owned by Chinese tech giant Tencent — for everything from distributing research to soliciting orders. The practice is flourishing in the world’s second-largest economy.”
These companies have one thing in common: they have built trust in the lives of the customers and they are simply monetizing it.
Business is not a vacation enclave. It is a contact game – you hit someone, someone hits you. It is a world of competition. For products you have on the market, success could be correlated to your brand which pushes out an image, defining if people should care on what you do. Building trust and nurturing it is something every startup must work on. When you do that, you build customer loyalty and that always opens moments of glory. For fintech (financial technology) and medtech (medical technology) products, the trust bar is even higher. But the good news is that once the customers have tested you and you are real, they will become fans. Apple in the eyes of its fans will do no harm. Amazon believes that its customers are now pals, giving it access to their homes even when they are not around. You need to have that level of relationship with your customers to succeed at a higher level.---