Amazon is Getting Tangled in the Trust Economy While
Airbnb Embraces It
If
customers stop believing you, they'll stop buying. While Amazon struggles with
fake products, Airbnb is raising the bar to give guests, hosts and even
neighbors more confidence in its service.
Executive director, Ed Kaplan Family Institute for Innovation
and Tech Entrepreneurship, Illinois Institute of Technology
The
most critical enabler of e-commerce and so many other tech-centric businesses
today is the emergence and continued growth of the "trust" economy. We're
surprisingly comfortable putting ourselves (and often our offspring) in cars
with drivers whose training, credentials and even honesty are mainly a mystery.
Their principal qualification is showing up --usually on time and hopefully
sober. And we buy products and services from sellers worldwide without a
moment's hesitation, in the good-faith belief that they are what they're
represented to be and that they will be delivered on time and as promised.
While
sites like The RealReal aggressively stress the
authenticity of their used luxury goods and the extent to which they go to
verify that fact, most e-commerce sites, and most of us, just take largely for
granted the fact that what you see is what you'll eventually get. Of course,
with the dramatic growth of third-party sellers on Amazon and the frightening
rise of knockoffs and counterfeit goods on the site, our uncritical reliance
may be increasingly misplaced. The Wall Street Journal recently uncovered 4,152 unsafe items for sale
on Amazon. Given what we're finding out, how much longer can
Amazon hang on to the title as the most trusted brand in America?
Seems
to me that even a golden reputation based primarily on execution and cost
considerations is more than a little vulnerable when the goods that are
promptly and economically provided turn out to suck or are actually harmful.
Cost is what you pay, but true value is ultimately what we're looking for. As I
used to tell my car dealer clients, customers don't care how fast you fix their
cars if you don't get the job done right. They'd rather wait a while longer
than have to bring the beast back to be repaired again. Amazon needs to clean
up its Fulfillment by Amazon (FBA) business, which continues to grow
explosively, because shoddy quality control is killing a lot of legitimate
players who can't compete with all the fakes, while slowly impairing our faith
in the company as well.
Airbnb
just raised the bar in the trust economy, and it will be interesting to see how
soon all the others step up their game as well. They will probably have a much
heavier lift than did Airbnb and, in some cases, not much interest or appetite
to open that particular Pandora's box. I can understand why. Brian
Chesky, an Airbnb co-founder and its CEO, announced last week at the DealBook
Conference that Airbnb will roll out four service enhancements to provide far
greater comfort to all stakeholders. Not just to the
guests and the landlords, but also to the residents and regulators in the
communities where the business operates as well. The four changes include:
(1)
All seven million Airbnb listings will eventually be verified
(2)
Unsatisfied guests will be rebooked or refunded
(3)
There will be a 24/7 hotline for unhappy neighbors
(4)
High-risk reservations will be screened to eliminate potentially disruptive
"party" houses
Chesky's
simple statement, contained in a company-wide email, that "trust on the
internet begins with verifying the accuracy of the information on internet
platforms" was especially telling in the context of today's conflicting
approaches by the major tech players. Twitter has opted for veracity,
banning blatantly false political advertising, while Facebook sticks to its
controversial hands-off position. (Google is on the sideline, trying to figure
out how to play the issue.)
And,
even more importantly, the changes and the challenges that so many of the other
tech companies are going to face in upping their "honesty" will be
much greater than those faced by Airbnb because basic trust was a critical
component of the Airbnb business and a central part of its culture from the
beginning. Not that Brian, Joe and Nate are exceptionally honorable and sincere
guys--although maybe they are. But they really had no choice, because
delivering the right experience was the whole essence of their business, so
they made accuracy, honesty and integrity all key components of their corporate
culture. When you invite someone into your home to sleep in your bed, you'd
better get a lot of things right from the get-go including, but not limited to,
the breakfast. Where you start the startup journey has a lot to do with where
you ultimately end up and what kind of business you build. If you don't care
where you end up, any road will take you there.
And, if
your North Star is "breaking things" or "asking forgiveness
rather than permission" or selling a "raised state of
consciousness" instead of speculative real estate space, you can end up
building a morally bankrupt business that no one trusts or ultimately believes
in. The examples of how to do it wrong are just about everywhere today. There aren't any
real shortcuts to sustainable success and there never have been. The miracle
workers and people selling any other story are just shipping snake oil.
Airbnb
is biting off a big chunk, betting a bunch of its own credibility, and taking
on a set of tasks that will require not simply its own efforts, but a great
deal of support and participation by their community and stakeholders as well.
This is a leap of faith to be sure, but in listening to the guy who has led the
charge for over a decade and done about as well as anyone could (especially in
dealing with the occasional serious bumps in the road), you have to believe
that he may have the right stuff and the strength and character to get the job
done because he's coming from the right place. If it's you against the world,
it makes a lot of sense to bet on the world.
All
these guys want to be appreciated and admired - a key part of what drives every
entrepreneur. Who doesn't want to be loved? But trust is a much bigger
challenge. Being trusted is a lot harder to achieve than being loved.
