Miles To Go.

Xin’s Thoughtful Gift: PBJ and Ramen 2

Being an entrepreneur is a lumpy business at best. And while I’ve written extensively about the mortality rate (95%), I’ve never written about how hard it is along the way for those 5% destined for greatness.

It ain’t easy, and it ain’t easy on everyone.

This is a basket of Ramen Noodles and Peanut Butter, presented on my Birthday by a very appropriate, thoughtful entrepreneur I backed; Xin Chung. Xin certainly has the moral authority to present the gift: he was liberated from Saigon as a child, spent time in an internment camp, and grew up in Valdez Alaska before settling in to SoCal and pursuing his dreams as an entrepreneur. He is now Founder and CEO of TrustCloud which has emerged from a “walk in the wilderness” with 10k passionate users and a growing number of interested clients in the social check space.

The Ramen and PBJ is our shorthand for being capital efficient, a must for start-ups.

My system at Vaux usually provides $250k of less for a team to develop a product that addresses a meaningful market problem, and do it within 90 days or so. This means most for the proceeds are dedicated to product. The next $250k usually goes to determining if anyone cares. The numbers vary, but either way the Founders and early employees do not get rich in salaries off of angel money. Frankly, they have to be prepared to barely eat, and when they do eat for strength. This is part of the ugly underbelly – and not a full underbelly! – of the dedication it takes to pursue your dreams. Every dollar you don’t waste can go to a better product or a better viral coefficient.

And of course, stuff takes longer than you expect. And costs more money than planned. This puts tons of pressure on the entrepreneurs as they debate the next crucial steps, often on an empty stomach. Probably once in my last 10 start-ups has a company got it right, right out of the box and kept doubling down all the way. Most try with a product, revamp, try again, tweak, and try again until there’s no track left. And it leads to some very difficult conversations about where to invest precious resources: make the product better and more people will come… or tell more people about the product and they will spread the word. Development vs. Marketing vs. Biz Dev. It often provokes difficult conversations, and sometimes desperate measures (these guys slept in a van on a Biz Dev road trip that lasted months).

And so the entrepreneurs themselves, while pursuing their dreams of autonomy, making a mark on the universe and yes winning riches, have to absorb the vagaries of what precious resources to assign where… including their own sustenance. I get queasy when I hear comparisons to the comp someone could make in the corporate world, which simply doesn’t apply in start-up-ville. And I get nauseous when I hear debates about how deep down the rabbit hole start-ups should go pursuing the next pivot (which is another term for fail and try again). Luckily  angels don’t have that much patience or that much capital for endless restarts. Which is why, when interviewing prospective partners I always look for that unique combination of resourcefulness, willingness and mental toughness that will see us through. And a dose of reality to know when to put a fork in it.

Entrepreneurship is not a straight line to the summit, it’s a jagged ascent and we have to be prepared for the whole ascent not just the sprint at the top.

~~

Save runway: TrustCloud’s sample T&E guidelines

Use personal credit card; expense every month with invoice. Avg trip: 2nts/3days, $800, $1000max

1. Air: economy $250

2. Ground:  $25/day

3. Lodging: Airbnb $50/nt

4. Entertainment: $75/day

5. Badges: pre-approved

6. Big dinners: pre-approved

Austin has a groove

I hadn’t been to Austin for SX for awhile, and the differences are palpable. Each of these observations deserve a post on their own (blog tonnage warning), but here’s the brief from the plane

1: These kids won’t lap their Parents, but they’re over it

UT Spring break notwithstanding, SXSW trends pretty young but not tragically hip. I’d call it self-sufficiently hip. Perhaps its a stack of student debts, lack of faith in future entitlements, or a crap job market but most everyone here lives and breathes self-reliance. Kinda reminds me of KFAC in some ways.

No, they likely won’t end up better off than their parents but they have founds ways- ingenious ways – to have a share in interesting events, luxuries and experiences. It is the walking personification of the asset light generation, a veritable ride-sharing, house sharing, tab splitting mobile-social-fueled existence. You can see it in the number of backpacks lugged around. The premium real estate around power outlets. The use of timely information to scout out clean bathrooms and taco trucks still serving food. Maybe this generation can’t get what everything they want, but they sure use information to get what they need.

2: Booze may work for inspiration: but Coffee is for Execution

Ok, close to SxCentral (Dirty 6th or perhaps Rainey) the parties roll on late into the night. Bold dreams do emanate from these spots, no doubt. But who will do them? No-one with a hang-over I assure you. Life is not a Reality show perversion of how things get done. The business still happens the next morning, by guys sipping coffee and probably not wearing skinny jeans . I noticed on Don Dodge on twitter, who has backed his share of great SXSW start-ups, hits the parties for a few pics but probably doesn’t extend the night further… unless the band is good. He’s one worth following.

3: Mobile Social Local drives peer actions

Even Steve Case does sharing

And how. In this urbania of the future, I can’t remember anyone who didn’t whip out a smartphone every 90 seconds. Pedi-cab drivers checking directions. SXSW’s checking in on panels, flash mobs, and open bathrooms. Cops, using video. Really no surprise there. But when asked, how many of them pay for apps or subscribe to content the answer was rarely anything but “what?” (see #1 Above).

This of course, drives a few of the major theses of my activity: mobile, social and local will be supported by increasingly relevant and targeted ads. It would help if they were displayed in appealing, but unobtrusive ways but that’s on its way as well. While I was there, I saw a stat that online screen time had yielded to mobile screen time. Revenue isn’t that far behind. Mojiva is ideally positioned for both.

I also noticed that a huge focus of the Sharing Economy conversation (aka Asset Light, Collaborative Consumption, Peer to Peer Economy- talk about a naming clusterjam!) is all about Trust. How will Sharing grow if every transaction comes with the doubt and questioning that goes like this : I know I will make (save) money on this, but might I die doing it? News from the washington Post this weeks kinda underscores the point. Who is behind that screen? Can I just rely on the one network to provide that data (and are they conflicted b/c they want the transaction)? Isn’t there a repository of all the identity, behavior and transaction data that sits with a third-party and can quickly display a dossier on a potential counterparty? I had a back and forth with FAKEGRIMLOCK (yes, all caps please) about ways the Sharing Networks might be compelled to share their API toward this end (his suggestion was a ray-gun).  Leah Busque from Task Rabbit mentioned TrustCloud as an option in her panel on sharing- no ray-gun needed. She’s a nice lady and a great entrepreneur.

4. Space: the Everest of STEM

The biggest draw, by far, was the rockstar Elon Musk. And his expertise and passion for Science, Tech, Engineering and Math overfloweth. PayPal, ok. But this guy has Tesla and SpaceX rocking along while parenting five kids. The sheer out-of-this-world challenges this guy takes on, and the STEM talent he draws to do it should be an analog for our entire workforce. Learn STEM, and develop a passion for it. Pursue bold visions.

5. Being Top ten in the information race hardly matters

Just ask #11 in line at the taco truck at 3am. Not so long ago, information was valuable for a lot longer, long as your counterparty didn’t have it yet. Now, most information travels so fast and is so complete that is becoming commoditized. So what counts anymore? Speed, and creativity.

Sam Lessin had a brilliant talk on this BTW. And ironically but perhaps not un-related, his dear departed father Bob wrote a small treatise (Lessin’s Lessons) on what is essentially the asset light generation I discuss above. Great read if you can still find it- self published of course. Ahead of his time. Sam is a great continuation of his legacy.

If everyone has about the same information, at the same time the people who will extract the most value from it will be those that get it first, those that understand it first, and devise a creative angle to use it. It’s an interesting leveler of the playing field.

So that’s the quickie from SXSW. More to come on each of these. But my takeaway for the week is “Live in the future: build what’s missing”.

My Frequent disclaimer: I own equity in TrustCloud and Mojiva. 

I’m about the x’s and O’s. She’s about 1′s and 0′s. (Notre dame photo)

I was saddened to hear of the death of Manti Teo’s girlfriend. It was a moving story of courage and recovery for Manti, and  demonstrated the empathy possible in a close knit nation called Notre Dame.  A truly moving story in time for the Heisman Media machine’s annual award.

And after the fact, it turned out to be all bullshit.

Manti was catfished in a hoax, whereby the girl he met online was… not what she appeared. I have written about this phenomenon extensively since the movie Catfish hit the screens a few years ago. Manti was focussed on x’s and o’s, she was all about 1′s and 0′s. If I recall, thousands of people wore lei’s to mourn the loss (of his mother as well) at a game, and the cameras couldn’t get enough of it. It has happened since, and it will happen more until people realize that, for all the time they spend online, they have to build and monitor a trust system they can rely on, or face the consequences of what is called Peer to Peer “P2P” risk. In short, buying through the classifieds has risks that don’t exist at Bergdorfs. And there is simply no way that could have happened if she had a TrustCard, or he had asked for one. DISCLOSURE: I am an angel investor in the sharing economy, including TrustCloud.

We are being more mobile and social everyday. believe me, I sit at the vortex of some 100,000,000,000 mobile impressions per month at Mojiva. People should start growing accustomed to being fooled with 1′s and 0′s, or not be shocked with the consequences. Manti is a telling tale for what is surely coming for most of America (except the jaded metro-skeptics) as we use mobile and social to power our interactions. Consider what Manti represents:

• Most of America still harbors vestiges of Classic Innocence that wants- indeed hopes- that what you see is what you get.
• Time demands and focus elsewhere – Manti had his dreams, and he spent 99% of his time (ok, still not enough) on his football. An expert on one field, but a rookie dater. And not much of a fact checker either.
• Doesn’t have time to track down all he sees online – and who does? And how would you?

It can suck to get catfished. Because we WANT to trust the peer to peer relationships we develop online. Sometimes, it means the car you rented on a sharing site comes back smelly. Sometimes worse. I’ve written extensively about the whoopsies in the Sharing economy here, here and here. Kickstarter has its case of the week, where Seth Quest may or may not have been forthcoming with his bona fides. And now on to dating, the ultra peer network  where Barry Diller will hook you up with a CRAZY BLIND DATE. Hmmm, can you say risk?

This will continue to accelerate as sure as mobile and social keep generating more P2P opportunities. And the risk will not be mitigated until there is a portable trust solution that people can rely on to quickly vet P2P prospects, reduce friction in transactions, and provide a trail of digital footprints if something goes wrong.

Until then, would someone please get Manti a real date?

BTW; The P2P networks have been working on trust within their networks, but unless they become the AMAZON of P2P, people will begin to demand that their virtuous data is partially theirs, and easily portable. More on Data to the people another time!

Pretty much sums it up.

A recent post had me going on about my three word manta: Discover. Develop. Deliver.

I’ve been fortunate enough to be around five companies from founding to past the Dunbar line, and that’s where the people stuff gets real interesting. (see the Develop section of the post). Well, 2013 started out with recruiters ringing employees and we decided to fight for what we value: A Players.

Ironically, just as you are seasoning a team and kicking into growth mode, the rest of the market often takes notice and starts trying to poach your best. The more competitive the marketplace, the worse the soliciting gets (I’ll submit mobile ad-tech ranks right up there). It won’t stop, so what we have done is create every possible intangible and tangible benefit to being happy while working with us. So here’s what we’ve done at Mojiva for example, to deal with it:

First, I learned more about the Dunbar line, a fairly interesting social study about leading groups.

Dunbar’s number is a suggested cognitive limit to the number of people with whom one can maintain stable social relationships. These are relationships in which an individual knows who each person is, and how each person relates to every other person. No precise value has been proposed for Dunbar’s number. It has been proposed to lie between 100 and 230, with a commonly used value of 150.

As we were approaching 100 employees I worked with my co-founders and core team to describe our core values. Everyone knows we try to govern by those values; it’s an early test as to whether a prospect matches up well with us (and if not, it’s eventually not going to work anyways). Once in the house, we all try to live and work by them. I’m proud to share them here

BOLD & NIMBLE // 360° RESPECT // INNOVATE // OPEN // SCALE AND BE PROFITABLE // LAID BACK LEAN FORWARD // TEAM UP

Next, I worked with our HR team to come up with every imaginable intangible program for start-ups (many of which I have to credit my EO group, Maximus for the ideas). We have bi-annual MAPs that people can self-assess their skills against their peer’s assessments, and identify places and skills to improve. We have bi-annual performance reviews, but so does everyone. We have Quarterly peer awards, where individuals are nominated for recognition (and swag!) by teams for their superior effort. We have a recruiting and retention program fashioned after GH Smart’s Who process, where most everyone who interfaces with new hires has a say in their fitness for offer. We have a 401k. We have a disaster recovery program that had 100% check-in within 3 hours of hurricane Sandy. We pay bounties for finding, and keeping people rated A Players. We have a cool office in SoHo. We have a 90 day leave bonus (yes!) where we actually look at people’s mojo after a quarter and offer them to leave if they want. We figure the cost of searching, recruiting, and training a new hire is expensive, so if they don’t confirm a perfect match in 90 days the company will suffer going forward. Better to part ways sooner.

But far and away, the reason people want to be around is to make their dent in the sky. We really believe that what they do in the coming years will echo through the rest of their careers. Working at a mobile ad-tech company growing 100% is about as exciting as it gets. They can point to that and say “I helped build that!”.

So if you’re looking to hire away someone from any of my portfolio, rest assured: we know who the A Players are, our core values are matched, and we serve them well. Most are just too busy for the flattery, and rarely do they take calls (we have a program for that too).

Face it: if your are a recruiter calling, you are likely speaking to someone who is not many of the above, and you will likely overpay for them. Happy hunting.

Meet Fake Grimlock

Mary Meeker just called it: Sharing is now a megatrend.

In her wildly popular bi-annual prognosis, Meeker points to the demise of asset-heavy life especially among 20 somethings wherebye sharing economy and  smartphones free time and money, creating an asset-light generation.

So how does this relate to virtual dinosaurs and dating? Hang on, let me tell a good story. Dialing it back a bit, I was watching Cat in the Hat with my son this morning and began to wonder about how that famous tech character might teach us something about a this big trend, now that Mary called it. Suppose I pose these questions abut the tech world’s favorite virtual persona Fake Grimlock… as only Dr. Seuss could:

Would you meet him in a mall? Would you pass him in the hall?
Would you let him drive your car? Would you let him drive it far?
Would you let him watch your pet? Would he eat them, hmm, sure bet?
Would you let him tutor the kids? Could you, would you blink an eyelid?
Would you let him sleep upon your couch? Would he scare you with those teeth- Ouch!
Would you date him late at night? Would you lend him money? Right!

Which means, essentially, if you were going to do a “Sharing Transaction” with an unknown Peer, do you trust the person behind fake grimlock? He’s extremely well known in a small circle of tech entrepreneurs (and deservedly so- he’s hilarious in a CAPSLOCK kinda way). But my point is, there are millions and millions of Fake Grimlocks out there.

From Spencer 323232 on gMail to Pineapple88 on EBay, people have for more than a decade created and maintained personas and avatars for everything from virtual gaming to very real Craig’s listings. Taking it back to Dot.com days, we used to hear the reason the internet was popular was … no one knew you were a dog. People could go online (Chatrooms!) under any handle they chose and behave pretty much with impunity. It was the digital equivalent of turning out the lights at a teen mixer. Stupid ideas came and went, as did plenty of fortunes and not a few great companies. But the ability to take on an alias, or even build an avatar in another parallel world lingered as a quaint benefit from back in the day. To some gaming sites, it’s a hell of a business that virtual world.

But now comes along Social, Mobile and Local where a billion people share their profiles, activities, photos and innermost thoughts with perhaps way too many friends. Privacy was redefined, or its boundaries were pushed out by the devils favorite vice, vanity. Rachel Botsman called it early with her Colaborative Consumption moniker, and subsequently has talked about trust within peer networks a lot. Now, as big data companies are starting to realize this data is meaningful, strong voices are pointing out that people should own their own data. Tim Berners Lee is one such voice, having started what I call the “Data to the People” movement with this Guardian interview. Add to this a rich mix of a green consciousness, underemployed/over-indebted college graduates and a sluggish economy and you get the Sharing Economy a/k/a the very more wordy Collaborative Consumption. Al it needs now is some glue, or as Neal Gorenflo recently said in a post to Shareable Magazine the dramatic transformation of the economy that’s needed is not going to happen until a large coalition begins to work together.

This is precisely why companies like TrustCloud, Connect.me  and MiiCard are helping stitch together a trust and reputation metric for the Peer economy. Basically, in 2012 everyone knows you are  dinosaur, and if you are transparent enough with it, more and more people are ok with it. So, for argument’s sake, let’s say Grimlock does not want to reveal his identity, but he wants to claim credit for all the good things he has done online. He has a ton of influence and follows (you can see that from twitter or Klout) but maybe he also contributes to Stack Overflow and helps out on GitHub under Grimmy22. Maybe he maintains an ebay account where he is top rated as a seller, but under FakeyBoy101. He has a few verifiable email addresses, and actually lives somewhere under the name Human B. Good. What if Human B Good claimed all that data and consolidated in one place- without actually divulging that he was Grimmy22, FakeyBoy101 or any other avatar. But he claimed the credit for all the good things he does for the community under whatever name. If he was transparent enough to verify and share his human identity, he’d be golden, or the human behind him would be. And all without blowing the connection to the mysterious Grimlock. Here’s my point: thousands of people every week are coming to that conclusion and getting TrustCards.

So… let’s look again at these peer transactions

Would you meet him in a mall? Would you pass him in the hall? 

This is the perfect CraigsList question. If Grimlock offered me $100 cash for my old iPhone in some dodgy exchange in the mall parking lot, it’s a pass. To much risk there. But if Human B. Good made the same offer (and had claimed all the virtuous data Grimock threw off), it would be a different story.

Would you let him drive your car? Would you let him drive it far?

This is the GetAround/Relay Rides/ Ridepost question. As Anotonin Leonard’s partner Benjamin Tinq (both OuiShare guys) remarked, “Ten years after Jeremy Rifkin wrote The Age of Access, shared mobility is fundamentally changing the way people think about car ownership, among other things. Especially the younger ones, to whom owning a car has lost its appeal of independance, which is now embodied by electronic and social media devices. So you want me to hand over the keys to  a $30k asset so Grimlock and his monster buddies can go up skiing Vermont for the weekend, and he will give me… $30 per day? Can you say asymmetrical risk? And for some extra credit reading, has anyone really looked at their insurance coverage when you turn your car into a small business. The answer is pretty disappointing (and the backup from the sponsoring sharing network won’t be good for much either, especially as that risk scales). But Human B. Good give me a better feeling about his identity, interactions and behavior with his TrustScore. Perhaps things would have been better for HighGear had they such a system in place. RideShare is already doing this, and more will follow I think.

Would you let him watch your pet? Would he eat them, hmm, sure bet?

Talk about precious assets! I would not turn Baxter over to Grimlock for fear of dinner! Rover.com is already onto this, and has trustscores flowing out to their 70,000 dog watchers nationwide. Essentially, people Human B. Good would get the job, and Baxter would come home safe (and incidentally, my home would be safe, seeing as how Human B. Good has the keys to the house).

Would you let him sleep upon your couch? Would he scare you with those teeth- Ouch!

This one comes right out of AirBnB’s book- and Wimdu, LoveHomeSwap, HomeAway, InterHome and lots of others. While millions of room nights have been booked, as the early adopted give way to a more mass acceptance of “crashing on the couch”, so to will a demand grow for “who is this”, and from both sides of the transaction. AirBnB has had its “Ej Incident” and the “Hookers on Holiday“, which at the very least left a bad taste (sorry) for the hosts. I’ve heard there are plenty more where those came from. But there is risk on the guest side as well, just ask the poor blokes who wired in advance for their Fun and Sun Holiday in France and got… (sorry) just pictures for their trouble (the house did not exist), and the hosts, well what do you think? Again, no keys in this scenario for Grimlock. Human B. Good, more likely.

Would you date him late at night? Would you lend him money? Right!

So after the roundup of the “Sharing Companies”, it makes sense to imagine the other places that a trust and identity system could help other Peer economies. While I have heard stories of young ladies throwing themselves at Grimlock at his personal appearances, I’m not so sure that is scalable. Dating is the ultimate peer transaction, and one where a few simple verifications would do a world of good. To wit: a) does the guy really make $100k+ and b) are those photos of the girl recent or retouched? Likewise, peer lending could be greatly enhanced with a similar solution. Of course, the incidence and transaction data that flows back through the intake API becomes crucial to the richness of the scores.

So to wrap this one in a bow… there is a great saying about trust and context: I would trust my dog with my life, but not with my hamburger.

Grimlock has done a good many great things for our tech community across a few social networks. He is known to the community, and he adds to it. And that’s fine for the virtual world. But for the rest of us, so much of our lives pass between the virtual and real worlds. And many of us have piled up so much virtuous data, it’s time to start harvesting it, claiming it and organizing it in one place that makes it useful to a variety of networks.

We all have our data from our own versions of Grimlock out there. Start using it.

 Full disclosure: I mention TrustCloud here. I am an angel investor in same. 

Good Knight

We recently took an investment from an angel who was graduated Cambridge and shared this tidbit:

One enterprising undergraduate examined the University statutes prior to an examination and discovered that all students sitting exams in full fusc are entitled to a glass of sherry. He demanded his due in the exam, and the University’s Proctors duly responded, before fining him one shilling for failing to wear his sword, allegedly also part of the archaic statutes. 

The point he made was, he fully expected that if I ever sat for an exam again I would cite a medieval code, perhaps in Latin, to set the playing field in my favor. I laughed it off at the time as a Frasier-Crane like idiosyncratic remark. But it got me thinking…

I have actually walked Temple Church in London, trekked the Crusader Castles from Syria to Jerusalem, visited the site of Jacque Demolay’s burning at the stake by King Philip IV, and never pass a chance to hoof through a cathedrale on any of my many visits to France. My family name is Norman French (the De Spencer meant warehouse manager, back in the day) and became English a bit after 1066 (lineage impossible to prove, or disprove). So if I wasn’t actually a Templar in training all these years, I certainly went through the paces. As per usual with Spencer’s, I did it without even knowing why.

Irony is, of course, none of these experiences hold a candle to entrepreneurship when it comes to having so many chances to do something with purpose, and to hone a craft in pursuit of that goal. There are so many risks to combat, so many people to inspire and lead, so many “bet the holy sites” decisions to be made every day I have come to rely on a basic code that I recite every day, and spend hours meditating on: my mission statement as taught to me by Steven Covey of Seven Habits. I have become a crusader for doing what is fair and best for the company and all its stakeholders while building enterprise value along the way. And I take it seriously enough to blank out everything else around me when I am engaged.

But to be honest, that’s about the only way to succeed in start ups today.

So what’s my point?  None really. I just consider start ups to be the great Crusader challenge of the 21st century.

I love what I do. And I have a sword. Touche’ BB

{EAV:7439ec7fe5805ac9}

Charlie Green, author of Trusted Advisor

(MS) Since there is so much buzz around Sharing, (I’ve written about it recently here, here and here) and it’s key component, Trust, I’ve asked some experts to lend their opinions on my blog to fill out the color commentary. Here’s Charlie Green;

Whether you call it “the sharing economy” or “collaborative consumption,” there’s a fascinating new economic and social phenomenon going on.  While not identical, both terms refer to markets for the sharing of products and services between individuals.

It may seem obvious that the role of trust is pretty critical. But just what that role is turns out to be not so obvious.    

Background

The chroniclers of the movement are Rachel Botsman (Botsman & Rogers, What’s Mine is Yours), and Lisa Gansky (The Mesh: Why the Future of Business is Sharing). Botsman characterizes three sub-markets: product-services systems (like ZipCar), redistribution markets (eBay), and collaborative lifestyles (CouchSurfing).

Some of those sub-markets hint at huge scale economies: how many zillions of available-seat-miles go unused on the nation’s streets and highways on driver-only trips? How many available car-hours per day are actually used for driving, as opposed to uselessly hogging valuable real estate? And for nearly every traveler vacationing, there’s an empty house back home going unutilized.

Other sub-markets are more akin to intriguing social experiments: imagine a global foreign exchange student program run for adults, only faster, bigger, and with do-it-yourself vetting, and you’ve got something like CouchSurfing.

In an odd way, “markets” is precisely the wrong way to describe the social experiment part of the phenomenon – it’s anti-market, in a sense, to focus on collaboration and reduced consumption, rather than on increased sales and  intermediating exchanges.

But in more traditional senses, these are very much markets, with loads of interest. Technologies are enabling peer-to-peer interactions; but unlike stock exchanges and book-buying, many of them exist to facilitate real flesh-and-blood interactions. Subletting your house or apartment to someone, or simply hosting an out-of-town visitor, is no trivial social exercise. And lending out your car or tools, while not necessarily social, also involves a social risk.

Which is where trust comes in.

Trust in the Sharing Economy

If you’re going to open up your house to someone you’ve never met before, you will make some form of trust calculus about the possible guest.

The reverse is true as well: if you’re going to go spend some time as the house-guest of a perfect stranger, you also will make some assessment along the lines of, “Do I, or do I not, trust these people?”

Might there be a secondary market here for trust. Indeed, there might.  (Disclosure: I have a small relationship with one such venture, TrustCloud). Suddenly, the decision to trust has economic, and possibly very personal, consequences.

Trusting and Being Trustworthy.  People often talk about “trust” as if it were a single thing.  It’s not.  “Trust” is the result of a trustor and a trustee arriving at an agreement. Trusting is not the same as being trusted. Trust is, if you’ll pardon the abstract language, an asymmetric relationship.

To be clear, the one doing the trusting (the trustor) is the one taking the risk. If I loan my tools or house to you, you might abuse them. The trustee, by contrast, takes little risk.

The trustor’s decision is based partly on the perception of the trustworthiness of the trustee. Wouldn’t it be great, the thinking goes, if we could come up with the equivalent of a FICO credit score for would-be trustees.

The search for trustworthiness metrics goes in two directions. One is reputation;  the other is behavior. Reputation is relatively easy to assess; unfortunately, it’s also easy to game, and can easily be confused with notoriety. Kim Kardashian may score high on reputation, and even influence – but does that mean you trust her?

Behavior is harder to game: to fake behavioral dependability, I would have to establish a track record of dependable behavior – which is, after all, the point. It can be faked, of course, but such an elaborate con requires a level of effort quite out of proportion to the benefit, not to mention out of character.

Trusting. It’s easy to focus just on measuring trustworthiness, particularly in the product-services and redistribution markets, where the trustor wants information about the trustee to mitigate downside risk.

But in the collaborative lifestyles segments of the movement, it’s not just the trustworthiness of the trustee that is important, but also the trustor’s propensity to trust. In the fascinating sub-movement that is Couchsurfing, the parties aren’t just looking to cut risk: they want upside potential in terms of fascinating people willing to take social risks in order to meet others. They want trustors.

The 60s Redux?

The parallel with the 60s is instructive. Some of the era’s social experimentation didn’t make it out of the 70s. But the Beatles, Steve Jobs, and the Grateful Dead were all once-radical types who created models that are mainstream business today.

Even the hard-core economic segments of the sharing economy aren’t as radical as we think. The timeshare industry “shared” underutilized vacation home capacity; so did distributed computing in the 70s-80s. McDonalds’ discovery of breakfast was another capacity utilization play that paid off big.

In any case, we’re all going to be talking more about trust. And that’s likely a good thing for us all.