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The WelderDestiny Compass #070 - The Value Of Trust
May 30, 2018
Wednesday, May 30, 2018 / Perth Australia / By Niekie Jooste
The Value Of Trust - Issue #070
In this edition of "The WelderDestiny Compass":
Trust For EntrepreneursOn a daily basis I receive a number of phishing e-mails, where scam artists are trying to steal money from me through some or other devious scheme. Not to even mention the the scam phone calls from people trying to convince me that they are calling from Microsoft, the phone company or the tax service.
Even financial institutions such as banks and insurance companies are being exposed for also running scams against their customers.
As an entrepreneur, we will need to constantly be "making deals" with people and organizations. These deals may be a few big one's or many small one's. None the less, as micro entrepreneurs, making deals with others will be central to our survival.
But how do we know if we can trust the people or organisations that we make deals with? Today we explore the skills required in operating in an environment where trust can be a challenge.
If you would like to add your ideas to this week’s discussion, then please send me an e-mail with your ideas, (Send your e-mails to: email@example.com) or add a contribution directly into the comments form on the bottom of the e-zine page on the WelderDestiny website.
Now let's get stuck into this week’s topics...
Aligned InterestsIn most cases where we receive something for nothing, we need to be very careful. If we are receiving free financial advice for instance, then we should ask ourselves how the financial adviser pays his bills. It must be from some kind of "kick-back" from the organisation whose financial products s/he is selling. If this is the case, then surely the adviser will try to "sell" the product that gives them the best payment rather than the product that is best for you.
In this scenario, your interest and that of your adviser is clearly not aligned. In such a situation, conflicts of interest will almost certainly result in less than optimal advice from the adviser. Regardless of the person involved, the situation will naturally lead to a situation where you should be weary.
Surely it is much better to use a financial adviser that is only compensated by you on an hourly basis? You will go back to them if they give you good advice and good customer service.
If you get to use an internet platform where you can do neat things like make contact with your family and friends and share photos with them, and this costs you nothing, then the platform needs to make money in other ways. Do not be surprised if they make their money by selling your information.
In short, in any business relationship you need to make sure that your interests and those of the person or organisation you are dealing with are aligned. If the price of this alignment is a financial charge, then it is probably money well spent.
This does not mean that paying somebody automatically means that your interests will be aligned, so you need to also look at whatever situation it is that you are in, to ensure alignment of interests, before you expose yourself to risk from such counter parties.
The best situation is where both parties win together or lose together if you are required to enter into a situation of risk.
Balance Of PowerIn the early days of Uber, when I spoke to Uber drivers, they were very supportive of the company. It was an opportunity to make some money that they did not previously have. As a "customer" I also experienced it as positive.
As of late, when I speak to Uber drivers they are no longer so complimentary towards the company. It appears that Uber keeps increasing the percentage of the fares that they keep for themselves. It has come to a point where they are wondering if it is even worth their while any more.
The problem is that once the platform has grown to a prominent position, it is difficult for the drivers to move to another platform, unless the other platform can themselves grow to a prominent position.
The problem is that once a company has grown large enough, then they can start to dictate terms to smaller parties. In general, those terms will be less favorable to the smaller parties.
As a small entrepreneur in the machine age, the chance is good that you will be interfacing with at least one platform through which you will receive or invoice jobs. The risk is always there that as the platform grows it will care less for the smaller participants.
To minimize the risk of this breach of trust, you need to cast your lot in with platforms that have business models that do well when you do well.
In this regard, I am most enthusiastic about the promise of Decentralized Autonomous Organizations. (DAO's) Once the scaling issues with current distributed ledger technology is resolved, I believe that there will be a host of DAO's that will assist the micro entrepreneur to thrive.
Past HistoryThere are many industries or groups that have shown themselves to be untrustworthy. Typical examples are:
I am not singling out these industries to necessarily paint them black. I mention them, because past history is a good guide to us in deciding who is trustworthy or not. If you go into a deal with a person or organization that has a history of being untrustworthy, then it is only reasonable that you take steps to protect yourself. This could be anything from requiring upfront payment to using escrow services.
Once again, I believe that many future organizations will be based on the DAO model. Those organizations will have a much better mechanism for making sure that you are protected. Their structures are by definition designed to ensure that transactions can be done in a "trust-less" manner.
And remember. If it sounds too good to be true, then it most probably is not true. It is most probably a scam.
P.S. Have you dealt with organizations that have betrayed your trust? What are some good ways to protect yourself against scammers in business? Please share your stories, opinions and insights regarding today's topic, directly on the e-zine page on the WelderDestiny website.
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