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This article was published on June 8, 2022

The greatest entrepreneurs in the world are also the best at building trust

Without trust, your startup is worthless

The greatest entrepreneurs in the world are also the best at building trust Image by: JumpStory
Jonathan Løw
Story by

Jonathan Løw

Serial entrepreneur and key note speaker

Jonathan Løw is one of Denmark’s most well-known entrepreneurs and business authors. He has been nominated as Entrepreneur of the Year and i Jonathan Løw is one of Denmark’s most well-known entrepreneurs and business authors. He has been nominated as Entrepreneur of the Year and is amongst Denmark’s 100 most promising leaders according to a major Danish business newspaper. In addition to being a serial entrepreneur, Jonathan Løw is the former Head of Marketing at the KaosPilots – named Top 10 most innovative business schools in the world by FastCompany. He is also former Startup-Advisor and Investor at Accelerace – the leading investment fund for startups in Denmark. Jonathan Løw’s latest books, Listen Louder and The Disruption Book, both made it to the top of the bestseller-lists in 2015 in the category “Business and Entrepreneurship”. Additionally Jonathan Løw is the editor of The GuruBook – published in March 2018 by Taylor & Francis. Løw is the co-founder of JumpStory – an AI-based digital content-platform, which has received a large million dollar investment and has offices in Denmark and Silicon Valley. He is also the author of the foreword to leadership-guru Simon Sinek’s latest book – “Find your why”.

As an entrepreneur or founder, increasing trust in your brand should be your top priority.

We all know it takes decades to build up trust, but only a few days, or even hours, to lose it.

In Denmark, where I live, we are good at trusting one another. It is common for Danish startups to grant their employees ‘trust with responsibility’ by allowing them to make important decisions on their own.

In fact, according to OECD, Danes are one of the most trusting countries in the world.

This is an encouraging discovery, as confidence is essential for people and organizations to develop. The German sociologist, Niklas Luhmann, called trust “a mechanism for the reduction of social complexity”.

In practice, this means that good entrepreneurial culture is about trust. If your employees don’t trust you, they won’t follow your instructions. Equally if there’s a lack of trust, a workforce behaves more like a group rather than a team.

In the past, organizations used physical representations to build trust among their clients. For example, in the banking sector, tall buildings would represent both affluence and security to potential customers.

Trust is something we share

Today, it’s not necessarily big buildings that build trust. Instead trust has re-emerged as an important component of the sharing economy. This focuses on placing our trust in people we may not know, so we can do business with them.

The sharing economy has increased in popularity partly because it has become easier to measure and assess trust.

This development has appeared in new technologies, where social profiles, identity checks, written reviews and ratings are the basis for a visualized and digital approach to trust.

Considering this it makes a lot of sense that when looking at one of the world’s biggest studies about brands and trust, Google, PayPal, Microsoft, YouTube & Amazon are in the top. But what can startups and entrepreneurs learn from these massive tech-companies that of course also began as small startups?

One key thing to consider is that written reviews create the most trust among peers in the sharing economy with Blockchain likely to play a central role in the coming years.

Trust is shared and made public through ‘trust scores’ which we give and receive based on our different business decisions. They show how much confidence others have in us.

The online company Trustpilot have built their entire business model on collating and visualizing trust scores for companies in the form of stars. Meanwhile, the startup Deemly, gathers your score across various platforms and assigns a ‘personal trust score’.

This benefits both yourself and provides useful information to those who want to do business, share, rent or exchange with you.

Displaying trust as a commercial value and currency

Taking part in the sharing economy has numerous benefits, including building up scores for participants. For example, when you rent a room on Airbnb, sell a lawnmower on eBay or buy an iPad on Amazon, this affects your score.

Rachel Botsman, a leading expert in the world of the sharing economy described how this score is not just a simple trust-indicator, but could have a real-terms impact in the future. Her research concluded that when trust increases, the probability of a company attracting more customers increases with it. This means a company can value itself according to its reputation.

In sum, trust has gained real commercial value.

Similarly, Botsman has shown how trust-ratings can be transferred from one context to another. Stack Overflow is essentially a ‘question corner’ for software programmers who can get solutions to problems from other users.

The owners realized that some users used their Stack Overflow-score on their CV, with companies incorporating potential employees ‘scores’ into their recruitment methods. This meant that users could transfer their online reputation to real job applications. Furthermore, their reviews travelled with them, and they didn’t have to re-start building their reputation in a new organization.

Building on this, many sharing platforms are starting to introduce discounts for their most trusted customers. This is similar to insurance companies which analyze their confidence in a customer when assessing an insurance policy.

Some banks in Asia are experimenting with the idea of providing loans based on customer’s Airbnb reviews. They are doing this by building on the logic that if you are a trustworthy person you are more likely to pay your loan back regardless of your current financial situation.

Trust is not just something we share, trust is the future currency!

Trust in the future

The future challenge will be to find out which trust scores work best for different industries.

For example if you’re about to hire a new salesperson to your company, is a high trust score for their post on a forum about rare birds, or a one for their actions on eBay worth the most consideration?

The first score could indicate passion and the ability to build relationships online. While the second could indicate that they are reliable. Can these trust scores give a more accurate prediction of a person’s success in a given job compared to the sales figures they gained in a previous role?

For organizations, the dilemma is that trust is necessary for cooperation, but you don’t always know in advance if your trust will be betrayed. Therefore it can be risky for a company to send a product before receiving a payment for it, although in principle the company wishes to be able to rely on the customer paying.

Similarly, a startup with a very good business idea can consult a potential investor, but may require them to sign a confidentiality statement. This in turn could send the wrong signal of trust.

As companies and individuals, we need to give something of ourselves including: skills, time and resources to build up trust. The challenge is that if we trust too much, we can be exploited, but if we give too little we run the risk of scuppering a potentially successful collaboration.

Building trust in your organization

To round of this article, I want to share with you my 3 most important pieces of advice, when you want to build more trust in your organization:

1. Listen Louder

Your employees are unique individuals who have their own ideas and viewpoints. Ask them to speak their mind, and when they do, genuinely listen. This is the foundation for positive workplace relationships built on mutual understanding and trust.

2. Show that you care

Yes, your employees get a paycheck in return for their work, but this isn’t enough to demonstrate that you value and trust them. It’s vital to provide them with frequent recognition in real time. You may show recognition by sending thank you messages, offering verbal praise, and distributing tangible rewards like employee awards.

3. Telling the truth can be tough, but do it nevertheless – always!

There’s no denying that telling the truth can be tough. It’s often easier to tell your employees what they want to hear — especially during difficult times. By being honest with your employees while being sensitive to their feelings, however, you can encourage them to trust you. If you’re not honest with a member of your team, you may lose more than their trust and respect, however.

Every relationship, whether professional or personal, is based on honesty. One lie can ruin even a long-term relationship — potentially irreparably. You should also be transparent when it comes to discussing changes to business processes and updates so that your employees are always in the know. Your team won’t trust you if you catch them by surprise by modifying a procedure without making it known or neglect to inform them in advance regarding major changes in the workplace.

‘The best way you can find out if you can trust somebody is to trust them.’ — Ernest Hemingway

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