Trusted Brands

Today is election day.  I'm on a plane today, so I voted early, a few days ago.  I cast my vote and it felt good. I marked my paper ballot with a marker (for optical scanning) glued it shut into a sealed envelope, and handed it to a volunteer who placed it in a secure case.  I left with a sense of confidence that my vote had been placed, and would be counted fairly.

Unfortunately, many Americans do not have the same confidence, often for good reason.  As Zeynep Tufecki wrote in the NYT last weekend in The Election Has Already Been Hacked:

"the legitimacy of an election depends on the electorate accepting that it was fair, that everyone who tried to vote got to vote and that every vote counted. Lose that, and your voting system might as well have suffered a devastating technological attack.

Unfortunately, in much of the United States, we are no longer able to assure people that none of those things has happened. A recent poll shows that 46 percent of the American electorate do not think their votes will be counted fairly, and about a third think it is likely that a foreign country will tamper with the results."

Put more generally, America's most important product, our democracy, is developing a trust problem.

I have been writing about trust for a long time. It is an essential ingredient for institutions (civic, corporate, etc) and also for technology platforms.  It is famously hard to earn and easy to lose.

In the most recent iteration of the USV investment thesis, we explicitly call out the idea of "Trusted Brands" as a key component.  This has been somewhat controversial, because -- obviously -- it's premature to declare that any early-stage startup is a trusted brand.  But what we mean by this is not that it's already a widely trusted brand, but that it's architected to be a trusted brand.

“Trusted Brands” is also controversial because in startups, things change. For example, while for a long time many considered Google (or really, insert nearly any other large tech company here) to be a trusted brand, initially because of the super useful/helpful services it provides, and then through it's mantra of "don't be evil" -- it's safe to say that today, many people (both consumers and b2b users) may not feel the same way.  

So, "Trusted Brands" is both aspirational, and potentially fleeting. 

By "architecting for trust“ we mean two things: 1) a business model where the platform and its stakeholders are aligned; and/or 2) a technical architecture that makes tampering/hacking/meddling difficult or impossible, even for the creators of the system.

On business model alignment: this one gets trickier the more stakeholders you have, and typically as tech platforms grow and expand, so does the breadth and variety of stakeholders.  But core decisions can be made, early on, that align interests as much as possible -- for example, see Andy's post about our recent investment in Scroll, and how they are attempting to align interests in the publishing industry.

On technical architecture: most of the work in the crypto/blockchain space is based on this concept, and many have taken to a mantra of a “can’t be evil” as a counterpoint to the arbitrary decisionmaking that is possible in traditional platforms -- this is at the heart of the "centralized vs. decentralized" debate.  But even in "regular" apps, technical design decisions, particularly around how data is stored/processed/shared/accessed, can go a long way towards building trust.

What we can safely say is that we are suffering from trust problems on a number of fronts.  On the tech platforms side, it's things like data breaches, abuses of market power, shady privacy practices, harassment and abuse, etc etc.   On the institutional side, it's relevance, capacity, efficiency, technological capability, corruption, and fundamental integrity.  Not a small or simple list of challenges to face.

The technology we build is really the foundation of our lives, and even the two "sides" I discuss here (traditional institutions and tech platforms) are getting blurrier by the day.  Given all that, what we mean by "Trusted Brands" is that establishing and sustaining trusted products / platforms / systems / institutions / brands is more important than ever, and we believe that the efforts that do manage to earn our trust over the long term will be the most important and valuable.

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