Money is the currency of transactions, trust is the currency of interactions

When introducing Frontier Digital Ventures (FDV) to executives or investors, I’m frequently posed with this question:

“Why bother with the instability of emerging and frontier markets?”

We have investments in 17 countries like Pakistan, Philippines, Sri Lanka, Myanmar and Panama — places one wouldn’t always associate with major investments. So, it’s not really surprising that some might question our choice to focus efforts there.

However, our prominent success in these markets justifies our decision.

I developed a passion for online classifieds during my time as General Manager of the REA Group and then leading the iProperty Group.

Over the years, the focus in this space has changed from simply advertising houses or cars to connecting buyers and sellers while facilitating transactions — of which I remain fascinated by how unique the online classifieds business model is from other digital businesses.

Most importantly, and in answer to my investors’ question, I’ve found that the greatest impact and satisfaction comes from working with A grade entrepreneurs in these local markets to accelerate them.

Something which I don’t think I would have achieved at the same scale in other markets.

And the surprising ingredient to all this success?

Well, I discovered that our platforms worked because we were building trust between buyers and sellers. These emerging frontier markets where FDV is present, tend to operate in a “low-trust” environment.

Simply put, there is a lack of trust between buyers and sellers – or what we call a ‘trust deficit’ – they don’t tend to trust each other because of previous bad experiences such as scams or misrepresentations.

These abound in an environment where regulations are less clear, and when a quick buck can be more appealing than investing in creating an actual long-term business.

In low-trust societies, transactions don’t happen as fast or as frequently as they should – simply because consumers are always questioning if they’re getting a fair deal.

That’s where platforms like Encuentra24.com, Infocasas and CarsDB come in. They’re more than just websites with free features for consumers.

Together, we work to design digital environments which are transparent and interactive.

Imagine if a buyer finds that a seller has acted with less than complete honesty, that seller is going to be called out immediately for all the platform’s users to see!

In essence, our community of buyers and sellers are able to self-regulate because of the open and transparent platforms we provide.

Designing for trust

To be honest, we didn’t originally design our business with trust in mind.

We did, however, know that we wanted to provide the best experience for our users and build sustainable future-proof businesses. And I guess, that’s essentially what trust is!

So, can you purposely design your business for trust?

I believe so and here’s how we did it:

#1

Thinking back to our early days, many of iProperty’s competitors suffered from fake property listings which greatly impacted how consumers viewed their brand.

Back in 2010, I even found my own house (which I was living in at the time!) listed for rent on iProperty.com.
When I called the agent to find out the details, he conveniently mentioned that it was recently rented out but he could show me other properties. Needless to say, the agent got some serious feedback about how they were advertising on iProperty!

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Since then, it’s been very important to me personally that we verify sellers and listings across our platforms. And if we do find a fake listing (like my home!) then we go back to the drawing board to make sure that we improve the experience for our users.

This is our way of being proactive about creating a platform our users can trust.

#2

Consumer experience, CX, has been the buzz-phrase of the last few years.

With the advent of technology, people are looking at how AI or big data analytics can help businesses better understand customer behaviour, and tailor services and actions accordingly.

But when your platform is dealing with potentially life-changing decisions — buying your first condo or upgrading your car — consumer experience takes on a whole different meaning.

For many of our consumers, using our platform is a matter of spending their life savings.

So I stress to my team that it’s our duty to provide a seamless consumer experience, making the buying process as painless as possible.

If this is done well the power of a positive experience for a consumer quickly takes hold by way of word of mouth and that’s the best reference any online business can hope for.

#3

FDV couldn’t possibly have gotten off the ground if our investors didn’t trust us.

They did so because of the reputation we built over the years, as our ability to source, grow and develop successful online classifieds businesses was proven by the success of iProperty.

But it doesn’t stop there.

I believe that we not only need to continue cultivating the trust of our investors but also to expand it.

We have to persistently listen and communicate with them so that our ideas and goals are constantly aligned, and an open and transparent relationship between both parties can be fostered.

Both are keys to establishing trust.

The same applies to the entrepreneurs we back.

Aside from providing the right capital to grow their business, our role as investors also include matching opportunities for them and to ensure their growth.

Whenever we deliver what we promised it helps cultivate a more trusting relationship between us.

As the digital economy continues to grow, the world is conversely getting smaller and smaller. People are more connected now than ever, and we need to understand how this changes their behaviour.

Looking back at the “low-trust” environments we operate in, our users may not trust a stranger off the street or even in an office with their money, whereas they trust our digital platforms.

Here’s another example: Airbnb.

We all know the story of how investors dismissed them because they didn’t believe strangers would trust others with their physical space, and how since they’ve been proven absolutely wrong.

Today, Airbnb is a business worth US$38 billion.

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Building a trustworthy brand may seem like something for businesses to “consider” — but in a few short years, it’ll be way past mere consideration.

As the market grows increasingly demanding and sophisticated, any business that wants to survive the long-term will need to be designed to be trustworthy.

As Rachel Botsman, an expert on trust and technology, puts so accurately, “Most businesses that we interact with are built around money, and money only goes so far.

Money is the currency of transactions. Trust is the currency of interactions.”

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