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Why Trust Matters

CEO Summit 2019

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“USV backs trusted brands that broaden access to knowledge, capital, and well-being by leveraging networks, platforms, and protocols.”

Trust is the cornerstone of Thesis 3.0.

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Why?

Obviously there has been a lot of discussion around trust recently…

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Trust is offense as well as defense

OFFENSE

Trust gaps create startup-sized holes

“Your margin trust gap �is my opportunity”

DEFENSE

Trust is a moat to be built and preserved

“Pick your promises wisely and keep them well”

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Operationalizing Trust: from Squishy to Actionable

Brands make promises to their users.
Trusted brands keep those promises.
Doing that creates loyalty & longevity. Trust is a moat.

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Brands make promises to users.
Trusted Brands keep their promises.
Trust is a strategy.

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Every brand has a core promise.

Brand Promise

Emotional Benefit

Logical Benefit

Features, attributes, claims

Brand name

Convenience

Peace of mind

I can call a car from anywhere to get from point A to point B

Get a ride from any point A to any point B

Uber

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Promises can be about values or experience.

Company	Promise	Promise is about...
Nike	Inspiration	← values
Facebook	Belonging	← values
NYTimes	Truth	← values
Amazon	Convenience	← experience
Apple	Quality	← experience
Verizon	Connectivity	← experience

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“Promise Market Fit”

You get to choose what promises you make to users
But getting the promise right is an important part of product market fit
And promises should adapt over time based on what users want

Brand	Starting Promise:	Later Added Promise:
Uber	Luxe	Convenience
Etsy	Handmade	People
Apple	Quality	Privacy

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Brands communicate promises in multiple ways.

For example, Nike communicates inspiration:

Method	Example	Communicated Message
User Experience	The clothes fit well, feel like quality	We want to help everyone be an athlete
Messaging & Marketing	Colin Kaepernick ad	We get that we are about inspiration
Business Model	If they deliver, you buy more clothes	We want to help you be your best athlete
Mission Statement	“to bring inspiration and innovation to every athlete in the world.”	We want to inspire you as an athlete.

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Brands communicate promises in multiple ways.

For example, Ethereum communicates Unstoppable:

Method	Example	Communicated Message
Technology	Built in a p2p unstoppable way	This is unstoppable
Messaging	"Build unstoppable applications"	This is unstoppable
Governance	Committees & Foundations	This is about the long term

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Brands make promises to users.
Trusted Brands keep their promises.
Trust is a strategy.

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Breaking the Core Promise is the biggest risk

Brand	Promise	Broken Promise	Just Disappointing
Facebook	Belonging	You don’t belong, you are the product.	Facebook is offline.
Uber	Convenience	Uber is offline, you can’t get a ride.	Treating drivers poorly.
Apple	Quality	Degrading batteries on purpose.	Phone is unaffordable.
NFL	Sport	Bans your favorite player or team.	Hides links to concussions.
NYTimes Wells Fargo Ethereum	Truth Security Unstoppable	Publishes false information. Opening fraudulent accounts. Transactions are censored.	NYT is offline. Lower savings interest rates. Transactions are slow.

The reason why the core promise is so important to nail down is because the core promise is sacred and breaking it poses an outsized risk for a brand. When brands mess up in ways that do not break the core promises they’ve made users, users are disappointed, but that may be easier to repair than if the brand had betrayed their trust.

For example, when Volkswagen cheated on its emissions test in 2015, customers were disappointed but their trust in the promise of Volkswagen was probably not betrayed, because Volkswagen's core promise to customers was never about the environment. If Tesla, however, were ever caught cheating emissions requirements, its customers would feel that their trust was betrayed because Tesla’s fundamental promise is to be environmentally friendly.

Another example is Nike vs Reformation. Nike’s core promise is about empowering and inspiring athletes, and Reformation’s is about ethical, green-footprint clothing. While Nike’s users are disappointed with Nike’s treatment of factory workers, the majority don’t feel as though Nike betrayed their trust, because Nike’s core promise is not about ethically sourced clothing. If Reformation, however, ever were to treat its workers in its supply chain poorly, its users would feel betrayed, because Reformation would have broken its core promise about ethical clothing.

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Choose your core promise wisely, and keep it.

Core Promise

Other Promise

Fulfilled

Broken

Love

Betrayal

Satisfaction

Disappointment

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Brands make promises to users.
Trusted Brands keep their promises.
Trust is a strategy.

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Offensive: Trust gaps create startup-sized holes.

user experience

Trusted brand

Oscar

Monzo

Broken Promise:

Your physical health.

Broken Promise:

Your financial health.

Health insurance

Wells Fargo / Banks

user experience

Trusted brand

USD

Bitcoin

Broken Promise:

Hard money.

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Defensive: Trust cultivates loyalty.

Trust is a reason for users to stay with the brand
It is a long-term defensible moat
Cultivates loyalty and longevity when there are alternative options

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The question for all of you:

"How do you think about trust in the context of your community, users, or product?"