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Why would anyone believe in the usefulness of a new P2P marketplace unless they trusted in their personal gain from using it?

Some weeks back, I wrote a whole lot about trusted intermediaries – banks are a great example, but so are many massively successful startups of our time (refer to my previous articles for details).

In general, every exchange of value between parties (be that money, goods, services, or other forms) require a mutually trusted party in between. Traditionally, this role was filled by brick-and-mortar type businesses: banks, law firms, travel/insurance/staffing agencies. You can count even supermarkets and department stores – what all the above have in common is their main value-add of providing quality inputs to individuals and other businesses.

We rely on them because we trust in what we buy. Traditionally, the main argument for the value of marketplaces (offline or online) focuses on the access they provide to goods and services on the one hand, and an audience of customers on the other. In reality, these two functions are worthless without such intermediaries building a fair amount of trust in the value of said inputs and audiences.

This is particularly apparent in the case of digital intermediaries. E-commerce platforms can only survive if they demonstrate value to both buyers and sellers. Unlike physical stores, there’s little proof that this value exists – inventory and crowds are not visible. Thus building trust in your ability to create value to your key audiences becomes essential.

In the case of P2P platforms, achieving this is harder still. How do you get enough users onto the platform without being able to ensure that they can benefit from each other, and how do you maximise trust in the value-add you offer through your user base?

It is tempting to think peer-to-peer services have it easier than traditional marketplaces. One might argue that it is the users’ responsibility to add value, and that there is little one can do to influence that. In reality, no one is going to use what you build unless those active on your platform can harvest value from it, and offer value to other users. This mutual value-adding requires mutual trust.

The platform’s ability to build trust in the value-add users offer to each other means determines its viability and success: Why would anyone believe in the usefulness of a new P2P marketplace unless they trusted in their personal gain from using it? This presents major challenges for these platforms to attract the right kind of users and trigger the right kind of interactions that maximise the overall value offered to its audience. Excessive attempts to control user behaviour usually backfire, as they can easily compromise the user experience and diminish the value inherent in the platform.

The best way for them to build trust in this context is to encourage the community to self-regulate, i.e. for users to define ‘tribe rules’ that govern the way in which they trade with each other. This seems risky and courageous at first (negative influences on a P2P platform can compromise the value many others see in it), but might well be the only effective approach available.

In general, we see an almost natural inclination for humans to self-organise. This tendency is extinguished the moment rigid structure comes into the picture. For a P2P platform to work, users need to take initiative to contribute, browse, and contact others on the platform. Formal structure would make users too cautious (read: passive) for a user driven value exchange to work.

This is the difference between a call centre and a strategy job – the call centre agent finishes one support ticket after another coming in, but the strategist cannot just move from task to task – he must be more proactive to do well. One job is more tightly defined, the other more loosely, and this changes how proactively we go about performing them.

Back to P2P platforms. One of the best local examples of a well-operating P2P market is Carousell. Since inception, the company has focused on making the selling of personal belongings as easy as possible, and refrained largely from intervening in the community. For instance, listings uploaded by users are visible immediately, relying on the user base to flag inappropriate activity. Carousell responds very well to how its users find value in the platform by adding features that support emerging behaviours.

Also Read: Carousell hires Airbnb rockstar to take charge of international growth

It also gives users flexibility in updating their particulars, user names, personal information, etc. This freedom may seem peripheral, but is actually crucial to make the app feel personal and user-friendly. The reputation system is another thoughtful touch. Only if both parties agree to any given offer, they can leave feedback for each other. This helps ensure all feedback relates back to whatever has been transacted.

Whether it is Carousell or craigslist, Wikipedia or Airbnb, Uber or etsy – great peer-to-peer platforms put users in the driver’s seat. The shared similarity among them is a certain courage to let users govern, and provide them with the tools to figure it out. Users are empowered to build a self-sustaining community and culture on the foundations given to them, just like a scientist prepares a petri dish for whatever he seeks to grow.

Like a petri dish, a platform can be the growth bed for healthy or unhealthy creations, and contamination is most likely in the early stages. Once a culture has established, it tends to be stable and resistant to outside influence. Organic creation is a good metaphor for the nature of peer-to-peer platforms such as Carousell. It explains how communities are interdependent, but also independent organisms. The platform on which they operate simply provides nourishment for them to survive and thrive.

The potential in creating a petri dish cultured by users can be maximised by calculated, step-wise trust building efforts that demonstrate the mutual value of the P2P platform for everyone using it. This is as much an art as it is a science, and getting it right takes time, deep insight and a rock-solid value proposition at the very least.

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