Trust vs Risk

How do you manage relationships in low-trust environments like the internet?

We often forget just how miraculous the internet is. It provides near-instantaneous communication with people all over the world, a capability that our simple ape brains have not had time to adapt to. More specifically, we haven't learned how to adapt our relationship-building to this fast-moving environment.

What the internet has done is trick us into thinking that we can create lasting, high-trust relationships through a screen over very short periods of time. This flies in the face of day-to-day experience, where the expectation is that you can't develop a genuine relationship without lots of in-person time between people. It's a process deeply rooted in our social biology, where physical presence, body language, and shared experiences play pivotal roles.

The internet, with its screens and virtual interactions, challenges this set of instinctual norms. It proposes a world where meaningful, high-trust relationships can be forged rapidly, without the traditional avenues of physical interaction and prolonged acquaintance. This concept runs counter to our lived experience, where genuine connections are often the result of sustained, in-person engagement.

In this fast-paced, digital landscape, the foundational element of trust is put to the test. Traditional cues and processes for trust-building are absent or altered, leaving us in a complex, often low-trust environment. The question then arises: how do we navigate this new terrain? How do we build trust when our primary interactions may be through a screen, spanning vast geographical and cultural distances?

Trust Exchange

The internet's illusion of rapid trust-building is just that—an illusion. Trust, by its very nature, is a product of time and experience. It grows in the soil of shared moments and tested loyalties, neither of which can be fast-tracked. However, the digital age necessitates new strategies for trust-building, particularly in contexts where relying on others is unavoidable. Here, the concept of risk exchange emerges as a pragmatic approach.

Risk exchange is a strategy that shifts the focus from immediate trust to calculated risk. In scenarios where traditional trust-building is not feasible, one must evaluate the level of risk they are willing to accept in dealing with a stranger.

This method does not attempt to expedite the trust process; instead, it acknowledges the lack of trust as a given and uses risk as a metric for decision-making. It involves assessing the potential consequences of a breach of trust and determining what level of risk is acceptable in a given interaction.

For instance, in a business context, this might mean starting with small, low-stakes collaborations before escalating to more significant commitments. In personal interactions online, it could involve gradually sharing more information or investing more emotionally over time, gauging the other party's reliability at each step.

Risk exchange is about incremental exposure, a gradual process of testing the waters, where each party offers just enough to gauge the other's intentions without exposing themselves to undue harm.

Technology has not rewritten the fundamental human need for trust. It has, however, necessitated a reevaluation of how trust is built and maintained in a digital world. The concept of risk exchange offers a practical framework for navigating this new terrain, allowing us to forge connections and collaborations in a space where traditional trust-building mechanisms are often insufficient.

Overcontrol Rears Its Ugly Head (Again)

What tends to create the biggest problems within this context is the pathological need for control. We want to force people into high-trust positions in order to get what we want out of them. But because we can't control other people in meaningful ways (without the use of force, at least), we create more problems.

Take the example of hiring, especially when it comes to remote workers. Companies seem completely incapable of making up their minds when they need to hire someone. There are so many variables they try to account for ahead of time, and nobody wants to take responsibility for decisions. Too many people involved are concerned about blowback—what if the wrong person is hired? That might make the decision-maker look bad, so it's best to just hedge, hedge, hedge and never make a decision.

Why does this happen? Because the people who run companies are trying too hard to vet for trust rather than taking a risk exchange approach. This is a manifestation of the old principal-agent problem, but it's reached ridiculous levels in the modern labor marketplace. Employers want to run the standard process of hiring someone for a long-term contract, complete with salaries, benefits, etc. and they fear getting sued in some kind of HR debacle.

It gets even worse with remote employees, as companies think they need to monitor every moment of the employee's life to ensure they don't "waste" any time. The reality is that nobody works for 8 hours continuously, nor should they immediately be put into a position of proving that they do.

A far better strategy is to use small tasks and build that trust over time. Give the employee something small to do, provide a clear explanation and a deadline, and see what happens. The best employees, like genes in a natural selection process, will emerge, while incompetent employees will go extinct.

This message carries over to any kind of relationship with another human. When you try to overcontrol in any system, you risk killing the system—and the same is true when dealing with people. Focus on risk exchange, and trust will either develop or the other person will get selected away.