It is a time when confidence in institutions and governments is at an alltime low but when theres been a huge surge in the growth of shared Economy Companies like airbnb, tender and uber. Statistics show we are shifting our trust away from institutions toward individuals or some would say strangers here in areas as diverse as dating, banking, to sharing rides or even hiring nannies. She has been in this getting these trends to try to understand how technology is transforming trust and exploring what the implications are for our decisionmaking in life, work in business. She completed her postgraduate studies at harvard and lectures at oxford. She divides her life between sydney where she lives with her husband and two children and london. We welcome rachel botsman. [applause] thank you. Good evening, everyone. Thank you for coming. I know that its the cusp of the holidays, so happy holidays to all of you. It is really lovely to come back to harvard. I have been back for about 18 years, which is a bit frightening but it is likely to be back and im excited to talk to you this evening about my work on trust. What i thought we would explore is this trust shift that is happening from institutions to individuals. And i hope that i can give you a balanced view on the implications of the shift that are both good and bad, and the were starting to feel that all different areas of our lives. Some going to talk for a little bit and then i will open it to all your questions. Before i get started i just want to get a little bit of a feel for you, so if you could just raise your hand sorry, my clickers not working. If you could raise your hand if youve ever been a guest on airbnb. So its almost all of you. Anyone a host on airbnb . A few people. Because it requires more trust to be a host than a guess. Does anyone on the crypto cuter and see . Ranger hand. Crypto currency. Ill talk about that a little bit. Its a crypto currency like bitcoin. Has anyone been on the dark web and you dont have to tell me what you bought, but just if you been on there and seen it lacks who doesnt know what the dark web is . Okay. This is where you can go and find all kinds of things like drugs and guns and pornography. I only go on there for Research Purposes i promise. But all these things, examples of how technology is changing the way we can trust one another. I thought i would start with a personal story because a very important story to me because when you become obsessed with the topic enough that you dedicate your life researching and you want to write a book there is a point we start to ask yourself where this fascination has come from. I realized that my fascination and how we trust people, replace our faith with the strangers he started at this very, very young age. What happened was around the age of five my mom decides is going to go back to work. Like many women she needed some help so she is going to hire a nanny. For some reason she placed an ad in this project bridges mexico the later if any of you are down at the fans you know the lady is where people either garters and the butlers and hernandez. Anyway this woman who entered was called doris. I remember the day doris walked into her house and she had this really big curly hair, steel rimmed glasses and very, very thick scottish axis overtime to seven and she would roll for ours at the thing i remember so cleared was she was wearing a Salvation Army uniform complete with the navy bonnet. These things are very important when they come to trust your they are called signals. Trust signals are clues or symbols that we knowingly or unknowingly used to decide whether someone is trustworthy or not. You will probably tuning into some of my signals right now. The problem is that some signals are louder than others and sometimes we get influenced by the wrong things. Doris lived with us for almost ten months, and for the most part she was a really good nanny and there wasnt anything suspicious about her, into one weekend she disappeared. And by day three my parents are now worried about where gorsuch is so they go read to the neighbors house at her neighbors are called the luxembourg and my dad says, do you know where doris is . He said that so funny you can read because i just found out that your nanny and are nanny are running one of the largest drug rings in north london. True story. At this point my parents are really worried that doris is going to come out pics of of te Search Engine and defined all kinds of things that you really dont want laying around when you have young children. Then what happened was three days later the police come knocking on the door and they arrest my dad. The worst wasnt a member of the Salvation Army going off on a sunday for charity. She was robbing banks and shed been involved in an Armed Bank Robbery and she used our family van as a getaway car. I love this story because i like to remind my parents that have left me in the care of a drug dealing bank robber for almost ten months. Its really interesting when you think about it because my parents are rational people. They often make good decisions and have good judgment. I started to think how did they make such a bad decision when it came to doris, why do we get off and place her faith in people who are not trustworthy . The thing i realized is that they thought they had enough information to make a decision about her. But in reality they faced a trust gap. This i think is so profound as to whats happening in society today. And that is often in our lives the illusion of information is actually far more dangerous than ignorance. So the way trust ferris will put this is, this is a gentleman who will say that trust has two enemies, not one. The first is bad character. The second is poor information. The question i started to ask myself in my research is how can a technology address these problems . Is technology making a smarter about who we trust or is it encouraging us to place our trust in the wrong people at the wrong places . Are we in fact, giving our trust what do the wrong things and is technology playing a role in that peer widely think this is such an important question . Solicitor very quick exercise. You can see where this is going. Im going to give you a boo and you can use that boo for a person you think is the least trustworthy, okay . So when i said name, you boo, you only get one boo or if you think Harvey Weinstein is a least trustworthy person on this slide say boo now. One boo. Okay. If you thank President Trump is the least trustworthy person on the slide say boo. This is sophia the robot and she is the first robot that has citizenship. Shes been made a citizen of saudi arabia. If you think sophia is the least trustworthy person on the slide say boo now. So the robot is more trustworthy than the president of the United States but we dont need to worry about that right now. Lets do this in reverse. You can clap. Id like you to clap for the company you think is the most trustworthy. If you think google is the most Trustworthy Company, clap now. [applause] facebook him who thinks they. Is the most Trustworthy Company on the slide . No one. Okay, amazon . [applause] so i think amazon and google were, i dont know, maybe amazon was slightly ahead but its certainly a rubbish exercise but i thought one of you might say to me rachel, trust them to do what . This is a this is a really impot and its something that i find very hard when it opened up the newspapers or i listen to the media or the way were talkback trust is in these very, very general terms. Its actually very dangerous because we can trust that President Trump will tweet something ridiculous at 3 a. M. , but we dont trust him to negotiate with north korea. We contrast even that Harvey Weinstein could make great movies but we dont trust his behavior necessary around women. And amazon is really interesting, so when people when they say they trust amazon, they are saying that they have confidence that when they can order online those parcels will show up. They dont necessary necessarim to pay taxes or to treat their employees well. This is the first thing that i would like you to think about is when were talking about trust is to keep in my inner own livs but also talking that institutions and leaders and individuals, that trust is highly contextual. You can trust me hopefully to write an article or to teach students, do not get in car with me because i am a terrible driver. Why did i show you this . I should do this because if you look at the surveys, so reuters, gallup, harvard are doing surveys, they all telling the same sad story. And thats too is very depressing and very worrying. So the narrative is that trust is in a state of crisis. Where this is coming from is if you look at the surveys trust in all major institutions, so not just government but religious organization, big businesses and the media, is at an alltime historic low. I urge you to look at the surveys and really dig into them because one of the problems is the way they asked the question is just how we did exercise, do you trust the media . Do you mean read it or the New York Times . What are you testing the media to do . You can see in a stored pattern and will have to look at is not the institution of the lowest level of trust, they cover trust has always been low, is the aestheticians of the sharpest decline. The institution that is the sharpest decline is the media. In the west that the run average of 16 points within less than 12 months which is significant. Theres all kinds of reasons as to why this is happening and i will explain why. An erosion of trust is basically a a lack of faith. Its a lack of faith or confidence in the system. Its a feeling that the system is failing us. One of the problems is when you look at how Institutional Trust works, so this idea would place our faith often blind faith in a few elite leaders and they could operate behind closed doors and keep things hidden and keep things secret, that wasnt designed for the digital age. You see this coming out like the Harvey Weinstein scale and a movement created is a symptom of this, that institutions cannot protect people no matter how powerful they are when they break peoples trust. But i think the narrative that trust is in crisis is helpful. I dont think its healthy to society because what it accidents it amplifies fears. It creates a vacuum and i will talk more about that. The other reason i dont like this narrative is because i dont think trust is in crisis. I think theres plenty of trust out there. It is just flowing in Different Directions and different people. The easiest way to think of is it like, youll note energy cant be destroyed. Energy is continually changing format. Whats happening is trust, our trust that used to float upwards, whether that be to leaders, ceos, regulators, experts, academics is being inverted and it is now flowing sideways through networks, through systems, through marketplaces, through technology, sometimes complete strangers, sometimes to friends on the internet, sometimes to our colleagues and sometimes to our peers. Why is this so profound . When you look back historically and you look at history of trust, and i promise you its interesting when you go back and look at how trust will is like the social glue of society. Trust is like liquid gold. Without trust, human beings cant trade, can collaborate or cooperate, they can be vulnerable with one another. Trust has always existed but in its first chapter, long time in history, trust was local. This is when we all lived in villages and communities and trust was largely personal. I would trust you because i knew you or someone near you. If you did something wrong you would get a a bad reputation. That would impact your ability to transact or have relationships in the future. What happened is when we went to mass migration when we wanted to trade internationally, the trust didnt work. As a society we invented Institutional Trust between fended things like corporate brands, brands that would tell us what products and services we should buy it when fitted Risk Behavior like insurance, intermediaries where weather wl estate brokers or lawyers. So trust stopped flowing drucker between people start to flow through institutions. Im not saying these forms of trust and exist and should exist in society but whats happening is there is a third form of trust rising up and challenging particularly Institutional Trust is what i call distributed trust. This is a trust that flows directly between people again. Its flowing at a scale that has never been possible before. Sometimes the other person is a real human being, and other times its an artificially intelligent bot or an algorithm. What i thought i would now explore which with you is somee consequences of this shift, how distributed trust works i know we see enabling incredibly things, also how we are saying it can be precarious because too much trust in the wrong people isnt necessarily a good thing. Lets look at this in three different ways. Lets look at this to through different lenses. I want to look at our trust in new ideas. New ideas and be anything. They could be a new technology but they could be a new political idea. They could be a new philosophy. So how do people build trust in new ideas . Im not sure how this is going to work but we will try it. I think it would be difficult. Lets try. Take out your phone. I want you to just swap your phone with the person behind you or the person next to you. Just find someone to swap your phone with. You need to make sure it is unlocked, okay . Great. Maybe you want to swap with that lady there. What a want you to do isnt going to give you 20 seconds, you can do whatever you want with that persons im at a public or i can dvds directions. Do whatever you want with that persons dont have the next 20 seconds. Its not alone time. Go. I see theres some nervous swappers out there. Youve got ten seconds. Its very quiet. Five more seconds. Okay. Now give the phones back. You are also respectful. This doesnt always happen. I suspect some people did want to play this game so they pretended they dont have fun. Thats okay. Others of you you swapped but you didnt do anything with the phone. He looked at the other person and then there was one or two of you that you actually into that found and i dont know what you are doing, but you looking at photos and maybe facebook or maybe you send a message or tweeted something. You had a a different relationp with that though. What i i was sensing was it was uncomfortable. It was only 20 seconds. This is what makes many of these ideas so remarkable when where using technology often with complete strangers based on information. Let me tell you a story that brings this to life. These three gentlemen of the brilliant entrepreneurs that founded airbnb and the names are brian, joe and nate. I first met them in 2008, so nine years ago. At the time airbnb wasnt what it is today. It was at the site where people were renting out mattresses in the rooms. I was writing my first book on the sharing economy and i told my editor i found the opening story. This is the example of people taking the assets and trading value for the durkee said no, no, no i cannot let you open your book with the story because this company will be dead by the time the book is to publication. I was really glad i stuck to my guns at the funny thing is you read that youll see its like 15,000 properties, which is nothing compared to today. The other person that i i tolds my husband. I said i think i just met the next ebay, you think we should give them our money. It was actually his money. I was still paying off my harvard loans i had to sit with you some money, he was a comparably pick he said tommy what they do. I sit first of all let me tell you about these entrepreneurs because i can tell you theyre going to be successful because theyre so curious about the world. So curious about Human Behavior but there also so resilient. When you see those two things in a human being, they often have the dna of the great entrepreneur. I went into this pitch and i said bear with me and keep in mind i only have these photos. Im not really selling very well for a mattress on the floor. This is the beginning and the idea is that People Like Us another people all around the world will open at the bedrooms and bathrooms and all those rooms they usually keep hidden and dont take photographs and ill post them on the internet, and then strangers from all around the world are going to book to stay in these rooms and this is going to be the future of travel. He looked at me like i lost the plot. Like you want to give these people and this id your money . The first thing you he said waa lot can go wrong. But he said this id is never going to work because strangers will not trust one another. Strangers wont trust one another with their homes. And i said to him, chris, i think youre wrong. Think of ebay, people buy secondhand cars and ebay without ever driving them. People trade with people like invisible wizards. This is just the beginning. He made a really good point and his point was that ebay was about online transactions. So when you buy something on ebay you dont need that human being. What i was talking about was using the internet to get off the internet and for people to meet up facetoface. He was right in some ways because even nine years ago it was hard to see how technology would change the way we could trust one another. He was also really wrong. I mean really wrong. Because for those of you who have gone on airbnb, youll see its not just the holiday homes. You want to make money go build a tree house. Thats what i recommend, treehouse is one of most popular categories on airbnb. You can stay in an igloo, and an aquarium. What theyve done for space is theyre trying to do for experiences. I learned the other day one the most popular tricks is going to meet someone, right, i just will address that i go get a pack of wolves and italy to work again. These people are making serious money. Some of them are making more than 150,000 a year to hosting these experiences. What these guys have done is very smart. They have used technology to create a marketplace that never had a marketplace before. This slide really shows it. Airbnb was on top for quite a long time. They made it to acquisitions might airbnb, remember the phone exercise, a Company Built on strangers touching one another is now the second most valuable hospitality brand in the world. I like