Trust has become the major buzz word in describing the currency of the social media economy. I’ve certainly been riding that wave, but I think it’s time we really took a look at what makes this social thing work. I would argue that the system is not based on trust as a currency, but more on social capital, which functions in a similar way to traditional economic capital in that it can be earned, spent, invested, and lost.
Here is the definition of trust from Merriam-Webster:
Assured reliance on the character, capitalforbusiness ability, strength, or truth of someone or something.
In the context of social media, do we really rely on people or brands in this way? I certainly don’t. I may “trust” certain connections in the sense that I believe they want to help me, or that they can add value to my personal or professional life, but (no offense) I wouldn’t “rely” on them. The connections we make in social media are not the same as those we make in real life. We only trust maybe a handful of people in real life, at least in the way it is defined in the dictionary. This trust is not something that can be earned easily, and therefore it is not a currency that we trade often. It is usually earned after years of shared experiences, values, and usually difficulties. In many ways, it is nearly impossible to grow this same type of trust in virtual networks exclusively. Now, that being said, I do believe that many of the people in my social networks add value to my life in different ways, and I respect their opinions and advice. But this isn’t trust. I think this should be called social capital.
Here is the definition of capital:
Accumulated goods devoted to the production of other goods.
Capital is what we deal with in the social media economy. We are trying to collect theoretical “goods”, such as respect, reputation, ability, and quality and quantity of output. These types of goods make up our social capital, which we then use to produce other goods, such as new customers, clients, blog subscribers, jobs, or pay raises. We gain and lose this social capital with our actions in the social media ecosystems we inhabit.
Social capital must be earned.
Just like dollars, we all start off with nothing, or close to nothing. When you first set up your social media profiles you might already have at least some social capital from real life that you can transfer to the virtual environment in the form of a close group of Facebook friends, or a handful of LinkedIn connections. But most of us start off poor. (You could also inherit social capital in the same way as economic capital. Think about if your father were Seth Godin…). We must earn our social capital in ways that are specific to our needs.
Social capital can be spent.
What’s the point of having money if you can’t spend it? It’s great to be rich, but capital is only truly valuable when you can exchange it for something you want. If you need the support of your community to vote for your blog for a certain award, you can spend some of your social capital to ask for their votes. If you need your customers to provide feedback on your new website, you can spend some social capital to ask them on the site or in an email. But just as with economic capital, if you spend more than you make, you will end up going into debt, and possibly bankrupt.
Social capital can be invested.
You have to be smart to be a successful investor. You have to see value where others don’t. There isn’t much risk in buying Apple stock today, but there also isn’t much reward. In social media, there isn’t much risk in telling your community how amazing Chris Brogan’s post was today, but there also isn’t much reward. If you can find the next Apple or the next Chris Brogan, and invest your economic and/or social capital in them, your investment will be much more valuable.
Social capital can be easily lost.
Just like dollars, if you don’t understand the economy and make a couple of bad investments, you can lose a lot of your capital. If you start blasting out advertisements on Twitter and Facebook, consumers probably won’t be happy, and you will have lost social capital. And if you don’t have the capital to cover this poor investment, you will be in debt, and will have to work much harder to gain that capital back. But the good thing about capital is that you can always get it back.
Social media has developed its own economy. And every economy runs on a currency that is constantly being earned, spent, invested, and lost. Trust is not a currency that is produced or traded very often. Social capital is the way in which we build and destroy our value in social media. We trade this currency every day in with our personal, professional, and corporate brands, we just don’t identify it as such. But capital is something that must be well-understood and closely managed in order to maximize its growth and potential.