The recent history of Internet innovation is highlighted by the emergence of “network effect” software platforms. Companies such as Waze, Uber and Open Table have disrupted several industries and have captured a large majority of value in each vertical. Trust Exchange is a Network Effect Platform aimed at innovating the Business Information industry in the same way these companies have impacted their industries.
What are “network effects”? How do they create value and how does this apply to Business Information? The Network Effect is when a product or a service becomes more valuable with each person that joins the network. The classic example is the telecommunications industry. As the number of phones on the network increased, the number of calls that could be made increased exponentially and therefore increased the value of each phone and in turn the entire network. Similarly, Robert Metcalfe showed (Metcalfe’s Law) that this effect, applied to computer networks, meant that with each user, or node on a network, the cost of access to valuable resources decreased proportionately.
Network Effects can also be leveraged to solve complex exponential problems that are nearly impossible to solve with linear solutions such as email, spreadsheets and people. For example, WAZE, the traffic information platform, used network effects to deliver real-time traffic information. Before WAZE, the best anyone could do was to put a helicopter in the sky to get a local snapshot of traffic in and around various cities.
Platforms that offer "Network Effects” are inherently valuable for several reasons. Here are a few core benefits for businesses:
One-to_One Links: The more users, the more valuable. The ability to interact, collaborate and share resources such as information, best practices and validations. The more users the more interactions. This saves time, reduces cost and increases the speed of information. Example: telephone, fax machines and email.
One-to-Many Links: The ability to broadcast through the network to all users or a subset of users. This saves time, eliminates redundancy and ensures accuracy. For example, a company can broadcast its compliance rules to all of its vendors. Similarly, all of the vendors can broadcast their compliance with these rules to all of their clients.
Grouping and Sub-Grouping: Connecting subsets of users on the network that have a common affiliation. Example: teenagers, high schools and football players are all groups and subgroups.
Markets: The ability to make transactions between multiple buyers and sellers.
Business Information
Businesses spend an enormous amount of money collecting and verifying information on each other. Getting information from and about other companies is a complex and expensive problem. The business information providers have a market value of over $200 Billion.
The majority of this information is stored and validated by very large third party providers such as Dun and Bradstreet, Lexis Nexis and Thompson Reuters. Furthermore, the information they collect, validate and store is not operational information i.e. audits, industry certifications, assessments etc. It consists largely of news and public financial information. Getting this information, assessing it and refreshing is a time consuming and expensive proposition.
Managing and maintaining this information is expensive and doesn’t scale for the modern world. They are linear tools fighting an exponential battle.
The Trust Exchange Platform
The emergence and adoption of social technologies via the Internet has led to the establishment of the collaborative economy. Businesses have lagged behind consumers in the adoption of technology. It’s time to change that. Trust Exchange is a platform that allows companies to connect, collect, and directly exchange mission critical business information: certifications, audits, news, results etc.
Trust Exchange leverages several "Network Effects” to continually increase the value to our users. As discussed above, here are some examples of how our platform is utilizing network mechanics:
One-to_One Links: Trust Exchange enables companies to connect directly with each other and exchange key business information. Example: news, certifications, compliance related documents etc.
One-to-Many Links: Companies can subscribe to each other and broadcast information to all users, groups of users or sub groups of users. For example, companies can publish vendor policies and have their vendors subscribe to the policies and push the required business information to an individual client or all clients.
Grouping and Sub-Grouping: Companies can create groups and subgroups of other companies on the platform. Example: Industry specific groups: banks, pharma, retail; Role specific groups: Customers, Vendors, Partners. Subgroups by role: IT Vendors, Research Vendors etc.
Markets: Companies can offer professional services to industries, groups or subgroups on the platform. Example: Professional services, Data providers, certification authorities, auditors or validators
Trust Exchange is currently being used by organizations of all sizes in many industries including banking compliance, banking risk management, pharmaceutical compliance, retail vendor management and agriculture. On average, companies reduce their cost by 50%, increase their scale, visibility and recapture valuable lost capacity.
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