The Trust Economy: What to Expect After Peak Complexity

Human progress is exponential. In the space of the last 10 years, since the emergence of the smartphone, there was more growth in human knowledge than arguably the first 5,000 years of civilized humanity. All this progress means more information to learn, more systems to navigate and ultimately more complexity.

To truly understand the gravity of this trend, we need a metric to put it in perspective. That starts by looking at the most basic unit of complexity: How many decisions do we need to make for a given task?

The steps required in refinancing can be straightforward, but the black hole of Facebook deletion — from all of your connected apps, to saving content and considering all of the connections and important information you will no longer have a centralized portal for — can be daunting.

The real question here is how long can this increase in complexity go on for? What happens 10 or 100 years from now if this trend continues?

The finite limits of complexity

While technological progress might be theoretically infinite, there’s a hard limit on how much complexity any human can handle. There are limits to how much information we can absorb, how much information we can process, how much attention and mental effort we can give each task and fundamentally how much time we have in a given day. Technology has been accelerating us towards the limits of human ability…and now we’re about to hit them.

Hitting these limits isn’t sudden like a car crash. It’s a slow, gradual decline in human ability as we become overwhelmed by the world we helped create. Our brains are nowhere near as objective as we think they are. We’re constantly cutting corners to conserve energy. We’ve evolved in environments where, if a bias helped us more than it hurt us, then gradually it became embedded in how we think.

Consider the availability heuristic, the tendency to overestimate the likelihood of events with greater “availability” in memory, which can be influenced by how recent the memories are or how unusual or emotionally charged they may be. This is a great mental shortcut if you’re a hunter-gatherer foraging for berries, but in today’s world where we rely so much on news headlines, it makes us dramatically misinterpret the world around us.

We overestimate how dangerous our cities and societies are, the likelihood of everyday risks, and even our chances of winning big at the lottery or Vegas. We are deeply subjective creatures — most of all when it comes to how objective we think we are. Stereotyping is another shortcut that, once helpful, now cuts a cultural divide. Living in such international and multi-cultural cities, we are constantly making assumptions about the social groups we see and interact with (mostly without even realizing it). With so many people around us, in such proximity, stereotyping is the only way to easily process our environment.

Couple this with the confirmation bias which predisposes us to only focus on information that appears to confirm our beliefs, and suddenly a single headline can divide communities. On the macro level, these examples illustrate how as complexity increases and we’re continually inundated with more information than we can process, our biases start to work against us.

We’re just not designed for the world we live in

The most important currency of the information economy is choice. Between shopping, eating, dating, entertaining ourselves and everything in-between, we have access to so many options it’s often paralyzing. Every company is competing for your attention and choice, and it’s not without cost. More choice doesn’t just make these decisions harder. Research from Iyengar and Emir Kamenica time and again proves that when we’re faced with more options, we make measurably worse decisions.

As if this rapid acceleration of complexity making decisions harder and our outcomes worse wasn’t enough, there’s also a body of evidence suggesting that more choice makes us measurably less happy, too. Psychologist Barry Schwartz writes: “As the number of options increases…the level of certainty people have about their choice decreases. And the anticipation that they will regret their choice increases.”

What our brains want is a small number of options with limited control, what we have instead is total control of virtually endless options. Complexity is not without cost. More choices lead to measurably worse decisions and more regret. Control only exists in artificial environments.

The irrefutable signs of peak complexity

On an individual level, it’s clear to see how we’re becoming overwhelmed by the world we live in, but when we look at the bigger picture, that’s where it’s painfully clear we’re reaching the limits of how much complexity we can handle. What we’d expect to see from a society reaching peak complexity is a gradual slowdown in quality of life improvement. We’d expect to see a growing tension as we try (and fail) to balance all the forces on us, and a gradual denaturing of our social norms as we become excessively influenced by our surroundings.

The truth is that all of these things are visible now.

Barry Schwartz writes: “As the gross domestic product more than doubled in the past 30 years, the proportion of the population describing itself as ‘very happy’ declined by about 5%, or by some 14 million people. In addition, more of us than ever are clinically depressed. Of course, no one believes that a single factor explains decreased well-being, but a number of findings indicate that the explosion of choice plays an important role.”

The 2010 the Global Burden of Disease Report marked a landmark turning point in human history: More people now die from over-eating than under-eating. While it’s a great thing to see malnutrition decrease so much in the last 20 years, this fact isn’t nearly as surprising as it should be.

In 2014, humankind passed an even more sobering turning point. We now live in a world where more people die from suicide every year than all natural disasters, violent crime and war combined. It’s the second leading cause of death for 15–29 year-olds globally. At approximately 800,000 deaths a year, and with an estimate of 20 attempted suicides for every successful one, that’s one suicide around the world every 40 seconds, and one attempt every 2 seconds…For all the benefits of progress, complexity is starting to take its toll.

All is not lost, the tides may be turning

As with any economy, commerce is never far behind opportunity. All this mounting friction and reduction in quality of life is starting to create a new set of economic incentives focused on simplification. The information economy was incredibly efficient at creating and extracting value from data. In this new economic era, companies will be rewarded for handling the last mile of all this data and making decisions for us.

Automation and AI might finally offer us a path down the mountain of complexity. We’ve entered a new era of global economics, where companies race to the bottom of complexity. We’re already seeing success with this new approach.

Consider Amazon Echo and Google Home. The hidden value here is that they do so much of the intermediary decision making for us. We ask for relaxing music, to refill on soap, recipes for dinner, etc…These may sound like trivial things, but they mark a significant change in our behavior. We’re no longer sifting through information. Instead, we’re trusting these agents to do that for us.

And it works. We love interacting with voice assistants. Already, 41% of consumers prefer using assistants over websites or mobile apps. We spend more money on E-Commerce when using them, and develop more meaningful relationships with brands because of them.

It’s not just AI that’s leading the charge. Lots of companies are now positioning themselves as agents of simplification that make all the decisions for you, so you just have to make one decision — to trust their brand.

Food and nutrition is a particularly good example of this. Hello Fresh and Blue Apron both deliver a recipe with the exact ingredients to your door so you can cook healthy meals without any hassle. Even more extreme are Soylent and Ample, who have the ideal meal’s worth of nutrition in a drink, so you don’t even need to cook anything. There are companies like these for just about every niche now, including fitness, travel, shopping, education, networking, and so on. We’re aggressively in pursuit of simplicity.

Perhaps the most culturally significant simplifying technology on the horizon is self-driving cars. With billions of dollars already invested and many manufacturers aiming to have the first fully autonomous consumer vehicles out in just a few years, this may mark the rapid descent from peak complexity. Self-driving cars have the potential to dramatically simplify our lives. It’s not just all the decisions we don’t need to make while driving or parking. It’s the time we earn back to manage our already busy lives.

It’s the reduced cost of delivery making our cities even more accessible. It’s the ability to pay for transport only when you need it, meaning no more mandatory car ownership and all the car maintenance, insurance and tickets that come with it.

Smartphones have changed society as we know it, so when you realize the App Store turns 10 this year, it begs the question: how will we change in another 10 years? We’ll likely be using voice agents as ubiquitously as we use smartphones today.

Almost everything we interact with will be tailored and filtered just for us. We’ll all use some level of automation on a daily basis from self-driving cars to automatic food shopping. The brands that we’re loyal to will behave more like people, shopping will look more like a social interaction than a search. AI powered tools will become indispensable to many careers.

In short, much of the low level, daily decision-making will start to disappear and we’ll find new allies and tools to help us navigate the harder decisions. Taking all the new technologies and trends into account, it’s becoming increasingly clear that while today is the most complex time in human history, it won’t be for much longer. In just a few years we might look back knowing life will never be so complex again.

The Trust Economy

While a seemingly gradual shift towards simplicity may seem like a trivial observation, it marks a quiet but tectonic change in momentum. As the rate of information creation continues to increase, and as the number of choices and options we’re faced with continues to grow on a daily basis, we’ll need to rely more and more on companies to process it all for us out of pure necessity.

Where we used to expect companies to keep us informed, we now trust them to stay informed. We’re trusting them to make the right choices for us. Choice was the currency of the information economy yesterday. Relationships are the currency of the trust economy today.

Looking at the explosion of the influencer industry is the clearest example of this. In 2017 the influencer marketing industry was valued at around $2 billion. By 2020 it is expected to grow to $10 billion. In many ways influencers are the perfect example of the pursuit of simplification. We learn from their collective experiences what the best places and brands around us are. Who should we trust or not trust? What should we care about?

The personal curation of influencers has become the new filter through which we gather information and establish our tastes. This is an industry built entirely on trust through the currency of relationships. It’s the very definition of a trust economy. Smart companies already know this, they put relationships at the heart of their business to establish trust. Apple got rid of the checkout to make retail feel like a face-to-face, personal experience. Netflix learns everything about their audience’s interests to make niche content that feels like it was made just for you. The watch company Daniel Wellington grew from nothing to over $300 million in revenue in under 5 years using almost entirely influencer marketing.

As we look for more simplicity in our lives, we run the serious risk of consolidating influence on our society into the hands of fewer, larger brands. Look at how much Facebook and the monolithic amount of data they have has helped shape the last US presidential election, or how much influence Amazon has over which products win or lose when it makes the decisions for us. Note how much Google’s and YouTube’s recommendation algorithm shape the information we see and the perspectives we see them through.

This consolidation of influence, left unchecked, is likely to leave society at large with a much more homogeneous view of the world. The recommendation algorithms at the core of user generated content companies like YouTube and Facebook are becoming a divisive force in polarizing us into a set number of information echo chambers. These algorithms were designed to make us much more radical (engaged) content consumers. The real risk here is that these companies’ incentives are inherently misaligned with public interest. These companies profit more when they influence us more.

There are no clear rules and regulations around how to walk this line between profit and ethics for these companies, between success and social good. We, as consumers, have to just trust that the companies we build relationships with will have our best interests at heart, even when we all know they could make more money if they didn’t.