Whether out of necessity or desire, what happens when we need to find that one professional who can help us out of a big hole, or move to the next level, and we don’t know where to look?
Where do we go to find:
- a plumber because the pipe burst
- a therapist because of an unexpected tragedy
- a nutritionist to help lose weight
- a business coach to help take a venture to a new level
At the moment a local professional is needed, we typically look for the quickest possible source to help us find that person:
- a recommendation from a family member or friend
- a referral from a colleague
- a quick hit from a search engine
- a query on a platform (app) designed specifically for this purpose
In a nutshell, we are looking for Alchemy. Someone who can get the job done at a moment’s notice, at a reasonable rate (relative to the work being done), and in a trustworthy manner.
The problem is that this Alchemy is difficult to achieve, even at the best of times. Billions are invested online into platforms that help better validate and reviews local services across various verticals.
Why is it so difficult to achieve Alchemy?
Alchemy & Trust
First, a quick definition for the purposes of clarity. Alchemy is finding a meaningful (and in some cases magical) connection between two seemingly disparate things.
If we trust someone, who then recommends us to a professional who fulfills (or exceeds) our expectation of service delivery, this is Alchemy, at least for the purposes of this article.
The more metaphysical definition of Alchemy has to do with converting water into wine, iron into gold, and other acts of magic. In the modern world, it is a great connection!
For this type of Alchemy to occur, the two nodes have to be trusted.
On one side, the professional has to be trusted to deliver the service, on the other side, the person has to be trusted to be a ‘good customer’ (pay on time, not be a nuisance, nothing nefarious, etc.).
For this reason, we see that many professional services businesses are built purely on referrals. In business. In life, human-to-human connection is sacrosanct when it comes to trust + commerce.
92% of consumers trust personal recommendations over Ads.Nielsen
While consumers trust family and friends more than any other source of recommendation, sometimes unexpected situations emerge where we have to look elsewhere for these types of services.
If two parties are themselves considered ‘trustworthy,’ but are not connected via “trusted” sources, then a 3rd party intermediary is required.
The Marketplace Model
This manifests as a Marketplace model.
A Marketplace model is typically governed by Reviews (ie. social proof), and as we scale into a time in history where trust is paramount, certain mechanisms of marketplaces become less trustworthy over time:
- first off, marketplaces are incentivized to maximize volume and accept failures as a cost of doing business
- secondly, marketplaces are (typically) compensated on a commission basis upon completion of the transaction between the two parties (a % of 10-30% as a benchmark)
- this creates a counter incentive to ‘cheat the system,’ which is why many marketplaces are then further incentivized to put as many barriers in place to prevent cheating them
Marketplaces are notoriously hard to build, and typically very capital-intensive. They serve a purpose, but nowadays there are countless of examples of major verticals where people are losing trust in online marketplaces.
The reverse trend is back to a more localized approach.
However, the array of markets listed above creates some complexity. Finding a plumber is a lot different than finding a leadership coach, which is a lot different than finding a divorce lawyer. The list of niche service providers that people in a local market goes on:
- Private Chefs
- Massage Therapists
- Speech Therapist
- Spanish Tutor
- French Translator
What we see is many global (typically VC-funded) platforms for many of the niches listed above. Google will also rank each possible category if we type in “near me.”
The result will look something like this, either on Google or a platform.
To determine whether there is indeed Alchemy (in the form of ‘the dream’ Nutritionist) would mean calling Profiles #1 and #3, scheduling some form of consultation, and then going through the process to see if it is indeed Alchemy.
If there is Alchemy, it will be a high-friction process to find it.
The Group Search Model
Most of the searches for these types of niche ‘local services’ thus happen in WhatsApp, NextDoor, Facebook, etc. Groups.
Mom’s groups, local sports teams, school parents etc. These types of groups are defined by factor(s) and characteristics related to being “like-minded,”creating a high degree of trust simply based around individuals in the group trusting those factors/characteristics.
Looking at Neuroscience on trust and the brain, there is a part of the brain that gets activated in a ‘similar to me‘ situation, and a part of the brain that gets activated in a ‘not similar to me’ situation.
“Birds of a feather” basically is a principle that states that we ‘flock together’ based on certain commonly identifiable traits, principally because it creates trust.
But when we find ourselves out in the wild:
- in a new city or place, away from common references
- in a ‘difficult to discuss’ scenario that we can’t talk to family/friends or groups about
- a more spiritual scenario that forces branching out from the flock
Then we need Alchemy. We need to find that professional to meet the needs of the moment. That brings us full circle back to the beginning.
Trust Signals in the Future
What signals of trust in the future can we harness to find someone in another ‘tribe’ to help us solve a problem or ascend towards a new scenario?