Tools for trust

At LUMO Labs, we believe emerging technologies hold the key to solving many of today’s global social challenges. To realise this potential, “trust” must be top priority.

Challenge
Trust – or better, trustworthiness – is an increasing challenge for data-driven software and smart hardware startups today.

The rising complexity and lack of transparency of connected systems can affect awareness of the potential negative side effects endured by some and/or disproportionate gains extracted by others. The risk of unfairness, uncertainty or bad experiences may trigger regulatory restrictions, but in all cases chip away at the end-user’s trust, inhibiting acceptance and adoption of innovative solutions.

From a business perspective, acceptance and adoption are core challenges. If people are unwilling (to continue) to use or buy what you are selling, your chances of building a healthy business are negligible.

However, acceptance and adoption of emerging technologies also pose a social equality challenge. When some individuals or groups are able and willing to accept, adopt and benefit from technological innovations and others aren’t, those who don’t also miss out on its positive impact. This may increase the disparity between groups and further inhibit the formation of trust not only in technology but also between groups and individuals.

When groups and individuals don’t trust each other but can’t avoid each other, the chances their interaction will make each other stronger, happier and healthier are slim.

The impact of (impact) investors
How can a capital fund make a difference here?

As an investor, if you believe something is bad – financially, operationally or socially – you can simply choose not to invest. At LUMO Labs, we believe “good things are coming.” But if not investing in what we consider bad is our most impactful contribution for good, then what is the point of having an impact-driven capital fund at all?

If we believe emerging technologies hold the key to a happier, healthier life for all, we must not pull back from the challenge but embrace it head-on.

Investors consider challenges but operate on the opportunity side of life. Our “job” as investors is to understand what is needed and to create opportunities for those who can deliver. The most powerful tool any investor has to avoid or end whatever they believe is undesirable, is to invest in alternatives that are better.

Opportunity
Trust is not just a challenge; it is also a huge opportunity for data-driven software and smart hardware startups.

The opportunity is to build tools that will improve acceptance and adoption of emerging technologies as enablers for progress. Tools that prevent unwanted, trust-impacting effects and increase confidence for all.  

These opportunities may bring competitive challengers to already existing products and services or enhancements that strengthen the trustworthiness and value of existing products and services.

Wanted and needed
We understand that trust is in high demand, and a hot and much debated topic. Some focus on the bad they are fighting against, others on the good they are fighting for.

To realize our vision for a happier, healthier place for all, supported by the immense and unique potential of emerging technologies, we must understand that trust is not just a desirable attribute. It’s a necessity.

Why?
Let’s take a huge step back to discuss why.

Note: our perspective is shaped by the thoughts and arguments of many but mainly by the recent writings of Michael Tomasello and Yuval Noah Harari (see Reference knowledge & Insights)

Power of people
From an evolutionary standpoint, the survival of humankind and our seemingly endless ability to adapt to our surroundings is marked by our ever-advancing abilities to invent tools and to cooperate. We depend on other people and tools to survive, and we rely on continuous value exchanges from the perspective of shared or collective intentions.

The basic elements – language, culture and morality – to facilitate value exchange and cooperation, have propelled us forward, far beyond merely the survival of our species. As we invent and use tools to improve cooperation and value exchange, improved cooperation and value exchange allow us to make better tools.

We build all sorts of communities around our dependencies and value exchange: families, clans, friendships, businesses, villages, cities, nations, unions and schools, just to name a few.

You grow the crops; I make the bread. You write a song, I’ll sing it. You build the machine; I make the microchip.

If you look around you and think about the number of people and accounts of value exchange (such as labour, knowledge and imagination) involved in shaping your physical reality, you realize this number is infinite. Especially when you consider some of these accounts happened hundreds or even thousands of years ago and have been endlessly exchanged since.

Our decisions about when, how and with whom we exchange value – jobs, education, marriages, co-founding a business, investing in a startup, the products we buy or using any form of transportation other than our two feet, hands and knees – are based on our expectations of a reward now or in the future. In turn, these expectations are based on our understanding of having shared our collective intentions with our “exchange partners.”

Conditional
Innovation and progress are conditional:

• As long as language, culture and morality allow us to have some notion of shared or collective intentions, we can predict our potential reward for exchanging value.
• As long as our potential reward is predictable, reliable and favourable, we are willing to exchange value.
• As long as we can exchange value, increasing the collective depth and width of value will make us stronger/fitter.
• The collective depth and the width of value can keep increasing as long as we can cultivate and embrace differences.
• We can exchange this ever-increasing value, as long as language, culture and morality allow us to have some sort of notion of shared or collective intentions, despite those differences.

In other words, to enable continued innovation and progress, we need to 1) cultivate and embrace differences, and 2) improve understanding of shared or collective intentions.

Self-determination, ownership, transparency and traceability
People use language, culture and morality to frame and communicate intentions and attention with each other.

Software is (like) a language, it enables information to be captured, to be kept, to be shared and transferred. And similar to human language, it makes perfect sense and is incredibly useful to those who know it, yet it remains a mystery to those who do not.

Imagine what it is like to join a conversation when you can hear the sounds but don’t know what they mean. Imagine the only thing you know is that these sounds are supposed to mean something and that whatever sound you make will mean something too and will be written down in the “book of you.”

You would want to know where that “book of you”’ is, who keeps it, who reads it, who writes it, if anyone is making money by selling your book to others and why others are willing to pay for it.

You would want to know how the sounds you made were interpreted, what they mean and whether they are written on paper, plastic or stone in pencil, crayon, magic marker or etching acid.

You may also want to know who decides how sounds are interpreted, who looks after whether this is the way it is done and if other people’s sounds are interpreted the same as yours. You would want to correct or erase false interpretations (in all copies, not just the one you happened to get your hands on). 

Also, you would want to come to the next conversation better prepared and perhaps initiate a conversation yourself at some point.

Finally, you would want to know who owns these books and who doesn’t and why.

You can say data is to software – and smart hardware – what sounds are to spoken human language. To understand the intentions of those using it and understand the potential reward of using it to exchange value, you need to make sense of it. 

Our contribution
At LUMO Labs, we advocate self-determination and traceable ownership of data and transparency and traceability of technology solutions to cultivate and embrace differences and to improve understanding of shared or collective intentions.

We invest in emerging technology startups who embrace differences and comprehensibly communicate their intentions. Also, we invest in startups who allow others to cultivate and embrace differences and improve understanding of shared or collective intentions.

For startup founders, embracing differences means embracing diversity in your team, but it also means realizing that – as long as it doesn’t lead to isolation or exclusion – it is perfectly okay to focus on one specific community and serve them well by catering to their specific needs.

We would much rather invest in multiple different interfaces/solutions and in platforms and infrastructures that facilitate exchange between those interfaces/solutions, than in assumed “one size fits all” stand-alone miracles.

We invest in startups that translate the value of data-driven technology into something tangible, something “normal” that people can relate to, understand and benefit from. This is where the potential of emerging technologies for continued innovation and progress gets interesting and how we contribute to unlocking this value.

Our portfolio companies facilitate value exchange and influence through relatable, human interfaces and explanations and allow for experiential learning. Experiential learning in this context means facilitating people and organisations to experience/try the outcome of innovation and innovative value exchange first without permanent consequences.

We also deliberately look out for solutions that represent and serve communities currently less able and willing to use and benefit from existing innovative solutions.

Can we?
People seem to be hardwired to cooperate and invent tools for progress. So, yes, we trust it is possible to build trustworthy tools and tools for trust, and we trust it is possible to build healthy businesses around them, because those tools are wanted and needed by many, if not all. That’s the opportunity we invest in at LUMO Labs.

Reference knowledge and insights
Prof. Michael Tomasello (1950) is an American developmental and comparative psychologist as well as a linguist. He is known for his pioneering research on the origins of social cognition, numerous publications, and for being “one of the few scientists worldwide who is acknowledged as an expert in multiple disciplines.” He is professor of psychology at Duke University and former co-director of the Max Plank Institute.

Prof. Yuval Noah Harari (1976) is a historian, philosopher, and the bestselling author of Sapiens: A Brief History of Humankind, Homo Deus: A Brief History of Tomorrow, 21 Lessons for the 21st Century, and Sapiens: A Graphic History. His books have sold more than 30 million copies in 60 languages, and he is considered one of the world’s most influential public intellectuals today. Harari received his PhD from the University of Oxford in 2002 and is currently a lecturer at the Department of History at the Hebrew University of Jerusalem.

Extract from Harvard University Press description of Michael Tomasello’s book A Natural History of Human Thinking

“In A Natural History of Human Thinking, Michael Tomasello weaves his twenty years of comparative studies of humans and great apes into a compelling argument that cooperative social interaction is the key to our cognitive uniqueness.

Tomasello argues that our prehuman ancestors, like today’s great apes, were social beings who could solve problems by thinking. But they were almost entirely competitive, aiming only at their individual goals. As ecological changes forced them into more cooperative living arrangements, early humans had to coordinate their actions and communicate their thoughts with collaborative partners.

Tomasello’s “shared intentionality hypothesis” captures how these more socially complex forms of life led to more conceptually complex forms of thinking. In order to survive, humans had to learn to see the world from multiple social perspectives, to draw socially recursive inferences, and to monitor their own thinking via the normative standards of the group. Even language and culture arose from the preexisting need to work together.”

Extract from Yuval Noah Harari, Sapiens: A Brief History of Humankind

“Homo sapiens is primarily a social animal. Social cooperation is our key for survival and reproduction. It is not enough for individual men and women to know the whereabouts of lions and bison. It’s much more important for them to know who in their band hates whom, who is sleeping with whom, who is honest, and who is a cheat.” 

---

Suggested Reading

Good Things Are Coming – By Andy Lürling
Start-up Life is a Balancing Act – By Sven Bakkes
How can founders and investors have more positive impact? – By Britta Gruenig