By Aaron Budnick and Joel Magalnick
When building a company, like when building community, trust is often a currency more valuable than money. But trust is a two-way street. In The Rainforest, our culture is defined by the Social Contract. As the social contract states, “I will give trust to others before expecting to receive trust in return.” At the same time, the tenet of honesty also comes into play: “I will be truthful and frank. I will break rules and call out elephants in the room.”
How does breaking the rules lead to a culture of trust? Doesn’t that seem counterintuitive? Well, no. We are innovators—by definition we challenge the status quo to improve the lives of ourselves and others. We don’t do this alone, and we can only succeed by building—and upholding—trust in our circles of engagement with others. The more our own circles can overlap with others’, the bigger our ecosystem becomes, and that creates our culture of trust.
In The Rainforest: The Secret to Building the Next Silicon Valley, authors Victor W. Hwang and Greg Horowitt quote Francis Fukuyama, who wrote that a “modern society may be thought of as a series of concentric and overlapping radii of trust” that can range from friends or friend groups to non-governmental organizations or religious groups: “Traditional societies are often segmentary, that is, they are composed of a large number of identical, self-contained social units like villages or tribes. Modern societies, by contrast, consist of a large number of overlapping social groups that permit multiple memberships and identities.”
Because, as Fukuyama notes, “in-group solidarity reduces the ability of groups members
to co-operate with outsiders,” the “weak ties” among these overlapping segments actually create strong associations to pass on information between one another, allowing for further innovation—and trust.
The ability for an ecosystem like Edmonton’s to create trust among one another allows individual organizations to grow and let in entrepreneurs who may have been previously sidelined. Alberta Enterprise’s just-released 2021 Alberta Technology Deal Flow Study highlights that 27 percent of startups in the province have at least one female founder and half of Alberta’s companies have at least one minority founder. The numbers for women have doubled since the last Deal Flow Study of 2018, which didn’t even include minorities in its statistics. A culture of trust will continue to open doors and reduce marginalization of groups for a more diverse startup ecosystem.
Culture is the foundation of any innovation ecosystem. That culture can be defined by leaders in a community or grow organically—the more strategically and carefully nurtured, the better the results. Any community’s shared values, and the actions of its members, will ultimately determine the success of new initiatives. Here in Alberta, The Rainforest Social Contract sets the expectations for behaviour and is reinforced when each member acts accordingly—that’s why we continue to push for buy-in. While the Social Contract intends to create community, each person signs as an individual, not on behalf of an organization.
Coming back to Fukushima’s concentric and overlapping radii of trust, Hwang and Horowitt write that “the rate of innovation increases when people can create bridges outside of their normal circles of trust, whether across geographies, cultures, social groups, or languages.” The center of that circle would generally be family, extending out to close friends, then the rest of the world, with trust decreasing at each level. They suggest that moving from this simplistic model to overlapping circles creates that potential for a culture of trust we need to grow our ecosystem.
Management guru Stephen Covey makes a similar case of building up trust:
"If I make deposits into an Emotional Bank Account with you through courtesy, kindness, honesty, and keeping my commitments to you, I build up a reserve,” he writes. “Your trust toward me becomes higher, and I can call upon that trust many times if I need to. I can even make mistakes and that trust level, that emotional reserve, will compensate for it.”
Trust removes obstacles. Trust enables greater transactional velocity—a must as we emerge from the Covid-19 pandemic. Trust creates a win-win situation for everyone. We know our province has potential to be a leader on the world’s entrepreneurial stage. We’re beginning to see the fruits of our efforts. Let’s thoughtfully build our culture of trust so we can work together toward a more robust ecosystem.
How will you contribute to a culture of trust? A small step might be to sign the Social Contract, but a bigger step is to live it demonstrably. This is harder than it sounds, and every one of us will stumble and struggle at times. The power of the community is ultimately how it helps its members when they are down. Edmonton’s strength has always been the way that the community supports its most vulnerable, it’s most disadvantaged, and it’s members when they are in need. This is exemplified by the staggering number of non-profits and charities in the city provided through ecosystems like our local innovation community—and by the daily conversations that happen, founder to founder, to share war stories, celebrate triumphs, and overcome obstacles through peer mentorship.
We’re proudly Edmontonian, and proudly members of the local innovation ecosystem. We’re proud to work to support innovators in any way we can. If you need help, a shoulder to cry on, or an introduction, let us know. We’re here for you!