“My reputation is being ruined!”Sumhun Ben Da’ad to his business partner, Joseph Ben ‘Awkal, 1005AD
Sumhun had asked his partner, Joseph, to repay a debt of several hundred dinars that they owed in Egypt, but Joseph had ignored him. As the average monthly cost of living for a middle-class family was three dinars, this was a huge debt to leave unpaid.
This wasn’t just a threat to Sumhun’s relationship with his current creditors in Egypt, but to his ability to access the entire network of traders. There was nothing more important to Sumhun than protecting his reputation for being trustworthy. He had already heard people were calling him unreliable across the region and was terrified. If he lost their trust, his livelihood was at risk.
Sumhun and Joseph were international merchants in the 11th century, but their concerns are the same as those that any business has today — they needed to decide who they could trust, and make sure that their customers trusted them.
Trust is everything
If you were an 11th-century merchant who wanted to sell your products overseas, you had two choices: 1) take a long and potentially dangerous voyage with the goods yourself or 2) rely on a local agent to manage everything for you at the destination port. Both had very significant drawbacks.
Hiring an agent meant trusting someone you had probably never met to unload the goods; to sell them in the markets; to bribe local officials (probably); and to return the money you’re owed, minus their fee. Choosing the right agent was a crucial business decision, and the risks were incredibly high.
The uncertainty of trade and transport at the time made trust even more central to business than it is now. Prices varied constantly, and the journey from Egypt to Sicily could take anywhere from 13 to 50 days, if your goods arrived at all. It wasn’t exactly FedEx or UPS.
Without legally enforceable contracts or fast communication, how do you ensure that your agent is honest? They could claim that the products were damaged; lie about the prices they managed to get; or even just steal everything. How would you know if he was telling the truth?
An 11th century social network
However, Sumhun and Joseph had an edge over most of the other traders in the Mediterranean. They were part of the Maghribi, a tight-knit group of Jewish merchants who were expelled from Baghdad in the tenth century and then settled across southern Europe and north Africa. Their close relationships and geographic spread gave them the ability to trade across great distances entirely within their trusted network, which was a huge advantage.
Shared heritage alone wasn’t enough to ensure that Maghribi merchants could always rely on one another. To protect everyone’s interests further, the merchants constantly sent each other letters in which they shared news, gossip, local prices for goods, and accounts of their experiences with agents across the region. These comprehensive dispatches meant that they were incredibly well informed, and ensured that anyone who was lied to or who received bad service was immediately able to make sure everyone else caught wind of it as quickly as possible.
It was essentially the Dark Ages version of a WhatsApp group chat, spreading news and gossip on parchment and ships. It was a lot slower and didn’t support gifs, but it had far fewer annoying alerts so it’s hard to say which is better.
This information sharing was tied to an oath that every merchant took. They swore never to work knowingly with anyone who had attempted to defraud another member of the community. This hugely increased the costs and risks of ripping off any individual, because such betrayal meant losing not one customer, but all of them. This created a system that incentivized long- term relationships, customer service, and honesty — without direct oversight.
By rewarding long-term reliability, and making it more appealing than the prospect of a quick buck earned through deception, the Maghribi ensured that they always gave and received the best customer service in the Mediterranean.
Solving the problem of trust gave the Maghribi an edge over the competition. By trading within their network and constantly communicating, they made sure that they gave and received the best possible customer service. This allowed them to trade at much lower risk than their competitors. By essentially creating a medieval version of Trustpilot, the Maghribi were able to thrive as international merchants for over a century.
In business we trust
The Maghribi found a way to ensure that they could trust their agents, but does that still matter as much today?
Trust is at the heart of every business transaction, big and small. If anything, technology has made it even more important and given us new ways to build it.
A decade ago the idea of staying in a stranger’s house during your vacation would have seemed crazy. Then Airbnb made it seem normal. They did it by deliberately building trust, both in their own brand and between individuals. By allowing guests and hosts to rate each other, and constantly iterating the system to improve it, they gave their customers the ability to assess other people’s reputations and created trust in the booking process. You could argue that Airbnb’s main product is trust, and it has turned them into a company worth billions.
While Airbnb have used trust to make billions, Amazon has used it to make a trillion dollars. It is now the second most-trusted institution in the US, behind only the military and far ahead of Congress and non-profit organisations. It’s hard to say how much of Amazon’s $1 trillion US valuation can be attributed to trust, but it has definitely helped.
Trust is hard to win and easy to lose
Technology may constantly change, but there is always a human element to business relationships. Today, everyone has their own version of the Maghribi communication system that can destroy trust in a brand. One Facebook post or tweet can send a story of bad customer experience across a network in minutes and lead to a huge amount of lost business.
Companies today face the same problem that Sumhun Ben Da’ad had over 1,000 years ago. Unfortunately, we don’t know how their story ends. Whatever happened, it’s hard not to feel some sympathy for them — nobody wants their mistakes to be remembered for over 1,000 years.
Without trust, even hugely successful businesses can fall apart. Luckily, great customer service can take difficult situations and turn them into an opportunity to save or even increase trust.
Trust disappears a lot faster than it can be built, or rebuilt. That’s why customer service matters so much — it’s the chance to save your customer’s trust before it goes for a long time.
There are always some interesting lessons to take from the past, even when you spend your days building the future. Trust me on this one.
This blog would have been impossible without the research of Avner Greif, and if you’d like to learn more about how the Maghribi traded, we suggest you check out his work.