The idea for the post came to me while I was driving through a very very small town in central Pennsylvania and I noticed a sign on a little furniture shop that had that saying.

My thoughts were around how a service like VideoEgg was a quality service but ultimately it’s model didn’t prove out. And how we put a lot of trust in start-ups, (trusting them with our pictures, video, documents) and if this is too precarious? Or should we trust the established tech companies more…. Anyway good post and important lesson, Quality and Trust. No business can possibly succeed without it.

I find trust failures are of several kinds. Venality is often at the heart of financial trust issues; no surprise, since financial institutions often deal with money itself. Short-term-itis is visible on industries built on immediate gratification, e.g. short-term sales, consumer goods.

The auto industry is a severe case of basic, rockbottom competency. It is the East Germany of American industry. Have a look at my own blogpost on this subject at http://trustedadvisor.com/trustmatters/451/Do-You-Trust-Detroit

I suggest some more radical solutions than those generally discussed.

Thanks for a thoughtful blogpost, and an equally thoughtful set of responses.

I think a good starting point would be a new 21st century definition of Monopoly. Like, to big to fail, is a good starting point. Rethink the model of Economy of scale, diversity is good in the long run. Do not allow the selling of math equations describing a fictional product. That’s what our “smart” financial Institutions basically did, after they run out of ideas on how to produce real products bound to real Money.

on the issue of planned obsolesce, i think you answer your question yourself. For the longest time, marketing and messaging were a way for making things obsolete and hence forcing us to think about buying the shiner, newer thing. Quality, remained a constant and there was belief that certain brands stood for quality. I think now the focus went on marketing only, and the focus shifted away from quality.

Think about it this way — most people want to buy american cars, except they don’t know if they can trust them. Or find them stylish enough It is the crisis of confidence in the auto makers and now in big banks.

@Mike Puchol

I agree with you – bailing out poorly run organizations that are themselves to blame for the problems doesn’t make sense. However, i think one needs to be pragmatic about the impact on hundreds of thousands of people who are unwilling victims of the stupidity of their senior management.

Regarding the auto industry – again, if these companies have been miss-managed into extinction, and were supporting thousands of imaginary jobs, how is government money going to help? Will they dump the SUVs right off the production line into lake St. Clair? Or will they instead pay people to stay at home? In any case, it doesn’t speak much for capitalism.

@Manish J: BusinessWeek’s Daniel Goldstein also gave Apple two years until they shuttered their retail arm when they opened the first store back in 2001. Facts prove he was dead wrong – and so are you.

Trust has little to do with the current situation the current govt’s active role in deregulating and actively refusing to regulate these big financial entities and their complex Ponzi schemes are what is now landing us in this mess. So the govt last month nationalized the banking industry, the auto industry is next, maybe the airline industry after that – so now we just trust the govt. right?

“Planned obsolescence” implies that manufacturers design products to purposely fail. It makes me uncomfortable because it seems to place the blame on manufacturers for conspiring to defraud innocent consumers by not releasing the best products that they are capable of producing. I have more faith in the open market to weed out bad products and reward companies that make good products. There’s still a trade-off between making products that don’t fail and products that people can afford, but I don’t think companies intentionally cripple products so you have to buy a new one in a year or two.

However, I agree that the American economy is driven by the need to buy more and more stuff, as you touch on in the second quote. Consumerism has driven the economy because Americans feel good about themselves based on what they own. And marketing has convinced us that owning “new” stuff is better than owning last season’s “old” stuff, be that clothes, cars, or consumer electronics.

I had a professor in college that argued that consumerism arose out of a psychological need to redefine self-worth because assembly-line manufacturing created too much distance between workers and the product of their labor. I wrote about that a couple years ago on my blog here… http://rewindblog.com/2006/11/consumerism/ (the lecture itself was about 20 years ago)

I agree with you — the hardest thing to do is say no to bandaid solutions but say yet to long term future options. I think prevention is the best option and that unfortunately is something our society of instant gratification doesn’t quite reward.

But the real problem is, the people in charge are still acting like young Engineers. Fighting fires instead of developing a plan to stop fire fighting and make sure it will not happen again. Everybody who has been in this position knows, stop fighting fires after you have started doing it, is really hard to do. It seems so logical to step on the the flames and the next one and ….. We need some experienced supervision. First thing teach every Economist engineering 101. Where do Economist learn math? Or is economy like quantum physics, if the equation doesn’t work. Just add another dimension, maybe somebody else figures out if the dimension exists. Or we could go into the illusion of more data equals better information. I will get a coffee instead.

I think you are absolutely wrong about Apple. The fact is they built a product (or series of products) that predict the wants of their consumers — not quite the 90% of the masses that buy Windows PCs — is one of the reasons why they keep selling their devices. I think they have a lower priced offering – $199 phone – which even today is selling briskly on the shelves. They are focused on a market segment — regardless, through the big downturn of 2001-03, apple did just fine.

On people going for more affordable computers, I agree with that logic. Perhaps that is why I expect them to sell tons of macbooks and not as many pros over coming months. As for the net-books are all noise as of now, and a lot has to happen before they gain some value.

actually your comment doesn’t make much sense. if you didn’t trust a product, you wouldn’t buy it. if you didn’t trust a service you wouldn’t pay for it. and companies that can’t be trusted are going to lose in the market place. i think it is a truism that would hold as long as there is a consuming-society around us.