Trust, Care, and the Capital You Already Have
You probably already hold these types of capital, but have never been recognised for them.
Before this post starts, it’s worth mentioning this one’s a bit longer than normal.
A twenty minute coffee with Carolyn Rohm turned into (as it always does with the two of us 🤣) a four hour marathon chat about everything we’re both working on, and I came away with ideas that I felt it was important to include in this post.
You’ll hear more from Carolyn next week, as she’s agreed to write a guest post for the series, to give us some of her amazing, and unique insights, and you’ll hear a lot of what we spoke about, in her own words.
In the meantime, sit back with your drink of choice, and enjoy this post.
The main focus of last week’s post was to outline the eight forms of capital, and I promised to go through them bit by bit over the next few posts. That’s what we’re doing in this post, starting with the two forms of capital everyone reading almost certainly has, but has probably never treated as capital.
It’s worth mentioning from the outset that this isn’t the wildly innovative part of the series. When people hear that I’ve identified eight forms of capital, they tend to brace themselves for new and exotic ideas, but these two are the opposite.
They are some of the most familiar parts of daily life. Everyone knows they matter. Most founders will tell you that their first hire and their first introduction are worth more than their first investor cheque. But the people that make these contributions almost always go unrewarded.
This isn’t a failure at the edges of the system. It’s an issue at the core of daily life, that’s been there so long that for many of us, it doesn’t even register as odd.
The one asset that grows, the more you spend it.
Social capital is the trust, reciprocity, and ability to bring people together: the quiet building blocks that make any deal, partnership or ecosystem possible without a formal agreement in place.
An extractive capital model treats it as goodwill: useful, but arbitrary and often someone else’s problem to keep it going. Collaborative Capital treats it as the asset is plainly is. Nothing can happen without it, so the system we operate in should reflect that.
Consider a group of construction workers, who refer each other work and vouch for each other’s quality, based on nothing more than a handshake, but collectively growing each others’ businesses, and the ecosystem as a whole.
What’s genuinely strange about treating trust as an asset is that it behaves backwards. If you spend money, it’s gone. But when you spend the trust you build, it grows in value. If you keep the trust in a ‘vault’, but never use it, it loses it’s value over time.
A network of people that you haven’t spoken to for five years isn’t a network. It’s a contact list. That’s where the challenge lies.
Something that grows in value when you spend it, loses it’s value when you don’t, can’t be bought or sold, and can be entirely lost in an afternoon after a single bad act, is not something that traditional finance or capital was built to handle.
That’s a fair explanation for the struggle, but it’s not an excuse to pretend that it’s free.
The price of admission
The market knows that relationships have value. Businesses are built on that idea. Recruitment fees, brokerage, commission, and the practice of hiring someone expensive just to access their contact list.
All of that is the market admitting that a relationship is worth something, and putting a price on it.
The finder’s fee is the purest form. Someone makes a phone call, a deal happens that couldn’t otherwise have happened, and someone gets paid.
But what the market doesn’t do is acknowledge that the relationship itself created that value. It pays once, at the moment of use, but ignores the future value, and the domino effect, that introduction has.
The platform economy has taken this to a whole new level. A great deal of the value created online in the last few decades has come from extracting other people’s trust and relationships, and charging them rent in the process.
The ratings, reviews, and the profile that took a decade to build, is all trust supplied by users, monetised by the platform, but forfeited the moment they leave the platform.
An Uber driver with thousands of five-star ratings owns none of them. That’s not some wild, complex economic theory. It’s a real world example that social capital is real, that it’s worth a huge amount, but is often handed over to someone else.
The idea here isn’t that people should be paid for their trust and relationships - they already are. Rather, people should be able to share in the value that they help create, if they choose to.
What this isn’t: a score
The moment you suggest that trust should count for something, it conjures up images of a dystopian, Justin Timberlake-style movie, with a number floating above someone’s head. A trust rating, or a credit score for character. That’s not what I’m proposing, and if someone did, it would deserve to fail.
It would fail for the reason I set out in last week’s post - if you try to force a hard figure onto something that doesn’t fit, you end up with a number that looks precise, but is quietly easy to manipulate and ends up being managed rather than meaning anything concrete.
It would also have a much more catastrophic impact too. A permanent, portable rating designed by a central ‘authority’ would quickly descend into becoming an instrument of control, long before it becomes an instrument of value.
The movie I mentioned earlier is a pop culture reference of this, but you don’t have to look too hard into current world news to see this playing out in real life too.
The important distinction to make is between rating a person’s inherent worth, and recognising the value in a contribution they make.
A cap table is not a credit score. Most people know that a shareholder registry is not a judgement on the moral worth of the people on it, but a record of how much financial capital they have contributed, in return for a specific thing, agreed at the time.
What I’m proposing is something like this, but wider. Specific, not universal, tied to a venture and not the person, agreed not imposed, and active only when it needs to be.
Not a verdict you carry around, a stake you hold.
Trust gets scarcer as everything else gets cheaper
Trust, in particular, is about to matter a lot more as a form of capital, and it’s a force I described earlier in the series.
The cost of plausibility is dropping faster than ever.
A convincing proposal, a personalised email campaign, a portfolio, reference or face, all of these are becoming so much cheaper to create, but more difficult to verify. But, a person with something of their own at stake, saying “I know them, they are good, use my name”, is becoming invaluable.
That sentence has a cost, because the speaker is putting their own trust, and social capital on the line, but that cost is what gives it the credibility.
This also creates some awkward questions. The least measurable of the eight forms of capital is quickly becoming the rarest, and most valuable, at the exact moment that we have no credible way to hold it.
Of the eight, this is the one to hold onto the tightest, because the rest of the series leans so heavily on it, and will fail without it. A system built on trust between strangers, and across borders, only functions if that trust is something that a person can build, hold and own.
Extraction has spent centuries insisting that it’s free. It never was, and it’s getting more expensive every day.
I wanted to acknowledge something before we carry on. I know this post is a bit longer than some of the others in the series, and I wanted to tackle that before we continue.
I considered splitting this across two posts, but decided against it. Social and human capital are so tightly linked, that arbitrarily separating them would mean that we give neither of them the justice they deserve. They are in some ways the same argument, but from different directions.
So bear with me, the walk is a bit longer than before, but we’re nearly there.
A term worth taking back
Human capital is the skills, labour, time and care that we all see and use every day, including the vast amounts of support and effort that never registers as ‘work’ at all.
The phrase itself has been thoroughly colonised. ‘Human capital management’ is a category of enterprise software, and to most people, human capital means something that a firm owns, deploys, retains and optimises.
Notice where the ownership sits in that model. You are the capital, and someone else is holding it.
Flipping the narrative is the first thing we need to do.
In this argument, the human capital is something that is held by the human, is put into a venture in the same way you might invest money, and earns the same result that the money would - a share of what’s being built.
That’s not just a rhetorical statement, but the key point. It’s the difference between being an asset on the balance sheet yourself, and being an owner of what you’re building together.
Hours are priced. The rest isn’t.
Your salary is a settlement, not a valuation. It puts a price on your attendance, and takes you out of the market for a period of time, which is a useful thing to do, it powers our economy and I’m not against it as a principle.
But it’s not, and has never claimed to be, an estimate of what your time, or your work is actually worth. The gap between the two is where the true value lies.
Around that gap sits a huge amount of effort that is never priced, or even recorded at all. The unpaid carer that keeps a household going, the mentor that creates the next generation of founders, or the lived experience that no qualifications could ever capture. By any honest definition that is capital, but it is often invisible.
And it’s not just a rounding error. The last time Aotearoa New Zealand actually counted, in 1999, unpaid or voluntary work was valued at around $40 billion, equivalent to 39% to GDP at the time.
That figure comes from the work of Dame Marilyn Waring who has spent a career forcing this question to the front of the national agenda, but it’s worth thinking about for a minute.
Something close to two fifth’s of the national productive effort was taking place outside of the global metric that claims to measure the national productivity.
The more revealing factor is the date. It’s now 2026, and 1999 is still the best answer someone can give you. This isn’t a country that shies away from measuring things. We publish monthly figures on building consents, credit card / EFTPOS spending, and even the price of a kilo of cheese.
But what we don’t publish is any current estimate of what is probably the single largest, but uncounted, input to the economy. That’s not an oversight, and after 27 years, it can’t be called a backlog either.
It’s an active decision, and it says clearly where the current economic system measures value, and where it doesn’t. You do not stop counting something you intend to pay for.
So for the moment, we’re left guessing, which doesn’t help but is worth doing anyway. If you adjust Dame Marilyn’s figures by inflation alone, you’ll land at somewhere close to $70 billion.
But factor in ‘economic growth’ (which is a metric that we will discuss further in a future guest post), and you’ll land closer to $170 billion.
This is just napkin maths, and the truth is, without real research, no-one will be able to tell you the real numbers, because you can make an argument in both directions.
What is not in doubt is the order of magnitude. Even at the bottom of that range, unpaid work is one of the largest economic facts about Aotearoa, and it is simply missing from the ledger.
The point I’m trying to make here is that the economy in Aotearoa New Zealand (and in all likelihood, globally), depends completely on this work, but accounts for its value at zero, and has arranged not to look at the detail below the surface.
Collaborative Capital counts it. Not as a courtesy, not a side-note and not as charity, but because it is simply one of the inputs that almost everything relies on, and whoever supplied it should be given the credit, and the respect that they deserve.
We invented the instrument, centuries ago.
What I find most striking about this, and the reason I think this is a practical rather than a utopian argument, is that we’re not missing the mechanism to make this work.
Equity already does this job. In its’ simplest form, it takes a contribution you make today and converts it into a claim on value that may or may not exist tomorrow. The issue is that it’s primarily used for financial contributions, and ignored for other types.
But we’ve had this technology for centuries, and we’ve become extremely good at using it in clever ways. Co-operatives, joint-stock companies, employee option programs are all steps in the right direction, but there’s so much more out there.
Most of the time, today, we simply point it at almost nothing.
In a conventional company, ownership is issued for two kinds of contribution: money, and the labour of a handful of very early employees, often begrudgingly, in small amounts, and behind a pair of golden handcuffs.
Everybody else who built the thing gets a wage, an invoice, or a simple thank you shout out.
That’s the opening this whole series is walking towards. Not a new instrument. An old and well-understood one, but aiming it towards seven more kinds of contribution.
What I do not know yet: what a vouch is worth
Claiming that these things count is the easy bit. The hard part is deciding how much.
A cheque is legible. It has a number on it and a date, and centuries worth of practice tell you what it should get in return. A three-year mentorship does not have a number on it.
Neither does the introduction that made the venture possible, or the twenty year old network that made the introduction possible, or the person who held things together during the hard year. Any universal formula for pricing these would be false precision of exactly the sort I warned about earlier, and I have no interest in building one.
My working instinct, and I put it forward as an instinct rather than a conclusion, is that these things should not be priced universally at all. They should be agreed locally and early, by the people in a particular venture, at the point when it is easier to be generous and everyone still likes one another.
Ownership decided at the outset is a conversation. Ownership decided at year four, after the value has arrived, is a dispute.
The most common failure of unpriced contribution is not that it never gets recognised. It is that it gets recognised late, and often include some hefty legal bills too. Whether my instincts survive in reality is one of the things I am asking you to help me work out.
You already hold some.
I’ve put these two forms of capital together for a reason. Everyone reading this post will have social or human capital in some form. You may have vouched for an old school friend’s new business, or trained a new intern that went on to be a great success.
Under the current system, none of that made you the owner of anything. Under a collaborative model, its exactly the sort of thing it’s designed to encourage more of.
Next week: the forms of capital we hold together. Knowledge, nature, and culture.
If you had a magic wand
The standing question I ask in every meeting, and answer here every week: if you had a magic wand, what are the three things you’d need right now? Mine, this week:
Real examples of trust networks that created value no term sheet ever recognised.
A way to measure social capital that’s neither naive nor easily gamed.
Someone who has tried to give unpaid contributors a real stake, and can tell me what broke.
Now you. What are your three? Write to me with them, and tell me if there’s anything I can help with. I read every reply, and I answer.