Updated: Dec 11, 2019
I often get asked my thoughts on risk management for marketplaces. Despite being a seemingly broad topic, it turns out that there is no shortage of people interested in discussing risk management. This is likely a result of three things: (1) the proliferation of marketplaces in the US and throughout the world; (2) the evolution of marketplaces from startups to mature businesses, including public companies; and (3) a lack of resources for executives, in-house lawyers, risk managers, trust and safety professionals and other operators. Recently, I sat down with Brian Powers, Founder and CEO of PactSafe, to share my thoughts on the value of risk management and how to best position for success as a part of the Legal Departments of the Future podcast. You can listen to the podcast here.
First and foremost, successful risk management starts from the top. Investors, directors and executives must see the value in risk management in order for anyone tasked with it to be successful. Unfortunately, leadership often sees risk management as conflict with growth, which is the ultimate goal of any startup. That does not have to be the case. In fact, embedding in-house lawyers, risk managers and trust and safety professionals into the leadership team ensures efficiency by way of a constant flow of communication and no delay in execution. When included at the table, the risk management function becomes part of the problem solving, rather than creating problems.
Once you’ve got buy-in from senior leadership, you’ve got to be sure to follow through on your responsibilities. But within an evolving industry, where do you turn? As we know, age-old resources are no longer applicable or beneficial in the age of innovation and disruption. My advice is to seek out resources. Out of pure self-promotion, I would encourage any in-house marketplace lawyers, risk managers and trust and safety professionals to check out the Marketplace Risk platform - it has become the most comprehensive source of education, networking and information sharing for the marketplace startup and sharing economy industry - with the Marketplace Risk Management Conference in San Francisco and the Sharing Economy Global Summit in London. Beyond that, check out the Marketplace Risk Webinar Series, Road Show, and Slack Forum. Through Marketplace Risk, you can connect with colleagues throughout the world and find the resources you need!
The primary benefit of the Marketplace Risk platform is the ability to engage and network with colleagues who are similarly situated. By engaging operators who have dealt with the same issues is the most efficient way to solve problems. At the end of the day, why recreate the wheel? The one thing I love about working in this industry is the overwhelming spirit of collaboration and sharing that goes along with being an operator. Don’t be afraid to reach out!
In my opinion, perhaps more important than everything I have written above, the best way to succeed is to share. Leverage your experience for the benefit of others and expect nothing in return. You will be shocked and amazed at how grateful your colleagues will be and, in turn, will be proactive about sharing with you. We are all in this together. In most cases, the issue or problem you are dealing with has been solved by someone else within the industry. Be willing to share your solutions first and I’ll bet many of yours will be solved for you organically through your own network.
Last, and certainly not least, I always tell in-house marketplace lawyers, risk managers and trust and safety professionals to approach the solution to every problem with a positive outlook - find a way to say “yes,” and then figure out how to get there. The answers are not always obvious. But, if the goal is always to find a path forward, you will demonstrate that you are a business partner and part of the solution (instead of in conflict with growth).