====== Trustpilot ======
Trustpilot is a globally recognized online platform where consumers can post reviews about businesses and their experiences. Headquartered in Denmark and listed on the [[London Stock Exchange]], it operates a "freemium" business model. Any company can have a free profile and invite customers for reviews, but they must pay for premium subscription services to access advanced tools like detailed analytics, marketing widgets, and enhanced profile customization. For investors, Trustpilot presents a dual identity. Firstly, it is a publicly traded technology company itself, offering a pure-play investment in the growing "reputation economy." Secondly, it serves as an invaluable, if imperfect, due diligence tool. Value investors can sift through its vast database of reviews to gauge customer satisfaction, identify operational weaknesses, and get a real-world feel for a company’s products and services before committing capital. It’s like peeking into a million customer service calls at once.
===== The Business Behind the Stars =====
==== How Trustpilot Makes Money ====
Trustpilot's revenue engine is built on the classic freemium software model, leveraging a powerful [[network effect]]. The more consumers who use the platform to check reviews, the more essential it becomes for businesses to manage their presence there. The more businesses that actively solicit reviews, the more comprehensive and useful the platform becomes for consumers. This self-reinforcing loop is the core of its business strategy.
  * **Free Tier:** This is the entry point. Businesses can claim their profile, see reviews, and invite customers to leave feedback. It’s the hook that gets them onto the platform.
  * **Paid Tiers:** This is where the money is made. Subscribing businesses unlock a suite of tools designed to leverage their positive reputation for growth. These features include displaying star ratings in Google search results, embedding review widgets on their own websites, and accessing sophisticated analytics to understand customer feedback. Revenue is primarily generated from these recurring subscriptions.
===== The Investment Angle =====
For a value investor, Trustpilot can be viewed through two distinct lenses: as a company to potentially own and as a tool to research other companies.
==== Trustpilot as an Investment (LSE: TRST) ====
Investing in Trustpilot is a bet on the increasing importance of online reputation. When analyzing the company, consider these key factors:
  * **Economic Moat:** Trustpilot's primary [[economic moat]] comes from its brand recognition and the network effect of its massive review database. A new competitor would find it incredibly difficult and expensive to replicate the millions of reviews and the established trust the platform holds with consumers.
  * **Competition:** While it has a strong brand, the space is crowded. It competes with giants like Google Reviews, specialized platforms like [[Yelp]] for local services, and countless industry-specific review sites.
  * **Profitability and Growth:** The company has historically prioritized growth over profits, investing heavily in sales and marketing to expand its global footprint. As an investor, you must analyze its financial statements to assess its path to sustainable profitability and whether its growth is slowing, accelerating, or maturing.
  * **The Trust Risk:** The company's most significant asset is its name: //Trust//. Its biggest risk is anything that undermines it. A major scandal involving fake reviews or a perception that the platform can be easily manipulated could cause irreparable damage to its brand and business model. Scrutinize its efforts and investments in fraud detection and content integrity.
==== Trustpilot as an Investigator's Tool ====
This is where Trustpilot becomes a powerful resource for analyzing almost //any// consumer-facing business. It is a modern-day application of [[Philip Fisher]]'s famed [[scuttlebutt method]]—gathering information from a company's customers to understand its real-world operations.
  * **Gauging Customer Satisfaction:** A company with a 4.7-star rating from 50,000 reviews is almost certainly delighting its customers. Conversely, a 2.5-star rating with a flood of recent one-star reviews is a major red flag, signaling potential issues with product quality, shipping, or customer service that a balance sheet won't show you.
  * **Spotting Operational Cracks:** Don't just look at the score; read the reviews. Are there recurring themes?
    - "The product broke after two weeks." (Suggests poor quality control).
    - "Customer service never replied to my email." (Indicates an understaffed or inefficient support team).
    - "I was charged twice and can't get a refund." (Points to serious billing or systems issues).
  * **A Word of Caution:** Use the data intelligently. Individual reviews can be emotional or biased. Instead, look for **patterns and trends** over time. Be wary of a sudden flood of generic, five-star reviews, which could be a sign of manipulation. Trustpilot is one piece of the puzzle, not the entire picture. Combine its insights with financial analysis and other research for a holistic view.