Reputation is capital

This talk is about the role of reputation in socially driven internet-based transactions. She imagines a future where we might all have a platform that assess this quality in a manner similar to our credit score today.

She highlights the role reputation plays in online exchanges such as AirBnB, TaskRabbit, Skillshare and a host of other sites in soliciting/acquiring peer-to-peer services. She does have some cool charts and employment anecdotes to highlight that this phenomenon is creeping into the mainstream.

Though I think most of the things she says are obvious to anyone who has spent more than five minutes on Couchsurfing, to anyone who has every tried to find a room mate on Craigslist, or to anyone who ever wanted to have first date with someone they met online. We need additional sources of information online. It is the grease which enables these social interactions to occur.

Retail is similar. For the most part, the traditional experience of buying a product in a brick and mortar store brings too much uncertainty. What am I getting? Is this a fair price? I have switched over the past year to becoming almost an exclusively online shopper. I read reviews religiously. I rarely buy a product without them unless it happens to be from China (usually Hong Kong) and only costs a few dollars including shipping (ie eBay). On Amazon, the first step in this process (even before price) is filtering the universe of potential purchases to those which only have a 4-Star or above rating. Then, I look at the number of reviews and the distribution - The larger the sample set the better and I generally avoid the leptokurtic distribution - That's a sign of bad quality control. I also find the 2 & 3 star reviews to be very helpful in pointing out the limitations of a given product. Anyway, that was a very long aside to point out that REPUTATION is the basis for my products. I trust the collective wisdom of Amazon users even though I haven't met a single one.

This analogy certainly extends to people. Though we all have free will (and infinite amount compared to a set of headphones) we generally still manage to provide a very "consistent product" from day to day regardless of our  internal mood or external environment when dealing with others. If the collective description is detailed, the comprehensive coverage can offer a lot of predictive value. This is the essence of trust in business - reliability (though trust in the context of human relationships is a very different thing - it has less to do with action and more to do with feeling - these things don't often matter in business because we usually only want a single item or specific task performed).

As an aside, I do think there is something very interesting about how the ability to allow others to report publicly about other's behavior tends to keep everyone more honest. It's similar to how putting cameras in public places will generally lead to less crime. People will behave when they know they are being watched. This obviously does not create a world of people with better hearts and souls, but if the only desire is to reduce negative behavior we would all be wise to design systems that allow for the possibility of public praise or scorn.