In the beginning, we all lived in small communities. You knew everybody close to you. If you didn’t know someone, the chances are they were a threat to you.
How times have changed.
We are not limited to the people that we can walk to, or shout at. We can connect to all sorts of people through Facebook, LinkedIn etc. Azeem has 138 Friend requests on Facebook at the moment from people he doesn’t know. (And some of those are friends of Facebook friends that he just realised he doesn’t really know either.
Making connections is now so easy that the value of connections has dropped dramatically. Ratings and trust however, are becoming more important.
- Credit ratings agencies like Moody’s and S&P provide a proxy for the trustworthiness of companies. They give people the confidence to transact. When credit ratings dropped, the banks almost collapsed.
- FIDE uses Chess rankings to let chess players know what they stand to gain or lose by playing another individual.
- Academic ratings drive cash and people to the ‘best’, highest rated, universities.
- Companies establish trust with consumers – Starbucks for example means you can buy a cup of coffee from them and know it will be of a set standard.
- Google’s page rank algorithm has delivered a degree of trust about the value of websites.
Until recently, delivering People Rank has been hard except for cases like eBay.
Quora, Klout etc are addressing a very important issue. How well should we trust someone on a certain subject?
Some rankings produce strange rankings – FourSquare rewards ACTIVITY, not VALUE. Just because you have got the Galleries Badge on FourSquare, doesn’t mean you know about art.
Peer Index tries to use online activity – Facebook, Quora, blogs, Twitter etc – to give you a sense of how trustworthy someone is one particular topics.
Q&A: Good question – why are ratings absolute numbers? Surely they are more subjective than that?
- Ratings have to be taken in the context of what you are trying to understand. Credit ratings agencies produce a single value that uses 300+ elements going into it.