Personal reputation systems are about to take off… but the next start-up won’t last

It is inevitable that organizations will become more forgiving about what they discover their candidates and employees getting up to. They never knew in the past, so finding out what goes on outside of business shouldn’t change things. Otherwise the employee pool diminishes too much. … So today, as we become highly visible in a range of different situations, including in the wilder situations we end up in, as well as of course expressing our opinions, open-mindedness becomes more relevant, and people can be seen more as they are rather than as the corporate persona they often assume.

However another critical issue is the quality of the reputation systems. One model is to enable unlimited anonymous feedback and rating, which it sounds like this start-up is going to adopt. While this approach may get traction for a while, it simply won’t last.

The context is that reliable reputation measures would transform the global economy. The reduction in transaction costs that we’ve seen through the rise of the Internet would pale in comparison to what would result from having a good sense of a person’s or company’s context-specific reputation before dealing with them. Far more sophisticated reputation measures will be required for this to be valuable. A forum for gripes would be useless.

I’ll comment more when I see the actual launch, but from what little Arrington has said about the forthcoming service, I doubt it will be an important enabler of the reputation economy, or successful in the long-run, though it could well get a lot of hype and interest for a while.