Reputation economy

Posted on August 3, 2011 by

The recent break in at AirBnB got me thinking about security, feedback and other incentives that would need to be built into the emerging Cleanweb economy to make it trustworthy and more foolproof. If we go back to the how we do this in our social interactions today, there are several examples that light the way. Financial systems are the most commonly used. So hotels take a credit card number and let you stay in their room. If they were to experience any kind of vandalism or damages, the quickest way for them to repair the damage is a charge to the credit card. The mischief maker presumably refrains from this sort of activity in the future (hopefully!) because of the damages sustained to their financial capital reasonably assuming there is no source of unlimited income. Come to think about it, much of “trust” in transactions is predicted on financial solvency and history. Landlords, car rental companies, business membership associations all use credit checks. Most remaining transactions utilize a combination of subjective individual assessment coupled with reference checks. Hiring decisions are a good example of this. At its heart, a reference check is an anecdotal way to check an individual’s social capital – what do other folks have to say about the quality of their interactions?

Very recently, we have seen an explosion of activity on online networks. Think blogs, social media and various online commerce sites. These virtual social interactions are also creating a track record of an individual’s trustworthiness. However, the problem is that there is no way to aggregate this information and present the consumer with a single score that represents their trust index. Search engines are not tailored for this and do an incomplete job as well as the results are hard to read and compare. However, they are the most commonly used for lack of a better mechanism.

This brings me to what Rachel Botsman calls the “Reputation Economy“, where everyone has a standardized reputation score analogous to a credit score today. This reputation score is your bank account and capital. Better scores presumably lead to preferred access while the AirBnB break in incidents would have resulted in a loss of reputation capital. Its a fascinating idea. I haven’t seen any implementations to date, but Klout is a new firm that is beginning to measure influence on the web. Influence is also a key currency to measure, especially in this social economy. However it is more targeted at advertisers who presumably want to identify the demographic types in an online audience as well as reach the influencers to seed product campaigns. Reputation index on the other hand would be needed by almost every body who wanted to do online business and limit losses. The best example of a well implemented Reputation index to date is eBay, but then of course it doesn’t extend beyond their marketplace.

I’d love to hear if there are others working on this space or you know if other start-ups addressing this issue.

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Does local equals clean?

Posted on July 20, 2011 by

I recently ran into this telling infographic on the green benefits of buying local. It got me thinking about localized e-commerce and how mobile, social and internet technologies are helping this movement take off after years of policy discussion. Traditionally, most of the “buy-local” campaigns haven’t been enthusiastically received, mainly because they implied the customer was paying more and there weren’t clear value differentiators for the end product.

However, local e-commerce has always been a focus of the search engines, given that 22% of searches are local. Google and Bing have both invested heavily in local search solutions. Till date however the focus has squarely been on discoverability and marketing. Until recently, there haven’t been innovative uses of technology to faciliate the transaction itself. That’s now changing with a whole slew of Cleanweb apps and renewed focus on the benefits of local supply chains.

Local buying shows up first in the food and consumer sectors. Wholeshare is a new Cleanweb startup that is using the power of internet to enable local food buying directly from growers.  The site helps consumers who live or work near each other form groups and buy together, allowing them to bypass grocery stores and buy directly from wholesale sellers. Consumers get access to fresher food and can save 20%-30% off their food bills. This would have been impossible to do without the uniquity of the internet, mobile devices and the social web. A broader internet application using the same concepts is WeCommune. Its re-energizing local communities by making it very easy to communicate and collaborate on a wide variety of commercial transactions. Lastl, but not the least Zilok is another spin on local commerce which offers peer to peer local rentals for almost anything you can think of.

These are all superb examples of the re-invigoration of local business activity. The New York Times recently ran an article of how the old fashioned business of manufacturing was turning local for a new lease of life. As patterns of consumption, ownership and use are changing, local supply chains offer everything from lower costs to rapid customer response times in addition to being good for the local communities. Its true that this NY Times post mentioned example of niche goods so its arguable how scalable this effort is. A far more exciting and dramatically innovative view on manufacturing stems from a recent article in the Economist on 3D printing which is rapidly becoming more widespread and affordable. Imagine the possibilities when there are localised 3D printing shops available and consumers or small businesses have access to internet applications to customize and order products followed by pickup at a local facility. That’s the true future of local manufacturing that is ultimately enabled by Cleanweb technologies.

I’d love to hear from you on local business sucess stories and how you saw Cleanweb enabling them.

 

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How to design metrics for clean?

Posted on July 9, 2011 by

I was at the WHIAAPI Sustainability Summit yesterday in Seattle and it got me thinking about how sustainability success is measured. Panelists from various government agencies struggled to answer with specific metrics to measure progress on this front. I heard answers like success equals “the community is one where the kids want to come back and live after college”and “good family wage jobs are available”.

The importance of having a specific, measurable and trackable metrics cannot be overestimated. Huge sums of money are being invested into sustainability because it is the current buzz topic and its important to have ROI clearly spelt out for these. A typical solar or wind farm project usually requires investment of the order of tens of millions of dollars!

Part of the challenge is the rapid evolution in our thinking on sustainability. The earliest metrics focussed on what was easiest to measure. Then we moved into a phase where the absolute metrics were less preferred over relative ones (such as ratios). With the maturity and growing financial benefits of sustainability, we have a new generation of economic metrics. Nowadays, the average corporate sustainability report for a company can run to several hundred pages with a plethora of metrics.

The key fact to remember is that metrics have to be segmented based on audience to measure true success. So corporate investors and business managers would care about economic returns on sustainability while governments and academia may care about measuring community, social and environmental impact at an aggregate level. Consumers care about many different causes, so detailed segmentation is required. As you all know, I’m a big fan of Collaborative Consumption - a not so new movement, mainly playing out in the consumer space today, and also with B2B applications across the supply chain. This morning I tweeted about a society based on sharing rather than ownership which is a mind-shift for most of us. In such a space, interesting success metrics revolve around the consumption of goods/services (at an aggregate level), the net reputation index (some measure of the quality of the network) and some GDP-like measure of the network.

This is not to all imply that the whole science of sustainability metrics is unwieldy and overly complex. To the contrary, metrics have evolved quite a bit and have taken quite a practical stance. Here is an excellent post about how to practically use sustainability metrics. However, depending on the role you are in it will be important to pick out the metrics that your audiences care about and develop robust systems for measuring and tracking. Of course, this all implies that you also have done the due diligence to be able to set targets for the metrics.

What does all of this mean for you? Well, as you plan your sustainable product or service offer, take a good hard look at how you would measure sustainability impact for your company, for your stakeholders and for your customers? Being explicit about the various metrics by audience will help you in business planning and setting realistic goals for the business. Secondly, work out the implications on the tools and systems that will be required to measure and track these metrics. Thirdly, be ready to market your progress for the different stakeholder groups while educating them why this is important. Lastly, keep the list short to force prioritization, especially if you are small company.

Well designed, executed and marketed sustainability metrics can be a key addition to the credibility of a sustainable business.

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Welcome to All Things Cleanweb!

Posted on July 6, 2011 by

This blog is dedicated to an in-depth discussion, coverage and analysis of all things Clean Web. CleanWeb is the ability to distribute software and services on top of environmental infrastructure that makes it more efficient. This is a relatively new classification of the space, best articulated by Sunil Paul here in the Green:Net conference recently. Here’s also an essay Paul wrote on the CleanWeb, which I’m republishing for your reading pleasure (originally published on his blog).

The concept is not revolutionary, however this is one of the more succint articulation of the power of social, mobile and digital technologies to revolutionize business practices and consumer lifestyles while growing sustainable impact. There is a growing movement towards re-use and sharing with a number of interesting business models popping up. One of the more comprehensive directories I have found is Lisa Gansky’s  Project Mesh. Lisa’s description of Mesh companies aligns pretty well with Clean Web concepts:

“Mesh businesses leverage data and social networks to enable people to share goods and services efficiently and conveniently—to gain superior access to what they need without the burdens or expense of ownership.There are already thousands of these businesses—in transportation, fashion, food, real estate, travel, finance, entertainment and many other categories—with more starting every day.The Mesh has emerged as the best new creative engine for getting more of what we want, exactly when we want it, at less cost to ourselves and the planet.”

 Most of the Mesh companies are in the C2C or B2C space. It remains to be seen if this model can apply in any manner to B2B companies as well. It can be argued that true impact to the global economy as well as the planet will require further adaptation and proliferation of these business models to the B2B space, both large and small. What do you all think? Please drop a line or leave a comment and maybe I will explore that more deeply in an upcoming post.

Lastly, a small group of us are volunteering to organize a CleanWeb Hackathon in the SF Bay Area this Fall (mid-September 2011)to bring together early visionaries and developers for a marathon hack session and to produce breakthrough concepts. All event details and registration information is here. I will be there all weekend long and look forward to meeting as many of you as possible to continue these discussions live.

If you have any suggestions for more posts, please let me know.

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