A good reputation takes long to build up. And it can be erased in a few moments, a few decisions and you can be all the way to the bottom (or even below)
Your history forms you. And internet remembers your history. Everything. No escape. There is a lot of commotion about one fundamental part of the sharing economy. You cannot decide what you give away of your privacy. It is all or nothing. Your behaviour is recorded online: all collected and used in the reputation economy.
On the bright side. We can now build up a network, a reputation that will solve a lot of trouble for the internet that is too big to be a real community. A movement that will make the middle man disappear. Who used to be necessary to make a deal. A community should not be too large. (different topic; will blog about it another time).
We believe in others online. We trust complete strangers online because they have already experienced the product/ shops/ items/ service before (if they don’t get paid to do it). It is a way to persuade you to buy stuff when you cannot check it in a different way.
We can give reviews to everything. We did so for restaurants. For books. For apps. And now even for persons. I got a review when I enjoyed an airBnB spot. I gave a review to the driver from Uber. All personal reviews. Public feedback. All part of a bigger sum that gives a ‘metric’ of how good you are.
A reputation economy is needed for all of us to make a sharing economy happen. We exchange our lifes and privacy for cheaper alternatives (and will let the middle man vanish). Be aware.
I didn’t use any cash during my Iceland trip. That is really really convenient during your travels. At the same time I really didn’t know how much I was spending. This is ofcourse always the luxery when being abroad in a country with a different currency. But now it is even more untouchable. No cash at hand, a foreing currency, an exchange ratio not totally clear. Only pay by plastic. Ingredients for trouble. A little shock for me when the credit card was charged. Not that bad. But more than I expected.
Can the future generations make a difference between 1 euro and 10 euro if all they know is this number on their mobile screen? That number which corresponds to their current savings (or better; loans). It doesn’t give any emotional reaction to spending, like it does with spending actual cash money. No attachment to the hard work that went into it, to buy the stuff.
Research (by Prelec and Simester) has shown that spending with your credit card doesn’t give the same emotional reaction as with cash. And people are even willing to offer higher prices due to the fact that the don’t feel the pain of spending. That’s why credit card company are so big. And a lot of people come into troubles.
But I guess we have a huge problem if this virtual number is all we ever are going see. How should coming generations coop with this? No emotions attached. We as humans are simple not able to give any emotion to a digital number.
We leave all kind of different trails online of our live. What websites we visit. Which Facebook pages we like. Clicks on emails we get. That is a online trail we are making without noticing. Sometimes we have such a passion for things we like. We want to express it. We want to share it with the world. We make a trail on purpore. That is exactly what Amazon is after. For them that is really interesting information.
So they bought both GoodReads and Shelfari. Book / library apps where you can show your current list of books you have read. But not only that. also can also add your wishlist of ‘want to read’.
Offtopic: I had a discussion about the best online tool to show off your offline library in a digital world. I once made the mistake of taking the wrong tool. Both owned by amazon but I had to switch from Shelfari to GoodReads app. Better alignment with the Amazon database and a greater community. Although the desktop version is not a beautiful as the Shelfari website.
Amazon did buy these tools. And it got a reason to do so. This TechCrunch article of the takeover of GoodRead sums it al up
The company also shared an interesting stat, which might have sealed the deal for Amazon:
In the last 90 days, Goodreads members have added more than four books per second to the “want to read” shelves on Goodreads.
With over 16 million users? You do the math.
It is so much more easy to convince your customers what to buy if they already indicated what they want. Surprised that Bol.com and Amazon both have a wish list for you?
Which other signals are there to pick up on? So obvious as sharing our next books to read? Some other items i can think about;
Which countries to travel?
Which movies to watch?
But probably a lot more.
Sometimes marketing and sales is really easy. Just ask the consumer what he/she wants to have. These are just obvious hits for these kind of companies to chase you on. (And this kind of data is really valuable: could be a separate business model for startups)
Ericsson has got a beautiful series of what the connected world means to us. (This is going to be BIG, bigger than anything else). This video shows the future of money and shows cases that already proof these changes.
Big fundamental changes coming up with how we use money and capital. Connections once again on the base of the shifts:
Not only getting finance, but an extra layer of community building and support. All done without normal financial institutions. Getting your working capital from the end-users. perfect way of doing business. The incentive of being first, getting a reduction.
Bitcoin (and other currencies)
This is really the one to watch. Not that it must be Bitcoin to be the currency to go. But the major shift is a currency that is not in possession of a national bank. One that cannot be centrally controlled.
We can share a lot of assets to others and get a small return for doing so. This will have an impact on a lot industries, We have to much potential value that wasn’t being used before because barriers to share were to high. But that becomes lower and lower. And trust is gaining on the internet. The reputation economy is going to start these days (will blog about that).
These changes are going to have enormous impacts on all different levels of the economy, for example:
Less taxes collected
Less income needed
Shift in power from government to the community (or just a few)