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Monday
Jan112010

Using the social graph to facilitate higher trust interactions

Stik.com begins with the premise that the current commissioned sales model is broken and that your professional interactions  could be vastly improved if you stuck to people already trusted and vetted by your network. In fee-based service industries, the incentive for many salespeople is to extract excessively high margins on transactions and buyers too often do not have the savvy to know the fair price. In a market where people are often simply web searching to find a mortgage broker, financial planner, or accountant, "lemon" salespeople may continue to thrive unchecked by any review process that alerts new prospective clients to their poor behavior.

To confront this challenge, Stik.com utilizes Facebook Connect to allow you to search for the service provider you need within the networks of your friends. Co-founder Nathan Labenz explained to me recently via e-mail: "By situating the sales processes in a social context and making reputation durable, we hope to create interactions that begin with trust and proceed quickly´╗┐."

With Facebook as the platform, my main question was whether the main filtering value that the site offers is to signal trustworthiness of the seller rather than competence or if it could do both. After all, I like my friends on Facebook, but I usually wouldn't be able to speak much to their professional abilities, and I'm not "friends" with my insurance agent who I might want to recommend. Labenz had two answers for this: first, that they will be introducing a review and recommendation function to highlight competence; and second, and more interestingly, that they are deliberately targeting specific use cases where the competence is really secondary to providing a good deal. By this, I understand that he is arguing that in industries such as accounting and insurance, you can assume that all prospective providers in your network are baseline competent to help you with the paperwork, so the real question is how good of a deal you can get rather than can you get the *best* accountant out there. In that case, the signal may be the most important.

With Facebook Connect as the platform, the power of the site does seem to be a bit limited (I personally would be better able to recommend professionally via my LinkedIn or Twitter contacts), but Stik.com does see the potential in mashing different networks or maybe Facebook will evolve to be less about friends and more about contacts. In many of these industries, however, trust is at a premium and I'm not aware of any mechanisms to find really already vetted providers besides, of course, asking your friends and family. Stik.com takes that idea and makes it scale.

I'm intrigued by the use of social networks to bring better transparency to the sales market, potentially moving it to a new equilibrium where buyers get better deals, scrupulous salespeople get rewarded with more business, and lemons are shut out. Stik.com was accepted into the Founder Institute incubator program last year, launched in October, and now has a serious funding commitment from a Silicon Valley investment firm.

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Reader Comments (5)

Thanks for your interest in Stik.com, Melody. I'm glad you see the value of a better way to transact.

I would love to make LinkedIn contacts available on Stik as well -- hopefully their API will mature and we'll make it happen.

January 12, 2010 | Unregistered CommenterNathan Labenz

Melody - it'll be interesting to see exactly which challenges they run into first when using Facebook Connect. I agree, this is forward thinking, and utilizing social graphs to build trust networks is going to be huge in the next 5-10 years, BUT...the main problem is that Facebook isn't a public, professional network and the way people use it doesn't produce the type of data that you need to make this work well. For this to really work it needs everyone to upload detailed work and expertise data. I currently have about 800 people I'm connected to that I know well on Facebook - while their profiles all list where they went to school and lots of personal data, only SOME of them list where they work, and there's very little meta data on what they do professionally there for a system to pull from. There's also no vetting system for expertise, so recommendations based on # of mutual friends could be bogus - For example, my whole immediate family knows my next door neighbor, who is a lawyer. He's a great guy at a party, but none of us trust him in a professional capacity. If one of my cousins was looking for legal help, they might think this guy is a clear winner. I'd be curious to see if vetting would even work on a social network where personal rather than professional relationships dominate - could I give my cousin 2 our of 5 stars for his accounting skills? A main ingredient to trust is objectivity - that's why customer reviews on websites work (and even those types of review systems have issues). Still, this is interesting. We should expect a lot more services like this to start popping up.

January 17, 2010 | Unregistered CommenterSteffan Antonas

I think both Melody and Steffan make good points. Simply, I didn't go to Facebook to find a plumber. The Stik folks I think would argue that while I didn't go to Facebook when my drain backed up, I did go to Stik. Which means that Stik only really has value when people use both it and Facebook. That's going to be a real challenge for this web site. As a business venture, the type of ads generated by Stick would be best incorporated into the existing Facebook platform itself; ie. someone writes as his/her status, "Up to my elbows in clogged drains. I need a plumber." The ad is then served for Joe (on Facebook vice Stik), who is a friend of a friend. Plus Joe gets an alert. Maybe this is a way Facebook could actually make some money? Maybe Facebook buying them out is what Stik had in mind all along? They'll need users for that.

January 17, 2010 | Unregistered CommenterKurt

@Steffan: I had many of the same concerns, especially that popularity (as judged by number of connections) does not equate with competence. Stik clarified for me that they will be introducing an evaluation system to help make that distinction (I'm not sure how this will be done while maintaining anonymity of reviews to preserve friendship or even if friends would give each other bad professional reviews). Also, regarding career path, you're right that Facebook doesn't have that data, so Stik makes you set up an additional career profile.

@Kurt: Your idea for advertising via Facebook status updates is a compelling one. Stik didn't mention this outright to me, but maybe it is part of their plans.

January 22, 2010 | Registered CommenterMelody

I wish I was a finer scholar ... just now was thinking "25yrs in harness; it feels longer." I remember, vaguely, the work I did on "conversion experience", how events or phenomenon take on such credibility that they effect as sea change in the individual. But only vaguely. The intervening years introduced me to such as Habermas and Rawls, but still ... it's a very nuanced complex.
The reason for that work was to establish how individuals form convictions. Needless to say I ended up doing some fine-grain analysis of ideology, of rhetoric and sophisty. And in in the end my initial intuition was more/less confirmed: there's not a heck of a lot of rationality working in this! (I happened to form very positive memories during my time in uniform, but perhaps some/most folk are allergic to nomenclature-mentality? *grin*)

What I'm working on at the moment is this: how to present credibility graphically. (Cog-psych has quite a bit to say on the topic, BTW. Not just "cognitive ergonomics", but also what moves us as human persons.) So, of course, the first task is to define the set ... face value, the individual's reputation, etc etc etc.

Needless to say *Haaa!* making a wining argument has precious little to do with making sense!

March 3, 2010 | Unregistered CommenterBen Tremblay
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