Entries in recommendations (1)

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.