RapLeaf is a great new system for managing reputations of buyers and sellers online — eBay’s reviewing system writ large. As the founders like to say, RapLeaf makes it “more profitable to be ethical.” I doubt this is one of the more common use cases, but I think their motto is exemplified in the case of the multi-million dollar deals that take place every day between venture capitalists and entpreneurs, where reputation really does translate into profit.
For a venture capitalist, reputation is everything. Reputation for a venture capitalist will mean drawing the best entpreneurs with the best ideas for the best price. In the Silicon Valley, reputation is driven primarily through word of mouth. Most of the time, an entrepreneur looking for funding will ask friends and contacts about the reputation of various VCs, but for a young entrepreneur with a small network, this may not be a feasible way to check out the reputation. The venture capitalist evaluating this young entrepreneur may have the same trouble. Because their networks do not directly connect, they know very little about each other.
RapLeaf has a brilliant solution to this problem. By allowing ratings based on transactions of all types, people will build up generic ratings that build trust before a personal relationship is established. This company can build rapport between people who have never met and were not personally referred. Of course, this will never supplant an actual relationship, but it allows connections that are not possible through sites such as LinkedIn. Making it “more profitable to be ethical” in this way will really add value to our daily lives, and I wish them the best in making their vision a reality.
Post a Comment