Reputation Networks – A BloxNexus Special Topic
When: March 9, 2019
Where: Node Worldwide
What: Reputation. At the heart of all human relationships, reputation drives whether we all feel we can work with, socialize with and participate with each other. In a ranging dialog, Stewart and John-Michael dig deep on the impact of trust, reputation, online vs. offline, across close networks and distant networks.
Podcast #: PodCast 2019-010
BloxNexus Reputation – Mar 9 2019
[00:00:00] Stewart Noyce: Hi there, it’s John Michael and Stewart Noyce again from BloxNexus and we are going to talk about reputation today. This is a different kind of an approach that we’re taking. We’ve done 12 interviews so far and we decided to take a week off of interviewing other people and talk to ourselves partly because we learned so much from the first three months, so let’s Dive Right In and John Michael maybe you can share with me what you think, you know, the purpose of this topic is today, which is reputation systems when you can just start with what is a reputation system.
John-Michael Scott: Sure. So, you know, if you go to Wikipedia, they’re going to talk to you about the idea of an online community a program that allows users to rate each other in such a community.
And the idea of building trust through reputation. I’m going to make an argument though that Community has been around maybe a little bit longer than online has been around and that reputation networks are actually one of the backbones of civilization. In fact, they allow people to come together [00:01:00] with different sets of skills and to make exchanges of value. So I think it’s a super old concept. I just think you know, we’re just kind of as we do so often in the modern era. We’re kind of glomming onto a super old concept and saying that just because it became online. It’s new.
Stewart Noyce: Okay. So why do you think this is important?
John-Michael Scott: So the critical part to me is exchange of value relies on people believing that each party can and will do whatever it is that they state in order to create that value exchange.
So, you know, I say that I can and will repair your car and you say I can and will. Pay for you to repair it and we together agree that each person in the transaction can and will do what the other thinks that they can and will do and that we generally subscribe to the idea that we can accept each other’s reputation on that.
And so we agree to a [00:02:00] transaction that neither side is going to get a finality on until some future point, but it’s based on this agreement that we believe in each other. At the beginning and often especially in Auto Repair neither of us know each other.
Stewart Noyce: Right. So one part of the, or one of the values of that is it reduces the friction in our experience so I can go to you and say I’d like to work with this Auto Repair person say you’re the auto repair person because I know a little bit about them. I don’t have to spend as much time interacting with you and every other Auto Repair person to figure out you know, which one I can trust. I mean, it’s not like we’re it’s not like an Enterprise opportunity here where I can go and interview for six months and figure out who’s doing what and try test projects. I just need to get my windshield wiper fixed.
John-Michael Scott: Yeah, and so what’s interesting in maybe different about today versus 10,000 years ago is that 10,000 years ago that reputation network was based on George knowing Fred and Fred [00:03:00] knowing Susie and Susie knowing, you know, Lincoln overall off to the right and eventually you reach a point where the person you need is somehow connected to you through a series of connections and they can do what you need to have done. However, as the needs that we have have gratuitously expanded finding that person at the end of the chain has become much harder. So what’s interesting about the online scenario is we’re somehow coming to an agreement that have generally 25 people say something is good that we can feel. Okay? Well, it’s probably good enough and I can somehow make this trust Exchange.
Stewart Noyce: Okay, so why why does the blockchain matter in all of this? I mean what this is? This is just a another technology to apply and we already have reputation systems, particularly that have developed over the last 10 years, that are pretty pretty influential in our lives today. So what’s the what’s the point? We have LinkedIn? For example, we have LinkedIn. So [00:04:00] why do we need another thing? That’s other than LinkedIn?
John-Michael Scott: So one of the things that I think is very specifically different about blockchain is immutability. So if a piece of information gets onto your let’s call it reputation blockchain and you are recognized for having done something or not having done something. It’s there. Doesn’t go away. Can’t go away. It’s there forever. And while you and I might discount something that happened to 25 years ago for a person reality is that we can see the whole history. That is not necessarily true with LinkedIn. I can change my LinkedIn profile anytime. I feel like. So that alone is a pretty big differentiator between what is happening on blockchain and what is happening in these other online reputation networks today?
Stewart Noyce: Okay, so maybe I like that because I screwed up royally at the last job I was in and I don’t want, I want to bury that I just don’t include it in my LinkedIn [00:05:00] and people don’t don’t don’t go there. So it now it’s an immutable record OMG. What do I do?
John-Michael Scott: Okay. So this is interesting you said well, you know, maybe I screw up and maybe I like that something can go away, but I wanted to point out something that was studied the beginning of the 20th century. They studied the idea of optimizing human performance in a factory condition and when they studied it probably the most interesting outcome of those studies was not exactly how you lift up a widget and put it on to the next place in the conveyor belt.
Probably the most interesting thing that came out of those studies was if people know they’re being watched they actually improve their performance. They are more productive and they you know, they take more seriously what they’re doing. So if you knew that your reputation was always going to be dumped onto an immutable blockchain probably your odds of screwing up the last job would actually go down.
Stewart Noyce: Yeah, and I’m going to argue actually now, I’m going to jump in and argue a little bit that I think the in [00:06:00] some ways the the job that I was in last might not have been suited to me, but I took it for some other reason. Maybe I’m trying to get somewhere. Maybe I just need the money.
Maybe someone picked me and put me there and I really like them and I wanted to go work for them and yet that was a terrible place to be because the entire thing just shifted in one because somebody else came in and ran the place. I mean this is this kind of thing happens all the time and I would argue that that we should be going in this direction where humans are the ones that should be the best thing you have in your in your company that can adapt to those situations and instead of having everybody sort of fit in a box, or in some sort of predefined role, that in fact, we want them to be more engaged and energetic and open to new things and Innovative. And in fact that with the introduction of reputation that has more to do with your ability to [00:07:00] problem-solve then it does your ability to execute within a box. That we would have very different kinds of Corporations at that point.
John-Michael Scott: So it’s interesting is we haven’t said necessarily their reputation Network would be bad, we’ve just said that we want to be a more nuanced interpretation of what it is. It shouldn’t just be based on I did X and therefore Y is the result should be based on do I contribute in a value creating way too a problem solving situation. So what I think is interesting about that is what we’re really saying is that there’s probably a need for us to have many reputation boundaries that we could be evaluated on rather than just one. So it’s not just linked in its LinkedIn plus 40 other linkedin’s and each one has its own thread and the the amalgam of those various linkedin’s if you will becomes a more substantive picture.
Stewart Noyce: Right, and that’s what that becomes really interesting because we could talk about a [00:08:00] number of different kinds of reputation systems and why don’t we just go there for for the moment. We talked. We started with LinkedIn, but what about Yelp, right and Yelp and Amazon and others where you’re actually rating and reviewing products and or services provided and that has its own sort of set of expectations. Certainly has a set of issues because there are plenty of people out there who are doing a really crappy job of reviewing restaurants, for example.
John-Michael Scott: So, let’s have some fun with that. So, you know, I have a love-hate relationship with Yelp without going into too much detail. Let’s say that I use them a lot. But at the same time I use them with a great deal of misgiving at all times. But you know where it starts to become interesting is the couple things one if you started to actually have Yelp. Blockchain for instance again immutability that’s a useful term the fact that Yelp can’t artificially impact the rating system. That’s interesting to me, but the second thing is, you [00:09:00] know, and I don’t think this is necessarily related to Yelp or Google or anybody else in terms of this, but I think it would be interesting to throw and AI that was capable of distinguishing more positive language versus more negative language against an entire data set of reviews about a a particular company or a particular restaurant and to create other alternative aggregates rather than just five stars one star two stars. I think that would be super interesting.
Stewart Noyce: Okay, so there are two things in there that I want to get at right away. And the first one is I think you are pointing to the idea of a platform. That [this is so that these that] reputation is so critical to all of us and in terms of our personal values and our expectations, our needs. But also our personal reputation is critical to us as a human being it’s critical to our ability to execute our success our potential failure something holding us back. But also maybe [00:10:00] reaching our you know, greatest dreams, right? So this is its reputation is a crucial element. Why is it now in the hands of a few programmers often some you know building in Mountain View or wherever it is. And why can’t you just put this out and have a blockchain, a public blockchain, which is widely open to all of us with a set of APIs and we can develop whatever tools we need so that we can really understand what it meant that this something happened in the world.
John-Michael Scott: I have a lot of feelings about that. I do definitely believe that creating platforms that could be readily utilized for creating a variety of different reputation networks would be a a positive and B, I think that the fact that most of the programmers happen to come from one or two or three castes of people is already a problem in terms of how these reputation networks get created today. So being able to open that up so that many more casts of people from variety of backgrounds would be influencing what we [00:11:00] keep reputation on would be a huge net positive. Those are just my immediate feelings.
Stewart Noyce: Yeah, and I’m going to go and run with that because you having more information about more different types of activities is always going to improve whatever AI system is out there. But let me just say right now. I don’t like the word AI. I don’t like I don’t like the fact that we went from artificial intelligence, was what clearly defined what it was, which is artificial intelligence and we turn it into AI, which is now appearing to be real intelligence, where the real intelligence is still back in the human being. And the human beings interacting with each other show us where the true reputation is, not in some artificial algorithm that was set, you know and established on top of that.
So I’m going to say I would like to argue with you, but I think actually think you’re a hundred percent correct that we need more information. We need more reputation systems and we need platforms upon which we can build our own reputation [00:12:00] Analytics.
John-Michael Scott: Yeah, I agree completely and the it’s interesting that you brought up the compression of the word artificial intelligence into Ai and the fact that people just kind of like have subsumed their understanding of this to just like, oh, it’s the thing out there doing the stuff. Well, it’s interesting. There’s some very interesting examples out there like Amazon. Amazon decided to work with a recruiting software that was AI based and they give it a massive training data set of typical kinds of people, you know, all the people who’d ever been hired by Amazon for the past 15-20 years. Gave it that whole data set of people, coded whatever and said, okay find us more great amazonians if you will. And the end result of that was that they effectively came up with a [00:13:00] profile that said that they needed to hire more white male lacrosse players from SoCal that was kind of the the outcome of. I am oversimplifying quite a lot. But the point is they came up with this weird profile that was not necessarily diversity based.
It was not necessarily generative towards creating, you know, a broad swath of different people for different roles. It was just, poof here we are, Brett. And I think that’s a problem training data sets are huge problem. So going back to what we said. If you don’t have a lot of different reputation systems, you’re making a pretty complicated choice about a human being without necessarily enough information.
And I think we’ve seen this especially in the credit space, financial credit. You might have made some super dumb mistakes when you’re 18 to 23 and those super dumb mistakes from a age 23 may still be affecting you 20 years [00:14:00] later. That’s problematic. So, yeah, I mean, I’m totally with you. I think that we need to have a variety of data points. And I think that there are some fairly interesting startups out there who are also of the same opinion, especially in the financial space where they’re looking at how to loan people money or not loan people money very differently. I think we’ve even talked to one. Previously,
Stewart Noyce: it’s possible we did. Hey, so let’s dig dig into then some of the opportunities where reputation could be developed where humans are interacting with each other and through that interaction, the result of that interaction creates a data point that we can then use. Is couple places well credit scores one of them. I got a terrible terrible service experience at this restaurant or at my dry cleaner, by the way, it turns out my dry cleaner is really good. They recognize me when I come in and even if they screw up they you know, they [00:15:00] assess, you know, they respond to it. And those are the kinds of things that keep everything going, but they’re everywhere and it seems like we’re going to you know, every hour we’re going through another set of these things. What do you think is maybe the most important ones that are going to happen first. Obviously, we’ve we have a number of systems in place. We got to Uber and Lyft we’ve got Yelp we’ve got Amazon we have LinkedIn we talked about already but where do you think blockchain can really jump in right away and make make a difference?
John-Michael Scott: Yeah. So, you know again there’s some people who specifically talk to you but things that are up and coming. I think you know, the thing that we’re really talking about here is removal of FUD. So FUD is fear, uncertainty and doubt. Right. We have these terrorizing moments in our lives where we suddenly realized we have to rely on a person that we don’t know to solve a problem for us and we are deeply concerned that we’re going to be spending $240,000 in the case of one founder who’s trying to work with somebody in the [00:16:00] legal profession. That we’re going to spend five thousand dollars to fix a car that isn’t even worth $5,000.
I mean, there’s all these interesting terrorizing moments and I mean terrorizing is a little stiff, but whatever, fear uncertainty and doubt that we’re going to make the wrong decision and we’re going to get screwed somehow. So if I look at what’s up and coming I’m going to say that I’ve met a Founder not that long ago who is concerned about auto repair and I think, I’ve never met a single person who was not directly a mechanic who felt very comfortable with getting their car fixed. Never never not once. I know unless you’re super lucky and happened to have your best buddy who just kills it at this profession. In general, it’s a very uncomfortable situation and we’re always feeling uneasy.
So there is a there is a company out of ironically or may not ironically but out of Calgary Canada that is trying to solve that specific problem [00:17:00] and blockchain’s a huge part of it. So they’re creating a reputation at work around auto repair. And I think that’s freaking amazing. I would love to see that as a blockchain model.
I think that the challenge with that one is that. You know, it’s a risk for the professional. I think that in general these reputation at works are somewhat of a risk for the professional because one bad apple relationship could you know put a dent in your reputation, but I still think that’s one of the most interesting up-and-coming ones. Beyond that
Stewart Noyce: certainly people when they first start out in a, you know, providing a service it would help them to curate their own set of experiences out the door and a lot of new product companies have if you’re a product manager in Silicon Valley this is how you think right you need to manage the first set of customers, so that you have a good experience from them, but also that you’re learning from [00:18:00] them. So you tend to pick your customers as opposed to picking you and I can see that happening in new new environments where your reputation is really valuable. I’m going to argue for a couple. I love the auto one. Let’s let’s just call out Pieter Gunst at legal dot IO. We just talked to him last week and he’s out there building a Federated system for reputation of providers of Legal Services. That’s really interesting because it’s not just how good you are but it’s what you know really well. It’s not just you know that I don’t screw up. It’s that I do this one thing super well and you should come to me for that expertise. I really like that and I really like that that side of it where it’s not all negative, but it’s extremely positive in some areas where you add a whole lot of value.
I would say that maybe one of the things I would watch really closely right now is the Steemit. The Steemit platform where you have something coming out of what is essentially like a Reddit only you have [00:19:00] people putting up information about topics. The challenge for any of those is to just build up enough really interesting topics.
And it does appear that if you are trying to curate it and you’re trying to really build reputation that it likely goes in the where you went, which is that there’s so many different ways to think about it. And the one the one that really attracts me most and we actually brought me into this whole block chain space was the idea that advisors to startups have a lot of information to share but who’d how do you know which one you should have talked, you know, which one you’re talking to and a lot of times start up the people in the start of don’t even know what they don’t know. So they’re just listening to people getting all sorts of crazy advice when they may be could benefit from learning a little bit more before they chose someone to come in and talk to them.
John-Michael Scott: Oh I have another fun one that’s related to that and it applies startups. It applies to corporations applies to anyone. Who’s. You know famous person needs some media relationship [00:20:00] management. It’s the world of PR. I really desperately want to see a reputation network in that space. I really have found a variety of experiences with the professional industry around that so love love love to see a reputation system that is keeping track of everybody in PR. Think it would have some really dramatic impact because you know, the reason I bring it up for those in our audience who aren’t aware, I found just generally across the United States that the average monthly retainer for PR is about 10,000 to 15,000 per month and you know for many people that’s well beyond a paycheck. So that’s an interesting number but 10 to $15,000 a month, and outcomes, man, if you happen to get as your PR agent Kris Jenner of the Kardashians Fame [00:21:00] man. She’s worth every bit of that 10 to 15 thousand per month. But you know what? I’ve met a lot of other people who I wouldn’t say necessarily the same thing about and I’m not going to cast, you know dispersion disparaging remarks about anyone but in general I found that the profession has some charlatans and some real gems. So love see a reputation system in that.
Stewart Noyce: Okay, so PR, so I’ll just say right now that I had a really good PR agent once and I would like to have shared her name with other people, but I didn’t want to because I wanted to keep that person. That’s how that’s how important it was.
John-Michael Scott: Yeah. So what Stewart just said there is that finding that gem is so freaking hard that he really wanted to keep it to himself and that’s kind of problematic. I mean as an industry, if you’re in a position where they’re so few gems that people are hoarding the gems. Oof. What does that say about the rest? I don’t know.
[00:22:00] Stewart Noyce: Well, what’s interesting about my my favorite PR person is that she didn’t look like a PR person in what people other people would have expected and she didn’t sound like one. She had a really rough voice, she but what she could do was something really special and you didn’t know it and understand it until you would work with it for a while.
And I think that’s, a lot of reputation is based around that. We can have very discrete moments where we learn something. But there’s something about being with that person for a while to really understand what they can do and how they go beyond and go outside of the, of the structure that’s given to them.
One thing that is is very clear. Now after having you know, lots of conversations and lots of work over many years is that there are set of rules that you know, you walk in there’s a set of rules. You got to follow the rules and then you’ve got to figure out when and where to start breaking all those rules, because you really the rules are keeping you back and not allowing you to move forward.
[00:23:00] So what’s interesting about this whole reputation thing is what is it that we’re going to see that is what we capture, and how do we use that information to to make really good Innovation decisions, right, and to really use that. If it’s just to reduce the friction of getting a you know, getting Auto Repair, getting a dry cleaner figuring out where to go for for our takeout dinner.
I mean, that’s one thing but you know, really I think that more interesting part we kind of got to here was. How do we pick those really important professionals who work with us, people in the legal environment, people are in are doing our marketing and our outbound communication, you know those and the people who are coding for us. Those are really super important areas and they require a lot more out of the box thinking and how do we you build a reputation system that helps us to understand who is the best innovator? That’s where I’d like to see us go.
John-Michael Scott: You know, and I think that honestly if we manage to get to the point where we can [00:24:00] figure some of those ideas out, what we’re going to do is we’re going to cause a lot less waste. So we we look we look at reputation is one thing that reduces friction, but I’m going to also argue that reputation and being able to make good selections based on reputation also reduces economic waste.
Because you and I are throwing money out and everybody else is throwing money out to do things, and we would like to be able to generate good results. If we throw the money out to the wrong person, we don’t generate good results. It’s wasted it’s lost. I think that kind of toll on the overall, you know, global civilization could be improved upon with a lot of really good advancements in this area.
So. I’m going to just throw this challenge out to anyone who’s listening to us come talk to us about reputation because I think that it’s going to take a lot of thinking around this we’re all gonna have to brainstorm a lot to try and find the right [00:25:00] systems and models for creating reputation networks or reputation systems around different professions. I don’t think that there’s a one-size-fits-all to this problem set. So we definitely want to talk to people about this.
Stewart Noyce: Absolutely and and we have so far. In fact, the this topic came out of the initial 12 interviews that we did. And I want to ask you John Michael. Where did where do you think you’re kind of the one who came up with reputation. I jumped all over it because it was on my mind too. What do you think maybe was in those those first interviews that prompted this?
John-Michael Scott: Well, you know as we were talking to everybody about decentralized applications, decentralized networks to centralize x, y and z. It just very quickly struck a chord that despite the fact that we talked about trustlessness in blockchain, the reality is that what [00:26:00] instead is true is that we are creating trust in a situation where we don’t have to all be a part of the same party the same group the same walled. It’s really that ability to create trust and amongst collaborators who are decentralized across the city, the state, the globe, the whatever, being able to create trust is actually the greatest outcome of this technology in my mind.
So you could have a logistics chain where you’re connecting, you know. A port in China with a port in California and all the bits and pieces moving back and forth between the two not having to write everything on paper being able to exchange a token across each of the members of the network. That is what was interesting and that’s what I was struck over and over again. So it became clear that creating trust was really actually an outcome being created by, you know, some kind of a belief or a reputation that somebody could get something done. [00:27:00] And then as we just continued forward with legal.io and our discussion with pineapple world, and so my outside discussions with micro mac about Auto Repair became clear that this was kind of a core theme for us and for watching.
Stewart Noyce: Yeah, I want to go actually it’s a little discouraging I have to say because I’m going to agree with you again and that, you know compared to our are offline conversations these online conversations have far too much agreement with n are far less entertaining in the way.
John-Michael Scott: Sorry guys. We’re trying to make it. You know, we’re trying to make it Crossfire but it’s not really working
Stewart Noyce: It’s not really working. But maybe we’ll have to pick some different subjects as we go forward. But the thing that that I want to reinforce on that is the idea of trust and what I saw walking into the blockchain technology space and the people who are in the communities that are forming around this space is they’re doing it because of a lack of [00:28:00] trust. There’s so much of a lack of trust of the existing systems and infrastructure that are in place. Which to be fair, I mean, I am completely invested in Amazon Google and all these companies they’re in my retirement portfolio because they’re very good corporations and it’s because they exploit information and people in a very strong and powerful way. So that makes them good Investments. It makes them at the same time terrible things to have as a service because who knows what they’re going to do, right? And that’s what’s driving people here. And that’s really the interesting thing. And so when you start looking at trust, then where does trust you know start to play out? Well, we’ve actually talked to a few different people and found some really interesting areas. I love real estate tokenization and asset tokenization just in general. But I love reputation as well. And so I think reputation was a great place for us to start. I would actually like to do this again and asset tokenization if we could, maybe [00:29:00] that’s a maybe that’s something we can do next.
John-Michael Scott: Sure and there’s just a couple other things I wanted to bring to the foreground in terms of trust and reputation. You know, if you look around and you try and understand whether or not your politicians are the right guys or the wrong guys, the right girls wrong girls, whatever. It’s very very very difficult having any sense of whether or not somebody is a reliable good actor or not a reliable good actor as a politician. No matter whether you’re looking at local politics or national politics, it’s a very difficult thing to do today. So that’s an area that was causing discomfort. The government’s various at every stage. We struggle to trust them. Because of circumstances around Enron we struggle to trust corporations. Because of circumstances around certain sports figures we struggle to trust all these interesting institutions that we have in the past felt better about 50
Stewart Noyce: Our Heroes
John-Michael Scott: All of our [00:30:00] heroes have been disenfranchised and I you know, I don’t want to go off on this right now, but I could say a lot about the rise of the superhero movie genre. I would argue that it’s very closely tied. Its explosive growth is very closely tied to the lack of real-world heroes. So what I think is interesting about blockchain is that we have the opportunity to re-establish trust that has been broken down pretty badly in the past 20 years.
Stewart Noyce: All right. Well, you know what we have reached the end of our time that we allotted ourselves for this particular session. And boy, I think we’ve come up with some other great ones, you know, great things to talk about later. But let’s just imagine that we’re going to do maybe another 12 interviews here. It was he who we can find and we’ve got a few more on tap that are actually really interesting particularly in social impact. I’m looking forward to that. Anything that’s on your mind that you want to share with with our community before we sign off for today.
John-Michael Scott: You know, the other comment I would make is [00:31:00] hey, seriously, please reach out to us. We want to find all these really interesting stories about, you know, the real will use cases blockchain sure, but things that blockchain has a unique and interesting impact on also I mean like reputation frameworks. So please don’t hesitate to reach out to us and let’s talk.
Stewart Noyce: Yeah, how can people reach out to us?
John-Michael Scott: Sure. So, you know the the short and sweet version of this is that you know, my name is John Michael Scott. In terms of my email at BloxNexus, it’s email@example.com. Stewart’s is firstname.lastname@example.org. Please use those and of course you can find us both pretty easily on LinkedIn as well. So we would love to hear from you.
Stewart Noyce: Yeah, so, this is Stewart Noyce, and …
John-Michael Scott: John Michael Scott,
Stewart Noyce: and we’re blocks Nexus. So thank you very much for listening.
John-Michael Scott: Thanks, everyone. [00:32:00]
BloxNexus explores the real world of blockchain and the founders, creators, visionaries and operators who are building the next version of the internet – the blockchain internet – along with all the new and disruptive applications that we will see as a result. BloxNexus is the brain child of Stewart Noyce and John-Michael Scott. Like you, they are busy learning and exploring this new technology and what it means for all of us.