Several months ago, my brother started selling his handmade leather books on Etsy.com. This was caused mostly from a failure of my part. I’m the family “web application” guy. He’s asked me several times to get him a website and I have not delivered. It’s not because I don’t want to, it’s been more an issue of lack of time since I’m in school. I was happy to see him get something up, even if it wasn’t his ideal web presence. His books are amazing and he has an incredible talent.

Now we get to the crux of the matter. Here we’ve got an online store for handmade leather goods, hosted by a reputable online “mall” (Etsy.com) but we have no sales. Etsy provides a feedback mechanism for buyers, à lá Ebay. Etsy shows him that people are indeed looking at the products. But no purchases.

What’s the problem? No one knows if they should trust him. No one knows him. He has no reputation.

He has to bootstrap his reputation to get something going. I think there a couple of ways to bootstrap reputation:

1. Lower the risk for people who interact with you. Let their feedback start your reputation.
2. Get someone to vouch for you—borrow reputation from someone who is already established.
3. Transfer reputation from another context where you do have a reputation.
4. Associate attributes with your identifier that have value—so that you have something to lose.

Number 3 is currently very difficult to do online. For instance, how can I let customers know of my good Ebay rating in a way that they can reasonably know that it is my reputation and not just me trying to point to another seller? Transferring reputation from different contexts doesn’t always make sense either; just because I’m a good plumber doesn’t necessarily mean that I’ll be a good babysitter.

Number 4 is also currently difficult to do online. If I’ve got a separate account at every website, how can I claim attributes in a way that can actually be verified by another user? So what if I tell you I’m a Sun employee, how can I prove it?

3 and 4 can be related. A good reputation has value.

It usually takes some combination of approaches to get things rolling. In the case of Artisan Graham my brother used Etsy, which lent him some credibility from #2. From #1 he gave a friend a discount for an item (lowering the risk) and that person liked the product and left a rating reflecting that. That seemed to have gotten the ball rolling—people who had been browsing felt sufficiently confident that the store was real to place some orders. They left good feedback and now he’s had over 80 transactions with a 100% satisfaction rate. I told you he made good stuff.

This is when I realized that Etsy (and Ebay for that matter) was providing much more than payment processing. They offer a trusted source for reputation to buyers and a way for sellers to build reputation.