We needed a computer for our family so I just bought an academically priced MacBook. Great laptop by the way. If you buy a laptop you get a free iPod ($200 rebate). The idea was that I would get the iPod for free, then sell it and the money made would effectively reduce the price paid for the MacBook. I got a guy at the bookstore to tell me what the highest selling iPod model they had—turns out it was the Black 30GB iPod Video by quite a distance.

My first thought about where to sell the iPod was eBay. I’ve never sold anything on eBay so I have no reputation there. I ask myself, “would I buy a $200 iPod from someone who’s eBay rating is 0?” and I think, probably not. Let’s face it, with eBay the size it is I’m a small small fish. I just can’t compete with someone with a reputation rating in the thousands.

As reputation systems become more pervasive I think we will run into more problems like this. I don’t plan on selling a lot of stuff on eBay (hey I’m a poor college kid so I don’t have very much to sell anyway). Without the ability to bootstrap from another source I’m forced to build my reputation via transactions or sales. That doesn’t work so hot since I’m just interested in a one-time sale.

What to do? Go old school. I listed it on KSL.com’s online classified ads. No reputation system. No feedback mechanism. Just like the paper version of the classifieds.

There is a cost to this. I had to give my address and home phone number. These are attributes that have value to me, and like I described last post, give me some reputation as each buyers knows I have something to lose if I misbehave, giving them an avenue of recourse.

A topic for another post perhaps; there is no explicit reputation system, but my reputation is most definitely being evaluated. It’s just instead of looking at my past behavior (transactions), people have to rely more on the metadata about the transaction. This is one difficulty of automating reputation calculations/algorithms. Sometimes it doesn’t matter so much that I say “I assert I have an unused iPod for sale” than how I say it. Instead of being about “what I’ve done” (past transactions) it’s instead “who I am” (metadata about me and a transaction).

This is one way local online classifieds have a leg up on eBay; face to face meetings, actual inspection of goods gives buyers and sellers lots of metadata.

The happy ending: I guess I priced it right, and expressed enough trustworthiness in my description that after listing it at 10pm last night it sold first thing this morning.

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.