Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Wednesday, March 31, 2010

Unvarnished and the Economics of Antisocial Media

Let's talk about an interesting new startup for a sec: Unvarnished. It's an open feedback system, with a few notable catches. You can't delete bad feedback, and feedback is loosely anonymous (in the sense that it's untraceable to anyone's real-world identity).

The really big problem with Unvarnished is simple - so simple, the founders have completely and totally overlooked it. For the average person, the supply of bad feedback vastly exceeds the supply of good feedback. If you had perfect professional feedback, you'd be a CEO (or better yet, retired before the age of 25). So Unvarnished is inherently biased against the average Joe, who inherently has more negative than positive feedback - that is, after all, what being a mid-level professional means.

But wait, there's more. So much more.

Consider a hypothetical Unvarnished post about...Steve Jobs.

"Obsessive, megalomaniacal, abusive, control freak. Responsible for screwing up a major product that nearly led to the collapse of a major Silicon Valley company".

Sounds pretty bad, gives one pause. Except, of course, it gives us exactly the wrong information about the value of Steve to Apple. Jobs is the world's most valuable CEO, by a long way - but Unvarnished wouldn't give you much hint of that. 

Why would that post surface? What about Unvarnished's so-called democratic self-regulation? There isn't any, really. The "community" has no better information about the veracity of a reviewer than my goldfish does, and asking them to vote a reviewer up or down is about as meaningful as asking my goldfish to choose the bicycle he likes the best.

Asymmetrical information - and a massive oversupply of bads - inevitably breed massive adverse selection. Unvarnished is a breeding ground for adverse selection in feedback itself. The least accurate, most overly negative feedback will rise to the top, making hiring decisions even less efficient than they are today. 

Here's another, simpler, way to look at it. Unvarnished is a social Ponzi scheme - borrowing reputation from another, to amp up one's own (until one's own gets trashed). Those economics are so 20th century, it hurts.

Unvarnished is the endgame of the "social web". I'm going to mark it as the day the "social web" became antisocial. Increasingly, today's "social web" doesn't empower people. It empowers hate, exclusion, and polarization, to put it bluntly. That's as lame and brain-dead as what went on on Wall St a few years back: hurting others to extract value from them. Except, of course, Wall St actually made billions. Social media's as bankrupt financially as it is ethically and economically: a trifecta of lameness.

Count me out of this charade of faux sociality. You - investor, entrepreneur, banker, student, whomever - might want to rethink it too. It's time to build a better economy. And that sure ain't gonna happen by building miniature social Ponziconomies. 

-- umair // 6:14 AM // 15 comments


It's hard to know what unvarnished actually is because its not even up yet. And i'm freaked out about logging into a supposedly anonymous site with my facebook account.

Have you checked out DirtyPhoneBook It's the same concept but much more entertaining because it works around phone numbers.
// Anonymous Gillian // 6:42 AM

I'm not sure we can blame the Social Web for "empower[ing] hate, exclusion, and polarization".

It's like blaming a gun for crime.

It will be interesting to see if you are right. I mean right now the recommendations on Linkedin are generally ridiculous. I even saw one case of someone I know recommending someone else who they had fired ten years earlier. So a need for honest feedback is there.

Whether or not Unvarnished has put enough 'community regulations' in place to ensure it's not equally biased to the other side is something that is going to surface sooner than later because as you point out, its success is likely dependent on it.
// Blogger Leigh // 7:48 AM

"Count me out of this charade of faux sociality." - I completely agree with you. That said you can leverage social media to find the right people and information suitable to your preferences.

It might take a little research, but that's the fun part. Throughout my time traversing the Social Media landscape i've learned not to fall for meaningless relationships et cetera.

To me information is the "key" aspect of social and i find different perspectives from a broad range of the "right" people very interesting.

I'd like to leave you with this clip from YouTube, it might put a little smile on your face today :-)

The Social Media Guru:
// Anonymous Ahad Bokhari // 10:06 AM

Punish in private, praise in public.
Grows businesses. Augments society.
Thank you.
// Anonymous Anonymous // 2:57 PM

Ya...pretty sad.

Too bad Rypple isn't part of the broader discussion here, such a better service.
// Blogger Ethan Bauley // 4:10 PM

thx guys, interesting comments.

nb, leigh - the question is: are we better off making guns, or [insert constructive stuff here]?
// Blogger umair // 6:51 PM

Umair, would love to have a more nuanced conversation with you about what we're doing at Unvarnished.

Your reasoning is sound, but unfortunately, a lot of the assumptions you make in your post are based on missing facts that TechCrunch left out of their article. So you end up in the wrong spot at the end.

And you're incorrect that there's are supply issues with positive feedback versus negative feedback for the "average Joe". Just because I'm not CEO doesn't mean that I don't have plenty of strong feedback as a middle-level performer. This is not a binary outcome: A+ or F-. There is room for A, A-, and so on. Your post misses that.

Looking forward to changing your mind.
// Blogger Pete Kazanjy // 7:36 PM

I agree that Unvarnished is a bad concept, but there might be some nuggets there worth exploring in terms of collecting feedback on employees and our peers. LinkedIn and people's resumes remind me of how search engines used to work before Google. Search results were once ranked almost entirely based on data provided by the site itself. If you repeated the word "funny" enough times on your page, the engines assumed your site was funny. Google's innovation was using data from other sites to determine which sites were deemed funny... in the form of inbound links and anchor text. Untarnished will bring out the worst in people, but the idea of peer ranked resumes is an interesting one if handled in another way.

For example, suppose LinkedIn introduced a new feature called Kudos. Kudos would be a simple way for people to provide simple feedback in a somewhat structured format, but only positive feedback. For example, if I attended a meeting with you, I might submit some Kudos indicating that your presentation got a thumbs up and tag it with some positive words from a predetermined list of options (ex. the presentation was "creative" and "analytical"). If enough people submitted "analytical" Kudos to your profile, you would rank higher in LinkedIn search results for that skill.

Resumes need to evolve from something that we make up ourselves every few years when we're looking for a job to a living, breathing profile that's based on continuous feedback from our peers. The system for doing that just needs to focus on people's strengths, not their weaknesses.
// Anonymous Joe Lazarus // 8:47 PM

Interesting post, Umair.

Glad to see you back and posting at Bubblegen BTW.

So, first, I hear what you're saying but I don't really agree that there is absolutely no value in Unvarnished. I mean for all intents and purposes its like any other review site - somewhat useful, but better for acting as a decision making signal rather than some sort of definitive decision making tool.

That having been said, it's an interesting question you raise - Is this type of site, which leverages typical tools of the social web, and is set up to destroy, not create, value somehow representative of where the wider social web is at?

My answers to that are yes, and no.

Yes, because there are many social web apps that are built on old-school, value detroying thinking, that have their effect amplified through the power of the social web.

No, because this isn't the end-game of the social web, it's merely the end-game of dot-com thinking married with web 2.0 tools. There are a bunch of great startups working on creating real, scalable value from the social web and over time they'll come to the fore. Here's hoping they come through sooner rather than later.
// Anonymous Kim // 12:58 AM

Umair, you are missing some of the key high points of Unvarnished's premise. I was a participant in the alpha, so I have first hand experience with the way the site operates.

Let's take your Steve Jobs example. First, yes, Steve might get some bad feedback here and there from someone looking to burn him. But, he will also have generally positive feedback from the hundreds (if not thousands) of people who positively interact with him on a daily basis. Not only will the negative review be swamped out by the number of positive reviews, but Unvarnished members will also have a chance to assess the positive and negative reviews. That's right, the reviewers will be getting reviewed as well. So, when someone makes a negative (or positive) review, his/her reputation as a reviewer is at stake. Also, Steve, and all of his trusted colleagues would be able to comment on and score the negative feedback, assuring that any falsely negative feedback would be modded downward....the exact opposite of what you propose.

Now, on to the average Joe. I disagree that the average person is steeped in only negative feedback. I, personally, am a young, middle level financial analyst, who interacts with dozens of people. I'm sure that some of my interactions likely leave bad tastes in some of my client's mouths, while I believe the result in positive feedback and would warrant a positive review on Unvarnished. This isn't about black and white, + or - reviewing. It's about capturing the nuanced interactions that everyone has on a daily basis. People talk about and judge their co-workers in real life, with their own reputation at stake. This site allows people to do the same thing, except in a consolidated platform, so individuals know what is being said about them, and can respond, in kind.
// Anonymous Mike // 2:51 AM

Who thinks these things up? A site where you can leave feedback on people? And from a business model standpoint, looking forward to seeing how its going to be monetized, and further, how there will be any value creation to customers whatsoever.

This is like 1999 all over again in the era, except this time its hitting social media.
// Anonymous don // 3:36 AM

Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000

By Pete Blackshaw
// Anonymous Anonymous // 3:54 AM

A much more balanced and reasonable alternative exists: (full disclosure: I’m a co-founder). Here is our response to this announcement:
// Blogger Unknown // 12:50 PM


An approach from a more scientific principle, perhaps.

Any of this sort of systems (Wierner's cybernetics based feedback) - most of social web/web 2.0/interactive systems are - are bound to have negative as well as positive feedback which will cancel out each other in a manner as close to "reality" as possible.

So while I was not in alpha and don't have previous experience with any of those platforms (dirtyphone, ikarma, jerk, cowokers), I do have a knowledge of cybernetics, game and systems theories.

Unvarnished might as well be just fine, as fine as any such conceived system is bound to be.
// Anonymous Anonymous // 12:55 PM


Great to see you're still writing on this topic, as you covered our service Rypple a few months ago in the Harvard Business Review Blog.

I was excited to see the comments above reference the idea of Kudos, as we have already built what Joe Lazarus suggested!

Rypple is web-based software that makes it easy to give meaningful kudos, get useful feedback, and have productive 1:1 meetings.

Unlike Unvarnished, we believe that:

* We should all be able to control our OWN feedback, reputation, and professional development, as opposed to having our reputation built by anonymous providers we may have little or no relationship with.

* Public feedback should be via Kudos, where you can see who gave it and who received it, the commentary provided, and the context. The kudos you receive help to build your reputation in a valuable way.

* You should regularly solicit private feedback from the people you work with to understand how you're doing, but YOU control which feedback to share/make public.

There is definitely a growing trend among top performers to get continuous feedback and coaching from people they know, but when users lose total control of their reputation, and viewers have little knowledge or trust in the comments they read, no one wins.

David Stein
co-CEO, Rypple
// Blogger Unknown // 10:36 PM
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