Linked Out
: :
I have a business idea. I've even developed a name and working logo for the new venture...



Whattdya think? Okay, so I'm only joking (kind of) - but wouldn't it be cool? I'm sure you get the gist. Instead of allowing users to recommend one another within an extended professional network, users would also be able to anonymously censure one another thereby providing more candid and useful information to potential employers and/or associates.

If you've ever applied for a job, or if you've ever been the one doing the hiring, you know that an applicant's supplied "references" provides limited insight into the applicant's abilities or merit. Obviously, it is highly unlikely that an applicant would include references that might potentially provide information that would make the applicant appear an unworthy hire. The system is inherently flawed.

As of now, existing professional networks such as Linked In, only provide the ability for users to "endorse" other users. In my opinion, this system would work much better if associates within a professional network were enabled to anonymously tag one another with more meaningful information about a person's capability as a worker, their integrity and character, and their ability to work in a team setting. More useful is when a potential employer or co-worker is warned away from "bad" people by seeing whether or not a user has been "censured" by other users. That's where "Linked Out" comes in. This system would be most effective if users were only given a limited number of "endorsements" and "censures" that they could dole out, thereby preventing over endorsement or unwarranted flaming. Of course, the user being censored would not be able to see who is doing the censoring, and every user in the system would need to be validated by some additional process for this to really be viable.

Naturally, there is a risk that insular networks (networks of people which endorse each other with the intention of promoting those within the network) would attempt to erect barriers to censuring. To combat this behavior, a user would be allowed to censure users that are more than one hop away (i.e. not a part of a person's direct network). This way, the only option for a user to avoid being "censured" (or recommended against) would be not to sign up for the service at all. This would lend further crediblity to those users who have joined the network by the simple virtue of the fact that they have chosen to make themselves vulnerable to censuring in the first place.

I was reminded of this idea when I recently spoke to a good friend and fellow classmate at the University of Michigan, who just took a position with a VC firm in Palo Alto upon graduation. He considers himself fortunate to be working with some of the "good" guys of VC. He has since learned that, in his words, 80% of VC and angel investors are, well, let's just say "bad" guys. I've met a few VCs and angel investors in my time, some good and some bad, but the overall logic of the 80/20 split makes perfect sense to me. The venture capital industry is, after all, notorious for the type of coopetitive and cross-promoting behavior as described before. The VC industry is one of those "old boy network" industries that will inevitably undergo transformation as the exchange and availability of information prevails.

So how would that happen? Take a recent example from my own experience. A VC contacts me to conduct due diligence regarding a potential investment opportunity. So what should I say? Do I offer endorsement, do I censure? The "Linked Out" model would make the due diligence process much more simple. Even more, the other side of the table could benefit from this model too. That is, an entrepreneur looking for "good" money.

Now, if only I can raise some "good" money to launch this gem of an idea.

posted by Jake B. @ 4:49:00 PM