Thoughts on Series A

Today, we announced our second round: a $4m Series A financing. A big milestone in moving one step closer to our goal of enabling the next generation of web and mobile applications, by providing rich, structured data sets. While it’s great to have more capital to take Locu to the next level, I am even more excited about the group of people that have joined to support us in our endeavor. A few thoughts on the past few weeks of fundraising craziness and the why-we-chose-who-we-did further down.

We took our first VC meetings in February. There was a lot of excitement about our mission to “structure the world’s information” and the early traction we have in the local data space. Several firms brought us back for follow-up meetings with other members of their firm or network, cumulating in Monday partners meetings. About a month later, we had a number of term sheets in front of us. The following weeks, while investors were busy doing due diligence on us, I was equally busy doing due diligence on them.  The discussions with the founders of portfolio companies, board members and members of the ecosystem not only proved very helpful in the vetting process but are also enriching from a general networking perspective.

Here’s the list of our new Series A investors and a few reasons why I am extremely excited by our new backers:

Lead investor: General Catalyst. Founded in 2000, General Catalyst has been quickly rising to become one of the best VC firms in the country, with investments in ITA Software (Google), Kayak, AirBnB,  and many others. Most importantly, all partners are successful former entrepreneurs. Larry Bohn, who will be joining Locu’s board, led two software companies to an IPO as an entrepreneur and has an impressive portfolio as an investor that includes companies like Demandware, Hubspot, GoodData, BigCommerce – right at the intersection of the data space and e-Commerce & SMB technology. A perfect fit for Locu.

LowerCase Capital. LowerCase Capital is Chris Sacca’s investment firm. After speaking to a friend and founder of one of Chris’ portfolio companies about a year ago, I knew I wanted Chris to be involved with Locu. Chris’ bio is truly impressive and he is one of the nicest, thoughtful investors you’ll ever meet – every interaction that we had since our first met a few weeks ago has been extremely value-add. #Impressed.

Lightbank.  I was very curious to meet Eric and Brad, Groupon co-founders and founding partners at Lightbank, so flew to Chicago and took a meeting with them. Unlike most pitches, Eric cut straight to the chase and we spend the better part of the hour discussing market entry strategies and operational challenges. I was impressed by the energy of the team and what they have created in the last two years. Local is our first vertical and few people understand it better than them; Lightbank’s portfolio includes some great companies like Beachmint, Zaarly, OnSwipe and our MIT friends from E-La-Carte.

SV Angel. The firm led by Ron Conway and David Lee, is arguably one of Silicon Valley’s most prestigious early-stage investors. We didn’t get a chance to work with them during our seed, so we are more than excited to have them on board now.

I also want to use this opportunity to thank the whole team for the hard work that got us here. I am excited for the journey ahead.

Happy Easter 2012.

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10 hours into the Locu Easter Hackathon @ 9pm 
 

I haven’t posted in a while. We have had an amazing run with Locu since raising our first round last summer, building out the technology and product, signing up first customers.

Most importantly, I am proud of the whole team (#LocuMafia) and excited for what Locu will become over the next couple of months (and years).

Raising Money Isn’t About Raising Money

This blog post was first published on OnStartups.com – one of the best blogs for entrepreneurs – check it out if you haven’t seen it yet.

Our company has raised more than $600k in seed money over the summer. In a matter of a few months we transformed from a group of students working on what one notable Silicon Valley investor called a “class project” in early April 2011 to an eight-person company, with a unique technology, a clear value proposition and strong customer interest for our product. I’d like to share some highlights and lessons learned from our journey.

Back in April, we had been bootstrapping for about half a year, building our first prototype and some interesting back-end technology and learning a lot about our market. We also realized we had been working well together as a team and were all ready to commit full-time.describe the image

Testing the waters

One of our early inflection points was a team trip to the Bay area for a week in late May. We had been selected to present at a startup showcase and had also set up a few meetings with investors while out there. The four of us shared a double room at the cheapest hotel we could find, the Ramada Silicon Valley in Sunnyvale. It worked out perfectly: free WiFi, a good enough breakfast buffet and an In-N-Out down the street.

We went to almost all pitches that week as the whole team. While this is not sustainable for the whole fundraising process, I highly recommend it early on. It helped us grow stronger as a team and develop a common lens for feedback. Also, rather than insisting that our approach was the right one, we explored all possible directions to make sure we were not missing the bigger picture. After our daily debrief by the hotel pool, we would prepare for the next day. One night, Marek, one of my co-founders, built a prototype to test an idea that had come up during the day and that has now become an integral part of our product.

Learning

That brings me to learning. Looking back, these early meetings were invaluable. One thing that became clear really fast was that investors were much more interested in learning about the menu acquisition and data curation technologies we had been building than about our recommendation application. We had stumbled upon a potential solution to a big problem the local search industry had been battling with for years. Going forward, we built our pitch more around the technology and how it could enable a data platform for local business data and had much more success.

Network

A lot of people have asked me how many investors I spoke to and met with in order to close the round. You might have seen the Anatomy of a Seed deck by Brendan Baker who analyzes AppMakrs $1m seed round, involving 173 people and taking 130 rejections to get to 14 commitments. Our round was a bit smaller and we were fortunate to hit a few super nodes early on, but I still ended up talking to around 100 people in the process.

While I prefer meetings that lead to investments, there is thing to be said about the ones that don’t. Raising money is about building a network. A lot of people might be interested or intrigued by your idea but not end up investing for one reason or another. However, they might end up introducing you to potential business partners, clients or other investors. I talked to one potential investor and even though he did not end up investing, a month later, he emailed me and introduced me to a potential client.

Filter

At an early stage, it is important to surround your startup with people that can support you and extend you network in the areas you most need it. For us, we were targeting investors with backgrounds in data platforms, local, small business marketing, and the restaurant industry. AngelList turned out to be invaluable in the process of filtering. As Scott Kirsner from the Boston Globe recently put it, they are a true matchmaker between investors and startups.

A few words on due diligence: You probably expect your investors to do due diligence before investing. You should do the same. In a world of LinkedIn and AngelList, it is relatively easy to find people in your (extended) network that have worked with or can vouch for an investor. Even if it means delaying the closing of your round, don’t take money from investors you don’t think have the best interest of your business in mind or from whom you get a bad vibe.

Looking back, raising money was much more than just getting money in the bank. The process helped us to grow as a team, significantly refine our product and business model and most important of all, bring on investors on board that understand our technology, support our (ambitious) vision and will help us build a better company.

So you want to be an entrepreneur, eh?

This blog post is for people recently admitted into a MBA program who want to start a company post graduation. While there are many great blogs out there to help entrepreneurs and early-stage start-ups (for example, Dharmesh Shah’s blog OnStartups is an amazing resource), I hope to fill a gap where I saw one when I started at MIT two years ago.

This is not so much about entrepreneurship as it is about making the most out of graduate school to hit the ground running come graduation.

This post is by no means a guaranteed recipe for success. A note on the term ‘success’: I am proud of the progress we have made with Locu and while there are clear metrics that will show whether our start-up will be a success, there’s a word to be said about personal success. To me, this term is tightly linked to happiness (for an expert opinion on the topic, please consult my friend Jeff’s blog on happiness). And, while often stressed, I am happy.

About two years ago, I came to Boston to start my MBA at MIT’s Sloan School of Management. I had no idea about what would be the best approach to find a great idea and team to start a company (I later learned that team is often much more important than idea). Here’s an attempt to capture some of the key take-aways that in retrospect made my time at MIT worthwhile or – if unaware of them before – I would have found useful knowing when I started.

1. Find your niche 

If you are at a place like MIT, there’s a high risk you will be overwhelmed (like me) at first by the sheer quantity of ideas and projects available at your fingertips. Cross-campus lab classes (a good selection can be found here), conferences, meet-ups. There’s probably an entrepreneurship event almost every night. While introducing yourself  with “Hi, my name is Rene, I am interested in entrepreneurship” might not be a bad approach in the first few months, you should quickly find an area that excites you and try to learn as much about it as you can. I have heard similar advice from Ric Fulop, a Sloan graduate, when he came to speak to us in one of our classes. He had no background in batteries. He started reading and doing a lot of research, before reaching out to the top researchers in the field at MIT. He ended up starting A123 Systems with one of them, Dr. Yet-Ming Chiang, and the company went public last year.

I regarded my first semester at MIT as one big brainstorming session. At the time, there was no MIT Ideastorm yet, a great format Adam, Morgan and Slava came up with and which I hope will survive for generations to come. Going into my second semester, I knew I was most interested in emerging web technologies, such as linked data, semantic web technologies and big data, tackling some of the big remaining problems such as trust, identity, and data freshness. By then, I was spending a good third of my time on “the other side of campus” – at MIT CSAIL and the MIT Media Lab. Having been a passionate hacker in my earlier years, I was eager to catch up with the latest advances in machine learning and building my first django app.

2. Build your brand

During my second semester, my personal tagline evolved to “Rene – MBA / hacker – interested in semantic web, big data” or something like that. One thing led to the next and in May I was sitting across from Sir Tim Berners-Lee himself, pitching him the idea for a cross-campus, hands-on seminar to be called Linked Data Ventures (LDV). I don’t think Tim would have gone for a beer with me to brainstorm about start-up ideas but I got to know a lot of great grad students at that time who would. For a lesson on personal branding, look at what Miro and Tom have done with the MBA Show and how they are leveraging it for their startup.

3. Connect with experts in your field

A month later, I was in San Francisco, at the annual Semantic Technologies conference, learning, mingling with industry experts and pitching them to come to MIT that fall for LDV. I also interviewed some of them for a series on semantic technologies I wrote for the MIT Entrepreneurship Review. I started going to meet-ups and got to know a bunch of interesting people who helped me connect the dots between what I had read and researched.

On a more general note, being in grad school is an excellent excuse to meet with anyone in the world and I highly recommend it (as long as you do your homework and prepare for the meeting). Networking is a term that is often overused, but getting to know people who share some interest or passion with you, is a great thing.

4. Team, team, team

By the start of the third semester, I had been working on two fairly serious start-up projects and various other (not so serious) ones through some of the classes offered at MIT. I was excited about LDV and had recruited a few friends and people I wanted to work with to take the seminar with me. Our first team meeting was at the Muddy Charles and after five (or six) pitchers of Sam Adams, we knew this could be more than just a “class project”.

We were off to a slow start. It took us almost four weeks to find a name for our project, Goodplates, and we hadn’t written a line of code with only three weeks to go to demo day. However, we had spend a lot of time researching the needs of our potential users and had come up with a  unique approach to making trusted recommendations on a dish-level. On demo day, our app was fully functional (luckily all of us were able to code and not afraid to get our hands dirty with 4store and SPARQL) and we earned some praise from Sir Tim Berners-Lee, but more importantly, we realized we can work well together as a team and decided to move forward with the project.

5. Surviving

There will be a point in your journey where it’s all about surviving.  For a group of people to decide to work on a project full-time instead of staying in school or taking a high-paid job somewhere else, it often takes more than a good idea. It requires coming up with a plan to either raise money or make money – enough money to pay the bills and make it to your next milestone.

While many of our MBA classmates had already have accepted a job at that point and will be training for marathons, building up their alcohol tolerance at BHP, flying to Indonesia for fun, or perfecting the art of BBQing pork ribs, we had decided to go for it and were working hard to get our start-up off the ground. There’s a ton of  things that can catch you off-guard or go wrong (hey, it’s part of the fun) – things which contributed heavily to my sleep deprivation during the last weeks of my MBA. Buy me a beer at the Muddy sometime and I can tell you about some of them. You will also be faced with uneasy decisions such as : Should you go to Silicon Valley to meet investors or on a week-long sailing trip in the Carribean with your MBA classmates?  I can tell you the weather is nice in Palo Alto in May.

6. Escape Velocity

Bill Aulet first introduced me to the term “escape velocity”. He was referring to how the curriculum and special programs and events such as the MIT 100k competition (that reminds me to make a shout-out to my friends Ani, David, and Lindsay from Sanergy) are all aimed at giving entrepreneurs the best possible shot at succeeding. Bill and his team at the MIT Entrepreneurship Center supported us along the way and even gave us free office space right after graduation for the summer, while we were busy fine-tuning our pitch (Goodplates is now Locu), figuring out our business model, raising money, and building a kick-ass product. It couldn’t have been better. Not only was our office right next to the Dean’s office with a free supply of espresso, we also had a river view, which certainly helped in recruiting our first employees.

I plan to post more regularly going forward, for example, on how we raised money (spoiler: AngelList is great!).  I hope this post is useful. If not, at the very least I had fun writing and reflecting on two great years at MIT!

Kudos, Karma, Kommunity: Impact of Social Design Elements on Online User Engagement

Why do some online communities succeed while others fail? One of today’s biggest challenges is figuring out online user engagement. Rather than comparing average website visitor numbers, the really important question is how many visitors become regulars or even addicts – and can’t live without your service. Understanding and improving user engagement is key – not only does it enable viral growth of a community, but it also helps to better reap valuable monetization benefits from more effective online advertisement.

This blog post is based on a paper I wrote in Sarah Szalavitz‘s class on Social Design at the MIT Media Lab.  I start off by taking a quick look at the fundamentals of communities, decision making, and game mechanics. In order to compare engagement levels on community websites, I will create a metric based on Quantcast traffic frequency data. I will then look at the engagement levels on 22 different online communities and derive some key differences. Furthermore, I will conduct an in-depth analysis of two Q&A sites, Stack Overflow and Answers.com, using a simple game mechanics framework.

If you are interested in reading the whole paper, feel free to ping me.

How do Communities Work?

Group Size

In order to better understand how user engagement can effectively work in online communities, one first has to understand the basic mechanics of communities. Christopher Allen, wrote a comprehensive blog post in 2009 illustrating the various types of communities in which we co-exist:

  • Support Circle (3 to 5 people): consists of people one is closest to and would “seek advice, support, or help from in times of severe emotional or financial stress”
  • Sympathy Circle (7 to 20 people): this circle is “often made up of kin, but usually includes some peers as well”
  • Trust Circle (40 to 200 people): there is “some type of intimate connection” to people within this circle
  • Emotional Circle (around 300 people): often also referred to as “weak ties”
  • Familiar Strangers (>1,000 people): people we have very infrequent interactions or random encounters with

I will come back to the concepts of weak and strong ties and social network size in the section on how to influence people. An interesting experiment was published in the paper “Social Network Size in Humans” where Granovetter tried to estimate the average social network size in an experiment based on the exchange of Christmas cards. It turned out that the maximum network size averaged 153.5 individuals. Granovetter identified the following determining factors:

  • Passive factors (for example physical distance, work colleagues, overseas)
  • Active factors (emotional closeness, genetic relatedness)

The study suggests the existence of cognitive constraints on network size.

Individual’s Involvement in Groups

“In online communities, […] participation inequality power rule is very apt”, closely tied to the 90-9-1 principle: “1% of people create content, 9% edit or modify that content, and 90% view the content without contributing.” is what Wikipedia has to say about the 1% rule.

Exhibit 1: Community Participation Rule of Thumb

Source: Christopher Allen, Life with Alacrity Blog

Michael Wu has done empirical research (10 years of user contribution data, 200+ online communities) that shows that the rule is a great rule of thumb, but depends on the setup and type of community.

How to Influence People?

There has been a tremendous amount of research into how people make decisions and how these decisions can be influenced (I suggest the following books: How We Decide, Jonah Lehrer, Houghton Mifflin, 2009,  Why We Buy, Paco Underhill, Simon & Schuster, 2000,  Your Brain is (Almost) Perfect, Read Montague, Plume, 2007, Predictably Irrational, Dan Ariely, Harper Perennial, 2010).

What is most relevant to this paper is the question of how people can be influenced to engage in an online community, with a particular focus on the effect of the social design component.

With respect to this discussion, there seem to be two schools of thought: (1) Influencing through powerful hubs, frequently called Influencers or Mavens, and (2) Influencing through the masses, in a decentralized way.

Exhibit 3: Influencers versus Masses

Source: Fast Company Article, Is the Tipping Point Toast

Clive Thomson has recently asked in Fast Company: Is the Tipping Point toast?- challenging the theory people like Malcolm Gladwell and Ed Keller are supporting, namely that key influencers are critical to spreading news, influencing community. Central to their argument is a study done by Milgram (famously known as the Milgram small world experiment) which, apart from showing support for the 6-degrees of separation theory, also shows that key people (three friends, in the experiment) are responsible for the success of a letter delivery in a majority of the cases, leading Gladwell & Co. to conclude that these super-connectors are critical to the system.

Duncan Watts, on the other hand, repeated the small world experiment on a larger scale in an online-based experiment and found that super-connectors are not that important – only around 5% of traffic went through them. He concludes that not people but ideas matter: “If society is ready to embrace a trend, almost anyone can start one–and if it isn’t, then almost no one can”.

In Thomson’s article, Watt also compares trends to forest fires: “There are thousands a year, but only a few become roaring monsters. That’s because in those rare situations, the landscape was ripe: sparse rain, dry woods, badly equipped fire departments. If these conditions exist, any old match will do. “

More support comes from Paul Adams, the former social research lead in the UX team at Google who now works at Facebook, with a great presentation titled The Real Life Social Network.  Adams says that “the role of influentials is over-estimated” and “whether someone can be influenced is as important as the strength of the influencer”. Whether someone can be influenced depends on “what their social network looks like” and “what they have experienced before”.

How do these influencers compare to the super-users identified in the previous section? It is not entirely clear whether these two terms are interchangeable. While super-users are characterized by their high level of activity, influencers can be identified by analyzing the activity within the social graph i.e. who is talking to whom in a given community. Influencers are those that shape opinions and influence others through communication. Therefore, they may or may not be super-users at the same time.

Understanding Game Mechanics

A lot of research has been conducted into social games, gamification and how businesses can use it. A great source for an initial overview is provided on Gamification.org, a wiki for game-related knowledge.  The site lists the following game features as the key components when building a game:

  • “Activity feed” (to show players what is going on)
  • “Avatars” (unique representations of players)
  • “Easter Eggs” (the fun stuff: include intentional hidden messages, in-joke)
  • Instances (unique experiences outside the normal experience
  • Leaderboards (track performance, compare to others – dangerous – don’t scare of newbees, tell stories – social leaderboards “you and your friends” – missions built in)
  • Notifiers (feedback to users about progress, performance in game)
  • User Profile (all data about one’s activity)

Amy Jo Jim provides a different way to think about gamification: In her presentation she points out four particular elements that build on each other:

  • Collecting
  • Points
  • Feedback
  • Exchanges Customization

In a different talk, she makes a very important distinction with respect to points. They can take three different forms and functions:

  • Experience Points (earned directly for user’s actions)
  • Skill Points (interacting with the system)
  • Influence Points (assigned by other people)

Furthermore, to go into a little more detail, Gamification.org lists 24 different game mechanics, ranging from A like Achievement to V like Virality. The authors of the site have also identified 3 attributes:

  • Type (Progression, Feedback, Behavioral)
  • Boosts / Benefits (Engagement, Loyalty, Time spent, Influence, Fun, SEO, UGC, Virality)
  • Personality Types (Explorers, Achievers, Socializers, Killers)

Obviously, the title of this paper has engagement in it, and this type is by far the most important benefit and brings with it most of the other benefit i.e. if Engagement is high, loyalty, virality, fun will typically be pretty high as well.

Looking at the similarities between the different frameworks proposed in recent literature as well as identifying the key factors that I believe will be most relevant to user engagement in the context of online communities, I have developed the following simplified framework for gamification:

Exhibit 4: Gamification Framework

Later on in this paper, when looking at the case studies of StackOverflow and Answers.com, I will use this framework to point out the key differences between the two sites.

Measuring Engagement

As recently pointed out by Rick Webb in a talk in the Social Design lab at the MIT Media Lab, “engagement is very hard to measure”, there is currently no well-defined industry standard.

Current Metrics

Here are some examples of the metrics, Google Analytics, the leader in tracking web site traffic and providing analytics, provides:

  • Average page views per visitor
  • Time spent on site
  • Total time spent per user
  • Recency and Frequency (including frequency of visits, time since last visit)
  • Length and depth of visit
  • Bounce Rate

These metrics can be helpful; however in today’s world of Flash and Ajax, they might not provide good information value.

In particular areas, such as online publishing, there are a few other useful internal and external social metrics that can help measuring engagement, as suggested by John Byrne, BusinessWeek’s online editor, in an interview with Eric Ulken:

  • Internal Metrics
    • Number of Comments
    • Return commenters
    • Number of times emailed
    • External Metrics
      • Tweets/retweets
      • Diggs / Delicious saves
      • Inbound links from blogs

EROC Engagement Ratio of Online Communities

Not only are there no clear metrics for online user engagement, also a lot of the internal analytics data is proprietary, which makes it difficult to compare online communities.

Quantcast, apart from providing website traffic rank data, also offers a break-down of traffic into three different user groups: addicts, regulars and passer-by.  According to the website, addicts are the “hardcore segment of a site’s audience, who have 30 or more visits to that site in a month”, regulars are users that “frequent the site more than once per month but not as much as addicts” and passer-bys “have a single visit over the course of a month”.

In order to make the data easily comparable for different websites, I am constructing the following ratio:

EROC = [ 2 * Aa * Av + Ra * Rv ] / [ Pa * Pv ]

where

Aa = Addicts % of total audience

Av = Addicts % of total visits

Ra = Regulars % of total audience

Rv = Regulars % of total visits

Pa = Passer-By % of total audience

Pv = Passer-By % total visits

While somewhat arbitrary, EROC puts the following criteria into one simple number:

  • Addicts are more valuable then Regulars (using factor 2, can be adjusted based on monetization of addicts versus regulars and more general business model and industry)
  • Addicts and Regulars are more valuable than Passer-Bys
  • Passer-Bys should not only have a small percentage of audience but also a small percentage of visits

The higher EROC, the better the user engagement of a particular community website. However, it needs to be noted, that best practice EROCs can differ by industry, as some communities have higher interaction frequency than others by nature

Data and Analysis

While the data is not available for every website, I was able to collect it for 22 community websites, grouping companies in the following segments:

  • Social Networks I (defined by demographic focus)
    • Cafemom.com
    • Parents.com
    • Myyearbook.com
    • 4chan
    • Social Networks II (defined by interest focus)
      • Rottentomatoes
      • Seekingalpha.com
      • Stocktwits.com
      • Goodreads.com
      • Mapmyrun.com
      • Online Dating
        • Okcupid
        • eHarmony
        • Online Video Content
          • Hulu.com
          • DailyMotion.com
          • Metacafe.com
          • Online Q&A
            • Stack Overflow
            • Askeachother.com
            • Answers.com
            • Social Content Sharing
              • Tumblr
              • Wikia
              • Posterous.com

I have also included LinkedIn and Pandora as comparables.

The overall average for EROC is roughly around 1. A few sites stand out with very high EROCs: okcupid.com (2.97), Hulu (2.78), Tumblr (2.37). On the low end of the spectrum, there are metacafe.com (0.14) and answers.com (0.232).

A key take-away, as expected, is that there are severe differences in the EROC for the different categories. For example, online dating is 2.41 while for social networks II (interest focus) EROC is 0.67.

While certainly a small sample size, this could imply that online dating communities – based on the necessity to create profiles as well as people’s strong desire for interaction have a much higher percentage of users that are highly active. Within the online video content group, one can also see a difference which could be due to Hulu doing an amazing job in engaging users or just the fact that people watch television every day, but might only watch a movie once a month. Goodreads and rottentomatoes.com also have lower OCERs which again might be due to the fact that people consume at a much lower frequency.

In general, there might be different issues to consider when analyzing this type of data, such as user access via third party apps (e.g. in the case of Twitter, where a high percentage of users access the service via a third party app such as TweetDeck) or mobile app usage, which is not reflected in the data either.

Case study: Comparison of popular Q&A Sites

I decided to compare Stack Overflow and Answers.com as they are both in the same category of online Q&A, yet are very different from a social design perspective and also have very different engagement ratios:

Exhibit 5: Comparison of Stack Overflow and Answers.com

Stack Overflow

 

EROC = 1.288

Answers.com

EROC = 0.232

In the following sections, I will compare both online communities according to the gamification framework developed earlier.

I m a new user to both sites, so I hope I can bring an objective angle to the analysis, evaluating the sites from a first-time user’s perspective (which is an interesting perspective when trying to find out whether a site is able to easily engage new users).

Stack Overflow

I will briefly analyze the site along the key dimensions of my framework: User Identity, Actions, Social, Discovery, Feedback and Points.

User Identity

While there is a box for leaving a small comment about oneself, most people share very little information. Also the key information tags name, member for, seen, website, location and age are a small number compared to most other social networks. There is a very strong focus on stats, in particular reputation – the biggest number displayed on the page is the reputation score directly below the person’s avatar.

Also, the user profile not only features the raw score, but also indicates that the user has placed in the “top 10% this week” – providing a feedback / ranking  measure. What’s interesting here is the small time frame; it allows even new users to quickly rise up the ranks and ensures high frequency interaction with the website.

Further down on the profile page, the sites lists a user’s questions or questions he/she has been involved with. For each questions there are several stats: number of votes, number of answers and number of views.

Actions

Only way to build reputation is to ask and answer good questions (other people’s questions). There is a variety of actions that is tied to a minimum reputation score; i.e. new users have a limited set of actions and have to rise to a certain level to do certain actions (a commonly used game mechanic). A lot of these actions fall into the social category and will be discussed in the next section.

Here are some of the key actions:

  • Create posts (no reputation required)
  • Vote up
  • Flag posts
  • Comment everywhere
  • Vote down
  • Retag questions

Social

As pointed out before, a lot of these actions are of a social nature, in line with Stack Overflow’s vision: “you earn reputation from your peers, you the community’s trust – and will be granted additional privileges on Stack Overflow”. Similar to Wikipedia, Stack Overflow is a collaboration site – users can edit other users’ answers, all changes are tracked. Furthermore, there’s a chat platform where users can meet and group around particular topics (see Appendix).

One thing that’s interesting to note is that there is no integration with Facebook and Twitter for spreading messages or actions, something that is very popular with other social sites such as Foursquare. I believe it is a conscious choice by Stack Overflow, due to the particular use of the site by its users.

Discovery

There aren’t many surprise and or discovery elements, as far as I can tell (note: as a Stack Overflow novice, I might not have reached the level where these show up). One thing that could fall into this category though is the bounties. Users can also offer bounties for solving questions. They are effectively a certain fixed number reputation points which come out of their own account.

Feedback

The feedback mechanisms are very clear and direct by having other people voting questions and answers up or down.  In addition, the user that has asked a particular question can, after looking at all the answers, decided which one is most helpful and mark it as “accepted answer”. Furthermore, other users can suggest edits. Both of these actions are also rewarded with reputation points.

Points

When describing game mechanics earlier, I pointed out three types of points systems: experience points, skill points, and influence points. Stack Overflow is a perfect example of mastering the points system, tapping into all categories, yet putting a very strong focus on influence points. As pointed out earlier, the reputation score impacts what people can do on the site (see screenshot on the right); for example, the 5% of “talk in chat” translates into 20 reputation points.

Stack Overflow has a relatively simple leaderboard and a large collection of badges (>60 different ones ranging from A like Altruist to Y like Yearling) categorized into three main categories:

  • Bronze badge: “awarded for basic use” e.g. Commentator (someone who left 10 comments)
  • Silver badge: “awarded for long term goals” e.g. Epic (earned at least 200 reputation on 50 days)
  • Gold badge: “are rare”, “actively work towards these” e.g. Famous Question (someone who asked a question with 10,000 views)

For each badge, the number of people that currently hold that badge are shown. For example, there are currently more than 64,000 Commentators, more than 150 Epics and more than 6,000 Famous Question badges issued. Interesting to note, that while gold badges are supposed to be hardest to earn, some of them have a higher number than certain silver badges.

Answers.com (WikiAnswers)

As done for Stack Overflow, I will again briefly analyze the site along the key dimensions of my framework: User Identity, Actions, Social, Discovery, Feedback and Points. As before, all the relevant screenshots can be found in the appendix.

User Identity

A typical user profile has the username, gender, age and location in addition to some key stats:

  • Trust points
  • Contributions stats, including # of Answers, # of Edits, Organization, # of Questions, Community
  • Badges

I will talk in more detail about trust points and badges in the points section.

In general, I noted that most profiles have very little information. Also the navigation is poor; it took me a long time to find information about how to earn points, what the different stats mean and where the leaderboard is. Another difference to Stack Overflow is that most users- even the top users – have no profile pictures, giving the site a less personal touch.

Actions

In general the key actions are asking and answering questions. Answers.com overlays 14 different member roles, ranging from Bug Catcher to Wiki Influential Teen. For example, there is a Vandal Patrol with different tasks and positions; the group has a program coordinator by the user name of An8thing and one has to send an email to JoinVandalPatrol@WikiAnswers.com to join. In general, the Community Roles & Programs pages are overloaded and very difficult to make sense of as a first time user.

Social

Answers.com writes that “half the fun of participating in a community is the interaction with your fellow members”. Yet, apart from awarding Trust Points (see below), the options available for interaction are the message boards, discussion pages and the community forum. The various roles that are available are geared towards high-frequency users creating a divide between regulars and addicts that seems hard to bridge.

On top, Answers.com offers Facebook integration to “see your friends’ activity”.

Discovery

I wasn’t able to identify any particular discover elements. Due to the large amount of activities and roles available, users might feel overwhelmed and not very receptive for discovery elements anyway.

Feedback

Users can receive Trust Points (see below) from other users when they click on “recommend contributor” to reward that user for a good contribution. Compared to Stack Overflow’s sophisticated reputation system, Answers.com’s system seems much easier to game and not as effective, e.g. as trust points can currently not be substracted.

Points

Trust Points “enable you to vote for a WikiAnswers member whose contributions you think are worthwile and legitimate”. Trust Points can currently not be substracted.

In addition users collect points for answers, edits, questions and other interactions.

The leaderboard is much more complex than Stack Overflow’s. While it is intuitive to have an overall leaderboard, it is not really clear why leaderboards are necessary and useful for the particular categories (questions, answers, community).

Lessons Learnt from Social Design perspective

For a social design perspective, one of the big trends is the “shift from storytelling to storysharing”.  Sarah Szalavitz has been developing a strategic framework at 7Robot around the social design of systems using this shift “through choice optimization and behavioral economics”.

The above case studies of Stack Overflow and Answers.com have illustrated the huge impact of these techniques on user experience, which is directly translated into user engagement.  For example, Answers.com has very poor choice optimization (for example, it is still unclear to me which group I should join and which badge would be valuable to me) while Stack Overflow has done an excellent job in choice optimization (simple leaderboard, easy to understand system of badges, intelligent time horizons).

Getting game mechanics right matters! The case study of Stack Overflow versus Answers.com has shown how Social Design elements can help to successfully engage online communities. The proposed framework of breaking down the game into User Identity, Actions, Social, Discovery, Feedback and Points has proven helpful in understanding the key differences.

With respect to measuring user engagement effectively, the proposed EROC metric can help to more easily compare traffic frequency data across multiple communities, however falls short to take into consideration the various subtleties of different verticals and user preferences. More work has to be done in this field to provide better metrics to companies and analysts.

Quora – Quo Vadis?

Last week, the MIT Entrepreneurship Review published my article discussing the role of the interest graph for building the next generation of consumer apps. A few days after I had written the article, Google announced the +1 feature and Reid Hoffman gave a great presentation at the Web 2.0 conference where he defined Web 3.0 as data.

I also talked a little bit about Quora as a great example of increasing relevance. Today I came across the following great infographic about Quora by KissMetrics (see below). There are few interesting data points:

  • 160,000 active monthly users
  • $86m valuation (currently that would mean >$500 per active monthly user)
  • Strong growth in registered users: 150% from 12/10 to 1/11
  • Unique visitors stagnant at around 300,000 (1/11 – 2/11)
  • Top 5 topics: Startups, Entrepreneurship, Food, Science, Venture Capital

the wonderful world of QuoraKISSmetrics Web Analytics

Cool Infographic on Mobile Marketing

One half of all local searches are performed on mobile devices .. and other interesting stats!

Found at: http://bostinnovation.com/2011/03/25/the-state-of-mobile-marketing-infographic/

Reputation Bankruptcy – A Difficult Cyberlaw Problem

One of the most intriguing  projects I worked on this past semester was on reputation bankruptcy, as part of Prof. Zittrain‘s Cyberlaw class at Harvard Law School, together with Christine Ezzell and Jason Spingarn-Koff.*
Below a reprint of our proposal from the Harvard Law / Berkman Center Cyberlaw Wiki page.

Issues of online identity and reputation bankruptcy deserve to be called difficult problems: Eric Schmidt’s comment in a Wall Street Journal interview that soon “every young person…will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites” [1] stirred a heated debate [2](even though when interviewed for this project he asserted it was only a “joke”). The controversy raised in this area provided enough motivation for our team to take a closer look at the problem.

We start by providing some evidence of the importance of online identity and reputation, with a particular focus on looking towards the future and impact of reputation on the internet to future generations. We then dive into the recent scholarship and other proposed solutions, organizing the field using Lessig’s framework of Law, Code, Market and Norms [3] before presenting our proposed solution: a law, supported by code and norms, which we call the Minor’s Online Identity Protection Act. We are aware of the potential implications and concerns and present some of them in the following section.

Our solution will ultimately benefit both children and adults. We seek to provide better protection for children, when still minors, from any damaging content that either they or others post about them. Looking forward, we seek to protect adults from earlier “youthful indiscretions” or “hijinks” and other damaging records from when they were minors, analogous to juvenile record sealing and expungement.

Contents

Importance of Online Identity and Reputation

As the first generation to grow up entirely in the digital age reaches adulthood, what has already been identified as a difficult problem could have serious and damaging consequences. Already vast amounts of personal content have been digitally captured for perpetuity, and more content is added every day. As one New York Times article aptly observed, the Internet effectively takes away second chances so that “the worst thing you’ve done is often the first thing everyone knows about you.” [4] Others have noted that “[t]he Internet erases inhibitions” which tends to make people, especially young people, more likely to act out or behave badly online. [5] In addition, the viral dynamics of the Internet and search engines — which are able to quickly rank information based in part on popularity — may amplify reputation damage. Moreover, as major advances in facial-recognition technology continue to develop, there will be a stark challenge to “our expectation of anonymity in public.” [6]

Minors are particularly vulnerable to these advances because they are the least able to fully comprehend the ramifications of online behavior, and are unlikely to exercise the maturity and restraint that we expect of adults (even if such restraint is not always exercised in practice). Congress has already recognized the importance of protecting children in this regard by passing several pieces of legislation, the most relevant of which is the Children’s Online Privacy Protection Act (COPPA). One failing of COPPA, however, is that protection ends at age thirteen. While young children may be the least cognitively advanced, it is older children and adolescents who are more likely to have sensitive and damaging content posted about them on the internet (e.g. photos of the youth drinking or smoking with friends, or sexually charged material). More importantly, COPPA has proven ineffective even at shielding the age group it is designed to protect: studies show that as many as 37% of children aged 10-12 have Facebook accounts, and there are approximately 4.4 million Facebook users under age thirteen in the United States despite the fact that Facebook’s policy is in compliance with COPPA standards. [7]

The lack of effective protection for minors, coupled with the staggering numbers of minors who post private content on the Internet, begs for a solution. This youthful web-based content also raises serious implications for these people’s lives going forward; a recent Microsoft study reports that 75% of US recruiters and human-resource professionals report that their companies require them to do online research about candidates, and many use a range of sites when scrutinizing applicants. [8] While these reputational problems similarly exist for those who posted content as adults, the problem of online identity and reputation is particularly compelling in the case of minors.

The Recent Scholarship and Other Proposed Solutions

Law-Based

The primary existing law to protect children on the internet is the Children’s Online Privacy Protection Act (COPPA). The scope of COPPA is directed to the operators of websites and dictates: “If you operate a commercial Web site or an online service directed to children under 13 that collects personal information from children or if you operate a general audience Web site and have actual knowledge that you are collecting personal information from children, you must comply with the Children’s Online Privacy Protection Act.” This law, however, is quite narrow and does little in practice to protect children on the Internet. Children under the age of thirteen can simply lie about their dates of birth when creating accounts. As a result, there are few repercussions for content hosts and intermediaries who do not try to prevent even such blatant tactics, as long as they do not have actual knowledge. It should be noted though that the FTC has successfully pursued some financial penalties and settlements. [9]

Congress has passed additional laws to protect children in the online realm, with differing results. One such law, the Children’s Internet Protection Act (CIPA) requires that schools and public libraries employ certain content filters to shield children from harmful or obscene content in order to receive federal funding. The constitutionality of this law was upheld by the Supreme Court in the United States v. American Library Association[10] On the other hand, the Children’s Online Protection Act (COPA), which was designed to restrict children’s access to any material deemed harmful to them on the internet, did not survive its legal challenges. In upholding a lower court’s preliminary injunction, the Supreme Could found the law unlikely to be sufficiently narrowly tailored to pass First Amendment scrutiny. [11]

In state law, there are some existing tort remedies for privacy violations, though not necessarily geared towards children. For example, in thirty-six states, there is already a recognized tort for “public disclosure of private fact.” Essentially, this tort bars dissemination of non-newsworthy personal information that a reasonable person would find highly offensive. [12] Some state laws are more specific. For example, criminal laws forbidding the publication of the names of rape victims (for a discussion in opposition to such laws see Eugene Volokh [13]). Anupam Chander has argued in a forthcoming article, “Youthful Indiscretion in an Internet Age,” that the tort for public disclosure of private fact should be strengthened. (forthcoming in “The Offensive Internet” 2011 [14]).

Chander also recognizes two important legal hurdles to overcome in strengthening the public disclosure of private fact tort. The first is that the indiscretion at issue may be legitimately newsworthy. This raises serious First Amendment concerns. The second hurdle is that intermediaries are often protected from liability under the Communications Decency Act (CDA). Despite these obstacles, Chander persuasively argues that such protection is needed, particularly in the context of nude images, because the society’s fascination with embarrassing content will not abate. Moreover, he observes that an individual’s humiliation “does not turn on whether some activity is out of the ordinary or freakish,” but rather that common behavior can still cause significant personal damage.

Other legal proposals have also been put forward to curb the problems of online identity and reputation. One set of proposals is geared toward employers. For instance, Paul Ohm has supported a law which would bar employers from firing current employees or not hiring potential new employees based on their legal, off-duty conduct found on social networking profiles.[15] [16] Germany is also considering a law, to protect people’s privacy, that would ban employers from mining information on jobs from social networking sites such as Facebook. The law would potentially impose significant fines on employers who violate it. German government officials have noted, however, that the law could be difficult to enforce because violations would be difficult to prove. [17]

Meanwhile, Dan Solove has considered a legal proposal which would give individuals a right to sue Facebook friends for certain breaches of confidence that violate one’s privacy settings.[18][19] He finds problematic the fact that the law provides no protection when others wrongfully spread your secrets. He also believes that the United States should adopt a regime which would better protect people from such transgressions. [20]. In some other countries, such as England, the law does provide for broader protection where friends and ex-lovers have breached a duty of confidentiality. [21]

A more drastic idea, mentioned by Peter Taylor, would be to create a constitutional right to privacy or “oblivion” to allow for more anonymity. [22] Less radical, but still significant in its own right, Cass Sunstein has proposed “a general right to demand retraction after a clear demonstration that a statement is both false and damaging.” [23][24] This bears some resemblance to defamation and libel laws, but where those laws would normally only require that the speaker or publisher pay adequate reputation damages, Sunstein’s approach is specifically geared towards the removal of the material. In fact, his proposal is largely based on the existing Digital Millennium Copyright Act (DMCA) notice-and-takedown system for unauthorized uses of copyrighted material. [25]

On the other hand, some have criticized legal solutions to these issues that would in any way restrict the free flow of information. Eugene Volokh [26] has expressed concern about highly troubling “possible unintended consequences of various justifications for information privacy speech restrictions.” [27] Volokh observed that children, as Internet consumers, are not capable of making contracts and thus any assent on their part may be invalid. He did not, however, discuss the topic in any detail.

Code-Based

Legal scholars have proposed several code-based solutions to the problem of online reputation. Jonathan Zittrain has discussed the possibility of expanding online rating systems, such as those on eBay, to cover behavior — beyond the simple buying and selling of goods — to potentially include more general and expansive ratings of people. The reputation system that Zittrain describes would allow users to declare reputation bankruptcy, akin to financial bankruptcy, in order “to de-emphasize if not entirely delete older information that has been generated about them by and through various systems.” [28]

Alternative code-based proposals would allow for the deletion of content stored online via expiration dates, in an attempt to graft the natural process of human forgetting onto the Internet. A major proponent of this theory is Victor Mayer-Schonberger, who wrote about such digital forgetting through expiration dates in his book “Delete: The Virtue of Forgetting in the Digital Age”[29]. Similarly, University of Washington researchers have developed a new technology called “Vanish” which encrypts electronic messages to essentially self-destruct after a designated time period. [30].

A less extreme code-based option would be a “soft paternalistic” approach proposed by Alessandro Acquisti, where individuals would be given a “privacy nudge” when sharing potentially sensitive information about themselves online. [31] This nudge would be a built-in feature for social networking sites, for example, and could either give helpful privacy information to users when posting such content, or contain a privacy default for all such sensitive information that users must be manually switch on. Such a “privacy nudge” has been analogized to Gmail’s “Mail Goggles,” which is an optional paternalistic feature designed to prevent drunken users from sending email messages that they might later regret. [32]

Hal Abelson recently provided a useful framework to think about technology that could support information accountability [33]. In particular, the capability to allow users to “manipulate information via policy-aware interfaces that can enforce policies and/or signal non-compliant uses” is relevant, especially in the context of our proposal.

Ted Kang and Lalana Kagal, from MIT CSAIL, have proposed a “Respect My Privacy (RMP) framework.” [34] Their framework generates privacy and usage control policies for social networks, such as Facebook, and visualizes these policies to users. Semantic Web technologies [35] enable extensive functionality such as “dynamic definition, extension, and re-use of meta-data describing privacy policy, intended purpose or use of data.” RMP currently offers five restrictions: no-commercial (similar to Creative Commons [36] counterpart), no-depiction, no-employment, no-financial, and no-medical.

Market-Based

Some believe that reputation problems on the Internet are best solved by allowing market forces to determine the outcome, uninhibited by other regulations. [37] In the wake of concern over reputation online, a number of private companies have emerged to defend reputation. One such company is Reputation Defender, created in 2006, to help “businesses and consumers control their online lives.” [38] For a monthly or yearly fee, Reputation Defender claims it will protect a user’s privacy, promote the user online, or suppress negative search results about the user. [39] Companies like Reputation Defender do offer the average individual some measure of protection. However, there are several problems with such market solutions. The first problem is cost. Some features on Reputation Defender carry price tags as high as $10,000, which is far outside the limits of what an ordinary individual can afford to spend sanitizing his or her search results. Even the less expensive services appear to cost between $5-10/month, which may be more than many individuals can afford, especially for long-term protection. Another serious issue with this type of market solution is effectiveness. It is unclear which exact tactics such companies use, but for the most part they can only offer short-term solutions — which will face increasing challenges as advances in technology, such as facial-recognition technology, make it easier to find people online and harder to protect their identities. [40]

Norm-Based

It is also possible that reputational issues could be solved by the development of norms. David Ardia, for example, has argued for a multi-faceted approach, where the focus would be on ensuring the reliability of reputational information rather than on imposing liability. Moreover, he advocates for the assistance of the community – including the online community – in resolving reputation disputes through enforcing societal norms. [41]

Norms could also be as simple as asking others “Please don’t tweet this” when discussing sensitive or private topics, and expecting that norms will compel others to respect such requests. [42] As the public grows to better understand and become comfortable with technological advances, such norms could help to curb the problem of personal information being leaked online.

Another norm-based solution would be to simply educate the public about reputational and privacy concerns in the context of the Internet. This has the potential to be especially effective with children and youth, who will be growing with advances in technology but may not understand the full repercussions of their actions. One example of a norm-based solution is the European Union’s youth-focused education campaign, “Think before you post!” designed to “empower[] young people to manage their online identity in a responsible way.” [43]. After years of pressure, a number of content intermediaries have voluntarily adopted self-regulatory initiatives with a goal to improve minor’s safety on social networking sites in Europe. [44]Recent follow-up reports, however, have demonstrated that the success of the program has been less than resounding. Specifically, despite their promises to do so, a majority of the involved companies failed to implement some of the important changes, such as “to ensure the default setting for online profiles and contact lists is ‘private’ for users under 18.” [45]Moreover, after many companies added an avenue for youth to report harassment, apparently few of the companies ever respond to such complaints. [46] Thus, while educational and norm-based proposals are a step in the right direction, they may lack sufficient force to bring about their desired changes.

The “Respect My Privacy (RMP)” proposal, mentioned above in the discussion of code-based solutions, also has norm-based features. The authors note that “an accountable system cannot be adequately implemented on social networks without assistance from the social network itself ([47] in [48]). In other words, norms and best practices are required in addition to purely code-based solutions to provide a successful, comprehensive solution.

Proposed Solution

Overview

We are proposing the creation of a personal legal right to control content depicting or identifying oneself as a minor, limited by an objective standard, supported by best-practice code and norms for Content Intermediaries to annotate content depicting minors. The specific proposal and its scope are outlined below.

Minor’s Online Identity Protection Act (MOIPA):

MOIPA will take the form of a notice-and-takedown system. The requester will have to demonstrate that his or her request falls within the scope of MOIPA. We are envisaging a wide adoption by the leading Content Intermediaries to watermark content depicting minors, as described further below. A digital watermark will serve as prima facie evidence that the content depicts or contains identifying information about minors. Absent a watermark or other metadata (or in the event of a challenge to a watermark), the requester will have to provide other evidence proving the age and identity of the minor depicted or identified in the content in question (via government-issued ID / notary notice). Standardized simple notice forms would be available to fill out and send online.

It is important to highlight that MOIPA requires affirmative action on the part of the individual. It would be used only in very limited instances where there is an individual who feels very strongly about the content and all the required criteria is met. Nothing would be removed or deleted automatically (cf. Juvenile record sealing and expungement).

Supporting Code and Norms:

MOIPA goes hand in hand with a set of best-practice code and norms which will help to simplify the notice-and-takedown process. Recent advances in technology, particularly semantic web technologies, make it possible to digitally tag and augment all forms of content, even text, to provide additional information — such as identity information of the Individual Depicted, the Content Creator as well as the Content Sharer in addition to date/time information relevant and available. One of the solutions presented in the section above, RMP by Ted Kang and Lalana Kagal [49], was based on semantic technologies, in particular a custom-made ontology, to annotate content. As in their proposal, we believe a mix of code and norms is necessary to complement MOIPA to make it successful.

The content could either be automatically tagged to accounts identified as belonging to minors or require an affirmative check box (or both) if the content depicts or identifies minors (similar to “I have accepted the terms of service” or “I have the right to post this content” boxes)

Ideally, every piece of relevant content submitted to a Content Intermediary would have such annotations; this is particularly important in the context of the role of Search Engines, as explained below.

Objective Limitation:

MOIPA would also contain an objective limitation to make sure that only reasonable and legitimate requests are honored as well as to limit any potential abuses of the law. The limitation would also help ensure that MOIPA would pass First Amendment scrutiny if challenged. The limitation would be similar to that seen in many torts, including the public disclosure of private fact tort, which provides a cause of action where (among other elements) the disclosure would be “offensive to a reasonable person.” [50]

It is important, however, that the law remains relatively simple to implement and does not produce many prolonged legal battles that would waste time and resources. Instead, simple or streamlined ways of enforcing the objective limitation would be preferable. One potential option for the objective limitation that would also co-opt technology would be to crowd-source the determination to a number others (possibly a “jury” of 12) for their opinion on whether the content is objectively embarrassing, unfavorable, or offensive. More broadly, these outsiders could make a determination simply of whether it is objectively “reasonable” for the individual to request that the identifying or depicting content be taken down. A simple majority finding that the content is sufficiently embarrassing or offensive could suffice. Such participants would not be able to download the content and would be subject to an agreement not to share or disclose the content themselves.

Involved Parties

We have identified the following parties to be of importance when discussing our proposed solution.

  • Individual Identified or Depicted

The Individual Identified or Depicted is at the center of our proposal and our attention. MOIPA is a personal right designed to be available to an individual with respect to conflicting content about him or her as a minor.

  • Content Creator

The Content Creator is the person who creates content i.e. takes a picture and typically has the copyright over the content.

  • Content Sharer

The Content Sharer is a person who uploads content to Content Intermediaries. In most cases, Content Sharer and Content Creator will be the same person, but not always.

  • Content Intermediaries

Content Intermediaries span personal blogging platforms such as WordPress or Blogger as well as social networking sites such as Facebook and MySpace. Facebook is already using semantic technologies (without going into too much detail, Facebook has been using RDFa, a semantic web mark-up language to provide additional meta-data about its content [51]) and could easily expand the provided meta-data to cover privacy/minor information as suggested above. The same is true for popular blogging services such as WordPress or Blogger.

  • Search Engines

Search Engines, such as Google or Microsoft Bing, could play an important part in the successful implementation of our proposal. Google already uses RDFa to augment search results (for more information see, for example [52]). Similarly, Google could implement a MOIPA best practice directive which would, for example, exclude certain content related to minors, annotated in a particular way. Search engines, because of their vast power over what content people actually find and see on the Internet, are an ideal target for a law like MOIPA. Even a focus solely on search engines, although not our current proposal, is a possible alternative to be considered in the future, especially since it might be easier to implement than the suggested Notice-and-takedown system.

Note: some of these parties could be the same person in a given scenario

Scope

In our opinion, the scope of MOIPA has to cover all pieces of content that depict or identify minors. In order to satisfy First Amendment concerns, minors who are of “legitimate public interest” (i.e. celebrities, performers/actors, and possibly children of famous public figures) will be excluded from the scope of our proposal.

Identity-related content:

Within the scope of our proposal, identity-related content can take various formats, ranging from pictures, to videos, to text.

While a general discussion of Star Wars Kid [53] is not necessarily harmful to the boy, content that links Star Wars Kid’s real name to the footage is potentially harmful to him and moreover adds very little public value. While this content should not be removed or deleted automatically, he should have the right to have the identifying information removed.

Minors:

In our opinion, minors present a particularly compelling case for MOIPA. The age of 18 is a cutoff already recognized by the government and drawn in numerous instances. As a reference point, one could refer to the various provisions to wipe juvenile criminal records (e.g. expungement) [54].

With respect to the age barrier, four scenarios are possible, as illustrated in the chart below.

(1) Content about oneself and at the time of posting still a minor (younger than 18)

(2) Content about another minor and at the time of posting the poster is a minor (younger than 18)

(3) Content about a minor and poster is an adult at time of posting

(4) Content about oneself and at the time of posting the poster is an adult

alt MOIPA Scope

While our proposal clearly covers scenarios (1), (2), and (3), we believe (4) deserves further discussion. While it might be theoretically less compelling, it is practically easier to implement and more efficient, in our opinion.

There are certain other scenarios when MOIPA would not be available; for example, due to contracts that were entered into over the content in question. The chart below provides a framework for what is and what is not covered under MOIPA. The chart is designed from the view of a person looking for ways to remove content about him- or herself.

alt MOIPA Scope

Is a Legal Measure Necessary?

It is possible that the burgeoning problems of online identity and reputation will dissipate on their own in a natural fashion. Thus, it might not ultimately be necessary to respond with a law or other significant change, so we do not recommend the immediate adoption of our proposal. Instead, it may be worthwhile to observe the trends in hopes that less drastic yet effective solutions appear.

For example, some believe that society will adapt to the ramifications of the Internet and either adjust its (online) behavior accordingly, or such transgressions will become so commonplace that any negative impact will be lost. Much of the information available now, however, suggests that will not be the case. Since the birth of the Web in the early 1990s, the Internet has rapidly become indispensable to a broad cross-section of society — yet we observe few behavioral changes to protect personal content. If anything, users of all ages have grown more willing than ever to share their private information, personal photos, and more. Yet our sensibilities to social and cultural “transgressions” have remained largely unchanged. Employers continue to conduct Internet and social network research on prospective (and current) employees, and then make hiring and firing decisions based on that information. The public has not grown to accept these circumstances as normal: embarrassing situations continue to be embarrassing and can carry severe consequences, seemingly no matter how universal they are or how many times similar conduct occurs (see, e.g. Chander’s discussion on whether “society will become inured to the problem” [55]). Ideally, society would evolve and adapt to the changes naturally, but so far in this area there has been no significant change. Moreover, children and adolescents are probably the least likely to pick up on these social cues and to understand the full ramifications of their online behavior. Our primarily legal-based solution is thus a possible avenue for government to protect the online identity and reputation of minors absent any other meaningful changes.

Before adopting such a law, which carries some significant ramifications of its own, some time should be taken to see if other solutions will appear. But at the current time such solutions seem unlikely. For example, at present there is no real pressure on content-hosting platforms or search engines to adopt any code-based or norm-based solutions, and there is no reason to suspect that they will spend time, money, and other resources to voluntarily adopt any protective measures that are not required (notably, even with the pressure from the European Union’s efforts to protect youth’s privacy online, more than half of the companies involved in that effort failed to follow through on their promises [56]). To the extent that companies such as Reputation Defender exist to solve these problems, they are problematic in that they are (i) limited to only those who can afford them, and (ii) cannot offer full protection because they lack any real power or authority over the sources. Thus, absent any unexpected and meaningful changes, the MOIPA proposal is an effort to adequately protect the most vulnerable segment of the population and ensure that youthful mistakes do not forever haunt an individual.

Implications and Potential Concerns

The First Amendment

Any law which restricts speech or expression raises important First Amendment concerns. In relevant part, the First Amendment reads: “Congress shall make no law… abridging the freedom of speech.” [57] This prohibition has been interpreted to allow restrictions on various narrow and defined categories of speech [58] (e.g. obscenityfighting wordschild pornography). MOIPA does raise certain First Amendment concerns, but its objective limitation and exception for minors of legitimate public interest, coupled with the state’s compelling interest in protecting the well-being of minors, should be sufficient for the law to survive constitutional challenge.

The Supreme Court has long recognized the well-being of minors as a legitimate and even compelling state interest, permitting legislation in this realm even where constitutional rights (including First Amendment rights) are implicated. For example, in Globe Newspaper v. Superior Court for Norfolk County, the Court expressly acknowledged that the interest in “safeguarding the physical and psychological well-being of a minor is a compelling one.” [59] Moreover, in the context of regulation of child pornography, the Court observed: “we have sustained legislation aimed at protecting the physical and emotional well-being of youth even when the laws have operated in the sensitive area of constitutionally protected rights.” [60]

The Supreme Court has also required that such regulations on speech and other constitutional rights be narrowly tailored to the interest such that they are not unnecessarily broad or restrictive. [61] In excepting content on celebrity minors or other minors that fit into the category of legitimately newsworthy, we have aimed to tailor MOIPA such that it is not overly broad. In addition, the objective limitation – resembling many state public disclosure of private fact torts – further tailors MOIPA so it is no more broad than necessary to shield minors in instances deserving protection. The objective limitation also curbs potential abuses of the law. Otherwise, MOIPA could be vulnerable to abuse as a legal lever for personal grievances. For instance, to the extent that violating MOIPA may be grounds for a civil lawsuit, one could imagine a scenario where a minor girlfriend breaks up with a boyfriend, and then threatens a lawsuit if the ex-boyfriend does not scrub all records of her from his social networking sites. Likewise, if content intermediaries shared liability, lawsuits against Facebook could become commonplace. The objective limitation can thus also serve to limit the ability of the individual from seeking judicial remedies and avoid any potential undue burden on the justice system.

Furthermore, it is important to note that the scope of MOIPA only covers the identifying or depicting information or content. Only that content which specifically identifies or depicts an individual would have to be removed (e.g. a person must only redact the minor’s name from a discussion, while the rest of the discussion would be outside the reach of the law; one can blur, crop or cut the minor’s image from a photo or video). Thus, any content not related specifically to the minor’s identity would remain untouched by MOIPA. This narrowed focus protects the identity of the minor while allowing important First Amendment discussion and expression to continue.

Technical Limitations

In theory, the use of semantic web technologies to annotate content would be sufficient to provide the necessary identification. However, people might scrape content or repost pictures. A combination of both semantic web annotation technology and digital watermarks might therefore offer better protection. However, as with all technical solutions, loopholes will persist (for example, someone taking a picture with a camera of a computer screen and posting that picture).

There is also a question to be raised whether the proposal would result in an abuse and/or overuse of the digital watermarks and metadata. We don’t see any strong evidence for that, however, given the well-defined scope of the proposal and the fact that the watermark only creates a rebuttable presumption. Were this to become a serious or pervasive problem, it would also be possible to include a misuse clause whereby if someone repeatedly misused or abused the digital watermarks, they could lose their takedown rights under MOIPA.

Notice and Takedown

The notice-and-takedown system should not require payment to utilize (unlike the DMCA) — the right to control should be available to all. Otherwise, MOIPA could result in a social imbalance where the most well-off have the most “clean” records, or are more likely to engage in “youthful indiscretions” knowing they can make corrections later. The cost of cleansing a reputation is one of the primary concerns with market-based solutions, such as Reputation Defender.

In general, takedown notices could be sent to whatever contact information is provided for a given website, content intermediary, or search engine. To properly implement an efficient and effective system, it might be prudent to require sites to list a MOIPA-designated agent (similar to a DMCA-designated agent; in fact, such an agent could serve both functions) for sending takedown notices.

Impact for Content Intermediaries

MOIPA would have a significant impact on content intermediaries, such as search engines and social networking sites, who are significant aggregators of content posted by or about youths. A central question is who is responsible for what? Does an intermediary like Facebook have the same degree of liability as its third-party partners who create apps and make use of Facebook data? There will be advantages and disadvantages of MOIPA on content intermediaries, including:

Advantages:

  • Public goodwill (parents might feel more comfortable with children using the site)
  • Gain additional insights from enhanced user/content meta data
  • Potential new market for content management systems: i.e. search, track, and delete material across the Internet

Disadvantages:

  • Penalties for violating MOIPA?
  • Could databases and archives include references to deleted data? i.e. write “removed”?
  • What if aggregators include copies of photos that lack metadata?
  • Differentiate liability of main intermediaries and third-party app makers?

As we consider the effects on intermediaries, meta-data tags for material about minors might have an unintended consequence: encouraging new marketplaces for such material. For example, it may be relatively easy to design an aggregator that could compile photographs of minors then sell this material to third parties for whatever purposes. One application would be a company that compiles photos, then contacts the featured people and requests payment for scrubbing the photos from the Internet (issuing and managing notice and takedown requests). A more ethically dubious version of this would be a service to spot embarrassing photos (perhaps a crowd-sourced GWAP-style game to enlist taggers of the most humiliating material) and request payment for scrubbing them. These situations are purely hypothetical, yet such unintended consequences should be factored into the design and implementation of MOIPA. By allowing for the personal legal right to be exercised without any fee (or costly judicial proceeding), and attempting to simplify the notice-and-takedown system to a brief online form, we have aimed to address these concerns, but still recognize that no system is without its imperfections.

Effects on Behavior of Minors

To insure that MOIPA has a net social benefit, it will be important to educate minors about best practices for posting and removing content now and in years to come. One may assume that if minors have seen and heard about the reputational damage inflicted on those who post material with reckless abandon and are well-educated about the MOIPA response, they will be less prone to posting “risky” material — especially about other minors — out of concern that they may eventually need to remove it years later and could even be subject to legal action if they do not. Yet it’s also possible that new protections afforded to minors’ content may have the opposite, unintended consequence: lowering inhibitions and promoting even more risky behavior online. Given their ability to retract photos and text later, teenagers may assume they have a temporary “free pass” to post whatever they wish. Perhaps the deciding factor will be the eventual ease or difficulty of managing material about minors. Youths may be least inhibited if a commercial content management service (yet to be invented) allows posters to easily search dates and friends’ names and remove hundreds of offending images with a few clicks. Absent such a service, minors should be educated about the needless effort that will be required of them if they share large volumes of risky or unfavorable content about themselves with the intention of tracking it down and trying to have it removed later. Moreover, the objective limitation is such that they are not guaranteed to have the material removed even if desired. Overall, many lay people (as with most laws) will probably be largely unaware of or disinterested in MOIPA unless they have serious reputational issues linked to content about them on the internet. Even among those who are fully aware of their rights under MOIPA, most will probably be unwilling to exert the effort to locate instances of such content and initiate a takedown, in part because much of the content about minors will not be so damaging as to induce them to utilize (or to qualify for) MOIPA’s benefits.

Implications for Adults

A challenging situation is raised by adults who post material about themselves from when they were minors. Should this material be protected? Theoretically, it’s more difficult to justify protecting this material on moral grounds (as society holds adults more responsible than youths for their actions), but on a practical level it may be necessary to extend protections to any material about minors — regardless of when it is posted. This is largely because content can get copied and reposted on many other sites so that it can be hard to follow the trail of content to find when, where and by whom it was originally posted. To the extent that discovering the original posting information of content could lead to lengthy or complicated factual investigations, it goes against the simplified aim of the notice-and-takedown system.

Given the potential liabilities of posting material about minors, it’s possible that this law would have a chilling effect: discouraging adults and institutions from posting any materials about minors. For example, school systems may be reluctant to post class photos — out of concern that alumni may issue notice and take-down requests to remove themselves from group pictures, forcing the school to either remove or digitally alter the photos. For a single group picture, one can imagine a steady stream of such requests over years and decades, so that the school is forced to progressively remove faces until only a few children remain. Given hundreds of class photos, the task could become daunting. Alternately, it would be far easier (and less expensive) for the school to prohibit the posting of all photography, which could have a detrimental effect on the students and historical records. These potential concerns are contemplated by MOIPA’s objection limitation, however, and it is highly unlikely that banal photographs such as class photos from school would warrant an actual takedown of the material. It is so unlikely that most people would probably recognize this fact and not send a notice in the first place.

Another implication for adults is that parents and guardians might seek to invoke the law on behalf of their children. For example, in the school photo scenario above, one can imagine a mother who does not like the depiction of her 5-year-old son and is empowered to take action against school. Or, more broadly, an over-protective parent requests that photos from birthday parties be removed from a friend’s Facebook site. Although it is hoped that before resorting to MOIPA parents would first simply ask the friend to remove the offending photo, as would probably occur absent the law. MOIPA is intended as a resort for those with a real reputational grievance; it is not intended to — nor is it likely to — replace social norms. Nevertheless, any negative impact of such a parental response is again tempered by the objective reasonableness limitation in the law. School photos and ordinary birthday party photos would be very unlikely to satisfy all of the takedown requirements.

Relevant Sources for Further Reading

  • Discusses the implications associated with how the web takes away “second chances” such that “the worst thing you’ve done is often the first thing everyone knows about you.”
  • Supports a strengthening of the public disclosure tort while recognizing two principal legal hurdles: (1) the youth’s indiscretion may itself be of legitimate interest to the public (newsworthy) and (2) intermediaries can escape demands to withdraw info posted by others because of special statutory immunity.
  • Suggests that intermediaries who demand an individual’s identity on the internet “ought to consider making available a form of reputation bankruptcy.”
  • Proposes a “Respect My Privacy” framework focused on using code to display privacy preferences in order to make users more aware of the restrictions associated with shared data and relying largely on social norms for compliance.
  • Argues that the focus should be on ensuring the reliability of reputational information rather than on imposing liability and advocates community governance.
  • Finds that “[t]he possible unintended consequences of various justifications for information privacy speech restrictions… are sufficiently troubling” enough to oppose them.

* We thank Anna Su for her input

Couch-Surfing A Web of Trust

Short-term apartment rentals, rooms for rent, couch-surfing activities are increasing in volume as the internet is making it easier and easier to find a “match”. While creating a search-able, easy-to-use market place is no longer a technical hurdle; establishing reputation and transactional trust remains a problem.

Some of the more successful start-ups in the space include AirBnB, MetroFlats.com, Roomorama and iStopOver.  CouchSurfing.org, on the other hand, has been around for a long time (in internet units – it was started Jan 1, 2004). For those of you not familiar with the project, it is described as a “free, Internet-based, international hospitality service, and it is currently the largest hospitality exchange network“.It has more than 2 million users in 245 countries. In comparion, AirBnB was created in 2008 and has “50,000 unique listings available in more than 8,000 cities and 167 countries” according to Crunchbase.

CouchSurfing.org Study

I recently came across an interesting paper by Debra Lauterbach, Hung Truong, Tanuj Shah and Lada Adamic from the University of Michigan titled Surfing a web of trust: Reputation and Reciprocity on CouchSurfing.com. It analyzes 666,541 users with 1,541,398 connections between them.

Key take-aways:

  • Importance of Reciprocity Principle: active participants take on the role of both hosts and surfers; for about one third of them “one couch can be reached from any other by following previous surfs around the globe” – as the authors note, this is “in contrast to other online communities [e.g. Q&A sites] where the core may comprise only a few percent of users, with the majority either exlusively asking or answering”
  • Vouching as Key Component of the Reputation System: based on the following factors, ordered by importance: level of friendship between two users, overall experience from hosting / surfing, how two friends met
  • Are Vouches Given Too Freely? The paper suggests so: “about a quarter of all edges that can be vouched are, as are a majority of highly active users”

The study confirms that when it comes to online trust and reputation, “friendship” is not a yes/no question as Facebook might suggest, but rather has various layers. What couchsurfing users basically do is annotate their social graph to reflect different levels of trust. Also, with respect to the truth value of vouches, the system might not be designed optimally – vouches are public. As the authors note, “it can be awkward for friends to not give or reciprocate a vouch, even if privately they have reservations about the trustworthiness of the other person”.

The Economics of Online Peer-to-Peer Rentals

In previous blog posts, in particular in Entering the “Golden Age of Graph Innovation”, I have talked about the (potential) power of our (online) social graph in various situations. In a lot of my examples, the companies mentioned have simply taken a real-world situation and made it available online, often leveraging the power of Facebook’s social graph API. The result is often-times much more powerful than the real-world basis, mainly due to the instantaneous speed of information transmission and transparency of information.

Clive Thompson from Wired recently wrote a great post on peer-to-peer renting. Peer-to-peer renting is a particularly good example of how accessible online social graph data creates a much better experience than could have ever been achieved in the real-world world. As Clive notes, “peer renting and sharing is, of course, an old idea. But it never took off before, for logistical reasons: It was too hard to connect millions of renters to owners“. The web provides the platform and modern peer-renting services, such as Zilok, are basically like modern-day Ebays, electronic marketplaces, with location- and/or social graph awareness. Other examples of peer rentals sites that quickly come to mind are AirBnB (apartment/house rentals), SharedEarth (gardeners and landowners), or Boston-based SwapTree (to swap DVDs, books).

While certainly nice for consumers – imagine not to have to buy a $300 power tool for a single use, or, on the other side, making a few extra bucks renting out your lawn mower every other weekend to your neighbors – the question arises:

Will peer renting services ruin producers?

We can probably find an answer by looking at a situation which provoked a similar question in the past: libraries. When libraries where once becoming popular, people asked whether the renting/sharing of books enabled through libraries would ruin book publishers. Hal R. Varian analyzes and derives a framework for this in his paper Buying, Sharing and Renting Information Goods. Without going into too much technical detail, Varian basically provides three ways in which markets for sharing can lead to higher profits (for producers):

  1. When the transaction costs  of sharing are lower than the marginal cost of production
  2. When the user only wants to use the item once i.e. the “utility of ownership is not much larger than the net utility of sharing”
  3. When there are heterogeneous tastes i.e. there are parts of the market that would otherwise be un-/under-served

For the peer-to-peer renting markets described above, the first point is typically full-filled. The internet has significantly decreased the transactions costs, making even the sharing of low-value items worthwhile. The second point is also full-filled in most situations; also, as sharing for certain goods becomes easier and cheaper, the utility of ownership for these goods will also relatively decrease as a result. The third point is not always given, but one could definitely think of scenarios where it applies as well, such as certain types of gardening equipment which certain groups of consumers would never consider to buy but happily rent for a low rental fee. While the total number of users for a certain good increases, total consumers’ willingness to pay is expected to increase due to the ability to generate rental income. Whether producers will simply be able to increase sales volumes or whether there will be price increases for certain goods, will depend on the peculiarities of each market.

In conclusion, online peer-to-peer rentals can be very valuable to consumers and in most cases do not reduce producer profits.

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