Wisdom of Crowds
Wisdom of Crowds
For us old folks – yeah, those of us over 50. We knew how to do our due diligence. We just asked everyone in our community about the realtors, the butcher, the lawyer, the stock broker and we double check the stories at our church, service clubs and social gatherings. We could easily get by on a question such as, “Hey Hal, you know anything about Phillip Grady, is he a good guy, I mean can he sell my house and get a good price?” Or one like this, “Say, Bea – what can you tell me about Margaret? Is she a good stock broker? Do you think she knows what it takes to make a good investment counselor?
This is how it was done. We asked people we trusted to see if the person was good or not. We shared references for good professionals and yard workers. We shared the names of good baby sitters and domestic workers that did a good job and did not drink too much while on the job. This is how we did our due diligence we used our network of trusted friends to see if a person was good or not.
That is why it was so hard for a new person in town. No one knew who they were or if they were any good or even if they were good. If anything unusual happened in town, everyone looked at the new person to see if they were somehow involved. Why? Because what it was that happened never happened before this person came to town. I know some small towns in Ohio that unless you were second generation in the area – you could never do any work. One lady was so blunt to me she said that she would only buy – for example – insurance from me if I was taking over my dad’s insurance business.
But in 40 years, our demographics have changed our living and working environments have changed and then, of course, the Internet developed into what it is.
Our demographics changed in many profound ways. Women account for about 50% of the workforce. The workers enter the workforce later but are much more educated and have become highly specialized. We are having fewer children later in life and both parents are working and raising their children simultaneously. We used to have two to three employers in our career, now it is expected that we will have ten to fourteen employers in our career. And yes, there is the impact of the internet connecting everyone to everybody – not just across town, but across the globe.
So now we are faced with the prospect of working with people that are not in our community, or maybe not even in our state – but maybe even in another country. How do we know who we are doing business with? How do we – even as lowly but all powerful consumers – do our due diligence?
It seems – we do our due diligence just as we did 40 years ago. We ask our community. We ask our community on social media.
I began to see this when a client’s receptionist called in sick on a Monday morning, claiming she had been sick all weekend. However, a quick check of Facebook and her Twitter feed suggested otherwise. She had been at a concert, got drunk and continued on at local bar and “crawled in” (her words not my dramatic license) “at 5:30 am”. My client was not upset at the antics – he was upset about being lied to. As a fair man and no stranger to concerts – if she had called in and told exactly what happened – he would have laughed and had her make up the hours. But she chose to tell a white lie and was betrayedby her very own posts to social media.
I began to wonder whether social media could be a replacement for the old community network of usual suspects? Well, it seems so. If you are a member of Linked-In, Facebook, Twitter, Yelp you start to send out clues. Now, if you are a member of say eBay, Airbnb, Tinder, AD MORE, you are not just part of a community, your interactions within the community are rated, very publically by people you have encountered in either a social or commercial encounter. Your cleanliness, your responsiveness, you professional ability are rated and rated in a very public fashion.
Now it even seems that certain data mining or managing companies are mining social media to provide a data base to assess not just your voracity but your credit worthiness. This may seem a wild hair for us in the developed nations of those of us with a credit profile already in file. But it is not for the lenders trying to asses ‘creditworthiness’ of people in countries where there are no credit data bases as well as those lenders in the developed world looking to acquire new young customers that are the most likely to be credit worthy.
We have moved from churches to chat rooms, neighborhoods to net connections, from social clubs to social media – and it seems our ability to do our due diligence is still with us. The same social interaction, now online, helps us determine if someone is worth the risk or not. So how many of you would trust a new member to a community? How of you would trust a recent post to Facebook or Linked In – huh???