Tag Archives: Trust

Aggregating user reviews across online services

In the offline world, you often don’t know the background of who you’re transacting with. To gain insight into this, you perform reference checks by asking people who you do know whether they know the person you’re about to transact with, and if so what their past experiences in dealing with that person have been.

Many online services allow for anonymity. This makes it more difficult to transact on such services than in the offline world.

However, an even greater share of online services, often based on real world identities, offer a more trustworthy environment for transactions than that provided by the offline world. They do so by aggregating and displaying the collective transaction reviews of a particular person for the viewing of future individuals who are considering transacting with that person. They effectively make available the references provided from people beyond your own network, and this makes it easier to reference check the person you’re about to transact with.

User reviews on sites like Amazon, Uber, and Airbnb are great examples of this.

The shortcoming of the user reviews made available by current online services is that these online services operate in siloes. When transacting on Amazon, you can only see the Amazon reviews of the person you’re transacting with. You cannot see the reviews of the same person on Uber. The same is true for other services.

So existing services miss the opportunity to reflect a more comprehensive and therefore representative view of the online trustworthiness of their users, new services miss the opportunity to jump start their service by reflecting the track record of their new users from the existing services that these users use, and individual users of one service either miss the opportunity to benefit from their good track record on other services, or are able to hide a poor track record to potentially abuse a new service.

This presents an opportunity for a company, likely new and independent but also potentially an existing company with a large number of reviewed users and user reviews, to aggregate people’s user reviews across online services, and make available this complete picture of an individual’s online trustworthiness.

A VC perspective on Turkey’s startup ecosystem since 2011

Numan Numan from 212, our co-investor in Insider, Hemenkiralik, and Hotelrunner, recently wrote back-to-back blog posts on his learnings from helping pioneer the venture capital ecosystem in Turkey.

Founded in 2011, 212 is one of the earliest VC funds dedicated to Turkey. This gives Numan a valuable perspective on what it takes to invest in startups in a young and fast developing ecosystem. In his posts, Numan identifies four key success factors including the importance of trust, adopting a pioneering attitude, resilience, and cultural understanding.

You can read the first post here and the second post here.


There’s a quote from Charlie Munger, Warren Buffett’s partner at Berkshire Hathaway, that states “When you get a seamless web of deserved trust, you get enormous efficiencies”. The corollary is also true. When you don’t have a relationship based on trust, you get tremendous inefficiencies because you spend as much time monitoring the accuracy of the statements and the performance of the person you don’t trust. Sometimes you can spend more time on this than on the actual work that you should be doing.

This quote is also very accurate in describing the relationship between investors and entrepreneurs. There’s a lot of information asymmetry after an investment is made, with the entrepreneur knowing much more about their company than the investor. If the investor doesn’t trust the entrepreneur, they can spend more time trying to stay updated on what’s happening at the company and cross-checking the accuracy of the metrics and financial information they receive than actually thinking about how to add value to the company.

Similarly, entrepreneurs may not trust their investor. If they believe that the investor won’t keep information confidential, they may not share it. If they believe that the investor is going to take advantage of their declining cash balance in their upcoming round, they can start fundraising too early and derail the company’s operational performance. In countries like Turkey which don’t have formal share vesting laws, if they don’t believe that the investor will release their shares as they vest, they may not accept an equity vesting arrangement which helps them just as much as investors.

In terms of solutions, legal terms which try to enforce trustworthy behavior do very little. For example, an investor may establish information rights in the shareholders’ agreement, but if an entrepreneur decides not to share information, there isn’t much that an investor can do in practice.

The only solution for investors is to back entrepreneurs whose character they trust. Similarly, entrepreneurs need to take money from investors who they believe they can trust. And deciding whether or not to trust someone is an art, not a science. Reference checks from people they’ve worked with in the past help evaluate whether you should trust someone to a certain extent, but for a reference to be valuable you also need to trust the person providing the reference. Sometimes they, not the person you’re getting a reference on, are the one who shouldn’t be trusted.

At the end of the day, I rely on my gut feeling about someone’s character as the key determinant of how much trust I have in them. It’s been a pretty good indicator so far.