The Reputation Economy Book Summary - The Reputation Economy Book explained in key points

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The Reputation Economy summary

Name: The Reputation Economy
Rating: 3.6 (14 reviews)
Author: Michael Fertik and David C. Thompson

Michael Fertik and David C. Thompson

How To Optimize Your Digital Footprint in a World Where Your Reputation Is Your Most Valuable Asset

3.6 (14 ratings)

16 mins

Brief summary

The Reputation Economy by Michael Fertik and David C. Thompson explores how online reputation affects individuals and businesses. The book provides insights into the power of reputation and practical advice on how to build and manage it in the digital age.

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Entrepreneurship Success

Table of Contents

The Reputation Economy
Summary of 7 key ideas

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Key idea 1 of 7

What’s in it for me? Learn how everything you do on the internet affects your reputation.

Shopping online is great; instead of traipsing through shop after shop looking for what you want you can get it with one easy click. Yet there is a downside. When you buy something online, say a pair of shoes, you will be bombarded with shoe adverts for the coming weeks. This is because everything you do online leaves a trace.

And it won’t just be your shopping and browsing habits that follow you around. We are entering an age where your entire reputation, including your ability to get a job, will be affected by what you do online. These blinks will help you learn (and prepare) for this coming age.

In these blinks you’ll discover

why a traditional college education may soon be a thing of the past; and
why getting your next job may depend on your ability to please the machine.

Everything you do online is recorded, stored and analyzed to determine your reputation score.

Before the advent of the internet, people had a fair amount of control over how they presented themselves to the world. Today, however, such tight control is a thing of the past.

This change is partially due to the dramatic expansion of our data storage capacities. Previously, only major institutions, such as the CIA, the NSA and IBM, had the resources to store massive amounts of data. Then came the internet, and now anyone can store huge amounts of data for close to zilch.

For individuals, that means that their digital footprint, the trail of data they leave behind after surfing the internet (photos uploaded to Facebook, credit card transactions and ATM withdrawals), will be recorded and permanently stored by a motley of companies.

Furthermore, emerging technologies are making it easier and cheaper to analyze, quantify and draw conclusions from this data. And companies increasingly rely on data-analysis tools to discern patterns in their customers’ behavior.

Amazon, for instance, uses a system called Hadoop to find, among millions upon millions of purchases, patterns that allow them to make customized product recommendations. And LinkedIn uses a similar system to recommend “People You May Know.”

These systems organize the cascades of data via numerical scoring. And at this point, pretty much everything is being processed and scored.

So whatever you do online – each click of your mouse – is represented as a number. And many companies are plugging these numbers into an algorithm that computes a reputation score for individual people.

Pretty soon, reputation scores will be ubiquitous. In other words, whatever you want to do in the future, whether it’s getting a job or buying a house, you’ll first have to reckon with your reputation score – the sum of all your online habits.

Your reputation score will be updated instantly and used to predict your behavior in all areas of life.

Our digital footprint and digital reputation will become more and more relevant as technology improves. What’s more, the information we share online in the future will go public almost instantaneously.

For example, a surprise compliment from your boss on social media will instantly increase your reputation as a good employee. Accordingly, a grouchy Facebook comment will instantly decrease your score.

Inaccurate information can powerfully and permanently damage a digital reputation.

Imagine someone has a grudge against you and your small business. What happens if that person starts spreading lies about you all across the internet? Unfortunately, you can’t program a computer to censor such comments. No matter how advanced technology gets, computers will always lack the ability to distinguish fact from fiction.

And so false or inaccurate information about a company can critically damage its reputation. Imagine a competitor leaving fake negative reviews about your company on Yelp, or paying people to create fake accounts from which to write negative comments. By slowly destroying its reputation, they’d sabotage your company, one fake comment at a time.

Be proactive to change the conversation and secure a good reputation.

It’s easy to feel like giving up when your reputation hits a snag. But don’t despair – there’s a way to bounce back. The key is to be proactive.

It’s impossible to change what information is being collected about you, but you can control what information people pay attention to. There are a couple ways of doing it.

Digital reputation will have a huge impact on your career.

In the Reputation Economy, computers are increasingly making important decisions for us – for instance, who to hire or fire. This trend is called “decisions almost made by machine,” or DAMM.

As the term suggests, these decisions are made with minimal human oversight. Consider hiring: Many companies now use computers to screen job applicants. After all, recruiters are slow and expensive; computers, on the other hand, can make thousands of decisions each second, and they don’t need lunch breaks or paychecks.

Past performance and reputation will increasingly play a role in hiring decisions.

Hiring valuable talent is a challenge, since there’s no way for companies to know exactly how applicants will perform in a role. After all, the conventional approach to hiring, which relies on gut instinct and resume evaluation, followed by a personality-based interview, simply isn’t that effective.

This was proven by a study that asked a group of MBA students to choose between two candidates on the basis of traditional face-to-face interviews. The results were grim: These well-trained future managers selected the higher-performing candidate a discouraging 56 percent of the time.

The Reputation Economy will destabilize traditional education.

Although more and more people are going to college, employers have difficulty finding job applicants with relevant skills and training.

Why the discrepancy? Well, part of the reason students enroll in college is to signal to employers that they’re likely to be high performers.

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What is The Reputation Economy about?

The Reputation Economy (2015) explains how to optimize your digital footprint and establish a first-rate online reputation. The authors identify emerging trends and describe how you can improve your prospect of both professional and financial success.

Who should read The Reputation Economy?

Anyone interested in protecting their online reputation
Every internet user
Anyone who wants to be up to date on the latest trends in hiring

About the Author

Michael Fertik is the founder and CEO of Reputation.com, a pioneering firm dedicated to online reputation management. He also co-authored the bestselling book Wild West 2.0.

David C. Thompson is a lawyer and business executive. Previously, he was the general counsel to and chief privacy officer of Reputation.com.

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