I am one of the biggest fans of rating systems anywhere. I believe they add useful and easily digestible value to otherwise pedestrian data content, and help effectively deal with the "option overload," so well described in the book The Paradox of Choice.

However, I have recently run across two sites that depend heavily on ratings and user commentary, and walked away from both wondering if ratings systems automatically add value in every environment.

The first site was irresistible: called TheFunded.com , it lets entrepreneurs rate venture capitalists. Let's just say the process of asking people for millions of dollars to fund your dream and in most cases being rejected is a process that creates strong emotions. Various blogs written by and for venture capitalists quickly took strong exception to the site, claiming it was a pointless service: those who got funding tended to love those who funded them; those who were turned down were invariably filled with vitriol. There is truth to this, but there is also truth in the old saying, "where there's smoke, there's fire." What really gave me pause was that the commentary on the venture capitalists, both positive and negative, wasn't very actionable. There was little that entrepreneurs seeking funding could use to advance their cause.

I had a similar feeling when I visited the hot new legal directory site Avvo. It's an ambitious attempt to rate lawyers through a computerized assessment of "various factors" that the company does not reveal, coupled with the ability of consumers to post comments. Users posting comments are obviously going to be heavily influenced by whether the lawyer won or lost their cases. Expect no plaudits for a lawyer who worked tirelessly and well on a marginal case. And in legal specialties like trademark law, is there much to say at all? Don't get me wrong: Avvo is fresh, creative and could revolutionize how consumers find and select lawyers. But at the same time, computer-driven ratings, coupled with consumers who are more likely to rant and rave rather than express useful insights may drag the whole product down. We'll just have to wait and see how Avvo develops. The bottom line on ratings and user commentary is that to be valuable they need to be rational, and we need to tread cautiously in areas where emotions run high.

Labels: avvo, paradox of choice, rating systems, thefunded, user generated content