People believe what they see in search, whether it’s true or not. This affects how people within the herd react, how they feel about a startup, and whether they invest.

Behavioral Finance: Search to Manipulate the Herd

People tend to mimic the actions of the group whether those actions are rational or irrational. It’s called herd mentality. Stock market crashes are big examples. Manipulation of search results for startups a smaller but more common example.

If a startup is of dubious value but enjoys search results reflecting a unicorn in diapers, it’s valuation can increase because few people fact-check search results. The opposite can also be true. A stellar startup with can under perform simply because Google arranged search results just-so.

Put simply, people react to bad things online because of something called a “negativity bias“. We tend to react psychologically to negativity than we do positivity. Search results react to people’s actions (something we at Reputation X call user-intent). Thus, negative search results tend to rise. This can not only kill a startup, it can be used to kill a startup.

Dogs Write the Content

There was a time when it was more difficult to manipulate the narrative. Today, “on the internet, no one knows you’re a dog” is the rule of the day. Most people get their content the same way, through many platforms that are all dependent on third-party content of dubious reliability. Some of the more vicious dogs know they can drive search behavior, and they do.

Agents of Darkness Manipulate Search for Gain

Sitting down? PR agencies exist whose sole purpose is to sink the reputations of people and companies. A negatively spun story is carefully placed. Then supporting evidence is also placed. Flimsy citations are embedded and the article gets juiced with aggressive SEO. Its sole purpose to deflate public perception before an important company event. Yep, it’s true.

Political Parties

Political parties secretly buy hundreds of domains readying content and commentary to drive audience toward planted negatives about rivals. A European political party once spent four years buying domains and developing content for that very purpose.

Governments

The NSA has been involved too as was exposed by Edward Snowden via the Joint Threat Research Intelligence Group. Manipulation of the herd by altering content and search results is done by governments, politicians, corporations, hotels, and even startups.

Startup vs. Startup

Venture and equity firms know that automated bots are frequently used to funnel fake traffic to websites with the purpose of inflating their true audience numbers and IP logs must be checked s part of the due diligence process. Reviews are engineered too; these are more difficult to spot. Stories are planted, journalists paid off – again, tough to spot if done carefully.

But startups can quietly sink their competitors the same way boutique hotels destroy the reputations of larger hotels nearby to gain market share. It starts out as a bad review or two, and eventually can mount to full blown negative content and SEO campaigns.

Startups are More Vulnerable

I don’t mean to be a downer here, but the pursuit of success breeds competition of the darkest type. Startups are most vulnerable because the strength of their online brand doesn’t yet have the ability to thwart attacks by competitors seeking advantage, or VC doing whatever they can to drive down valuation before a planned purchase.

A single teenage misstep by a startup founder, though long buried, will make a dramatic reappearance just before a funding round is about to close. Reviews will suddenly start to slide. A dubious but popular story about the questionable nature of the a startups IP will emerge. Sometimes by chance. Other times by design.

Starting early by developing an aggressive, ethical online protection strategy is the best way startups can have results monitored and action taken to develop a glowing online persona and protect it from aggressors and just plain bad luck. Reputation X has been at it for over ten years.