Eric Johnson

Recent Posts by Eric Johnson

Modria Wants You to Settle Your Workplace Problems (and Even Patent Disputes) Online

As anyone who’s ever gotten wrapped up in an online-commenting flame war knows, the Internet doesn’t have the best reputation for resolving disputes. Too often, the discussion doesn’t stray far from “I’m right!” versus “No, I am!”

But conflicts arise online all the time, as Colin Rule knows. The “online dispute guy,” as his coworkers once called him, cut his tech teeth at eBay and PayPal, where he led the group that stepped in when buyers and sellers clashed.

Now, Rule has spun off from eBay to become the CEO of Modria, one of a slew of organizations trying to solve more and more types of disputes online. Modria launched Monday with $1.25 million in seed funding, with The Wall Street Journal also reporting that the company is seeking about $4 million in its Series A round.

Online dispute resolution may sound like a snoozer, but it’s actually needed. In theory, companies such as Modria would take pressure off the courts to get disputes resolved faster and with less need for old-school legal paperwork. That means a cheaper, faster route to peace of mind for businesses, particularly those that live or die with their customer’s trust.

(And no, you don’t have much of a choice in the matter. In the aftermath of the Supreme Court case AT&T v. Concepcion, corporations can legally put arbitration clauses into those Terms of Service that no one ever reads; that means they have the highest court’s blessing to keep customer disputes out of the judicial system entirely.)

Modria is licensing code from eBay — which he compares to a “big brother,” since the two companies are independent but friendly — and applying what he learned there to other types of problems for clients around the world.

While most of eBay’s problems were simple misunderstandings over, for example, when purchased items had to be delivered, Rule said his “Lego block” model can be applied to everything ranging from workplace difficulties to problems with your cellphone bill to Silicon Valley’s new favorite sport of patent disputes.

There are, Rule said, four blocks that can be combined in different ways depending on how significant the problem is: Diagnosing a dispute (which can be done through a simple questionnaire), negotiating (which software can also take care of), mediating (for which you need an impartial human or group to help) and arbitration (which leads to some sort of resolution outside of the courts that both sides have agreed to accept).

Modria’s corporate clients pay a subscription fee to use a customized version of the site’s suite of tools. But for personal affairs, Modria lets anyone use a one-size-fits-all version of those tools for free.

The customized versions of the tools include specific questionnaires and the ability to upload attachments as “evidence” for one side or the other. Paying clients like telecom companies can even build rules into the negotiating software, so that customers can’t haggle below a certain level with the computer.

However, there are some disputes that can’t yet be tackled online. Rule said Modria couldn’t help Craigslist because the site makes sellers anonymous and doesn’t require them to report what actually happened as the result of a cash transaction. He said it is still possible, though, for the parties to remain confidential in an online dispute, just so long as both come to the table.

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