Wow what a week. I though that I heard it all until Mitt Romney said “Corporations Are people”. Actually, I admire Mr. Romney but I do struggle with this interpretation for his sake and those who he represents – and possibly an opportunity lost to rise above the noise.

In a way, Mitt provides us with a looking glass into the fundamental differences between the rich and the poor. The rich see themselves as the proxy for the prosperity of the poor. Meanwhile, the poor see themselves as the proxy for the prosperity of the rich. Neither side admits that they need each other, but I won’t pretend that I can solve this argument any time soon.  However, allow me to suggest that the winner of the debate will be the one that can evolve above the paradox.

The following video discusses how many components of a corporation – and government – are being duplicated in Social Media. The beauty of is that this great social innovation is available to anyone including the rich, the poor, the corporations, and the government. Oh, but wait – if the UK shuts down social media, they will effectively shut themselves out of the paradox, not evolve from it…Ooops. Be careful, Mitt.

So here is a video I made last year which, in a way, validates much of what we see playing out before us in politics, business, and social media.


The Hub and Spoke system is a time honored formation of commercial aviation. People accept hub and spoke as the most rational way to organize people and planes much like they accept the corporation as the best way to organize production of goods and service.

Meanwhile, social media is challenging every assumption that we hold dear to our hearts as new applications role out which steadily increase the ability for people to organize their selves.

The newest applications such as Google + show us that people are the hub and their various forms of social networks are their spokes. A person has a group for their family, one for their friends, their colleagues, their schoolmates, etc.  While G+ fatigue may wear in as people get tired of classifying their casual contacts, the real value of G+ may arise in the intentional Organization of people for social and financial efficiency.

The similarity between the airport and G+ Hub and Spoke is not a casual coincidence.  There is a very real and physical connection between the way people organize themselves in social media and the way they organize themselves in corporate production and the way their organize themselves in air transportation systems.

Suppose we make the analogy that the person in the center is the customer, the circle that they belong to is the market, and the person in the market is a client.  The analogy hold when we try to “preserve college friendships”.  College is the social market and the friend is the mutual client relationship where the currency is a social currency.

The analogy is still very young, but it is truly profound.  This way of thinking will drive a form of social organization that may rival corporations, government, and even international boundaries.  It is also no coincidence that Social Flights has been modeling this analogy for the 2 years since we first started developing our business plan.

Today, Social Flights is working on some important concepts for defining Travel Tribe Leader functions.  The objective is to duplicate the function of a “concrete” hub and spoke system denominated in dollars with a virtual hub and spoke system denominated in social currency.

Network Characteristics of Travel Tribe leaders:

  • Each Travel Tribe Leader is responsible for 10-20 city pairs from their own location.
  • Two travel tribe leaders for each city pair (one located at each point)
  • Travel Tribe Leader creates revenue by matching people and places
  • Builds tribal/shared knowledge
  • Redundant, opportunistic, and fault tolerant
  • Ideally suited for Twitter, Google + and Facebook Distribution Channels

Conclusion:  The organization of people it figuratively (with G+) and literally (with corporations) is the exact same thing.  This will become obvious when people discover the necessity to organize their selves into productive communities in the absence of corporations and government.  But why wait – we can, and we will use social media to form a new system of social organization.

Citationhttp://www.slideshare.net/padday/the-real-life-social-network-v2


I am deeply concerned with the Liberal / Conservative flame wars. Countless Facebook discussions start with a casual reference to one position or the other, then quickly devolve into deeply divisive language. I see it in forums, Chats, Comments on blogs, news articles and YouTube Videos.

It’s getting worse – people can no longer agree to disagree.

I do not believe in big government. On the other hand, I do not believe that corporations should be the sole protectors for safeguarding the social charter. Call me an idealist, but I truly believe that given the right incentives, people can govern themselves to a very large degree.

Weapon of Mass Reconstruction

We have at our disposal the most powerful tool ever created for the potential benefit of humanity. Societies since the beginning of our time would have envied us beyond words – as their villages were pillaged, as the plague spread, or as the hurricane hit shore – if they had a system that could unify and organize people as we can do today with social media.

My fear, is that we will use this tool to divide instead of unify. Traditional media and the advertising industry are in deep trouble as people go online to self-select their news and content.

Trust me, I’m your friend

Unfortunately, traditional media (TV, print, and Radio) are under extraordinary pressure not just to maintain ratings, but to increase ratings to subsidize less successful areas of the enterprise. As a result, the content must become more and more sensational in order to keep people watching commercials. If I earned one dollar for every minute of YOUR time that I could waste, would you trust me? Yet people do.

The Terrorist Within

I am terrorized by the notion that Americans will turn against Americans. The problems facing this nation are so complex, so controversial, and so far reaching into the past and the future that it is unlikely that any intelligent person is more qualified than any other intelligent person to hold the highest office. Barrack, Hillary, Sarah, John, would all have the same pressures pushing back on every move leading them down 95% similar paths. None could be better and none could be worse – we’re officially in this together.

So until the super-star with extra-human discernment rides out of the clouds, People should really really be looking for a third way through this. Pure Communism is a Failure, Pure Socialism is a failure, and we are quickly learning that Pure Capitalism also runs out of track.

America’s Uncivil War

The Next Great American Civil War will be a battle against ourselves – all of the artifacts of past generations that pull at our subconsciousness; the reactionary fight or flight instinct of our ancestors. We are being called to something new. Let’s get on with business and find out where this road leads – together.


If an IPod is shuffling in the forest, and nobody is around to hear it, does it make a sound?

This is a standard philosophical riddle that raises questions regarding observation and knowledge of reality. Alexander T. Jackson, one of the great minds of the 20th century, may have said that, “View points of this riddle differ based on the perceived definition of the word ‘sound’, often confused with the definition of the word ‘hearing’.”

A $300 Ipod is shuffling in the forest and nobody is around to interact with it, does it have value?

This philosophical riddle also raises questions regarding observations and knowledge of reality.  Viewpoints in this riddle differ based on the perceived definition of the word ‘money’, often confused with the definition of the word ‘value’.

To this question, Wall Street would say “Yes”, but Main Street would say “No”. In fact this brings into question the order of how we assign value in our world.

Suppose we constructed the same riddle for any physical asset such as a bridge, house, airplane, computer, car, university education, insurance policy, Marketing Department, tennis shoe, police officer, trumpet, leaf blower, FaceBook, Twitter, Linked In, fungus cream, guacamole, anything at WalMart, etc…..

Value of human interaction

Before long, we notice that the value of nearly all products and services is wholly derived from the value of human interaction with the object.  So where exactly is the true value of our economy, in the object or in the human interaction?   Wall Street would say “object”, but Main Street would say “human interaction”.

Credit Score

In finance, the credit score was established to assess the human interaction with a financial instrument called debt.  Yet, in the above example it is relatively clear that the vast majority of value created is dependent on human interaction with products and services that may or may not be financed with debt, not the debt itself.  It would seem that a social credit score and a knowledge inventory would be more appropriate way to assess the true value of economic activity. But where do we start establishing such an index?

The Social Value Index

We’ll start with a baseline 80/20 rule first identified by an Italian Economist named Vilfredo Pareto.  In our rendition, 80% of the true economy is created in the form of social value and 20% is created in the form of financial value.  Keep in mind that Dr. Pareto also defined a concept called the “Pareto Efficiency” for social resource allocation. This refers to the end-state of an economic game where no player can become better off without also making at least one other player worse off.

The objective then, is to design Social Value Games that are 80/20 (social vs. financial leverage) compliant and Pareto Efficient then, test the hypothesis and improve it toward optimality.


The Social Value Game

The value game is a social media business method developed by the folks at The Ingenesist Project in a dynamic application of social technology.

Most applications of game theory are controlled from in-house or deployed against a competitive landscape.  The Value Game is deployed external to the corporation and in a cooperative landscape where rewards are given to those who organize people around a “highly leveraged product” in valuable ways.

There are 5 elements to The Value Game

The first is what we call a highly leveraged product such as a conference, experience, convenience, ZipCars, or reunion – we’ll see that almost any product can be leveraged.

The next element is a secondary product vendor such as a hotel, restaurant, transportation, clothing, or equipment supplier – we’ll also see how almost any product can be deployed in the secondary role.

The third element is a consumer who seeks to minimize financial cost and maximize social value.

The fourth element is a 3rd party entrepreneur who is able to organized people in social networks and leverage primary and secondary assets in unique combinations.

The fifth Element is a true value calculator called the Social Value Index (SVI).   The SVI is the scorekeeper that calculates the actual value of the leveraged product after all of the discounts and social value factors are counted.

The game starts when everyone joins the same social network underwritten by a mobile electronic debit card platform and sets their filters for what information can enter (and to block out spam).  The highly leveraged product in the middle acts like a ball in play whose value is dependent on the interaction of the other elements.  Secondary vendors will deploy incentives into the field.  Third party entrepreneurs will organize people around the incentives and take social profits.  The Social Value Index will keep score.

Example 1: A ZipCar costs about 8 dollars per hour; this business model does not encourage social activity; it encourages fast shopping. Suppose that a person pays for the ZipCar on their debit card.  Local restaurants will be made aware of the purchase and then deploy coupons against the ZipCar to the buyer’s debit card. Next, a 3rd party entrepreneurs may improve the SVI by organizing a ZipCar swap so that the person does not have to leave in the same ZipCar that they arrived in and can spend more time shopping.  Another entrepreneur may organize events for families and friends that increase the passengers in each ZipCar, or by capturing any inventory from the community such as movie tickets or family experiences to deploy against the ZipCar.  After the event, the SVI updates the net cost of the ZipCar from 8 dollars per hour to, say, 1.42 per hour.  This is 80% savings on the ZipCar and 33% savings on a day out with the family over using their own car.

In effect, the leveraged product buys itself in a convertible social currency

Example 2: Suppose that a popular aerobics instructor has 40 students.  The local health food store may authorize her to give away 1000 coupons for 5% discount on store products.  In return, the aerobics instructor gets 5% of total purchased.  The health food store already spends 10% of revenue on advertising. It is in the instructor’s best interest to give the coupons to people who are likely to spend the most at the store.  After all, if 1000 people spend 100 dollars each, she stands to gain 5000 dollars.  The health food store stands to gain loyal customers without advertising. The aerobics instructor may maximize her profits by joining with a health food chef to teach classes in healthy cooking.  Or, she may join with a caterer, wedding planner, or hotel to supply an entire event for which she will receive social and financial value.  She may give them to colleagues who also become authorized to give away coupons – and she negotiates for a percentage of their output as well. She will become knowledgeable about the products at the store and talk about them with her friends.  She may even sell the face value of the coupons for cash since it is likely that a high bidder would also be a large customer for the health food store.  The Social Value Index favors this store, this aerobics instructor, and this social network – higher than competitors.  SVI registers with Search Engines and bargain hunters seek the Aerobics Instructor for deeper information and services.

Millions of applications will arise limited only by the imagination of communities not Wall Street


As we discuss many times in this blog; human knowledge assets include combinations of intellectual capital, social capital, and creative capital. Of course nobody can survive without all of these elements, however, I am continuously amazed at the power of the last and most important element; Creative Capital.

This video is from an extraordinary Seattle Musician named Aaron English. I have known Aaron for several years and follow all of his work. He is always up to something completely interesting. Aaron can say more in 4 minutes that I can say in 100 blog posts.

Artists and musicians have what I call “communication density”. They are the true innovators among us.  They can combine so many different concepts, media forms, and objects to produce something completely new and interesting. Artists create value. I rely heavily on the artists for my day dreams.

Please enjoy this video – American Day Dreams. Watch it several times. Don’t forget to daydream


Editorialized Economics

Social media used to be so cool – a way to bypass the mediated reality of editorialized content. Real people coming back with real ideas and real opportunities from the crystal clear waters of cooperative community. Then legacy media and their ad-rev departments started to wonder “Hey, where did everyone go?” Marketer started saying, “Hey, these CPM numbers are F***ed – something is cutting into our pie ?!?!?”

Then came the Social Media Gurus

like the tattle-tale kid brother intent on spoiling a perfectly good game of hide and seek, screeching: “There they are, there they are!!!….Can you see ’em?…see, see, your customers are hiding in the shadows… there, in the shadows….quick!!! Can you see ’em now?.  By the way, pay my fee, buy my book, and did I mention my latest ‘keynote’ yet?”

Next, the Gurus went mainstream as legacy media analysts!! Legacy media picked up the ball on the run-away ad spend. They glossed poetic on the “effects” but not the “causes” of social media. And, OH Gawd, what a nuisance all those pesky bloggers are to the dignified art and science of professional journalism.

A Monster was Born

Facebook declared that people really want to share their personal details with the world, and a monster was born. So now we are stuck with Corporate Media on steroids.  Your data are scraped so they can find you. Images are reproduced infinitely. Lies and deception grow legs half way around the world before the truth can even be awakened from it’s slumber. Say one thing wrong and it haunts you forever.

Casualty or Causality

Social Media has become another casualty of the broken financial system where people fight for artificial scarcity.  It is no longer a means to empower and enlighten, it is becoming another means to exploit and oppress.   Special recognition goes out to all the so-called social media gurus. I can’t blame them though, everyone has the right to make an honest living.

Call it tattle-tale economics


Gambling with Jobs

The US Senate recently blocked a measure designed to reduce the outsourcing of US jobs that many corporations pursue in the relentless drive to reduce costs.

Modern Globalization is a system

Globalization must be analyzed like a system. Data, Information, knowledge, Innovation, and wisdom are profoundly related in a system. If you take away one of the components, the others become worthless.  If you destroy one component, the entire structure could fail.

Everyone knows that data, information, knowledge, innovation, and wisdom are related.  If I corrupt the data, then the associated information, knowledge, innovation, and wisdom are also corrupted.  Likewise, if I eliminate any of these elements, the system fails.

Focus on Core competency – what core?

The standard argument for outsourcing is that knowledge workers are better allocated in innovation jobs so “we can better focus on our core – and heck, we can all save a little dough in the process”.  But when we outsource our knowledge economy, the innovation economy is choked off.    The knowledge economy is the source of the Innovation Economy.  The Knowledge economy is also the recipient of the information economy which transforms data and information into useful tools, ideas, and products.

Rate Of Change is Innovation

The rate of change of the innovation economy is directly proportional to the INCREASE not the OUTSOURCING of the knowledge economy.  This is the calculus of outsourcing.  If, on the other hand, it is in you best interest to keep a population poor, weak, and unable to organize into powerful collectives, then yes, outsourcing is an effective method.


Future of Banking

When I use the term “Innovation Bank”, people conjure up the image of a cheery place where anticipation reigns as starry eyed depositors arrange their intellectual property in neat cubby boxes, Patents fly like cash register receipts and companies troll the halls looking for a cure for their bottom line blues.

This is not exactly what we have in mind, nor is it too far off either. An innovation Bank is simply a knowledge inventory that contains knowledge assets that exists in the format of a financial instrument and can be deployed for the purposes of increasing productivity.  In the process, it makes 10X more of itself every time it is deployed.  It mints its own money.

The Innovation Banker

This is not much different than a financial bank. In fact, in the financial bank, everyone assumes the borrower has the knowledge to execute the business plan and the bank lends the money. Oh, by the way, the money makes more of itself  10X over (fractional reserve system) every time it is deployed.

With the innovation bank, everyone assumes the entrepreneur has the money to execute the plan, and the seek to borrow the knowledge. Other than that, they can be considered identical. The key is in the scope, depth, and format in which the knowledge assets live in a community as well as the ability to track and preserve the creation of new knowledge in a community.  An innovation banker is a knowledge banker

A Virtuous Circle

Together with the financial banking, these two system engage in the dance of the virtuous circle of innovation enterprise. Apart, they collapse into the swirling cesspool of eternal debt and infinite interest (pun intended).

Ingenesist.com

Music by Phil Felicia


Mathematics Dysfunction Disorder

I am continuously astonished at the reactions I get from people every time I make a reference to mathematics, especially Calculus. Most people politely glaze their eyes over and stare at an inanimate object somewhere behind my head. Others launch into a diatribe of how the linear thinkers destroyed the world in the first place. Others will simply say, “I have [insert Deficit Dysfunction Disorder here]”

Puzzled by Limits?  Perplexed by derivatives?

The truth of the matter is that everyone already knows Calculus, they solve differential equations all day long – they just don’t know that they already know what I’m talking about.  If you take away all the strange terms, squiggly lines, and alphabet soup notation,….

Calculus is astonishingly simple


  • The Banker does not care about money, he cares about the rate of change of money.
  • The Stock Market does not care about risk, it cares about the rate of change of risk
  • The Politician does not care about votes, they care about the rate of change in votes
  • The Meteorologist does not care about weather, she cares about the rate of change in weather
  • The Pilot does not care about lift, they care about the rate of change of lift
  • The Gymnast does not care about motion, she cares about the rate of change of motion
  • The Artist does not care about color, he cares about the rate of change of color
  • The Doctor does not care about your health, she cares about the rate of change in your health
  • The Baker does not care about dough, they care about the rate of change of dough
  • The Farmer does not care about crops, he cares about the rate of change of crops
  • The Scientists does not care about data, they care about the rate of change of data
  • Google does not care about information, it cares about the rate of change of information
  • Entrepreneurs do not care about knowledge, they care about the rate of change of knowledge
  • Markets do not care about innovation, they care about the rate of change of innovation
  • Our children do not care about our wisdom, they care about our rate of change of wisdom

When people can learn how to understand what they are really doing in instead of what they think they are doing, then and only then, will we be able to see, and subsequently, build the next economic paradigm.  That is why I use mathematics and that is when Social Media Becomes a Science

The Capitalist does not care about value, they care about the rate of change of value