Economic Paradigm

Watching The Birds Play The Value Game

by Dan Robles on February 23, 2011

To some entrepreneurs, the problems with the aviation industries signal many insurmountable obstacles.  At  Social Flights these challenges portend an extraordinary opportunity for a new business method to bring efficiency, order, social value while eliminating artificial barriers.

Social Flights value proposition is very strong for travel ranging from 200-1000 miles between smaller airports. Social Flights can deploy quickly in response to specialized market needs, environmental condition, opportunities, or events. Social flights adapts the mission of the aircraft to meet the opportunities presented to the market.

Conversely, commercial aviation struggles dearly in this segment because they try to get the market to meet the pre-ordained mission of the aircraft. The entire air transportation system would be best served if commercial aviation concentrated on the long haul/high volume “migration” service.  There is no reason why private aviation cannot perform the job that gridlocks commercial aviation.  This would make both industries more efficient.

Commercial Aviation’s Race to Nowhere

The Deregulation Act of 1978 in the Commercial Aviation system led to the development of the Hub and Spoke system whereas commercial carriers would fly people from small locations into a one or more large “Hub” cities where they would transfer on to the next destination – usually another hub, or on to the final destination.

Deregulation undermined point-to-point service regardless of market demand, ignoring social objectives of the passengers, having no regard for the final destination of the passengers, and blowing off the “time-value” of their passengers.  Recently, the ever expanding security layer has reached the point of personal privacy invasion.  With the age of the Internet, sites such as Travelocity and Expedia diluted the “service class” market segmentation of the airlines in favor of the “price class” segmentation of airlines.  These forces caused the commercial airline experience to become a deceptive, deeply invasive, and physically strenuous experience.

Private Aviation’s starvation diet

Meanwhile, the private aviation sector has fallen under the thumb of listing agents who tie up the industry behind the gilded walls of Charter Brokerage Houses.  FAA regulation hampers the ability to attract passengers on a per-seat basis, which gives private operators a hugely limited marketing position.  Brokers took over to mark-up the price of chartered flights far beyond the reaches of a mainstream market.

For these reasons, the private aviation sector has had difficulty organizing itself into a self-sustaining cooperative, until now.  In Fact, the smaller the airplane and the more widely distributed the airports, the simpler and more efficient the whole social system can become.

Social Flights changes the Game by Changing the Mission.

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Ideas Travel Where People Travel

by Dan Robles on January 28, 2011

Good ideas travel easily and far along trade routes.  Ideas like irrigation, Apples, grapes and wine spread along the Silk Road. The paper and writing spread new ideas leading to increased literacy, the scrapping of old philosophy and the creation of new social orders. The printing press then led the way for today’s mighty publishing Industry.  But don’t forget a simple fact, travel is the substrate of the next economic paradigm.

Ideas: A Chain with many Weak Links

Seth Godin wrote a wonderful article about the publishing industry called The Domino Effect.  He observes that:

1. The middlemen (bookstores) have too much power to limit shelf space.

2.Authors are separated from their readers and don’t have the data to contact them directly.

3. Pricing is based static, slow, and largely irrelevant of content or any form of supply and demand which is of little benefit to the reader or the author.

4. Ideas from books travel much farther and faster than the book itself which does not translate into book sales.

Mr. Godin’s point is that given how important books are, the Chain has many weak links between the author and the audience. Publishing is due for an extraordinary disruption and Seth is going to change it with The Domino Project.  But how many other industries suffer from the same weak-chain syndrome?

Travel: A Plane with many Weak Links

Well, if Books and Travel spreads ideas along the Silk Road, then they must have a lot of other things in common.  If we apply Seth’s observations to the commercial airlines:

1. We see that Airports and airlines have tremendous power to limit gates, times, and availability of routes.

2.  Airlines have no idea why they are carrying all those people around.

3. Pricing is static, segmented, slow, and has very little to do with the actual supply and demand for travel.

4. Travelers are transporting ideas which move faster and more broadly than the aircraft itself and which does not translate into more airline tickets sold.

Where ideas spread; value is created

What is so powerful about ideas?  Most innovation gurus discount raw “ideas” as the useless drivel of idle minds. “Show me the money, not the ideas”, they bark.  If ideas are not innovation, then what are they?  If Ideas are not valuable, then what are they?

The Travel Economy

Travel technologies and applications are being sold for incredible sums of money.  Every airline merger is big news and every geolocation application is huge business.  Travel data is a lightening rod for everything from pricing to privacy.  Social Media applications are getting that migration routes are an excellent marker for “value flow” and therefore, cash flow.  Airline Travel is still the most favored mode political disruption because the links in the economic chain are so weak.  Travel is serious business.

The “New Value” Integration:

Every industry with weak links between production and end use are candidates for disruption in the great integration. Any idea that can strengthen the link in the chain between origin and the destination of an idea is a product of the great integration.  The Social Value creation process and astonishing opportunity will happen at the weak links between origin and destination of any product or service.

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(Editors note: The above post is #2 in a series [1][2][3][4][5] introducing The Value Game to a new class of business methods.  The first real world application is Social Flights; a collaborative production / consumption game being deployed to the market.  If this works, the new business method class will be generalized throughout the economy to catalyze the convertibility of social currency.  Please join us at The Future of Money and Technology Summit in San Francisco on february 28th 2011 where we will unveil the work to the technology community)

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The 3 Steps To Social Profits

November 29, 2010
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Nothing Economic can happen until two or more people get together to build something. Social Profit is like a fungible option with a face value. If structured correctly, an option can have a face value equal to the difference between discount and full price.

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A Tale As Old As Time

November 8, 2010
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Social values such as freedom, liberty, family, community, trust, health and welfare are derived from how one is allowed to prioritizes their own time, not how one is able to prioritizes the time of others.

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80/20 Rule: The Value of Human Interaction

October 25, 2010
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Viewpoints in this riddle differ based on the perceived definition of money and value. 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.

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The Social Value Game

October 19, 2010
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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.

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American Day Dreams

October 14, 2010
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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.

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Tattle-Tale Economics

October 2, 2010
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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.

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Of Anxiety and Optimism

September 30, 2010
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Most people feel that a huge change is underway. Most people feel deep in their hearts that whatever we are doing today will be different tomorrow. Most people feel a strange combination of anxiety and optimism.

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Outsourcing Fail

September 28, 2010
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If you take away one of the components, the others become worthless. If you destroy one component, the entire structure could fail.

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The Investment Banker Vs. The Innovation Banker

September 22, 2010
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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).

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Calculus for Dummies and Capitalists

September 20, 2010
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everyone already knows Calculus, they solve differential equations all day long – they just don’t know that they already know

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Sell-ebrity Sects

September 8, 2010

Social media is introducing a host of new Sellebrities peddling some object designed to fortify their credibility, usually a book tour, keynote address, or a-list client. Then, pitchman preoccupies the consumer into standing still long enough to create an arbitrage position for those who can exploit TIME.

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Alternate Currencies Ending The Monopoly on Money

September 7, 2010

Do the math: Interest on debt can approach infinity while austerity measures can only approach zero. You don’t need religion to predict that outcome.

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An Economic Paradigm Breaks Down

September 2, 2010

Land, labor, and capital are no longer effective proxies for human productivity, creativity and intellect – end of story. We need to stop talking about social media as if Monetization is some kind of mystery.

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The True Value Calculation

September 1, 2010

The True Value Calculation is the expanded ROI of a business venture which includes the positive and negative impacts on a much wider body of stakeholders in the sum total of viability.

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Intellectual Property In the Cloud

August 31, 2010

Wall Street is quite happy collecting the royalties of the creative people in America – those people who actually produce something real and tangible. Social media is a social contract and Intellectual Property is our tangible currency.

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The Definition Of Innovation Must Change

August 30, 2010

Most good ideas can’t find a place to be profitable in a silo, so they are scrapped. This is not the fault of talent or the idea, but invariably, both are lost.

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An IPO For Humanity

August 26, 2010

The Ingenesist Project tries to string this all together with just enough specificity so that an alternate financial system will jump start itself and become both visible and available to everyone.

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The Last Mile: Social Media Battleground

August 24, 2010

Nothing “Economic” can happen is Social Media until real people get together to build things. Sure, Marketers are trying their hardest to penetrate the last mile, but communities are trying to defend it too.

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Please Vote for The Ingenesist Project; SXSW

August 18, 2010

We sincerely encourage our readers to vote for this presentation. It promises to be hugely compelling, deeply controversial, and boldly disruptive.

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Social Capitalism and The Innovation Bond

August 18, 2010

It follows to reason that all of the innovation that could return somewhere between 10% and 1000% goes largely un-capitalized. Now, suppose that an innovation bond were to come along which produces a risk adjusted return of, say only, 15% per year denominated in a fungible currency, investors would seek refuge in the Innovation Bond.

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Securitization of Social Currency

August 17, 2010

This new security, called the innovation bond, will become the basis for a new social currency

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System for The Monetization of Social Capitalism

August 11, 2010

Exoquant.com Currency is a device used for the storage and exchange of Value.  Two characteristics of modern money are the abilities to Capitalize and Securitize the currency.  In fact, Wall Street touts a specialized professional precisely for that purpose – they are called “Quants” This video introduces a very similar form of mathematics that Wall [...]

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