Tag: Social Entrepreneur

Social Currency Takes Flight

On December 6, 2010

Private Aviation is the first of several industries planning to launch a new class of business methods built on a “Social Value Game” developed by The Ingenesist Project . Social Flights is a virtual airline which aggregates communities according to their interests, knowledge assets, and social graph. Social Flights matches people with mid-distance transportation options that deliver them exactly where they want to go in a shortest period of time and the least amount of harassment.

By the time you factor in Social Value, the price of private air travel becomes highly competitive.

In this variation, The Airplane Game has 4 players; (1) A traveler, (2) accredited private jet operators throughout the US, (3) travel services vendors, and (4) a 3rd party entrepreneur. The objective of the game is for each player to act in their best interest to ultimately produce a door-to-door cost of traveling between two geographic points on a private jet equal to or less than the cost of making the same trip on comparable modes of transportation. The true door-to-door cost will be denominated in social currency and then converted to financial currency to establish a par value.

The Airplane Game scheduled for departure in 2011

The game starts when a traveler states a anonymous intention to geolocate between their zip code and any distant zip code. This intention will be sent to a private jet carrier who will establish a price for each seat based on a full plane. Next, vendors for products and services matched to the traveler’s intensions – such as ground transportation, hotels, restaurants, interests, and tourist attractions at both zip codes – will assign a contingency coupon of known face value against the airfare of the private jet seat thereby lowering the cost of the seat.

Enter Social Entrepreneurs

Next, 3rd Party Entrepreneurs will use social media to locate seat inventory to put in play. Then, they will locate product/service inventory to put that into play. Finally, they will locate “Social Inventory” in each zip code to fill the jet and drive down the ticket price even further in what amounts to social arbitrage. The Social Flights Algorithm will compare the social value such as time savings, carbon footprint, airport congestion, and experience quality against the comparable modes of transportation, such as car/bus/train/commercial aviation, and provide a par value for each option.

Social Value Conversion Factor

Social profits can be maximized where people are empowered to travel point to point consistent with their social graph rather than car, train, or hub and spoke commercial aviation modes. Decreasing social friction increases social profits. This launch further demonstrates how any asset, from jets to zip cars to public infrastructure, can be leveraged to create abundant social value.

The aggregate effect of such businesses will establish a conversion factor between social currency and financial currency from which any number of social productivity applications can be built and monetized.

Social Enterprise; The Vetting Mechanism; #1

By Admin

On October 26, 2008

In General Information

I read many articles with rants like “all this social network stuff is cool – but show us the money”. Innovation Economics offers a way to see new markets and new businesses that are currently hidden by “the old way” of doing things. This article is part of a series called ‘Business Plans of the Innovation Economy” which will identify ways that Social Networks can command huge markets and drive vast revenues – if, and only if, they align themselves in a specific way….

Managers manage through experience. They observe a situation and compare it to prior situations they have encountered. Through a process of intuitive (statistical) analysis, they calculate the probability of success based on the success or failure of prior experience. This is the reason why managers are often older and also why youth correlates with inability to manage. The depth and breadth of one’s experience is often called wisdom.

Today’s problems, business opportunities, technological change, and competitive strategies are so complex and so integrated across the globe that no single person can accumulate in a lifetime the experience needed to manage at what is called a Pareto Efficiency. A Pareto Efficiency, named after Italian economist Vilfredo Pareto, is an economic condition where a one’s actions benefits at least one person while leaving no other person less better off.

The problem with the “top-down” management structure is that the “top” no longer has a statistically relevant sample of prior experiences from which to fully understand the probable future outcome of their actions – the consequence is that someone always gets screwed (Pareto Inefficient).

The concept of Pareto Efficiency may be what people are today inadvertently calling “sustainability”. I recently saw the movie Syriana with George Clooney about the petroleum industry in the Middle East. It was a convoluted mix of 5 different stories. Each story had its hero doing what they thought was in the best interest of those they represent – “the common people”. Yet the combination of actions carried out by these heroes was absolutely disastrous for all of them. So no matter how benevolent one’s intentions are – and I believe that most corporate managers are acting in the highest integrity that they know – this systemic failure of knowledge will always hurt someone, continually adding to those already at the fringes.

The world of imperfect information is therefore the enemy of sustainability. Perfect information is when everyone associated with a business transaction has the exact same information as everyone else. Perfect information is what makes markets efficient and decisions rational. Agreement is perfectly mutual, supply and demand are perfectly aligned, all risks are perfectly predictable and cause and effect are perfectly transparent.

It follows that any business plan that simply improves information in a market can command revenues proportional to the degree at which market efficient is improved. For example; Ebay owes its 50 Billion dollar market capitalization to the feedback system which supplies improved information in a market. Carfax, The FAA, Craigslist, Democratic Government – all have vetting mechanisms that make their prospective markets more efficient.

Likewise, when the vetting mechanisms fail, the market fails. I attended a lecture once with Charlie Munger, CFO of Berkshire Hathaway. Regarding Enron, he said (paraphrase) “It’s tragic enough when the accounting profession goes bad, but God help us if we lose the engineers”.

This brings us back to management. The business plan of the millennium will be the art and science of perfect information. We know that no single human can accumulate enough experience, however, we also know that perfect information can reside in many people – it is simply a matter of finding the perfect group of people who collectively possess perfect information.

This relatively simple task is entirely and irrevocably the domain of Social Networks. Social Networks are sufficiently enabled by current technology to perform this essential and highly lucrative task – if and only if they align themselves accordingly. Social Networks need to hold a complete and detailed inventory of resident knowledge. Social Networks must cooperate to codify social capital, creative capital, and intellectual capital so that computational methods can be used to assemble unique collection of persons holding unique collections of experiences. That unique set of knowledge assets must then be deployed precisely in the market, ideally targeting specific transactions.

If Real Estate Agents can command 6% of a gazillion dollar housing market and bankers can take another huge chunk – and not even do a very good job at providing perfect information – only to get bailed those at the fringes. Social Networking have a moral, ethical, and entrepreneurial obligation to compete in the sustainability game.