Month: June 2009

“Hey, I know a guy who owes me a favor …”

It is only a matter of time until professional contacts will be for sale. The problem is that the ROI (return on investment model) is such a poor valuation tool for social media. Another valuation tool used in finance is called Real Options. An option is the right, without the obligation, to act on an opportunity at some time in the future. Social Networks, friends, family, and professional contacts behave much more along these lines.

Five Easy Pieces:

While the calculation for the value of an option is complex, the things we need to plug in are fairly simple in the context of social media:

1.    There must be an inventory of the assets
2.    The future date when the asset can be acquired must be known
3.    The cost of acquiring the asset must be known
4.    The value effects on the enterprise must be estimated
5.    The uncertainty related to the asset must be estimated

The term “asset” in social media space may include: Knowledge, skill, an undertaking of a new project, or the generation of a new idea, etc.

The Social Networking Manifesto:

The objective of the building a social network is to know where the knowledge assets are, how much they can help you, how much they cost to exercise, and the certainty that they will be applicable, available and useful when you need them. Conversely, the best way to increase the value of a social network is to be visible to others, tell people what you can do for them, tell people what you need from them, and establish a reputation for reliability.

Most importantly, everyone must have the right, without the obligation, to accept or decline the opportunity. This is what jump starts ‘supply and demand’ and makes a market a market

Let’s consider all options:

To estimate the value of an option to call on anyone in your network use a financial option calculator tool on the web and plugged in social media numbers. Let’s use Linkedin as the knowledge inventory; 40 million knowledge assets also hold options with their contacts. Say that the expiration date is 1 year (for tax reasons). Assume the market value of their skill is 100 dollars and that at some point in the next year, the value of their skill relative to yourself becomes 200 dollars. The right to buy the asset at the earlier price is worth a premium. Suppose that the volatility of the asset is 50% and the interest rate is 7%.

The value of the “call” is worth about $3.47 dollars. The Call is an option contract that gives the holder the right to buy a certain quantity of an underlying security from the writer of the option, at a specified price up to the specified expiration date.

The value of options in a network:

For the above scenario assuming all assets are equal in price of 100 dollars; if someone has 10,000 1st and 2nd level contacts on Linkedin, the value of their implied call option is about 34,700 dollars. If Linkedin were a stock market, the value of the social contracts that people have with each other is 34K x 40M = 1.3 Trillion Dollars market value for the contracts that people hold and trade.

This is not even the value of the transaction – only the right to have a transaction. The value of the social contract is in the conversations that they hold. Contracts are a financial instrument that can be traded, combined, diversified, and aggregated for real money. It’s only a matter of time.

The Ingenesist Project specifies the structure of an innovation economy where a knowledge inventory, a percentile search engine, and an innovation bank will facilitate and aggregate the 5 components of Option Valuation. Social media applications form the operating system for the market in options.

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The 2.3 Trillion Dollar Mentor Market

By Admin

On June 29, 2009

In General Information

Mentors provide expertise to less experienced individuals to help them advance their careers, enhance their education, and build their networks. In many different arenas people have benefited from being part of a mentoring relationship: Freddie Laker mentored Richard Branson, Bach mentored Mozart, Dr. Dre mentored Eminem, Aristotle mentored Alexander the Great, and Obi-wan Kenobi mentored Anakin Skywalker.

Mentorship: a Valuable 2-way Conversation

Suppose that mentorship could be monetized like financial instruments. Within the structure of an innovation economy specified by The Ingenesist Project; a knowledge inventory, a percentile search engine, and an innovation bank will match the most worthy student to the most worthy mentor in the respective market structure. The mentor would take an equity position in the protégé, not unlike taking a stock in a corporation.

For example: A single mid-career mentor could take on 10 protégés with an option to exercise, say, 1% of the students future salary for every year mentoring upon predetermined retirement date. Say that the average mentorship lasts 10 years. Likewise, each of the protégés also becomes a mentor taking on 10 protégés of their own. The Master mentor will collect 1% of the revenue that each of the 100 sub-protégés provide to their middle mentors per year.

The Educational Pyramid Scheme

If each protégé becomes at least as successful on average as the mentor, the master mentor can collect the equivalent of their average salary for the duration of their retirement. If each of the protégés become equally effective mentors, then the master mentor can double their average salary for the duration of their retirement. A third tier adds another salary to the master mentor.

This is what actually happens in an informal way within companies, government, and Jedi Knighthood; the exception is that social media will enable this to occur outside the construct of a corporation – and such.

Game Theory for the Rest of Us

An interesting social game emerges: It becomes the best interest of the mentor that each of their protégés is successful in their field and practice high integrity. It is in the best interest of the mentee to learn as much as they can and become as proficient as they can. It is the best interest for mentees to pick appropriate mentors and it is in the best interest for mentors to take on appropriate mentees. It is efficient for mentees to form a social network among themselves and for Master Mentors to form a network among themselves. A multiplier effect surges with cross-mentoring.

In aggregate, it is in the best interest for the membership in the social network to cooperate rather than compete because their income would ultimately benefit less from competition than from cooperation.

2.3 Trillion Dollars Market

The American Public education system is in disarray. Standardized education defies the diversity of the country. Teacher’s pay has been stagnant. Curriculum takes years to respond to new knowledge. Recent McKinsey research finds that a persistent gap in academic achievement between children in the United States and their counterparts in other countries deprived the US economy of as much as $2.3 trillion in economic output in 2008

None of this has anything to do with the dreams of our children. None of this has anything to do with the intellect, motivation, and perseverance of our kids. It has everything to do with Political stalemate and failure of the economic system. All children can achieve their dreams, and ours, if there were a market for mentors.

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Social Media Strikes Back

By Admin

On June 26, 2009

In General Information

Money represents human productivity.

Recent headlines declare that 78 billion dollars worth of fuel and productivity are wasted each year by congestion on highways. 1.2 Trillion dollars per year in productivity is lost due to past failures in education. The US spends 7% more of our GDP on health care than the average of other developed nations leaving nearly 1 trillion dollars of unknown ‘productivity value’ in vapor per year. 200 Billion dollars per year is spent on war, whether necessary or not, that has not increased American productivity in an economic sense.

2.5 Trillion Units of Human Productivity

Without even trying hard, 2.5 Trillion Dollars per year in stuff not produced is wasted on activity that does not increase human productivity (stuff produced). Obviously debt is a promise to produce stuff in the future. But we’re wasting stuff now? At some point the logic falls apart but no matter how you look at it, money represents productivity and the only way out of this mess is to innovate at an astonishing rate.

Conversational Capital

In an earlier article, we conjured up a rough tabulation of productivity gains due to social media:

One billion messages are sent on Facebook every day. Suppose that each Facebook conversation has a net value of $1.00 per person. That comes out to 730 Billion dollars per year of human productivity saved.

Twitter is worth a cool 100 Million tweets per day. Let’s assign a net productivity gain of $1.00 per tweet delivered. That is $36 Billion per year in increased human productivity.

Suppose each blog article published increases human productivity by $0.50 each. With over 100M blogs, that is 10 billion dollars per day – or1.8 trillion dollars per year.

The grand total is 2.5 Trillion Dollars worth of conversational currency.

In Search of Waste Economics:

Now, return to the waste side of the balance sheet let’s reflect on the areas of impact that social media has on: transportation, energy, education, health care, and world Peace:

Social media reviews automobile quality and drives social priorities toward green industry. Social media allows people to find work close to home, social media vets energy systems such as wind, solar, nuclear. Social media is driving journalism to value added roles and away from corporate collusion. Social media provides richer and more current content than textbooks. Social media is driving social priorities over Wall Street priorities in health care, energy, politics, industry, and science. You Tube is seeing a 1700% increase in downloads as people set up video cameras all over the world searching and reporting injustice. Little Brother is watching.

Social media strikes back

In order to predict where social media will strike next all we need to do is look for the waste economy; areas where world governments, institutions, and corporations are inefficient, wasteful, co opted, or corrupt.

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Is the Corporate Structure Obsolete?

By Admin

On June 24, 2009

In General Information

The Social Media Production System

Social Media has demonstrated in many ways capable of meeting or exceeding the deliverable output of many traditional industries such as advertising, marketing, journalism, human resources, design, community organizing, education, and social vetting.

We have also seen social media form communities that increase productivity in manufacturing processes, software development, and project management. We have seen people self manage in social media to segregate and elevate good information away from bad information. We have seen communities act with logic, tact, and precision previously thought to be the province of top management guidance.

In short, we have seen social media replace or duplicate almost every structural element of the traditional corporation outside of the construct of corporations. Can social media provide a corporate structure in and among itself?

General Accounting Practices:

Corporations have an internal accounting system, internal processes, internal procedures, and often their own lexicon and unique job descriptions relative to their product. This is how a corporation stores knowledge and trades value internally and defends itself from external influence. The common thread is that each department is accounted, assessed, and compared in terms of money. Standard balance sheets are compared by banks and investors.

Social media uses the exchange of information, knowledge and new ideas to store value. Processes, procedures, job descriptions, and accounting are done in a public lexicon that everyone develops collectively. People share, trade, and exchange information, knowledge, and new ideas like tangible property; and they trade options on futures in the same. Increasingly, access to the community knowledge inventory is becoming a means be which people can convert productivity to money.

Standard Balance Sheet for Social Media

Most elements of a corporation can be duplicated in social media. For those parts that cannot, the entrepreneur will soon figure out how they can. The entrepreneur does not worry about money, they worry about productivity and the money always follows. The next paradigm of economic development will reside almost entirely on a statistical game of managing risk and return, matching surplus to deficit, and increasing human productivity in the operating system of Social Media. Every Newspaper that falls to Social Media is simply transferring its value to the new paradigm. That value is still in play. This trend will continue until a new currency representing that value is introduced.

Business Plans of the Future:

As you witness the progression of Social Media unfold, look for innovations that contain incentives for people to reorganize themselves. Look for similarities between new social media developments and traditional corporate departments. Look for businesses and institutions that support social vetting mechanisms, knowledge exchanges, and groups bringing together strategic combination of diverse knowledge assets, not just similar knowledge assets. Most importantly; look for the “Last Mile of Social Media”; diverse groups of 5-10 people living within a few miles of each other forming new enterprise.

Threats:

Finally, look for the threats that can corrupt an innovation economy. Social Media is currently responsible for trillions of dollars of productivity gains – all this money is still on the table for social entrepreneurs to monetize once the integration reaches a tipping point. Be watchful for attempts at censorship, attempts to monopolize information nodes, and the corporatizations of social networks. Wall Street was corrupted when the value of the currency became divorced from human productivity. Don’t let the same happen to Social Media.

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Matchmaker, Matchmaker, Make Me a Match

By Admin

On June 22, 2009

In General Information

The $40 Billion Dollar Dowry

Every organization wants to attract the most qualified employees and match them to jobs for which they are best suited. The human resources department is responsible for matching a knowledge surplus to a knowledge deficit through the hiring process. Fortunately for them, there is no knowledge inventory in society and managers don’t necessarily know what they want.

Human resources, training, and labor relations managers and specialists held about 868,000 jobs in 2006. The following tabulation shows the distribution of jobs by occupational specialty:

Training and development specialists    210,000
Employment, recruitment, and placement specialists    197,000
Human resources managers    136,000
Compensation, benefits, and job analysis specialists    110,000
Human resources, training, and labor relations specialists, all other    214,000

An HR Generalist pulls an average income of about $50,000 per year; A Director earns up to $140,000 per year. The total HR national payroll is estimated at $40 Billion annually.

Commodity Management:

Human Resources creates the impression that people are merely commodities to be treated as expenses rather than assets; or at best, like office machines or vehicles, despite assurances to the contrary. The HR profession is built on the assumption that people cannot manage themselves, that human behavior is random and intangible, the independent variables for success are always known by management, and that the key words on a resume is the best predictor of a good match.

Innovation Economics; the science of incentives:

Social Media is providing systems for people to organize and manage their own career. True knowledge inventories are forming as social groups coalesce around standard taxonomies of professional practice outside the corporate construct. Knowledge assets are being vetted in communities of peers and the resume is being replaced by a Social Network Profile and “Search Engine Footprint” which more accurately predicts the quality and quantity of knowledge assets. In the near future, a predictive search engine will be able to predict the probability that various collections of knowledge assets can execute a specific business objective at a known cost. Scenarios can be tested and compensation will reflect true supply and demand.

Superior Value Comes in Many Different Packages:

So what happens when top management meets the new Human Resources Training and Content Development Manager who was sent by the Social Networks Search Engine to build the new corporate Blog and Social media strategy – sporting facial tattoos, a nose ring, and a black kilt, and dreadlocks? If the fact that a top manager is not comfortable with a person of a particular culture or lifestyle can be perceived as detrimental to the innovation capacity of the organization, that organization is threatening its own survival.

Don’t Shoot The Fiddler

The story of Fiddler on the roof centers on Tevye, the father of five daughters, and his attempts to maintain his family and religious traditions while outside influences encroach upon their lives. He must cope with both the strong-willed actions of his three older daughters—each one’s choice of husband moves farther away from the customs of her faith. The story resolves with a slow acceptance of the new world and creeping redefinition of what love is and what love can be.

In an Innovation Economy, the perfect match is no longer determined by those inside the construct of tradition, rather, it is determined by those entrepreneurs on the outside redefining tradition – and earning 40 billion dollars.

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How Does Social Media Affect GDP?

By Admin

On June 19, 2009

In General Information

Gross domestic product (GDP) is a basic measure of an economy’s economic performance. GDP is the market value of all final goods and services made within the borders of a nation in a year measured in Dollars. Globally, GDP is equal to the total monetary income generated by production of goods and services in a country.

Gross Domestic Product does not take into account many important variables accelerated by Social Media and growing exponentially in economic influence.

GDP counts only industrial output, but…

Industrial output is becoming increasingly dependent on social networks and social innovation. GDP does not take into account such non-market transactions such as open source development, crowd sourced innovation, conversational currency, social capital, creative capital, or intellectual capital exchanged between people in diverse social networks

GDP reflects Wall Street Priorities, but…

Wall Street Priorities are increasingly challenged by social priorities. GDP does not account for sustainable business practices, heroism, mentorship, activism, volunteerism, social networking, uncompensated innovation, and community involvement. GDP does not account for quality improvements and social multipliers such as aggregation of social media, increasingly powerful computers, acceleration of conversations, online etiquette, multi-media, and social editorial services.

All of the above exclusions are valuable, because…

These exclusions add value, they store value, they create value, they distribute value, and they exchange value. If we called it a financial instrument that is highly convertible, extremely liquid, and easily transported it would describe a currency by any definition of the word. For the purpose of this discussion, call this currency the “Rallod” – or Dollar spelled backwards. The Rallod is the currency of the new American economic and production paradigm.

The Invisible Currency

For Example; Twitter is doing in Iran what America has been trying to do in Iraq for 8 years. Face book, LinkedIn, and the entirety of social media space is producing many times the effectiveness of the $200 Billion U.S. advertising industry in terms of driving people to specific action. Social vetting platforms such as blogs, commentaries, groups, and content aggregation have increased the efficiency of markets by vastly reducing arbitrage opportunities while also identifying scams and corruption. Human productivity is being converted to Rallods and there is no politician, executive, or white collar criminal anywhere in the world who is not deeply concerned about this invisible currency.

The Best is Yet to Come:

The “Last Mile of Social Media” is analogous to the last mile of broadband Internet – the marginal cost of reaching every person in every household and tightening social networks to extremely high resolution, is diminishing rapidly. The Last Mile will bring communities together to vet local politicians, corporations, products, and policies. The Last Mile will formulate a knowledge inventory combines with close proximity of knowledge assets and a percentile search engine to predict outcomes. The Last Mile of Social Media will duplicate every function that exists in a corporation except it will be built upon the social media operating system; aggregated, amalgamated, sustainable, and reflecting social priorities.

So what happens to GDP?

GDP by current measure will reflect only the value of the “dollar”, not necessarily the value of the human productivity. Perhaps it already does.

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The Invisible Currency Among Us

By Admin

On June 17, 2009

In General Information

Liquid Swords - by Megan Olson

Invisible Currency

On my birthday, I received many greetings on Facebook from friends and family. So, let’s say for example that Hallmark sold 10 less cards (@$3.95 ea), the telephone company sold 10 less long distance phone calls phone calls (@$.60 minute), FedEx delivered no additional packages, oil companies sold no gas, and my friends did not deploy, say, 20 hours (@$25/hr) of human productivity buying stuff, licking stamps, or delivering mail in my honor. Total productivity savings can be valued over $500.00; or roughly $50.00 per message.

Conversational Capital

One billion messages are sent on Facebook every day. Each message sent and received constitutes a conversation. Each of these conversations has a value that can be expressed in terms of productivity saved and assigned a dollar value. Suppose that each Facebook message has a value of only $1.00 per person engaged in a conversation. That comes out to 730 Billion dollars per year of human productivity saved – enough to fund TARP.

Twitter is worth a cool 100 Million tweets per day. Let’s assign a net productivity gain of $1.00 per tweet sent (not received). If you think that tweets are not productive, follow the Iran Crisis; a revolution fought with liquid swords. So let’s assign Twitter $36 Billion per year in increased human productivity.

Next, according to Google analytics, about 100 real people spend enough time on my little blog every day to read at least one article. Suppose each blog article increases human productivity by $1.00 each. Technorati tracks well over 100M blogs. That is 10 billion dollars per day – or a whopping 3.6 Trillion dollars per year. Let’s discount that by 50% to only $1.8T in fairness to the skeptics.

The grand total is 2.5 Trillion Dollars worth of conversational currency – 2 times the 2009 national deficit and 5% of America’s entire debt obligation – and growing. Where is all this productivity going?

What’s happening is what’s not happening.

People are NOT sitting through hours of TV commercials anymore. People editorialize their own news and do NOT watch what is designed to corrupt them. People are NOT letting their ideas die unheard. People are NOT letting politics run them down and have now elected health care, the environment, and the end of warfare to the Presidency of this and other nations. People have become far more focused and more productive through the rediscovery of family, friends, Art, Music and social priorities over debt enslavement. Next, social media is coming to the neighborhoods.

Millions of people practice “social media” in their spare time. This is invisible productivity that effectively magnifies the productivity of others with an astonishing multiplier effect. Craigslist, CarFax, Zillow, Epinion, Amazon, and Expedia are all eliminating arbitrage opportunity and sending brokers scurrying for a real education. Product reviews are killing the scams and delivering the right product to the right market.

The Anti-buck

Maybe the Dollar is not so overvalued after all. Maybe the dollar deficit is counter balanced by this new invisible currency. Suppose the more inflation that occurs, the more this invisible currency will affect the overall economy. Suppose people are hedging dollar currency with conversational currency. Suppose social priorities are replacing Wall Street Priorities. Suppose we are approaching a new equilibrium rather than an impending free fall – except for those who try to control it.

Special Thanks to Megan Olson

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Treating the consequences, not the symptoms?

By Admin

On June 10, 2009

In General Information

Problems and opportunities are moving very fast. Problems are often so complex and so integrated across the globe that no single person can accumulate in a lifetime the experience needed to manage effectively. The “top-down” management structure no longer has a statistically relevant sample of prior experiences from which to make essential decisions. Actions without wisdom have unintended consequences for yet unknown victims.

The Wisdom of Management

Managers manage through experience. After many years in an industry, they can observe a situation and compare it to prior situations that they have encountered either through experience or formal education.

An effective manager can identify an issue, determine the probability that it will become a problem, and discuss the consequences of action or inaction. Then they make similarly calculated decisions that either solves or manages the consequences of the problem. The depth and breadth of a manager’s experience is called wisdom.

Duplicating Wisdom

In order to duplicate wisdom in a laboratory, scientists generate statistical events. By duplicating a scenario 20-30 times, a range of outcomes becomes statistically relevant for predicting future outcomes and identifying the way things can influence the outcomes. The idea behind the peer reviewed journals is to display the experiment to everyone for vetting. If it survives vetting, it becomes part of the human body of knowledge until otherwise challenged.

Managing consequences

The rate of change has become extremely high and problems too complex to manage. Vetting mechanism are breaking down like levies against the dam in industries such as Banking, Insurance, automotive, medicine, education, environment, etc. We are in a crisis of consequences where we can no longer manage the symptoms, only the consequences – forget about curing the disease.

Social Media: The Operating System of an Innovation Economy

The business plan of the new millennium will be the art and science of making information “less imperfect”. In a condition of perfect information, everyone associated with an issue has the 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.

Wisdom of Crowds

No single human can accumulate enough experience in a lifetime to manage the totality of human problems. Perhaps the wisdom of crowds could be used to simulate one person that does. This cannot, however, be a random collection of people acting in haphazard process. The challenge is in finding the correct group of people who collectively replicate a condition of “perfect information”. Then we must transform the perfect information into knowledge. Finally, we need to transform that knowledge into innovation through entrepreneurial activity.

The Social Imperative

Social Networks need to form complete and detailed inventories of resident knowledge cataloged on a ‘bell curve’. Social Networks must codify social capital, creative capital, and intellectual capital so that scientific methods can be used to predict and assemble unique collection of knowledge assets that capture statistically relevant collections of experiences. That unique set of knowledge assets must then be deployed precisely in a market.

By all indications, this is the direction that the integration of social media is trying to go. It is now our social imperative that it gets there.

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Collateralized Innovation Obligations

By Admin

On June 9, 2009

In General Information

Collateralized Debt Obligations (CDOs) are a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets. In the case of the current financial crisis, the underlying assets were home mortgages. It is not necessary for the CDO buyer or seller to know who lives in the home and what they produce; the asset is a contract backed by future productivity.

CDOs vary in structure and underlying assets, but the basic principle is the same. To create a CDO, a corporate entity is constructed to hold contracts as collateral and to sell packages of predictable future cash flows to investors. The more money handed out in home loans, the more money could be collected in CDOs

You are a liability.

While corporate leaders proclaim that people are the greatest asset, corporate accounting practices specify otherwise. Employees are an expense and their salaries, benefits, and pensions are liabilities to be reduced any time the opportunity arises. So what’s the problem? Liabilities can’t innovate.

Suppose for a moment that people were in fact an asset on the accounting sheet and their salaries, benefits, and pensions were “investments”.

Collateralized Innovation Obligation (CIO):

The CIO would obviously be a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets, specifically, the output of productive and motivated people.

Like the CDO, a CIO would vary in structure and underlying assets, but the basic principle is the same. To create a CIO, a corporate entity is constructed to hold assets as collateral and to sell predicted future cash flows to investors. It is not necessary for the CIO buyer or seller to know who is innovating or what they are producing; the asset is a contract backed by future changes in productivity. The more money handed out in innovation loans, the more money could be collected in CIOs. For all practical purposes, we could call it an Innovation Bond.

Enter Social Media:

Social media is teaching us an important lesson about innovation. Every time you get a diverse group of people together to share ideas, new ideas form. Every idea is useful as long as it is shared; thousands of bad ideas must expire before the good one appears. Conversational currency is the vetting mechanism of all ideas. While not every good idea becomes a great invention, every great invention is built from good ideas. Machines cannot produce ideas and no single company, country or person holds a monopoly on ideas. Innovation and the creation of all wealth arise from the social, creative, and intellectual interaction of people.

Conversational Currency: The underlying asset

The underlying asset that supports both the Collateralized Debt Obligation and the Collateralized Innovation Obligation is a person and their ideas; one is an asset and the other is a liability. Both types of people go to work every day to interact with other people. They both share ideas and create better ways of doing things. People increase human productivity through fault tolerant networks and support systems. They transform information into knowledge and innovation – and both pay their mortgage.

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The Competition is Competition Itself

By Admin

On June 7, 2009

In General Information

In quantum physics, the Heisenberg uncertainty principle states that certain pairs of physical properties, like position and momentum, cannot both be known. That is, the more precisely one property is known, the less precisely the other can be known.

A practical analogy is the modern corporation. It is difficult for a corporation to truly innovate because people behave as a function of the corporation’s interaction with them. Heisenberg’s uncertainty principle suggests that the more we know about competition, the less we may know about cooperation.

Is competition is good for innovation?

A corporation is a closed loop that feeds on internalization. External influence is traditionally shunned because of the great promise of the competitive economic system. We compete with other companies, with our own legal system, with Unions, and with each other. We hold and protect trade secrets; spend millions on patents that never get used. We make our “intangible Human Assets” sign “tangible” contracts of secrecy and non-competition.

How do we define cooperation?

We often think of cooperation as teamwork. However, we define cooperation as the alternative to working separately in competition. The definition of cooperation is derived from competition; the assumption that there is an opponent. There needs to be a war against something in order to accomplish something together. If you are not with us, you are against us.

Who exactly is the opponent?

Competition is a deeply ingrained part of our culture. The business world is filled with sports analogies like; “knock them dead”, “carry the ball”, “we need a home run”, “great save!” We see that national sports franchises command the highest pay and best ratings. Reality TV is all about kicking people off islands, backstabbing one’s fellow apprentice. We have even turned the pursuit of love and happiness into a competition. The object is to decimate the competition. We define ourselves with slogans like: “may the best man win”; “the survival of the fittest”; “winner takes all”. Destruction sells.

Beating a dead horse:

So what happens when we compete with each other? What are the consequences when we decimate each other? What happens when one departments competes with another department in the same company? What happens when one person competes with another for a salary and bonuses? What happens when society competes with Wall Street for their 401K? What happens when the competition is already lost – do we continue competing or do we then cooperate?

The unwinnable war

After a while, societies and communities becomes a closed loop much like the corporations that they interface with. They have no idea who the friend is or who the enemy is. When people are in a game that they cannot win, they feel alone. Loneliness is the war that cannot be fought.

Social Media Cooperation; A closed loop system:

Social Media is emerging as an astonishing force in cooperation by uniting communities and people of diverse and complementary interests, affinities, and actions. Social media works in a new dimension: It is a “cultural dimensions” where the opponent is opposition itself.

Social media teaches cooperation. The more we know about cooperation, the less we know about competition.

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Change You Can Bank on

By Admin

On June 5, 2009

In General Information

The Earth changes – it always has and it always will. The most interesting thing about Earth is not rock, it is rate of change of rock. Yet it is this rate of change in rock that created oceans, continents and geographical features. The rate of change in the landscape is what created and affects all humanity; global warming not withstanding.

In fact, the rate at which things change is the root of all financial deals, social interactions, creative discovery, intellectual pursuit, even criminal activity. All value is created and destroyed in response to the rate at which something changes. Since change is relative to time, the rate of change is something, like death, and taxes, that you can bank on.

Money, Knowledge, and Power

As a corollary; the ability to measure rates of change in things is the ability to measure value. The ability to cause rates of change is the ability to create or destroy value. It is therefore in our interest to try and express our world in terms of rates of change. For example:

1 Money, interest, and stock price are deeply related. Therefore, the rate of change of money is related to interest. The rate of change of interest is related to growth rate. The change in growth is monetized through a public market for its stock. Stock price affects money and the cycle continues.

2 Information, knowledge and innovation are deeply related. Therefore, the rate of change of information is related to knowledge. The rate of change of knowledge is related to innovation. Innovation creates new information. And, the cycle continues

3 Attention, attraction, affinity, audience, and action are deeply related to each other. Therefore the rate of change of attention is related to attraction. The rate of change of attraction is related to affinity, etc., until finally, the rate of change in action gets everyone’s attention. And the cycle continues.

Achilles’ Octopus

There are a few problems however. If you remove, corrupt, or disengage any of the components, the cycle fails. To complicate matters further, our three examples are also related: money, knowledge, and audience; stock price, information, and action; etc.

Points of failure can occur at any part of the cycle and it is often difficult to identify which failure caused what effect. Does a stock price fail because the public lost affinity or because information was corrupted? Does an economy fail because there is no money to invest in innovation or because our society outsources its knowledge economy? Does a school system fail to deliver the right knowledge to society because the stock market failed or because there is no public action?

Social Media and the next paradigm of economic development

Social media allows us to express the dynamics of our world in real time and at great speed. Feedback loops are shorter and cause and effect can be more easily differentiated. The data that will be generated through the integration of social media will allow entrepreneurs to identify rates of change of the rates of change! Armed with computer enabled search and analysis algorithms, they can mange these complex new relationships to create value for themselves and their community in a new era of social capitalism. Social media is a higher order calculus.

It will take everyone to accomplish this together but we can create a new landscape for our Earth, ourselves, and our children’s future. This is change we must bank on.

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Buddhist Economics

By Admin

On June 2, 2009

In General Information

Back atcha!

Everything is Connected:

The economic models and theories that prevailed through the 20th century are rapidly falling apart. Economists scramble to offer explanations and solutions. However, much of what has gone wrong was anticipated years ago by E. F. Schumacher (1911-1977), an Oxford economist and protégé of John Maynard Keynes who proposed a theory of “Buddhist Economics” following his interest and studies in Asian philosophies.

Schumacher was among the first to argue that economic production was too wasteful of the environment and non-renewable resources. But even more than that, he saw decades ago that ever-increasing production and consumption — the foundation of the modern economy — is unsustainable.

Never see what has been done; only see what remains to be done.

Schumacher wrote that western economics measures “standard of living” by “consumption” and assumes a person who consumes more is better off than one who consumes less. He also discusses the fact that employers consider their workers to be an “expense” to be reduced as much as possible. He questioned the theory that some amount of unemployment might be better “for the economy.”

What we think, we become.

Schumacher argued that an economy should exist to serve the needs of people. But in a “materialist” economy, people exist to serve the economy. Notably, he argued that labor should be about more than production because a person’s work has psychological and spiritual value that must be respected.

Instead we consider goods as more important than people and consumption as more important than creative activity. It means shifting the emphasis from the worker to the product of work, that is, “from the human to the subhuman.” We have outsourced our soul.

Three things cannot be long hidden: the sun, the moon, and the truth.

Today, many enterprises – some entire industries – are failing and they cannot understand why. Over time, they have crossed that philosophical line and now serve advertisers, not their customers.

Traditional media and journalism are an example; they scare people, feed on their anxieties, promote insecurities, and stoke desire. Demographers trespass into people’s homes, collect statistics, run numbers, and design messages that steal the things people love about their self and sell it back for the price of the product.

We end up with no end of entertaining consumer products that soon end up in landfills, but we fail to provide for some basic human needs, like health care for everyone.

A jug fills drop by drop:

Top News in Business Week Print Edition v. Growth Rate for print media:

•    Pending Home Sales Rise for Third Straight Month
•    GM: A View from the Back Seat
•    U.S. Corporations Size Up Their Carbon Footprints
•    Move Over, Amazon? Google Aims to Sell e-Books

Top News in Business Week Exchange – Reader Chosen Topics vs. Growth rate.

• Social Networking

•    Global Economy
•    US Economy
•    Green Energy

The Editor selected topics in the top chart are aligned with corporations, consumption, and large bailout efforts. Meanwhile, the reader selected topics in the second category screams: “Hey, where are we and where are we going?”

It would seem that mainstream media should be asking the same question.

(ed note: special thanks Barbara O’Brian at about.com)

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The Next Economic Paradigm

Month: June 2009

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