The Next Economic Paradigm

Month: September 2009

Marketing in the Age of Social Capitalism

Family Recipe?

The recipe for selling great products to great customers in the age of Social Media resides first in helping people find their highest talent and passion.  Advertisers need to offer something to the community that they target.  The best place to start is in understanding the challenges and opportunities that a modern community faces.

The great innovations of our time were created by people doing what they enjoyed most by using their talents to the highest potential.  Disney, Boeing, Apple, Mattel, and nearly every other ground breaking venture had the secret sauce of people doing what they were best at and most passionate about – and it was not about collecting “stuff”

The passion play

Computer Enabled Society is in the midst of a struggle to reorganize itself outside of the construct of the traditional corporation. It seeks to develop methods and systems that allow for the reallocation of social capital, creative capital, and intellectual capital to match a person’s natural talents, passions, and abilities with those complementary to other people. This is as true for communities as it is for corporations.  The result will be a profound new paradigm of Social Capitalism reflecting social priorities and community values.

Do no evil:

If marketers have the foresight and talent to “get ‘em while they’re young” or to “sell ‘em what they fear”, they certainly also have the foresight and methods to “develop ‘em to their highest potential”. Advertising agencies are full of real smart people who know how to deliver a hidden message – why not use that talent to empower people?

Instead, mass marketing pays mass money for mass audience from which to draw mass revenues – the message gets debased to play on mass fears, anxieties, and insecurities because this is the least common denominator.  As a result, actual products are designed to be marketed, sold, and thrown away; not to be particularly useful, productive, or even healthy.  Unnecessary innovation wastes human effort and natural resources while mass marketing of unnecessary innovation wastes the time and bandwidth of those for whom the product is irrelevant.  Yes, the majority of advertising is just Spam.

Advertisers as community organizers?

Few realize that advertising can become a highly useful component of the Innovation Economy.  In many professional practitioners look forward to hearing from vendors, educators, and fellow practitioners for trends, news, and developments that can strengthen their community.  Bad products are rejected quickly and good ones are elevated quickly. This is how the great innovations are found. This is where the early adopters congregate. This is where brand loyalty is unyielding. This is where wealth is created.  This is efficiency that society wants and needs. Social Media can deliver this audience but advertisers need to adapt by losing the CPM (cost per mille) model (more on that later).

Marketing to communities is fluid, dynamic, specific, and it takes some work.  The dynamics of communities will replace the statics of demography and CPM.  Fulfill those needs of a community and your products will win forever.  It is not difficult to see the future, only to act on it.  That is innovation.

Share this:

The Voice of the Youth

Does One size fit all?

The 40+ crowd is flooding to Facebook.  The 30+ massage their Linkedin profiles. The 20+ crowd is tweeting their hearts out.  What are the kids doing?  How are they organizing themselves?  After all, they are saddled with a 50 Trillion dollar debt liability and a warming planet courtesy of their Tenants.  I posted an article below about a High School Student from Issaquah Washington (read “Small Town USA”) with a head full of ideas.

Reading between lines:

Kids are looking for better ways to promote themselves to colleges, employers, and each other, with a twist; they want control and ownership of their data.  They see it as an extension of a business card rather that a bill board branding channel.  Yes, they are open for business and ready to produce insanely creative things.  However, there must be some intimacy in relationships which other social networking sites cannot provide. They seek quality over quantity in the next economic paradigm.  They seek simplicity and eschew the corporatism of  their media.

They are consummate sharers always aware of their own productivity.  Their new applications are a chain of productivity tools for other students creating a world where teenagers can find useful tips, tricks and products to get through the teen years successfully.  They are passionate about engaging the world on their level.  They are passionate about their role in providing value to others.  I, for one, welcome the prospect of turning the world over to it’s rightful owners – the kids.

Students develop Web sites for peers

By Christopher Huber

Skyline Running Start student Adam Sidialicherif has a lot of ideas floating around in his head these days. The self-taught Web developer has so many, he even maintains in his bedroom a list of Web applications he wants to write to help his peers with numerous aspects of life, he said.

Share this:

Building a Better Entrepreneur; Google 10^100

Google 10^100 award voting is Launched.  There are two sectors that we believe would have the greatest impact on the greatest amount of people; building a better banking system and funding social entrepreneurs.  You can’t have one without the other – if Google funds these two sectors in concert, the outcome would be incredible.

Build A Better Bank

In the old banking system we assume that we have the knowledge to execute a business plan and we go to the bank to borrow the money.  In the new banking system, we will assume we have the money and we go off in search of the knowledge.  Social Media is an excellent “public accounting system” for knowledge assets.

Our current banking system has gotten it backwards.

Technological change must always precede economic growth. The supranational currency may be backed by productivity and not debt.  Social media provides an excellent platform upon which to design such a banking system. People trade “social currency” at a tremendous rate.  This is evidenced by the amount of destructive innovation is occurring in many legacy sectors due to social media.

Better Banking Tools for everyone

“Partner with banks and technology companies to increase the reach of financial services across the world. Users submitted numerous ideas that seek to improve the quality of people’s lives by offering new, more convenient and more sophisticated banking services. Specific suggestions include inexpensive village-based banking kiosks for developing countries; an SMS solution geared toward mobile networks; and ideas for implementing banking services into school curriculums”.

Suggestions that inspired this idea

1.    Enable prepaid cell phone bank accounts for millions of people working in the informal economy
2.    Create a community-level electronic banking system for rural areas
3.    Build IT-enabled kiosks which provide access to financial services
4.    Create a single world bank or supra-national currency, uniform rules and transparent public accounting

Fund Social Entrepreneurs

Venture Capital is ridiculously expensive. Corporate innovation serves shareholders value over social priorities.  Some say that the financial risk of funding innovation is too high. The top ten reasons why start-ups fail are due to knowledge deficits, not money deficits.  A new banking system that trades knowledge as currency would solve this problem.

The key is to match most worthy knowledge surplus to most worthy knowledge deficit.  Google is perfectly able to build a search app for knowledge assets if there were an inventory of knowledge assets.  With the most worthy match, Risk can be reduced and new financial instruments can be developed such as the innovation bond, innovation insurance, tangential innovation markets, and destructive innovation transition contingency options, etc.

Help social entrepreneurs drive change

Create a fund to support social entrepreneurship. This idea was inspired by a number of user proposals focused on “social entrepreneurs” — individuals and organizations who use entrepreneurial techniques to build ventures focused on attacking social problems and fomenting change. Specific relevant ideas include establishing schools that teach entrepreneurial skills in rural areas; supporting entrepreneurs in underdeveloped communities; and creating an entity to provide capital and training to help entrepreneurs build viable businesses and catalyze sustained community change.

Suggestions that inspired this idea

1.    Provide targeted capital and business training to help young entrepreneurs build viable businesses and catalyze sustained community change
2.    Create a non-profit, venture capital-like revolving fund to invest in high-impact local entrepreneurs
3.    Send young American entrepreneurs to underdeveloped communities to help create small businesses that would economically benefit those communities
4.    Create schools in rural areas to teach local people how to become entrepreneurs
5.    Create a private equity fund to help immigrants in developed countries finance business development in their countries of origin

Share this:

Critical Value of Conversational Currency

Can the value of conversation fluctuate when compared to a “basket of conversational currencies”?  The translation is as follows;  If several conversations are taking place at the same time, does yours hold more or less value depending on the value of the others?

Same as a Lie?

If you ask a newspaper whose lead story was trumped by an unexpected celebrity death, the answer is yes.  If you tell a political activist whose rational message is lost to  more radical activists, the answer is yes.  If your speech is interrupted by a heckler, the answer is yes.  If you are caught lying about your Nuke Plant, the outcome is unintentionally the same – a loss of credibility, value, equity, and associated increase in risk, volatility, etc.

In today’s world of floating currencies, almost every currency rises and falls against other currencies at one time or another. But a currency that is persistently weak or continually falling relative to others presents a problem. If the dollar’s value were to continue to fall to new lows, eventually this would trigger rising inflation pressures. That’s because inflation can be defined as the loss of purchasing power of a unit of currency.

Inflationary Pressure on Conversational Currency?

Likewise, weak and falling conversational currencies are also bad for growth, since they scare away investment by another conversant. Who wants to invest time and knowledge in a conversation if there exists the real possibility that one’s investment will be eroded by a falling currency? At the very least investors require special incentives (i.e., premiums) to invest in an conversation with a weak currency.

Incentives Packages of Social Media Space

Weak conversational currencies are symptomatic of a variety of factors: cheap talk, lack of references, weak economic growth prospects, lack of confidence in the other participants, weak currency demand, and bad fiscal policies (e.g., wasteful discussion, high cost of participation, low quality venue or presentation). Strong conversational currencies, on the other hand, typically reflect tight topic control, vetting policy, strong growth prospects, confidence among participants, strong currency demand, and good fiscal policies.

The Critical Breath Mint

For better or worse, in order to “mint” conversational Currency, a discussion must be made accessible to largest audience possible.  The discussion must also be directed to those most “qualified” to engage in the discussion. When the value of the conversational currency reaches a low level threshold in either factor, the discussion ends with no resolution to continue and no tangential discussions taking place.  This can often be attributed to disruptive innovation making old conversations obsolete.  But it can also happen to worthy conversations infected by a parasite such as spam, hecklers, radicalization, flame wars, and emotional versus rational articulation, vendetta, sabotage, etc.

Critical Level of Conversational Currency

The critical level of conversational currency is where supply and demand cross.  The value of conversational currency will be determined by the ability to match the most worthy knowledge surplus with the most worthy knowledge deficit.  We use the financial analogy because the idea is the same – a currency is a currency.  Many of the same rules, methods, and calculus hold.  What is missing in Social Media are an inventory and accounting system for knowledge assets. While such systems are emerging on FaceBook, Twitter, Linkedin, etc.  Some intervention is needed to integrate a social media system we can bank on, literally and figuratively.

Share this:

Good Blogging is Good Business

Bankers do not care about money, they care about the rate of change in money – Interest Rates, ROI, and CAPM make the world go around.

Static web presence is getting squashed by dynamic content.  The best party has the best conversation.  It’s not the quality of life, it’s the quality of living. Countless expressions in business and culture reflect this idea.

I would like to thank John Ryan for this analysis:

***

More proof that blogging is smart business. Just make sure that whoever is blogging is a good writer and is committed to being consistent.

Otherwise, it will be a waste of time. You can either have your developers include a blog in your web experience or use free tools like WordPress to link to your website.
From Hubspot:

If you blog, you know that it’s good for your business.

But how — and how much?

To answer to those questions, I looked at data from 1,531 HubSpot customers (mostly small- and medium-sized businesses). 795 of the businesses in my sample blogged, 736 didn’t.

The data was crystal clear: Companies that blog have far better marketing results. Specifically, the average company that blogs has:

* 55% more visitors

* 97% more inbound links

* 434% more indexed pages

Why are website visitors important? Because more visitors mean more people to convert to leads and sales.

Why are inbound links important? Because they signal authority to search engines, thus increasing your chances of getting found in those search engines.

Why are indexed pages important? The more pages you have on your site, the more chances you have of getting found in search engines.

****

Thanks again John.  The value of any innovation is in the transformation.  Starbucks transforms 25 cents worth of milk, beans, and water into a 2 dollar cup of coffee = 800% return.  The laws of leveraging conversation applies equally effectively in conversation as in finance where astonishing returns are not uncommon.  We really need to start thinking about Conversation like a financial instrument capable of all the capitalistic magic that derivatives, bonds, options, and securitization methods offer. 

UA:F [1.6.1_878]
Share this:

Unspoken Communication and the Bottom Line

As a community developer for several websites, I go through lots of different information sources.  I am looking for stories and nuance that demonstrate how conversation behaves like a currency.  The more I look, the more I see.  The strength of the analogy is quite remarkable.

Unspoken Values

I can also see how the unspoken communication stores as much value as the spoken communication.  In the U.S. , there are race troubles, financial troubles, trust troubles, and confidence troubles. Many fears and anxieties can be accelerated by Social Media in unpredictable ways.  First, information riles people up quicker than facts can follow, and second, the shelf life is much shorter as issues are dissipated by new ones.  Much is left unprocessed.

The Micro-Trauma

What happens when important issues in life go unresolved?  The life of a soldier may offer some clues where events can happen faster than the mind can process them.  Perhaps the life of a child offers some clues where every day brings so much new information that all new events  are processed in terms of basic necessity.   Perhaps any traumatic event such as a divorce, loss of a family member, or victimization places us in the realm of the unspoken communication.  This is a protection mechanism, not a delivery system.

As the World Churns

Billions of people hustle off to work and spend their day producing stuff in order to earn imaginary money so they can spend imaginary money.  This helps things move from the forests to the dumps. They have no idea the sophistication of the micro-trauma delivery system that acts on how they process information.

The unspeakable drives our fears, interests and concern and influences how we process future information.  I am amazed at how two people will arrive at opposite conclusions from the same data and the inability for those two people to speak to each other rationally.  Advertisers, politicians. PR firms, and traditional media can deliver bits of information and dissipate them quickly leaving an unprocessed data-packets behind.

Opting Out:

I just closed my land line, canceled cable TV and purchase a subscription to on-line music radio that I play constantly.   I “hide” the fringe mongers on my FaceBook, and get my news from Google alerts, feeds, and sources that align with what I am able to process mentally and emotionally.  What I cannot process, I have a network of trusted friends who can process the information and guide me through the issues.  I am quite happy, in fact, as many areas of my life are improving; health, friends, family, productivity, and finances…etc.

There is a tremendous opportunity available in delivering the right information to the right people with the intent of helping them to successfully and completely process information.  This is more work up front, but the loyalty in the long-run is exactly what politicians, marketers, and news sources are competing for.  Instead they are killing the patient to cure the disease.

In order to monetize in the new economic paradigm, help the unspoken communication become speakable and then listen to your friends.

Share this:

A Clear and Present Value!

Image credit

Clear and Present Value

The value of conversations is real, clear and present – especially in the actions of those who profit wildly from them. I saw this in the negotiations of NAFTA when it was clearly in the best interest of the some negotiators to keep engineers poor weak and disorganized.

I saw it again in corporate America.  Imagine if Boeing was to publish a complete accounting of the incredible intellect, ingenuity, talent, and creativity that roams their hallowed halls – the world would dismantle them piece by piece.  The “knowledge inventory” is a company’s most closely held secret.

Keeping secrets from the secret:

Sometimes it seems that the biggest secrets are held from those who represent the greatest real value. Corporations pay their engineers the minimum amount of money required to get them to their desk in the morning.  Then they resist organization of engineering professionals, and they give them little or no power over marketing, human resources, accounting, and sales promises related to the engineering outcome.

The problems get worse when this big “secret” becomes public. For example: Steve Jobs has now been identified as trying to collude with Ed Colligan, the CEO of Palm, to not poach each other’s employees.

A Currency Collusion Collision Conversation

“Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal,” Colligan said to Jobs last August, according to an article Bloomberg reported.  Jobs succeeded in making such an arrangement with Google, according to published reports. The feds are investigating and the Palm allegations only make Apple look worse.

It is quite amazing that companies would expose them selves to such risk if conversations among engineers were NOT in fact extremely valuable.  Why else would Apple engage in such disrespect to engineers and others who actually create the products Mr. Jobs gets credit for?

The liberation of Knowledge Assets

The IPhone that rolls off the assembly line is not an innovation.  Rather, the millions upon millions of tiny incremental ideas, conversations, and shared thought are assembled into what does eventually roll off the assembly line.  The role of the CEO is significant, but still a minority task in the larger picture.

More than ever, social media is empowering people to hold equally productive and focused conversations outside the construct of corporation.  With the ability to measure and track impressions comes the ability to pay royalties to those that produce, direct, and sustain conversations.

With the Obama justice department and other federal regulators already looking closely at Apple over the iPhone and handset exclusivity and the sharing of board members, Jobs’ alleged anti-poaching efforts only add to the fire that is growing around him. If social media continues to integrate at a rapid pace, the biggest fire that Mr. Jobs and other CEOs may have growing around them is the autonomy of creative, social, and intellectual staff.

Special thanks to a post written by: Veteran industry-watcher David Coursey who tweets as @techinciter and can be contacted via his Web site.

Share this:

Do the Laws of Persuation Hold in Social Media?

 

Anyone who has ever shopped for a car is familiar with the tried and true negotiation methods.  With the advent of social media, negotiations are happening more and more in social space and in combination with in-person events.

Time pressures, price pressures, asymmetric information, location, vetting, and abundance of alternate solutions are breaking the rules of negotiating.  Meanwhile, retribution for deals gone wrong has swung in favor of the consumer.  Here is a list of methods sourced from Robert Cialdini for negotiating and a few point about how things have changed.

1. Law of Advocacy; Introduce a third party: a salesperson can tell a prospect he “needs to talk to the manager” From that point forward, the prospect views the salesperson as an advocate.

People don’t need an advocate. Social media provides a written record of a past transaction as well as a snapshot of supply and demand in a market. People check FB while salesperson is off checking with manager. Customers have checked prices elsewhere and are only calculating the cost of time to scroll down the street for the deal they want.

2. Law of Urgency: Top negotiators create a sense of urgency by specifying which terms they’re willing to agree to, then setting a firm deadline, after which the deal is off the table.

Twitter sets a new standard for urgency.  Cause and effect are reversed as people respond to social media news to initiate the process.  “Off the table” means off the screen and on to the next vendor.  Next prospect is warned not to fall for the urgency trick.

3. Law of Authority: Using statistics to establish why you offer the best value on the market. It’s a way of saying, “You have more to lose here than I do.

Facts are increasingly easy to check. Undisclosed facts are easy to discover. Statistics can be read many ways in social media. Is the negotiator ready to be accused of warming the planet more than the next guy?

4. Law of Social Proof: Credibility is king in negotiations. Presenting testimonials from best-in-class companies lets prospects know the best in the business choose to do business with you.

Some references may in fact be liabilities.  Best in class companies (such as Whole Foods Market) can get in trouble real quick.  Is the negotiator ready to keep this list “twitter ready”?  Testimonials come from the bloggers, not the PR department. Ouch.

5. Law of Reciprocity: Shrewd negotiators establish a quid-pro-quo early on, so prospects understand it works both ways.

What can a negotiator offer in an environment where the customer has the same information they do? The customer is more able to put a fair market value on the “quid” thereby eliminating any arbitrage advantage.

6. Law of Commitment and Consistency: By getting the other party to agree to the “no brainer” terms gets them in the habit of saying “yes” and they are less likely to say “No” to a deal that is 99% done.

Customer is more empowered to say “no” to the terms that matter.  They have studied the case studies of others who have gone down the same path. Social interaction is desensitized especially of the negotiator does not appear to be tech savvy – commitment and consistency is easily lost.

Traditionally the negotiation process starts in the advertising campaign.  Get it?

UA:F [1.6.1_878]
Share this:

Why Are Leaders Failing?

People look for leaders that inspire them to achieve innovative breakthroughs. People trust, or so we think, CEO’s to effectively lead their organizations so that employees can continue to get paid.

The confidence in leadership is waning and a new “leadership” is emerging. The new leadership is from and by the people. The reason for a shift in leadership is as follows:

1. Politicians have failed us with self interest and politics as usual. Usual no longer works for the people

2. CEO’s and management have failed to listen to the markets of conversations

3. Greed is out, efficiency is in and the old market is not adapt at “lean, mean and fast”

4. The people has lost trust in media, politicians and old management schemes

5. Advertising and marketing methods of the past are dead. 96% of the online ads get no responses. A rate of 3% at best is the return on direct mail, coupons and broadcast ads.

6. The market is no longer listening to the old market rather the market is listening to the people

7. People have been empowered and engaged to create their own markets and they follow a new kind of market leader. A leader who enables them to learn, grow and share with others whom have an affinity to their interest and beliefs.

8. New leaders are now  conversing with their own audience and there are many of them.  There are also a few leaders who are enabling many to engage, converse and build our own audience.

9. Conversations have never been so fluid, so reaching and so powerful.  The irony is that the power of speech has always been and will always be disruptive. History proves it so but we are in an era of making history that reinvents itself daily from the conversations.

10. Old leaders either adapt very quickly or die. The old game is over and the longer you try and play it the more it will cost the market, your investors and the people whom supply the market with commerce, the people.

Admit It, You are Out of Touch And Blinded By The Past

For politicians and corporate leaders the downfall of your empires is directly related to markets changing and you denying the change. If you haven’t noticed markets are now transparent. There is nothing you do that the market won’t notice and freely comment on, good, bad and indifferent. When you do good the market with follow you. When you do bad or do the same thing the market will leave you. Unless you recognize this shift your dead in the water.

Time is your enemy and denial is your your deathbed.  Being dead in the water means the next wave will topple your boat because its force is too big, too large and you can’t move fast enough to navigate around or over it.

Then again you may simply not have time or attention to even recognize that it just may be true and real.  In that case, move over for the new leader to replace you sooner than later.  Leaders are failing because they fail to change and fail to listen. Sorry for being so frank but I don’t have time to be politically correct. Get it?

Share this:

YOU are MONEY

Some HR bloggers are calling for a new profession called “Social Media Administrator”.  While there are many opinions and wide agreement about the roles and responsibilities – most of which I fully agree with – I would like to add the following considerations:

The corporate social media administrator should have a direct connection, responsibility and accountability with other social media administrators external to the corporation.  Not unlike a board of directors having diverse membership.  The membership and reputation of member of a Social Media BOD is also on the line.

Social media is just that, social.  It cannot be sequestered fully behind corporate walls and must be open and transparent in it’s message.  The Social Media administrator must protect the voices of those who speak.  While there is a constitutional amendment for freedom of speech in our government and the basis of democracy, none exists for corporations who use the information or the social media enterprise that hold “possession” of the information for eternity.

A market can only be efficient with adequate vetting mechanisms; the SEC vets Wall Street, The FAA vets Airlines, and the system of Checks and Balances vets government.  When the vetting mechanism fails, so too does the market.

Few people can see why this is important largely because the reasoning lies in economics and market theory.  Simply put, we are entering a new economic paradigm unlike anything we have ever seen or could imagine.  The idea that each and every iota of knowledge, experience, and opinion that exists between your ears behaves like a financial instrument has not fully been explained.  YOU are MONEY in every definition of the word.  Your productivity supports the value of the dollar. You own your knowledge, it is your property – you can waste it, you can mint more of it, you can borrow it, and you can lend it – and you should be able to capitalize in any currency of your choosing.

The only thing missing is a financial system for your knowledge. If we are smart – and ONLY if we are smart, this system will arise with the continued convergence of social media.  Among the KEY elements that MUST be in place is a public accounting system for Social Media Administration.

Share this:

Gnomedex 9.0 Seattle

I attended the Gnomedex 9.0 Social Media Conference in Seattle.  While it was wonderfully informative and every single person that I met was engaged, interesting, and accomplished in some productive way related to social media, I was left with some troubling observations as well as some very inspiring moments.

Observation:

1. Trillions upon trillions of dollars are being transferred to Social Media with the persistent extinction of old media dinosaurs – does anyone care?

2. Advertising concerns, print media, corporate HR, were strikingly absent from the corporate vendors on site and in among the sponsors – they should have been hovering over in helicopters.

3. There were ONLY a few hundred people in attendance – there should have been a few hundred thousand (6619 Tweets sent).

4. This event should have been gold plated – it was not, which leads me to some of the inspiring moments.

Inspiring Moments:

1. Many of the presentations reflected social priorities like the environment, using social media to empower yourself and the people around you,  and empowering less developed nations.

2. Relative absence of commercialization

3. Gnomedex 9.0, means that 9 have occurred and this is what it has “evolved to”.  As a worthy social experiment in itself, this shows us what social media WILL evolve to

4. Building trust was a predominant theme

Read Between the lines:

Social media reflects social priorities, not Wall Street Priorities – in fact, the table has turned.  For example: Twitter will be charging Corporations to view social media – after corporations failed to get people to pay them to view social media.

Every single business transaction is subject to a similar “reversal” relative to social media space.  The World has no idea what’s coming down the tracks.

Share this:

Will Facebook Currency Intermarry with the US Dollar?

Facebook is testing a virtual currency, because it’s cool and they can do it. They are not alone, the gaming industry has been at it for a long time for people who want to be more “productive” in the game space.

There is no mention, however, whether a Facebook currency could be used as a medium of exchange in the event of hyperinflation and the crash of the US dollar.  I can find nobody, writing anywhere today, that is willing to cross this proverbial line in the editorial sandbox.

I personally witnessed a devaluation in Mexico. Like a tsunami, the “adjustment” happens relatively fast as values ’snap’ fluctuate relative to other currencies.  Then very interesting things start to happen in the community. People will literally empty WalMart because most goods will be cheaper today than tomorrow.

As with other hyperinflation events, black markets form around various items such as gasoline, cigarettes, or Levis as people require some medium of exchange in order to buy necessities such as groceries and cooking fuel.

A Facebook currency may just be what communities will use to get through the event.  However, a Facebook Currency would likely be temporary because it could not be used in Banks to capitalize assets – or, by government who can’t figure out how to tax it.

Now the question becomes, what type of social currency could be intermarry with dollars?

Here is a hint; the dollar is backed by debt which is a promise to be more productive in the future. Conveniently, “innovation” is also a promise to be more productive in the future. Two such currencies are of the same species and can intermarry yielding new economic life.

The degree to which any ‘virtual’ currency is interchangable with the dollar is the degree to which it represents human innovation. Chew on that, Facebook.

Share this:

Twitter Vetting = Twetting?

Picture Credit

There are 3 characteristics of financial instruments which make them tangible in a market:   They live in an inventory, they are exposed to vetting mechanisms, and they are subject to constraints.

Tangibility of knowledge:

Here at Conversational Currency we are constantly seeking examples where human knowledge behaves like a financial instrument because a true innovation economy will arise when all 3 characteristics are true for the ‘human knowledge’.

We believe that the platform for the Innovation Economy will be Socialized Media; not corporations, or government.  So we get excited when we see posts like this from Brian Solis via Matt Marshall regarding Twitter’s monetization plans.

Twitter to becoming the vetting mechanism for business intelligence.

Think about the credit score; a list of independent variables run through an algorithm that correlate with the likelihood that you’ll fulfill a financial obligation. I’ll leave the rest to your imagination…read between the lines:

************

By Brian Solis:

Over at VentureBeat, Matt Marshall is reporting that Twitter will introduce its first revenue-generating series of premium services.

In an interview with co-founder Biz Stone, it was revealed that Twitter is in the initial phases of introducing commercial accounts to businesses seeking detailed analysis of activity in and around the brand on the popular network as well as other data not available to Twitter users directly.

In the next phase, Stone indicated that Twitter may also debut a new set of corporate-specific API’s that would allow the company to insert a customer layer over the profile and other aspects of the network to more effectively engage with the community, while increasing strategic visibility.

Stone revealed to Marshall, “Twitter will still be free for everybody and we’ll still tell them to go crazy with it. But, we’ve identified a selection of things that businesses say are helping to make them more profit.”

He further elucidated, “We want to build statistics or analytics that let users know — ‘How am I doing on Twitter?”

This news is the latest in a short series of information bursts following the company’s announcement that it is rolling out a new set of APIs to integrate geo-location into Tweets, mostly likely to contend with rising competition of geo-location networks such as Loopt and Four Square and also as a potential generator of hyper-local advertising revenue.

************

Ponder this:

Social value lives in an emerging inventory that is ever increasing in granularity.  Corporations have very little control over public opinion –  except in retrospect – which amounts to a constraint on social value.  Now, Twitter is the vetting mechanism.  Wow, we’re getting closer to the next economic paradigm every day.

The implications are vast.  Now we shall ask a few question:

At what point will Corporate Innovation reflect social priorities over Wall Street priorities?

At what point will Wall Street Priorities reflect Social Priorities?

If the Wall Street Manifesto is to “return shareholder value” and Twitter is vetting “social values”, what is the value of Twitter and who is really holding/voting those shares?


UA:F [1.6.1_878]
Share this:

Set the Data Free, Please

The following commentary was posted last week  in  Wall Street Journal Op Ed. This is an opportunity to consider the term “Conversational Currency” at it’s most literal meaning. People pay money to talk to each other. Other people want to control how when and how much people can talk to each other. The battlefront is technology, like rockem-sockem robots, technologies duke it out in this trillion dollar struggle to control our conversations.

Who benefits … shareholders?

The irony is that each and every titan is the beneficiary of conversation. The 135 year old Alexander Graham Bell era is about to End. Will patricide or scionism prevail? Will unified voice systems integrate all mediums and devices into a single channel? Will the elimination of conversation “frictions” also eliminate innovation “frictions” (you know, all those things that make innovation impossible to capitalize by regular people; Patents, risk, velocity, market intel, 1000% VC, etc.).

It’s about the data, stupid

Mr. Kessler proposes a National Data policy – after all, voice, text, video, etc., are simply different forms of data and should be treated as such.  Any device should work on any network and data should flow freely.  What’s with owning airwaves? Who came up with that idea ? – it creates more interference than it is touted to solve. Ditto for exclusivity contracts – who needs them, except those who stifle innovation.  And finally, the mother of all frictions, restricting speed and bandwidth.  Sure, I like driving with the emergency brake on – it improves my eligibility for “cash for clunkers”.

Resistance is futile

The truth cannot be hidden by economic tyranny.  Noble institutions like journalism, education, and entrepreneurship are being sacrificed in the name of shareholder value. People communicate freely and freely they shall communicate.  These are the profound questions of our era that play out every day in the news. Please read this and our other posts at CC with great optimism that a new paradigm is arising where an innovation economy will be built on a social media platform outside the construct of corporations:

Share this:

The New Reverse World Order

The New Reverse Order

If someone can track your spending, they can predict your behavior.  It is also true that if someone can track your behavior, they predict your spending.   The next economic paradigm is simply a higher order of the same.

On the next higher order, if someone knows your “Knowledge Inventory” they can predict how you will manage changing conditions – that is, how you will innovate.  Likewise, tracking how people innovate exposes the development of new knowledge assets (the ‘gold-standard’ of conversational currency).

Everyday some new headline shows that we are getting closer and closer to that point – for better or worse – where humanity learns to manage an innovation economy.

Profound Issues Arise.

The following article about Wal-Mart adopting the debit card (Wal-Mart to Staff: Bye-Bye Paycheck, Hello Debit Card) as a means of issuing paychecks represents a quantum leap in the monetization of knowledge assets.  We expect many more will closely follow in one of the most important financial developments in financial history – virtual currency.  If food stamps can be delivered on a debit card, why not frequent flier miles, Disney Dollars, coupons, rebates, tulip bulbs, beanie babies, or a new global currency such as the Rallod?

A Vetting Zoo

The only questions that remain are related to Vetting.  By all accounts Social Media is developing into the mother of all vetting mechanisms.  Who controls the card? What system is it replacing? Who can pull money off?  Who charges fees to whom and why? Who gets the business intelligence?  What is the PR spin?  Can advertisers interact with the card to apply discounts and rewards?  What types incentives motivate what types of people and can it go on a debit card?

A Steep Departure

Each of these questions, and the companies they spawn, will live or die by Tweet and Blog – this is a steep departure from the past.  For example; 30 years ago, if every American were told that their social security number would be tied to a credits score that is tied to their driving record, employability, insurance premium, health care, mortgage rate, and, yup, their debit card – the cities would have burned in protest.

Nobody could have seen this future except those who designed it.  Today, the designers are you and I – see the future now, see the future here at Conversational Currency.

Share this:

Trust as a Social Currency

The idea of trust as social currency is appearing in more articles, conferences, and books.  This is all highly consistent with the TIP thesis on Innovation Economics which describes the necessity of a vetting mechanism among the knowledge inventory as a means for the emergence of a currency in a market – that is, a conversational currency.  People need to trust the currency if they are to trade the currency.

Shefaly Yogendra provides some excellent insights below.  Keep in mind that American Culture does not have a monopoly on the definition of trust.  It should not be an American expectation to define the conversational currency in our own image.  Indeed, convertability of such currency will be, and must be, global.

I kept the analysis sparse on this article because it is a valuable exercise to form one’s own perspective on trust prior to diving into someone Else’s opinion.  After all, it’s your currency – you own it.  Good luck.

******************

by Shefaly (please see her Bio here)

Trust is a non-negotiable essential in business. The post linked here refers to web-based business-to-consumer interactions. But as social currency, Trust is the most significant in interactions amongst organisations, customers, employees and regulatory bodies.

Definitions

Wikipedia defines social currency as “information shared which encourages further social encounters“. Social currency is different from social capital which refers to “connections within and between social networks and individuals“.

Social currency – some characteristics

a) No distinction between ‘physical’ and ‘virtual’ worlds

b) No distinction between ‘individuals’ and ‘corporate entities’

c) No distinction between validity of negative or positive normative labels

Determining the value of Trust as social currency

a) Verifiable Identity and antecedents

b) Consistency

c) Reliability

d) Peer recognition

e) Value of the network

f) Individuality and collaborative consciousness

The original article can be found here and it elaborates on each of the points above.

UA:F [1.6.1_878]
Share this:

Creative Capital; The Hidden Hero

 

Social capital, intellectual capital and creative capital are the factors of production for the Innovation Economy; next economic paradigm.  Few people realize that Silicon Valley arose from a perfect storm of social capital from the 1960’s, the music and arts scene of the same era, and the proximity of academic centers Stanford and Berkeley.  The Bay area corporations may have been the beneficiaries, not necessarily the originators of innovation.

Creative Capital remains the least understood, yet most important element of the Next Economic Paradigm.  As we continue our march into the regime of social media it is imperative that we understand, support, and develop this critical factor.  We cannot “take it for granted” that creativity exists and will always exist.  It must be recognized, developed, and integrated into the fold of Social Media.

Here are some stats:

Wikipedia:

  • Social Capital has it’s own page with 6816 word article
  • Human Capital (Intellectual Capital) has it’s own page at 2597 words
  • Creative Capital does not have a page of it’s own on Wikipedia

Twitter:

  • I found 20 Tweets referencing “Social Capital” in the last HOUR
  • I found 20 Tweets references to “Intellectual Capital” in the last 6 HOURS
  • There were 20 Tweets that referenced the term “Creative Capital” in the last WEEK (mostly as a trade name)

Facebook Groups:

  • Social Capital Groups: 2000
  • Human Capital/Intellectual Capital Groups 1000
  • Creative Capital: 412

Linkedin Groups:

  • Social Capital: 69
  • Human Capital (intellectual Capital): 272
  • Creative Capital: 12

While the ratios vary, the trend is fairly clear.  Creativity is not often interpreted as a financial instrument otherwise it would be associated with the term “Capital”.  There are other factors as well that may play into this.  Artists are often self-actualized outside of the trappings of material possessions and therefore less visible as economic or political power brokers.   As a professional class, they may be under-represented in social media space.  In addition, creativity does not punch a clock and is likely not working for wages as such. Or they may be running around dressed up like Engineers

I’ve made the point that was intended so now I’ll leave the remaining analysis to a person who has done a great deal to advance the modern understanding of the field of study related to creative capital; Richard Florida – an unsung hero for whom Wikipedia does have a page:

Richard Florida (born 1957 in Newark, New Jersey) is an American urban studies theorist.

Professor Florida’s focus is on social and economic theory. He is currently a professor and head of the Martin Prosperity Institute at the Rotman School of Management, at the University of Toronto. [1] He also heads a private consulting firm, the Creative Class Group.

He is best known for his work in developing his concept of the creative class, and its ramifications in urban regeneration. This research was expressed in Florida’s bestselling books The Rise of the Creative Class, Cities and the Creative Class, and The Flight of the Creative Class. A new book, focusing on the issues surrounding urban renewal and talent migration, titled Who’s Your City?, was recently published.

UA:F [1.6.1_878]
Share this:

Creative Capital in Austin (SXSW)

The SXSW Music and Media Conference showcases hundreds of musical acts from around the globe on over eighty stages in downtown Austin.  By day, conference registrants do business in the SXSW Trade Show in the Austin Convention Center and partake of a full agenda of informative, provocative panel discussions featuring hundreds of speakers of international stature.

We at TIP find this combination of music, indi films, and Geekdom to be extremely interesting.  According to the work of Richard Florida; Engineers and scientists think and act more like artists and musicians than like production workers.  This calls into question much of what we assume to be true in corporate America (specifically 9-5 work weeks, wages vs. royalties, and who manages whom).

The mashup of music, film, and social media/technology is the basis of the most under-recognized factor of production for an innovation economy; Creative Capital. All the academics and corporate outsourcers thought talk about Intellectual Capital.  All of the marketers and PR experts talk about Social Capital.  But the SWSX is reflecting something very different.

As such, there are some interesting Filters in play. The following observation by Janet Fouts points out the curious absence of known superstars on the panel list.  It’s not the all-star game that traditional media loves so much. I would also encourage the reader to look at some of the Hot List Ideas that Janet Links to below.  My mini-rant: For the parents among us, the addition or elimination of Arts from any curriculum should not be under estimated.  Thanks Janet:

***

With all the talk about Twitter grades and the social media elite it’s sobering to look through the “hot” list form SXSW and see the proposals currently in the top of the voting. Sure, I looked for my proposals first and no, they weren’t on the hot list, but more importantly neither were many of the social media superstars I expected to be at the top of the list. After all, it is the interactive division of SXSW and that’s not all about social media folks.

There’s some pretty cool stuff in here for the web developer part of my brain too. A few people I recognize like Jason Wishnow from TED, Adam Pash from Lifehacker , Peter Shankman from HARO, and Skylar Woodward from Kiva, but there are a a lot of people I don’t know, and that’s pretty darn interesting. I spent an hour or two this morning finding some new information resources, and isn’t that really the point? Why not take a few minutes to browse the hot list to see what people are voting for and find next year’s superstars?

***

It is crucial to watch how events evolve and to recognize how people organize themselves.  Austin is not NYC, Silicon Valley, LA or Chicago – they are largely disassociated with traditional media, financial, and political power centers.  The purity of this disassociation cannot be underestimated.

Janet is right – events such as SXSW may be the best way to predict the future –  and with surprising and uncluttered clarity.

UA:F [1.6.1_878]
Share this:

You Can’t Eat Gold

The following is a question and answer that I responded to on a Linkedin economics forum.  This question still occurs in so many forms when it is also abundantly obvious that Social Media is driving so much value in so many directions.  The irony is that the question is asked within the currency that it fails to recognize.

Art credit

Question:

Fiat money is the cause or always the main cause of financial crisis. Reverting back to gold standard can give stability. How can this be implemented?

Answer:

It cannot.  Everyone agrees that money needs to be backed by something tangible. However, gold has a host of problems as well that are discussed extensively on-line and cannot be ignored.

A successful and stable currency must be backed by the productivity of the [citizens of a country] users.  So these two words should be interchangeable; i.e., a country spends productivity to fight a war.  A country spends productivity to fund universal health care, etc.

The cause of financial crisis is when the money becomes divorced from the productivity.  Debt is a transaction that exchanges current productivity for future productivity – assuming that productivity will increase at least by the so-called ‘risk’.  CDOs and other exotic financial instruments further obscure true productivity until money becomes driven irrationality and emotions completely separated from productivity.

If people lose trust in the currency, they will no longer trade it – they will find something else. Your hope is that they will find Gold.

Note clearly that innovation is also a transaction that exchanges current productivity with future productivity (due to the innovation).  As such, a currency backed by innovation is of the same species as a currency backed by debt.  Therefore, the entire financial system does not need to be torn down and rebuilt to serve a new non-debt backed currency.

The answer to your question is to look toward the places where extraordinary innovation is occurring today, right now.  It is clear that social media is developing this new currency.   The problem now is fairly simple; making human knowledge tangible.  This is where the innovation is. Here are some resources of people working on this problem:

http://ingenesist.com

http://relationship-economy.com

http://conversationalcurrency.com

Our deepest concern should be to feed the Goose what’s been so good to the Gander all these years. Of course one argument in favor of gold is it’s scarcity.  However, it is difficult to imagine that in an era of scarcity of so many resources, the basis of a currency ought to be more scarcity.  Knowledge, conversation, and innovation are scarce relative to the problems that they must be deployed to solve.  We’re in this together.

Share this:

Powered by WordPress & Theme by Anders Norén

css.php