The Ingenesist Project

The Next Economic Paradigm

Month: March 2010

Culture: When Engagement Is Not Optional

By

On March 26, 2010

In General Information

Today we see Social Media duplicating many of the functions of earlier society by storing community wisdom, applying social vetting, and deploying social currencies.

It takes a Community

Here is an article is about a a person who learned through social media profiling that her fiance was active in hobbies that conflicted with her moral constitution – before the wedding instead of after.  In the old days, the community would also profile each individual based on the social record of their behavior.

Social Capitalism

Here is a video article that discusses how social media is  duplicating many functions of the corporation outside the construct of the corporation. Factors of production increasingly enter the org chart as a social media application.  We now question whether the corporation itself is the sole vehicle of wealth creation.

Social Currency

We see social media duplicating many of the functions of the financial system where currency, credit scores, banks, land, labor, and capital are being replaced by social currency, social vetting, social capital, creative capital, and social entrepreneurs.

Macro vs. Micro

We see divisions of scale from the long-winded one-sided content of the static web presence to the micro blogging applications that more closely resemble a conversation.  Time factors are accelerated to the point where real-time is not fast enough.

Local vs. Global

We see an emerging segmentation between Local Social and Global Social. At first global leverage was the awarded the small entrepreneur with something to offer to the world.  Now ‘Local Social’ enjoys substantial leverage over global corporations by reorganizing the way people prioritize and experience each other and their community.

Everyone is a node

Taking an analogy from the physics of electricity, the term “potential” means the difference in energy between two nodes.  The greater the difference, the bigger the spark and the greater the impact.   The local energy at each node influences the direction and size of sparks between nodes.  As people accumulate ‘Social Current’, their position relative to those around them changes. Likewise, their potential also changes relative to the ‘Social Current’ of others. Everyone has some potential relative to every other node.

Integration has arrived

Much like the knowledge economy integrated, but did not replace, the agrarian economy, Social Media will not replace the corporation, the financial system, dissertation, conversations, localization or globalization.  Rather, everyone becomes a corporation, everyone prints their own social currency, everyone publishes their intentions, everyone has local and global leverage.  That’s what Integration is all about.

A ‘culture of one’ is moot.

It is not surprising then that our culture itself is now being defined in terms of social media with effective aggregation of  social norms, storage of social wisdom, and medium of exchange for community ideals.  The true test of “culture status” is when engagement is no longer an optional.  Without engagement, there is no culture.


Share this:

Reality is Simple: Money is Time

By

On March 25, 2010

In General Information

Whoever said “Time Is Money” got it backwards. Anyone who still believes this is now moving backwards in economic time.

Reality is simple: Money is time.

We pay to extend our live, we pay to have a good time, we wonder what time it is, we share time, we exchange time, we invest time. Everybody has a limited amount of time on Earth and everybody is competing for a slice of someone else’s time. Money is just the scorecard in a game of time.

Time is limited for everyone on Earth.

Sure, we often trade our time for money, but we also trade our time for many things; our children, families, travels, experiences, sleep, and consuming products and services. There is no other factor to which our behavior is more determined than time. Everyone does whatever they know to make the best use of their time.

How on Earth can the Whole Wide World go bankrupt?

Easy. The interest on money increases with time. When the total amount of money in existence is less than the sum of the principal plus the interest due, the World is bankrupt. We have long passed this point so what happens next is anyone’s guess, but be assured, something will happen.

Here is my guess, Money and Time will swap places. “Time is Money”, becomes “Money is Time”.  The principal will inflate away while the “interest” will continue to changes with time – but it will be pegged to “people” who also change with time.  As such, People and their knowledge become the medium of storage, exchange, and trade.  Knowledge is contained between their ears as social capital, creative capital, and intellectual capital.

Social Media Happens

Social Media saves time and people’s interaction with each other on social media is affecting the nature of money.

Google saves time, Wikipedia saves time, Amazon.com saves time, Facebook saves time, Linkedin save time. Foursquare and Gowalla increase the value of social time because going local saves time. Mashable and Tech Crunch save people time. Bloggers, educators, entertainers, and recreation increases the quality of time related to the intentions of the consumer. Trust, engagement, reputation, conversation, relationships, and tribes save time. Social Innovation saves time.

The Time Paradigm and the next generation of social applications

The next economic paradigm will be time based (as the scarce resource) and will probably look very similar to the one we know and understand today. The difference is that everyone will interact with the clock instead of the dollar.

In the next generation of social media applications we see that value will be derived from time saved or punished for time squandered. People will behave in a manner dependent on how much their time is worth.

The new business models will compete against time, rather than price. Quality will be measurable by anyone.  Precision and accuracy will be rewarded and manipulation will be punished. At the end of the day, Money is Time and the quality of time is the quality of money.

The Future of Money is the future of Time:

It’s hard to imagine any product or service that wastes people’s time surviving past the next decade.  It is hard to image any future innovation that does not save time over whatever it replaces.  It is hard to imagine the basis of any currency without a time value.

Image Source

Share this:

They Should Pass A Social Currency Option

By

On March 23, 2010

In General Information

My new favorite rebuttal to any argument from economic ailment to political controversy is: “I’d like to see a social currency thrown into the mix”.

It is really convenient to have the same position on all issues; Health Care, Terrorism, abortion, financial meltdown, education reform, and political scandal – my response is the same. “I’d like to see a social currency thrown into the mix”.

What the heck am I talking about?

Several recent blogs articles (and here, and here, and here) have converged around the idea that social currency is something that people earn from being active in a community, network, or social organization. Social Currency in lauded upon the recipient in many forms such as Google juice, respect, engagement, trust, re-tweets, reputation, merit badges, check-ins, tokens, Whuffie, wiggly worms, etc…

Regardless of what you call it, all social currencies have a very unique characteristic that differentiates them from a financial currency. Social currencies reward high integrity and punish low integrity.

Social Currency can be earned or converted:

Organizing a community around a common goal is serving a need that government and corporations do not have to fulfill in their “Social Charter”. So it has value.

  • Helping a neighbor find a job supplants the work of the government funded unemployment office.
  • Helping an elderly neighbor with their shopping supplements the Department of Health and Human Services.
  • Adopting a child alleviates expenditures in the foster care system, abortion, and possibly the courts and prisons.
  • Helping local vendors stay afloat by organizing a community of group buying or groupons reduces the demands on bankruptcy courts and social services.

Social Currency can also be eliminated:

  • Public servants and politicians who squander the trust of their constituents through acts of corruption and impropriety
  • Corporations who decimate local priorities in favor of Wall Street priorities.
  • Breaking the law, endangering others, neglect, fraud, breech of social contract .
  • Consumption far in excess of social contribution.

Take any issue and apply social currency

The health care debate is an excellent example. First, let’s apply a social currency to all of the people voting on the bill. Next, let’s apply a social currency to everyone arguing against the bill. Next, let’s apply a social currency to everyone arguing in favor of the bill. Let that count establish the burden of proof of the argument.

Next, let’s pay for Health Care Reform in social currency, not financial currency. That means people with a surplus of social currency receive health care at a certain rate. People with a deficit of social currency receive health care at a different rate.

Finally, compensation to health care providers would also be biased by a social currency. Providers with a surplus of social currency are paid at a different rate than providers with a deficit of social currency.

What about cheaters?, who pays these subsidies? how do you count it?, It’s a job killer, corporations will go bankrupt, losers still lose, Holy cow, this messes everything up!!!!

Actually, it’s not much different than how we allocate money on a credit scoring basis. It’s not any more difficult to count than the blood-money coursing through the veins of an unvetted financial / insurance system. Most importantly, constraining a Financial Currency with a Social Currency sets up a whole new landscape of benchmarks and incentives that accelerate innovation, in effect, printing new currency.

That’s what I mean when I say; “I’d Like to see some Social Currency in the Mix”


Share this:

Gowalla and Foursquare: Money is as Money Does

By

On March 21, 2010

In General Information

Money happens because people happen, not the other way around.

Wall Street has no idea what’s knocking at their door with the emergence of a new class of Social Media Applications that incorporate geolocation strategy.

Money is as money does.

Hanging out in bars and buying silly tokens does not define a sustainable economy any more than borrowing money from yourself with interest in order to keep it sufficiently “scarce”. However, the strategic combination of social capital, creative capital, and intellectual capital does define a sustainable economy.

Social Productivity can be loosely defined as “what you make with your time”. All of us have a limited number of hours on Earth.  “Don’t waste my time” is the new Tax on Tea. The Last Mile of Social Media is a critical step that will complete the Internet as a system of social organization, and as a result, financial reorganization.

The 5 components of a financial system

A financial system must have 5 components acting in a system in order to sustain itself:  1. a means to store and exchange value (currency). 2. inventory 3. vetting  4. entrepreneurs, 5. A business model.  If any of these components is missing or becomes corrupted, the whole system fails.  Where all of these components are intact, however primitive, an economy will flourish.

1. Currency is a social agreement and the Dollar is no exception.  The “social agreement” is the presumption that the currency is scarce and therefore valuable.  In reality, time is scarce.  Geolocation is important because traveling is a quantity and guessing is a quality that are both time consuming.

2. The knowledge inventory is emerging where people establish themselves as experts through blogging, community organization, and development of creative content.  The new class of social media applications like Gowalla, Foursquare (and those not yet created) will eventually evolve to highly organized and finely granulated knowledge inventories in and about communities.

3. The vetting mechanism will form as people with common knowledge assets aggregate around cooperative activity rather than competitive activity.  High integrity will be rewarded and low integrity will be punished. Gowalla and Foursquare are still easy to cheat, but that will get worked out.

4. Entrepreneurs. As information becomes infinite, time becomes more scarce, thereby forming the basis of this new economy. Entrepreneurs will identify knowledge assets and elevate them from low levels of productivity to higher levels of productivity. Gowalla and Foursquare provide visibility to some rudimentary knowledge assets – it will only get better.

The New Class of entrepreneurs will begin by aggregating strategic combinations of vendors.  Then they will aggregate strategic combinations of knowledge assets and match them to strategic vendors in infinite combinations. They will manufacture “time”.

5. The business plan is simple: A. transform data to information, B. transform information to knowledge, C. transform knowledge to innovation, D. transform innovation to data.  Each transformation produces “time”.

In fact, this is all that Gowalla and Foursquare accomplish.   Each transforms data into information and people transform information into knowledge.  People are drawn to the possibility of  increasing the value of their time in their community.

If people can make their own currency more efficiently than a corporation or government can do it for them, they will. Don’t worry, a currency will find a way to represent them – after all, money is as money does.

Share this:

Foursquare Economics

By

On March 18, 2010

In General Information

The Next Economic Paradigm is arriving and the first entries include Foursquare.  Few people understand the significance of this new class of social media applications. Foursquare contains many (but not yet all) of the components of the Innovation Economy that we have been discussing for several years at Ingenesist.com, Conversationalcurreny.com, and Relationship-economy.com.

Here is what Foursquare does have:

Geolocation: Sure, social media has been great sport for chatting with your buddies across the world, but nothing really happens until the rubber meets the road.  people need to be in the same location in order to “build something” together.  We call this The Last Mile of Social Media

Mayor of Popcorn: As silly as this may sound, badging it is a highly sophisticated feature that we have called the “knowledge Inventory“.  In order to build anything, there must be an inventory of parts. “Knowledge” is not the exception as the crude and archaic resume system would have people believe.

Knowledge is an asset and it will perform as an asset if it is characterized in the form of a quantity and a quality.  “Mayor of Popcorn”, believe it or not, is in the correct form.

Vetting Mechanism: Vendors are an equal part of the social network and will soon provide their coupons, specials, and other economic incentives on Foursquare because advertising any other way is dead meat.  Vendors will live in a system that is in their best interest to practice high integrity rather than low integrity while favoring mom and pop operations that live in the community.  We call this “Social Vetting” as it lives beyond law and government – let the market be the judge.

Here is what they do not have (yet): Currency

The attraction of foursquare is the promise of fun and fancy crowd play.  The incentive is to be seen as connected, mobile, and plugged-in.  As such, people will be implicitly attracted to you like bees to a flower. In actuality, this game takes Social Media right to the edge of becoming a new financial system that can compete with, and challenge, the almighty dollar. No kidding.

Remember that currency is a social agreement.  History shows that people will trade seashells, tulip bulbs, paper notes, and little copper disks as a device to store and exchange value. All value is expressed in terms of human incentives of some kind.  Well here we have it.  Now let the entrepreneurs play.

That is a huge, huge, huge matter.

The dollar represents productivity….well, so does Foursquare.  What will entrepreneurs do in this environment?  How will entrepreneurs organize communities around “things-o-do” – or even – “things-that-must-be done”?

Here is the hint.  The idea that innovation is the exclusive domain of corporations, academia, or government is now as obsolete as Twitter.  Innovation is now related to knowledge as knowledge is related to information.  Anything that increases the rate of change of knowledge in a community can now be defined as innovation in Foursquare.

Debt and innovation represent the exact same thing.

Innovation is a promise of future productivity. Debt is also a promise of future productivity.   It is only a matter of time that all of the activity in this new generation of social media applications will resolve to, and aggregate around, a new form of currency that will compete with the dollar itself.  Mark these words.

Share this:

The Social Caterpillar Award Goes To Home Depot

By

On March 18, 2010

In General Information

Corporations may be getting social “online” but how are they doing offline?  Anti-social behavior on the ground is the genesis of our not-so-coveted Social Caterpillar Award.

The Social Caterpillar Award goes to companies that have what it takes to become great social leaders and transformational community assets but who somehow fall short due to some management cocoon.

Blockbuster Goes Bust

Last week, I wrote about Blockbuster signing their own obituary.  Today on the news, I hear they are filing for bankruptcy and blaming everyone but themselves – hmmm, maybe there is a correlation?  As such, Blockbuster was the first recipient of the Ingenesist Project Social Caterpillar Award. Who’s next?

Home Depot: Living under a rock?

It would seem that Home Depot gets it with 30,000 Facebook Fans, 20,000 twitter followers, and 4000 Youtube members as well as some pretty slick instructional videos.  The slogan “I Bleed Orange” is quite the graphic branding opportunity – I sort of wonder what exactly does such blood-letting involve.

But a company with almost 2200 stores, 210,000 employees and 100 Billion dollars in annual sales – this social media presence is hardly a blip.  Even the employees don’t show up.

The Last Mile of Social Media

I went to Home Depot recently buy something for a project.  I parked in the most reasonable spot and walked to the nearest of at least 5 sets of doors spaced across the entire building.   The first door stated in fairly crude language “This is and Exit, Use Entrance North of here”.  OK, so I did not bring my compass, and I proceed to the next door.  The same sign appeared.  So I went to the next – it was blocked for forklift activity.  So I returned to the prior door and found that the door on the other side of a partition was actually an entrance with a tiny sign partially covered with something orange… etc.  I think you can see where I’m trying to go with this.

Entering the store was no better.

I was corralled around a set of barriers past the full length of shopping carts and dumped on the side of the store that I did not want to go to.   I asked a manager why they insisted on tormenting customers like rats in a maze and the response was to control shoplifting.  I wondered how much plywood I could fit in my pocket.  I certainly did not feel welcomed.

In other words, the customer is subsidizing the failures of the enterprise to control shoplifting – if that is the real problem.  Like the age old tactic of government, blanket legislation makes all people suffer for the shortcomings of a few because management is too lazy to devise a method for actually solving problems.

So they plod along.

No competition from China, no Internet based Plywood stores, no power tool kiosks at the mall, all the small shops are driven out of business, and the economics of planned obsolescence driving product quality.  Is this a recipe for obsolescence?  Does this invite an innovation disruption?  Will a competitor arise who can float like a butterfly and sting like a bee?

And Now, The Social caterpillar Award Goes Tooooo…..

In Honor of Home Depot lack of imagination in solving their own problems with social media at the expense of their community, we proudly issue our Social Caterpillar award to Home Depot.

Share this:

It’s About Asking The Right Questions

By

On March 17, 2010

In General Information

My new favorite speaker is Dr. Nick Bontis. He is smart, funny, dynamic and he has the intellectual horsepower to back it up. I found his work while trolling academic journals for intellectual capital.

Among his dozens of academic papers, I am particularly interested in one that rationalizes that allocation of knowledge assets. It’s brilliant for the reason that it employs much of the same methodology that we predict will be needed to build the innovation economy – not in the hallowed hall of industry, academia, or government –  rather, on a platform of social media.

Here’s the Twist.

The following video was filmed about 10 years ago where Dr. Bontis is making predictions for 10 years into the future, the year 2010.  His predictions do not explicitly include the phenomenon of Social Media.  Instead, he extrapolates to a somewhat more “intellectual” outcome.

This is interesting because it provides us with an experiment that can exclude a huge variable called ‘social media’ and allow us to study intellectual capital as a distinction from Social capital. Dr. Bontis provides some remarkable insights about where we would be headed in 2010 (thus, compared to where we are), free from our social media bias. Cool, huh?

One statement struck my interest when he was framing a definition for “intellectual Capital”.  He said:

“[All the data will eventually combine.  We will then need to ask the right questions]”.

This is an evolutionary change in the way people will need to think. Instead of regurgitating hearsay (a social media staple), people are challenged to provide some modicum of analysis to sets of data that they encounter lest they remain useless (both people and data).  This is expressed in the form of asking the right questions.  The opportunity, therefore, is to bring people into contact with data in their communities and allow them to ask the right questions. We’ve coined this the “Last Mile of Social Media”.

Next he points out, with a very entertaining story, that 30 years ago a school assignment consisted of 95% search and 5% analysis (hence regurgitation) whereas in 2000, he estimated that 50% search and 50% analysis was allocated to the average academic assignment.  In the future (year 2010), 5% of the time allocation would go to search and 95% would be allocated to analysis. Humans would become endowed with higher order learning and thinking skills, the ability to derive new interpretations that will accelerate  innovation.  So kids, how’s that workin’ out?

Of course, he did not anticipate Twitter.  His portrayal of “Nancy the Supercomputer” is replaced by a Facebook the super social network…but even that sets up an even more interesting and important dialog for tomorrow.  Bravo Nick!

Please take a few moments and enjoy this video from Dr. Nick Bontis

Share this:

The Invisible Surplus

By

On March 16, 2010

In General Information

Knowledge is THE Asset. Deal with it.

I don’t care what the “definitions” by the Experts, the Patent System, Production Systems, Money, corporate bonds, marketing, advertising, or all the rest of that stuff. In the next economic paradigm, knowledge is an asset, knowledge is the only asset that matters because the transformation of knowledge into solutions will become the next currency.  If not human knowledge, then what else?

You can’t hold it in your hand because you hold it between your Ears

Yet, if you listen to mainstream media, our education system, politicians, and even college textbooks, everything else is the “asset” and human knowledge is treated like some expendable line item that is unworthy of economic development – or economic equality for that mattter.

Knowledge is invisible because there is no inventory. Why are we unable to see things like this? This is the most stunning cognitive deficit imaginable for the World’s most developed country. Why is this such an impossible philosophical chasm that we cannot seem to cross with our modern accounting system?

Now, what would happen if we did? Perhaps we would find find a cognitive surplus.

Image Credit

Share this:

The Knowledge Inventory: You Can’t Make A Bet Without Odds

By

On March 16, 2010

In General Information

In order to create anything useful, there must be an inventory of parts, a bill of materials, or an accounting system with assets on one column and liabilities (deficiencies) in the other column.

The purpose of this video is to demonstrate how a knowledge inventory should be structured so that useful things can be built.

  • The knowledge inventory must be machine enabled
  • The knowledge inventory must be vetted among peers on a bell curve
  • Yes, I know Dewey is archaic, however, a cascading decimal system facilitates code
  • The objective is to be able to predict the likelihood that a collection of knowledge assets can execute a business objective and thereby “Capitalized and Securitized”

The knowledge inventory is the most important part of Social Capitalism. It is also the piece that will most challenge people to think outside the resume system regarding about how we organize ourselves in on-line and local communities.

(Developers, entrepreneurs, and angel Investors: please contact us for the Zertify.com business plan summary and specifications)

Share this:

Everyone, Inc.

By

On March 11, 2010

In General Information

In the state of Washington, it costs 200 dollars to establish a Limited Liability Corporation. All the documents are online and there is no shortage of tutorials on the process. It’s a whole lot easier to get a job because it’s real easy for one corporation to hire (and fire) another corporation. Taxes are simple.

Everyone’s liability is limited and transactions are conducted under a uniform commercial code. And there are no incentives for people doing what they are not good at and every incentive for people to do what they enjoy most.

A corporation is fictitious.

A corporation exists in the form of a bits and bytes simulating a folder of papers in a virtual file cabinet. A corporation gets to deduct all of their expenses from their taxes. A corporation has a credit score, it can borrow money, and even have a bankruptcy just like a person. A corporation can donate unlimited amounts of money to a political candidate. Corporation garner social respect. Laws favor corporation. In fact, the cards are stacked in favor of the corporation over the employee; unless, of course, you are both.

It’s all in the Management….of knowledge assets.

All of the business theories are written to apply within the construct of the corporation. Corporate accounting provides a host of clever ways to manage assets. You can depreciate assets, you can inflate or deflate “intangibles” as needed for whatever valuation purpose. You don’t need to show anyone your accounting either (unless you are a public corporation). American corporations don’t even need to hire American employees, or any employees for that matter. Outsourcing goes to other corporations.

Land, Labor, and Capital

Corporations allocate Land Labor and Capital – well, that’s the theory anyway. Land is underwater in a real estate bubble. Labor is tragically unemployable or under employed or outsourced to the political slave markets. Capital is being consumed by the “interest” monster conjured into existence from the debt. Uuhhmmm….So how’s that workin’ for ya’ll??

So why not become a corporation??

Social Media is able to perform almost all of the functions that a corporation would normally do internally. The “Last Mile of Social Media” is when local communities organize themselves on, say, Facebook. High integrity is rewarded and low integrity is punished. Now you can reliably find other corporations to do your accounting, Human Resources, Marketing, and content design and distribution.

If you need to actually produce something “solid”, well there will always be a corporation willing to do that too. All of these things are only a keystroke away. So why isn’t everyone a corporation?

No, seriously……

We teach our kids to be good employees, not to become good corporations.  How do we expect social priorities to compete with Wall Street Priorities?

Share this:

Factor of Production #2; Creative Capital

By

On March 10, 2010

In General Information

The financial system that we live in today is allocated to us all through combining chunks of Land, Labor, and Capital. It should be fairly obvious that there are some issues with land (real estate bubble), Labor (high unemployment/out sourcing), and Capital (financial system meltdown).

As Dr. Phil would say: “How’s that workin’ for ya?”

There has been a flash of conversation centered around the idea of Social Capital as a form of currency in these two blog posts by Brian Solis and Venessa Miemis. I would like to use this post to expand those ideas to one of at least two more “Factors of Production”: Creative Capital, and Intellectual capital, in future blog posts.

Introducing the subject of Creative capital (more later, no doubt), here is a video from TED about the league of extraordinary dancers. Watch them move but also listen to how they talk about what they are doing. Skip through the 17 minutes if you must (you probably can’t!), just see how different they see the world.

If we expect to deliver an alternate social currency backed by innovation, we need to reflect deeply upon this specific factor of production.  We need to think, observe, and interpret with the flexibility that “Creatives” have – if not, we need the humility to let them help us.   Only then can we start connecting the dots.

Share this:

They’re Finally Saying Something New About Social Media

By

On March 8, 2010

In General Information

Yes, we know that social media is humongous. Yeah, we’ve all heard the 10 amazing ways to “fill-in-the-blank”. Nope, you are still not allowed to shove your products down the consumer’s throat until you have earned their trust.

Now, all of a sudden, a new idea is emerging…it’s barely an audible chirp, but it will become a tectonic rumble before long:

Social Media is beginning to take on the characteristics of a Financial Instrument.

This is a stunning development with vast implications. Allow me to interpret this excellent article by the respected visionary, Brian Solis, as a basis for my argument.

One thing that everyone can agree on is that “information”, “knowledge”, and “innovation” are related somehow. The problem is that nobody can agree about exactly how they are related. None of the definitions for these terms include the adjacent terms and no algorithm exists which performs the conversions, until now.

Now comes the interesting observation:

They say that Google ranking represents a proxy for knowledge in a knowledge economy. What they mean to say is that the rate of change of information with respect to time can be used as a proxy for real-time knowledge. This is a valid idea because Google organizes the World’s information based on time rates of change of the Information.

Yet “knowledge” can only exist between the ears of breathing, thinking, creating, and acting human beings – one important component for which Brian expands the term “Social Capital”. If we carry his observation one step upstream, we should be able to also say that the rate of change of Social Capital (a component of “knowledge”) with respect to time is a proxy for real-time innovation.

Now this idea should be pegging seismographs and flooding the Valley with the ensuing tidal wave of glee. The implication is that we can now identify and organize innovation by simply measuring the rate of change of knowledge with respect to time that an enterprise induces among social networks in a market. Alas, we can now see the direct Integration of Social Media into the business plan.

Calculus is the science of change.

Definitions are fluid, they must change. Brian Solis has, in fact, introduced the construction of what scientists call a “differential equation”. Much like “distance, velocity, and acceleration” are all defined as a rate change of their adjacent term, so too will “information, knowledge and innovation” become defined.

Economics is the science of incentives

It should not go unnoticed that Bankers are scientists too and “money, interest rate, and market capitalization” are also related by the same calculus. This makes possible the miracles of capitalization, securitization, insurance, diversification of risk, options, hedge funds, etc… For better or for worse, Wall Street lives and dies by this algorithm and so do we.

Let me repeat; social media is taking on the characteristics of financial instruments.

Please, I hope that I am not alone in celebrating this historic moment. Few people may recognize this now, but mankind has just experienced an evolutionary leap in it’s understanding of it’s own nature. Bravo Brian, Bravo.

image credit

Share this:

When Social Media Becomes a Science

By

On March 5, 2010

In General Information

Jay Deragon posted a series of articles recently on his Relationship Economy blog which I found especially exciting. As usual, Jay is bringing forward some very important ideas related to social media components and outcomes, but what really sets this new mindset apart is the fact that Jay is asking the same questions that have been plaguing scientists for 100 years.

In Jay’s posting “The Social Moment is Gone” He describes how organizational decisions are driven by metrics that no longer exist.

In another post: ”Measuring Social Moments”, Jay suggests that if things are in a dynamic state then measuring, a moment becomes irrelevant to what is happening the next moment.

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

Scientists figured out that in order to study a sub-atomic particle, they had to stop it from moving. As soon as they did that, the nature of the particle changed. Scientists could only study their interaction with the particle, not the particle itself.

Jay is saying something similar: “How can you measure social media if it is responding as a function of your interaction with it? All you are doing is looking at yourself in a mirror – so stop it”. He‘s right.

Status Quanta

Keep in mind that this comes in a time when the chorus of social media gurus are still trumpeting the C-Suite Concerto called “ROI or Die”. Maybe someone should remind them that the value of the Corporation that they so fungibly defend is in fact an approximation based on things that cannot be measured. Let me explain:

It is not surprising, therefore, that Wall Street hires Quantum physicists (affectionately known as Quants) to manage money and investments in markets and to “Innovate” new financial instruments.

The Calculus of Social Media…on Wall Street?

Heisenberg’s uncertainty principle lead to the development of a new branch of probabilistic mathematics for approximating both the position and the momentum of subatomic particles. In fact, the science of Quantum physics is entirely contained in probabilities that events will or have occurred and not necessarily based on direct observation – and so are the Wall Street Valuations.

Wall Street uses the same calculus to estimate the probabilities that financial particles will have a specific location and momentum without having to actually witness them. The result is a host of exotic financial instruments that make, bet, hedge, and securitize such approximations for the benefit of stockholders…..

Getting Back to Jay

Markets are conversations. People make products, invent things, design stuff, hold stock, buy, sell and trade everything. Those Quantum Physicists on Wall Street are estimating the position and momentum of people.

All Jay is saying is that now you can do it too.

Share this:

Social Media: Power By The Hour

By

On March 3, 2010

In General Information

Making human knowledge and intentions tangible in a market place opens up the possibility of a whole new class of business plans. We call this Social Power by the Hour.

A Social Trifecta

1. Obviously, Social Media is powerful.

2. Fractional ownership or rental of assets is an emerging trend in our environmentally, geographically, and monetarily constrained economy.

3.Vendor Relationship Management (Doc Searles) promises to change the shape of traditional advertising in the future.

What if we combined all three?

ZipCar is an excellent example of the fractional membership for automobile transportation. There are many advantages but also huge drawbacks. $7.00 per hour is a lot to add to a casual lunch at a sidewalk café or any social experience. Then there are all the lost options like the one-way-trip, guaranteed availability, all those rules and regulations. So, it’s pay now or pay later.

Social memberships

What if your friends in the social network also had ZipCar memberships and the scheduling were interchangeable? Suppose you could find a ZipCar anywhere and park one anywhere?

Now, enter the Vendor of goods and service. What if the Vendor were to subsidize the cost of the ZipCar to bring 4 people into the restaurant, club, or event? What if amusement parks, zoos and art exhibitions helped pay for full car-loads of friends to drive themselves to events?

The Vetting Mechanism:

What if the real social value of the ZipCar could be compared to car ownership for each intended trip? How would this influence your decision to drive, plan, or combine events into your user experience? What if Vendors could influence that cost to drive incentives?

Power By The Hour Game

The Above schematic is What I’ll Call the Social Media Power by the Hour Game. Everyone is part of the same social network and can talk to each other. Each Box represents a player that can influence the cost of the power by the hour. The True Value Calculator keeps score by comparing each transaction value to the equivalent car-ownership or public transportation value.

Set your filters and wait for the proposition…

Instead of scheduling, everyone (including passengers, vendors, social network) start by setting a bunch of filters that represent their approximate intentions. The system compares the intentions with ZipCar locations and compares it to the True Value Calculator. When a suitable transaction is in play, all the players are notified.

Once the game starts and enough people play, statistically, there should be ZipCars distributed proportionally around the city and all vendors will be managing their marketing campaign with 100% ROI on their impressions. The system will become a self optimizing money game.

A fully convertible currency

At first, this may seem like an application to sell ZipCar memberships, but actually, it is selling odds and entrepreneurs are placing bets. The ZipCar is simply a mechanical device that converts social currency into money.

A few Scenarios:

Scenario 1: When a vendor notices a group of friends going to the mall, they can pay for part of the ZipCar with a lunch coupon.

Scenario 2: Amusement park or event promoter can see when a family has no plans and can offer a free ZipCar to them

Scenario 3: The bigger your social network, the cheaper it becomes for you to drive a car

Scenario 4: Vendors can bid for the ZipCar audience with Packages of discounts, coupons and also earn impressions and trust.

Scenario 5: Friends can see what other friends are doing and can jump in the same ZipCar

Scenario 6: ZipCars can be parked densely at events since you will not necessarily leave in the same car that you came in.

Scenario 7: As soon as you park, the zip car becomes available for someone else. As soon as you need one, there is a high probability one is parked close by.

Scenario 6: ZipCar options can be traded like currency to buy things on, say, Craigslist

And many many many more……..

End result: The bigger your social network, the cheaper your Power By the Hour. The bigger the social network, the more effective WOM marketing becomes. The bigger the social network, the more options are available to users. The greater the social network, the more SOCIAL VALUE a ZipCar membership will have in comparison to independent car ownership. The bigger the social network, the more social currency can trade hands as the Dollar fails.

Share this:

Powered by WordPress & Theme by Anders Norén

css.php