The following question appeared on a Linkedin Forum that I follow:

Complete this sentence: The ONE factor that is MOST important to innovation is… and here’s why…

I have said this in a few blog posts and I’ll say it again here: The current definition for “innovation” may be the single most disastrous eliminator of innovation.

Innovation Suicide:

Yeah, it kills itself. Really, look it up – it’s a horrible cacophony of buzz bits and weasel speak that amount to nothing more than “Ya know it when ya see it”.

Any definition is supposed to give the reader enough information to duplicate, recognize, and identify instances of the subject – Preferably before the event has ended. Think about it – if the definition for Innovation were clear, nobody would be asking this question.

I am always amazed at how simple the answers to complex questions – and how complex the answer to simple questions – can often be.

Question: THE ONE: Complete this sentence: The ONE factor that is MOST important to innovation is… and here’s why…

My Answer: The Definition of Innovation

Here is why:

Information, knowledge, and innovation are obviously related to each other.

1. You can’t have one without the other two.
2. If you cannot measure one, you cannot measure the other two.
3. where all three are integrated, the system becomes efficient.

Yet, the definitions of each term do not include the other two. Therefore, the current definition of innovation is insufficient to describe the condition. That is why this is the ONE most important factor.

Let me prescribe the following analogy; distance, velocity, and acceleration are obviously related.

1. You cannot have one without the other two.
2. If you cannot measure one, you cannot measure the other two.
3. where all three are integrated, the system is efficient.

This is because distance is the point between two facts, velocity is the rate at which the distance between two points changes. Acceleration is the rate at which the velocity of travel between two points changes.

Therefore let’s re-define innovation as follows:

Information are facts and data. Knowledge is defined by rate of change of information. Finally, innovation is defined by the rate of change of knowledge in a community.

If we can accept this definition, everything changes. Seriously, everything changes.

Now, that’s Innovation!!!

* note: If you are familiar with differential Calculus you may see how a new economic paradigm may arise from this algorithm.


angry-engineerEngineers are money.

China and India are producing millions of engineers as part of their global economic dominance strategy. Engineers increase productivity and productivity creates wealth. Why? Because money is only a means for storage and exchange of value and engineers create the value.

America has no idea who the engineers are

I heard an interesting comment on a group discussion board recently; “there are so many engineers on the streets that employers have their pick of the crop”.

First, I find the reference to “crops” ironic. Second, why should engineers need to fit every nuance of a job description? Engineers tell us the things that we don’t already know – who exactly writes those job descriptions if they know what they don’t know? Or in practical terms, why isn’t an Aerospace Engineer immediately qualified to be an Energy Engineer?

The Ingenesist Project identifies 3 types of knowledge assets: Social Capital refers to one’s ability to organize, perform, and manage themselves in teams of other people. Creative Capital refers to the ability to relate seemingly unrelated concepts, objects, and perceptions into new and innovative ideas. Intellectual capital refers to the ability to deploy book learning, objective reasoning, and tactical experience toward specific objectives.

Everyone has ALL of the above asset categories, however, we each posses them in different proportions. People like Steve Jobs have all of these in very high quantities, but the rest of us are somewhere in the middle. Most have a surplus in one or two at the expense of the remaining asset categories. Engineers typically enjoy a surplus of intellectual and creative capital at the expense of social capital.

Social Capital

Should we, as a society, expect engineers to meet meet the same social standards as say, Baristas? The job market favors the young, socially adept, and politically wired people. But engineers are a different – we all need them to be exactly the way they are in order for the rest of us to be who we are. If engineers were “marketers” they would either cease to be engineers or marketing would cease to be manipulative.

Who’s your money maker?

Engineers are responsible for nearly every penny of value stored and exchanged in a modern economy. Roads, infrastructure, medical devices, food production, software, hardware, housing, transportation – anything worth anything is in some way touched by God and an engineer. Engineers are responsible for creating the tangible value we enjoy so dearly but is also so easily corrupted by others.

Who is squandering whom?

So when I hear comments like; “there are so many engineers on the streets that employers have their pick of the crop”. I ask myself, “how exactly did that employer become an employer without engineers”? How does any employer expect to remain an employer without the direct, strategic, and honorable deployment of engineering assets? How does a country expect to arise from financial crisis and insurmountable debt obligation without elevating their engineers to “First-Responder” status?

I heard a story that Haiti is so poor, they would chop down a fruit tree for charcoal. Squandering engineers is like killing the golden goose. Every single engineer in America should be cherished. Every single engineer should have their pick of most qualified employers, not the other way around. Every single engineer should have a job waiting for them as soon as the prior one is finished. Engineers should be paid money, real money – not some “proxy” for money.


daylight-saving-time-costs-billionsWhoever 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


manhattanMoney 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.


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?


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.


Money represents human productivity, but the interest on money represents risk. This means that the lender collects interest because that represents the risk that they assume in departing from their money. Meanwhile productivity fluctuates naturally and can be affected by a many external forces.

The problem is that risk can never be negative, therefore interest rates can never be negative – that is called “breaking he buck”. Risk is a measure of volatility, or, “deviations from what is considered normal”. While there is certainly good deviations and bad deviations, there can never be a “negative” deviation from normal – it is a mathematical impossibility, a glitch.

The result is that productivity must always be driven up and up and up – sometimes in unnatural ways, such as forcing consumption. Constant production is unacceptable – it must always increase. Vacations, free time, family time, and leisure are not acceptable. What if we had a currency that could accommodate a negative interest rate?


'Innovation and Growth, Chasing a New Frontier' book launch(2)The real estate market is trashed, money markets are unstable, commodities are in the tank, the banking system is corrupted to the core, inflation is looming around every corner, and the politicians are engorging themselves in a game of Cerebral Gridlock.

Literally, there is no safe place to put your money. Instead, people are investing their productivity in social media – social media is simply a storage device for knowledge assets. Soon it will become a stock exchange for knowledge assets. Investors should not take this lightly – the best place to store your money is in the real productivity of real people.

People are trading knowledge assets in social media. This exchange is denominated by a conversational currency. If we consider the structure of conversations and compare that to both the structure of social networks AND the structure of our financial system, we see a huge opportunity to develop an alternate financial system that can capitalize and securitize knowledge assets in social media.

Ingenesist.com

Music by Phil Felicia


Hundreds of community currencies are forming across the globe. Gaming currencies are jumping back into reality. Europeans communities are calling for the authority to print their own money arguing that the fractional reserve system is like trying to recover from a war by waging more war (a novel thought).

Many people doubt that the dollar has more than a decade or so of steam left as the interest on debts mythically exceeds the total amount of money on Earth (at least in my world). Yet banks march on, heading straight for the cliff.

Governments are polarized against themselves (and in cooperation with other governments) to solve the problem – except by reducing services to the people. But isn’t this why Governments exists in the first place? Are they suggesting their own elimination? Of course not, so they issue press releases worth about as much as the photons they are printed with.

Meanwhile, corporate media is trying to dominate (and subdue) social media….ultimately, the end game will be the other way around. This short video invites the status quo to look at what people are “doing and saying with their productivity”