Think Bigger. Aim Higher. Go Further.

Tag: game

The Institution Hack

In the first post of this series, we identified the 5 components of a financial system and suggested that Zertify, Gamidox, and Exoquant would serve to simulate their functions in a parallel economy before being adopted completely.

In this post we will identify a hack to the vetting institutions and players that are supposed to keep the financial game fair but are in fact complicit with it’s unfairness; these include Libor Scandals, Banks, Insurance, The legal system, etc.  Any institution that sets the rules of play, Gamidox will change the rules.

At first Gamidox resembles a classic MBA analysis and strategy tool called Michael Porters 5 Competitive Forces.  In Porter’s analysis a corporation competes within its own business environment against:

  • Competitive rivalry within an industry
  • Bargaining power of suppliers
  • Threat of new entrants
  • Threat of substitute products
  • Bargaining power of customers

The Zertify Hack swaps out the competitive nature and installs a more efficient collaborative nature.  Revisiting Porters 5 Forces for collaboration, we can say the following would be true of the parallel economic system:

  • Collaboration within an industry
  • Collaboration with suppliers
  • Collaboration with new entrants
  • Innovation of improved products
  • Collaboration with customers

This is already happening.

Social Media is driving many social innovations that act as “institutions” would in the legacy economy.  For example:

  • Vendors use Customer Relationship Management (CRM) systems in nearly every industry.
  • Designers use Supplier Relationship Management (SRM) systems to collaborate Globally.
  • Social Media has spawned the field of Vendor Relationship Management (VRM) where the market tells the producer what to make and how to behave.

Community Relationship Management

But when we combine CRM + SRM + VRM we get Community Relationship Management (CoRM).  In essence CoRM is a Value Game.  Where customers, vendors, and suppliers all acting in the best interest of their constituents are in fact acting in their own best interest.  Cheating gets you thrown out of the game.  The combined analytics provide extensive data to the next hack called Exoquant.

Benign.

Gamidox is an organization that educates, creates, and deploys this new class of business methods where  Communities are encouraged to act in their own best interest when collaborating with other communities.  Jobs are created, things are produced, value is exchanged, and assets are accounted.  Capitalism remains in high gear and the hack will not trigger an antigen.

Playing The Value Game

The Value Game is played wherever 3 or more communities interact with each other to preserve a shared asset rather than consume it.  A Value Game can be built around any sharable asset such as a public corporation, an airplane, a high impact citizen, a condominium building, public infrastructure such as schools, bridges, and health care, etc.

However, A Value Game fails for asset and communities that offer literally no socially redeeming values (that is the point of social redemption, BTW)

The New Value Movement

The Value Game literally manufactures New Value.  As communities interact with each other around a shared asset, they teach and learn from each other – populating the Zertify Hack.  Several layers of vetting and conflict can be eliminated from an economy which will make all many forms of production and associated employment, run faster,  smoother, and more efficiently.

The New Value Tool

The New Value Tool is a repetitive simulation of The Value Game (described herehere, and here) that may be used to determine in advance the true value that may be created when people interact with each other around a shared asset.

The Social Charter

This should not be too difficult to envision since The Value Game plays out daily in the modern corporation where workers acting in the best interest of the corporation (the shared asset) interact with each other in various departments to preserve the asset rather than consume the asset – this is how corporations create social value; through the employment of people and the social utility of their products.

Obviously, corporations that fail to fulfill their social charter likewise fail to sustain value creation in a community.  Those that do, tend to thrive in the Internet Age. The objective of the New Value Platform is to enable communities to organize, as do corporations, except without the burden of corporate governance or the priorities of outside investors.

Drag, Drop, and Dream

The New Value Tool is simple to use; just drag and drop from the Zertify Personal Knowledge Inventory into The Value Game and see what the Exoquant dashboard tells you about your simulation. It may take some practice at first to see how to make the numbers move, but soon it will become intuitive which scenarios create lots of New Value – and will likely sustain themselves in practice.  Scenarios that do not, will likely fail in a particular community and ought not be ventured to practice.

Community Algorithm

Exoquant provides a very simple algorithm relating the creation of data, information, knowledge, innovation and wisdom that govern the Value Game.  However, the weighting of these elements is a component of the “fuzzy math” that entrepreneurs bring to the game.  The empirical data resulting from the application becomes property of the players (community) as their “Secret Sauce” of value creation in their own uniquely optimum economic game.

On the path to a Social Currency

The New Value Tool May become an important system for analyzing existing ventures for optimum social value creation as well as predicting how collections of knowledge assets in a community can optimize their social value in collaboration with each other.  Eventually, the predictability of the outcomes will improve while diversification of projects will eliminate risks such that a social currency can be capitalized and securitized.

The Value Game For University Outreach

The question that persist for many college and university administrators is what actions must they take to optimize all of their relationships in a manner that reinforces their own value to their community.

The Value Game is an ideal solution for this type of scenario (if you are unfamiliar with TVG, please visit this primer link).  The first step is to identify the asset. The recent graduate is the university asset because they are the customer and the product being advanced.  After all, the life worth of that graduate will reflect upon the institution that prepared them for professional service.

Next, we identify the players that will interact with that graduate over the course of their lives.

A* = The Graduate

  1. The graduate will interact with their Alma Mater
  2. The graduate will interact with their alumni association
  3. The graduate will interact with Their broader community
  4. The graduate will interact with corporations and entrepreneurs

Now, Let’s review each of the relationships and the economic incentives that drive them:

A-1: The graduate relies on the university reputation with players 1,2,3 as an extension of their own capabilities.

A-2: The graduate relies on the influence and success of prior graduates who hold an affinity towards each other in fraternal social networks.

A-3: The graduate will interact with their community for friendships, residency, recreation, and support.

A-4: The graduate will rely on strong and equitable employers / entrepreneur base where they may self-actualize as productive citizens.

Now, let’s review the relationships and incentives that each of the players has with each other:

1 – 2,3,4: The university has an interest in preserving the community because a motivated and educated workforce attracts opportunity far and wide in the form of business, travel, tourism and economic growth (Jacobs Externality).

2 – 1,3,4: Alumni seek to preserve the value of their alma mater because of the direct reflection upon their careers.  It is in their best interest to support the university, it’s graduates, employers and the wider community.

3 – 1,2,4: The community relies on the university graduates and alumni to provide equitable and fair innovations that provide sustainable living standards.

4 – 1,2,3: Employers compete globally for talented, stable and engaged employees and service providers who are attracted foremost by a vibrant entrepreneurial economy and sustainable communities.

Data, information, knowledge, innovation, and wisdom

The Value Game is now played by university administrators who direct university facilities, influence, and resources to bringing at least 2 of these four groups together.  Each time there is an interaction, the university will capture the data associated with the interaction.  That data can be compiled to form information which gives the university administrator knowledge about what their next action must be.  University feedback to the community will tell all of the players what interactions create the most social value upon which all players will innovate in their best interest.

As the game continues over time, the university gains the wisdom to understand the values of their assets and surrounding community. The community will act in the best interest of the other players as a means of acting in their own best interest (Social Capitalism).

Data is the ultimate shared asset

Over time, the University will become the physical “Search Engine” for data, information, knowledge, innovation, and wisdom in a community instead of just a vetting mechanism for book learned material. The University can now deploy this wisdom to their own internal programs and curricula as well as becoming an external reference source for government, industry, and economic development.

*(The University of New Haven is in no way affiliated with this post except I (the author) am a graduate of the UNH Engineering school (go Chargers!) and needed a realistic example that probably would not sue me – thanks guys)

The Value Game Primer

This reference post serves as an introduction to The Value Game (TVG).   The Ingenesist Project will be posting Value Game Solutions to many specific scenarios that our readers and clients propose.  Having this post as reference will help those new to The Value Game catch up quickly.

The following 12 minute video gives some historical perspective of The Value Game as we have applied to the aviation industry (see SocialFlights.com).  This video also expands the idea to any shared asset and provides important insight as to how to generalize The Value Game across the economic spectrum.

Introduction to Value Games

  • The Value Game is a new class of business methods that manufactures New Value.
  • New Value represents all value that is not normally convertible to U.S. Dollars; i.e., creativity, community, sustainability, resilience, compassion, trust, etc
  • Currently, The Value Game begins and ends with dollars, however, all New Value created within the game is denominated in “social currency” which has no physical manifestation.
  • The Value Game converts between Social Currency and Dollars; i.e., business plans that are not viable in dollars may become viable when social currency is included in the bottom line

Building A Value Game

  • The Value Game starts by identifying any asset, tangible or intangible, that a group of people would share.
  • The next step is to find 3 or more communities that have a vested interest in the asset
  • The New Value Entrepreneur is able to discern which communities and which assets will interact successfully in a Value Game.
  • In general, once a value game is started, it will improve itself since only those who have a vested interest in the asset will continue playing.
  • Players that are inappropriate for the given asset and related communities, will drop out or find another value game
  • All players will eventually find and play value games that correspond most closely to their natural interest and passions.

The New Value Entrepreneur

Just like with any business venture, it is up to the entrepreneur to identify and engage all of the right components required to build any enterprise; this is no different for Value Games.

  • The objective of the new value entrepreneur is to organize three or more communities to interact around a shared asset
  • The interaction among these communities acts to preserve the asset rather than consume the asset.
  • Each community acting in the best interest of the other community is, in fact, acting in their own best interest.

The material that references this post will help identify what types of assets are suitable for value gaming and what types of communities would make worthy participants.

The Ingenesist Project is currently building Value Games for clients in aviation, construction, education,  affinity groups, and social service communities.  Please let us know how we can serve your New Value creation enterprise.  

Encouraging Customer Self-Organization

TrendPOV

Here is a repost of an interview with myself by Dr. Amy Vanderbilt at TrendPOV.  I like Dr. V for her ability to really draw out the best in people.  Here she tackles a topic of great complexity and makes it feel like an everyday conversation.  If you ever have an opportunity to work with Dr. V you will be deeply rewarded with the outcome.

On a side note, I felt so comfortable that I forgot that I was on air – you can see my eyes wandering, yikes.  Next time I’ll tape a sign on the ceiling that says “Look Down”.  Anyway – it’s an interesting topic so please watch and let me know what you think.

From Trend POV

Social media is no longer just a way to reconnect with friends; it has become an integral part of daily life that is rapidly gaining traction in the business world. Social media now provides a format for customers to self-organize in a way that creates a competitive market for goods and services where both the customers and the vendors can benefit. The depressed economy has brought people together to share advice and zero in on great deals through group buying.

As defined on Wikipedia.com, “Group buying, also known as collective buying, offers products and services at significantly reduced prices on the condition that a minimum number of buyers would make the purchase.” Originating from China, group buying, called tuángòu grew from the practice of haggling and has now infiltrated the online world in many parts of the globe. Notable sites include Groupon, LivingSocial and MyCityDeal.

Unlike China’s deal strategy that is self-organized and executed, most of the group buying in Europe and North America is done using online intermediaries who charge vendors fees that can be as much as 50 percent of the deal. Group buying has been gaining consumer popularity for three years now; however, group buying in the business sector is still in its infancy. Despite Groupon having over 100 million subscribers that had bought over 60 million Groupons by September 2011, skeptics suggest the trend will not last.

Consumers may be getting saturated by email overload from deal sites competing for their attention. China is struggling amidst accusations of selling fake goods; almost a fourth of the 6000 group buying Web sites shut down in 2011 and those still operating are losing money. But group buying is probably not yet dead. As Dan Frommer said on businessinsider.com, “The future of group buying is on mobile devices. Why? Because they’re always with you, can identify your location via GPS, and can access a network of real-time, instant deals.” If businesses can engage customers and retain loyalty, group buying may have a bright future.

To turn this trend into an advantage for your organization, consider the following. Customer self-organization is going digital. Selling to groups can increase profits. Use social media to drive customer self-organization. Group-selling is not for gaining new customers. Instead, try group-selling for exclusive products and services and rewarding loyalty.

 

New Economies; May The Best Street Win

The great dream for new economies movement is that Wall Street has finally met its match from the vast interconnected social systems that now dominate communication, organization, and commerce.

The problem is that no matter what the New Economies Movement comes up with, Wall Street will capitalize it, commoditize it, securitize it, and sell it back to us for the price of our communities.  Then they’ll build derivatives and options around it and wrap it all up in a nice hedge fund that transfers all risk back to us.   The Street always wins.

So why can’t we do what Wall Street does?

At Social Flights we believe that we can provide 10,000 jobs across the United States by letting people sell options on aircraft seats.

How would this work?

The Hub and Spoke system consists of about 30 major airports in the US that act as hubs.  The rest are spokes and many smaller cities are barely served at all.  So unless you are flying between two hubs, you will always have to catch a connection, waste time, and incur social expenses.

For the price of a typical airport lounge bar tab, a traveler can buy an option to fly a private jet non-stop between their destinations.  An option is the right without the obligation to take a position in the future.  The option would be convertible, transferrable, and may even be exercised on a wide variety of schedules.

Calling all unemployed entrepreneurs 

Suppose that I saw a listing on Social Flights for a private jet flight from Boise Idaho to Colorado Springs taking place in three weeks and costing 300 dollars.  Since I know a lot of people in both cities, I can either use the ticket myself, or I have 3 weeks to sell it for, say, 500 dollars.

This is a bargain because there are no non-stop flights between these two cities and airline prices tend to increase as the departure date approaches.  The private jet can do the trip in two hours whereas the commercial airline would take 8 or more hours. I could buy an option on that flight for, say 30 dollars and resell the ticket for a $170.00 profit.   If I cannot sell the ticket, then I can use the ticket, convert it to another option, or lose my 30 dollars (just like the bar tab).

I am a Capitalist

In effect, I am rewarded for my size and quality of my social network.  I am rewarded for my ability to research in the Internet to find likely prospects who would seek to travel at a time savings.  I am rewarded for my knowledge, associations, professional skills, and ability to analyze data and organize people.   I am rewarded for finding arbitrage opportunities in an inefficient industry.  I buy low and sell high – I am a Capitalist

While this may not seem like a large impact, if 5000 – 10,000 people make their living trading Social Options, the market will shift.  If Social Options can be created for aviation inventory, they can be created for all inventory.  For the exact same effect as a Groupon, people can trade options on goods and services while hedging against Wall Street and restoring community Values.

Don’t just change the game, change the street that it is played on….

BizDev with Cascading Info Game

Social Flights is a complicated game.  Aviation is a complicated business.  This makes Social Flights a challenging business model as much as a great opportunity for those who can figure it out how to play for keeps.

The Challenge

The challenge is to bring on as many as 5000 independent Travel Tribe leaders distributed broadly across a wide geographic area.  Their task will be to strategically build flight plans for private aircraft in their communities. Community leaders will be compensated financially for driving revenue … much is common to a traditional sales channel.

However, each of these community leaders will have already accumulated a vast set of strategic knowledge and experience that can benefit Social Flights across the system. Likewise, Social Flights needs to bring each of them up the ladder of domain specific knowledge in the aviation business.

For compensation, Social Flights offers a tiered affiliate program that pays out various levels of commissions on flights booked according to the affiliate’s tier.  One concern is that this strategy may not create an incentive to share information broadly if one is protecting their own tier standing or their own order of influence.

Cascading Information

Another approach would be to use a cascading information system.  This is a gamification theory that suggests: information should be released in the minimum possible snippets to gain the appropriate level of understanding at each point during a game narrative.

Initially, information would be released by social flights in our initial training program.  Later, other players of the game can release information to each other in specific packets defined by the flight scenario.  Such packets of information can be rewarded with other packets of information – or access to more scenarios. The Cascading information theory promotes loyalty, engagement, influence, and time involved in the game of building flight plans.

Gaming the game:

From the onset, Social Flights encourages gaming the game.  This means that we expect to learn a great deal about our business by watching other people play it.  There are far too many scenarios and permutations of business strategies for us to predict how and where they would apply.  All we can do is specify a baseline game scenario form and watch the ways the game is gamed.

In a sense, Social Flights would also be subject to the Cascading Information Theory, thus demonstrating how a corporation would enhance their own engagement, loyalty, influence, and time-quality in the communities where they operate.   

(reference: Gamification.org – wiki; Cascading Information Theory)

The Game and The Counter-Game

The term “Gamification” is pretty cool, except that it is meaningless.  Anyone who has ever worked a day in his or her life knows that the World is already gamed.  Anyone who follows politics and world events sees the game playing out constantly.  Everyone, including the winners, know that the game is stacked.  The last thing anyone needs is another game layer.

If you are like the majority of people on Earth, you are given a game that you can’t win playing by the rules.  If you are like the majority of people on Earth, you would do anything for a chance to play a game that you CAN win.  Imagine the value of an IPO for a gaming company with that prospectus.

What is a Counter Game?

Wikileaks – love them or hate them – is a Counter Game because they turned the lights on a game that was being played in the dark.  Bloggers play a Counter Game because media was editorialized by powerful interests.  Twitter is a Counter Game because it drives the narrative instead of being driven by it. In fact, any place where there is a broker – someone or something that benefits from you NOT having complete information – is an opportunity to introduce a Counter Game.

An astonishing array of Counter Games is forming in social media and the brokers are falling out of the sky like hailstones.  Power brokers, mortgage brokers, energy brokers, media brokers, even Google is gamed by Counter Gamers.  The better they get at hiding information; the better the Counter Gamers gets at rooting it out.  The harder they try to control a message, the better the Counter Gamers gets at disclosing the truth behind the message.

The game creates the Counter Game.

Likewise, to kill the game is to kill the Counter Game. As such, the only way to kill the counter-game is to kill the game. Think about that for a bit…Do we really want to do that?

The Holy Grail of the Counter Game is the global monetary system. Money is supposed to represent human productivity; otherwise people would not go to work to make things that everyone else needs.  The Game has caused Money to become increasingly divorced from actual productivity.  People who produce the most value are exploited while those who produce the least are most grandly rewarded.  The Game is stacked with money.

The Holy Grail of The Counter Game is to replace monetary currency with a True Value Currency.

The financial system stands on 5 pillars: currency, inventory, vetting institutions, entrepreneurs, and value arbitrage. All of these are slowly being replicated, mimicked, or duplicated in Social Media.  When the 5 pillars integrate in social media systems, a new currency will emerge.  People will use it to store and exchange the value that they create through their work. It will be a no-brainer

The Value Game

The Value Game is outlined in this short video using the now proverbial “Corporate Jet” as the turning point in the global economic paradigm.  The Value Game does not kill the Financial Game, rather, it challenges, corrects, and improves it.  The Value game has reached a critical milestone – it has been funded in dollars by investors.

This is not insignificant.

The Human Infrastructure Game

Social media is emerging as a tool that may replace corporate and physical infrastructure of market capitalism.  Social Flights is attempting to sort and match people, airplanes, and destinations with community organization and interaction rather than the massive infrastructure of Hub airports.

Social flight introduces a Community Leader to the “last mile of social media” who can interpret and manage Value Game data to drive social and financial revenue.  In order to articulate this real-life gaming system we need to specify a baseline game scenario such that all future “real-life” scenarios will simply be some unique variation on the baseline game.

The Baseline Scenario

Consider a condition where 4 persons (group A1) from a metropolitan area (point A) self-organize to initiate a flight plan to another metropolitan area (point B). An 8 passenger jet is available at the local airport near point A. The group seeks to return 3 days later. Price sensitivity is high.

The responsibility of the Community Leader at Point A is to:

1. Deploy social media strategies to find 4 more people to fill the remaining seats.

2. Contact Community Leader at point B to notify them of the empty leg that will originate there (when aircraft returns to base).

3. Coordinate with Community Leader B to promote vendor attractions that influence 8 new travelers to fly the jet back from Point B to Point A.

Three days pass and Group A1 needs to return home from point B:

1. Coordinate with Community Leader at Point B to determine who will originate the flight plan and who will own the resulting empty leg (the passengers are agnostic as to where the plane originates).

2. In either case, Community Leader B will deploy social media tools to fill remaining empty seats if any.

3. In either case, Community Leader A will use social media tools to fill the empty seats if any.

Variables:

In this scenario; 32 seats must be filled to support a flight plan for two round trips in an 8 person aircraft AND the 3 steps outlined for each and every flight remain relatively constant – only their order may change.  Most of the variables to the baseline scenario are factors of social influence and may therefore respond to game mechanics and rewards, i.e.; the number of initial passengers, social draw in each community, 3rd party vendor incentives, social influence of passengers, price sensitivity, traveler schedule, etc.

Re-introducing Human Infrastructure

Social Flights needs game data from which to match supply and demand of corporate resources.  The Community Leaders need game data to match supply and demand of social influence.  Finally, the passengers and support vendors need game data to match supply and demand of social value, etc.

By structuring the game around a baseline scenario and introducing “Human Infrastructure” responding to game data, we hope to increase our likelihood of  replacing physical infrastructure in the operation of point-to-point air transportation.

The Gamification of Air Travel

Commercial airlines continue to astonish the traveling public with an ever-increasing array of new ways to charge extra fees.  The newest scheme is to charge 5 dollars to have a customer service agent print your boarding pass.  You can get around this by using your own printer, or using a free kiosk – which undoubtedly will not be free for long.

Your schedule or theirs?

Meanwhile, the different prices that people pay for the same trip continues to fluctuate wildly. There are very few products whose price defies supply and demand or actually increases as it approaches it’s expiration date.

People who book 4-6 weeks in advance have the highest probability of getting the lowest fair – as long as the don’t buy the ticket on a weekend.  Buying a ticket on a Tuesday morning 4 weeks in advance can yield a 50% discount of the person who bought their ticket 2 weeks in advance on a Saturday afternoon.

Obviously, there must be some net average cost for a seat, per mile traveled with all services restored, so why can’t we save the drama and loss of productivity and use the average price? An “average revenue per seat mile” price is good enough for Wall Street Annual Report – why not the rest of us?. Another nagging question: why can’t I use frequent flier miles to buy lunch on the plane or carry extra suitcase?  What, they don’t accept their own currency…?!?!

Are You Gamed by FlyVille?

The airline industry has been gamified and people are hard wired to play along – of course they complain, but they also learn to behave in a manner that they perceive to be in their own best interest, but actually is in the Airline’s best interest.  Tacit collusion among airlines can now play out using frequent flier miles, copycat fares, and lowered customer expectations.  How much time do people spend playing this game?

This is also the environment where a competitor can emerge with a  “counter-game”.

Social Flights was launched a few months ago with a very simple data landscape; a means and manner in which people can meet to ride share on private aircraft.  Currently, the amount of time required for a social flights customer to execute a flight plan – that is, organize people in their community with shared flight intentions – may still be greater than the time and harassment of just going through the flow of the commercial airline abyss.   Over time, however, this will change.

Frequent Influence Miles

Suppose that Social Flights deployed frequent flier miles?  Suppose these could be awarded for organizing a social flight plan to a social network?  Suppose miles could be redeemed for discounts on hotels, car rentals, and ground services (think AAA)? Restaurants, entertainment and events routinely pay commissions to concierge referrals, why wouldn’t they also redeem Social Flights Flier Miles in the same manner?

What if Social Flights frequent flier miles could be earned and redeemed without actually flying, but by simply organizing communities until your perfect trip comes along?  What if a person with high Social Flights Frequent Flier Miles represented a better social influence predictor than say, a Klout score or Twitter follower count?  Would vendors want to know who these magical people are?  Will vendors compensate them for their influence in a community?  Wouldn’t the community then define the ads that get pitched?

What’s the end game? Let’s transform the industry together.  Seeking game designers to build the next generation of air travel

The Art and Science of Social Sudoku

It’s been a few months since Social Flights entered the market with our February 28th Soft Launch.  Since then we have grown at an amazing rate after getting picked up by a series of important news publications.  But for this article, I would like to talk about what we learned.

He who hesitates, iterates

Learning is a critical element in any organization.  The iterative process is a series of intentional steps that a group of innovators must invariably endure.  The iteration process requires a strategy for introducing new variables to a product or process in such a way that the experimenter can isolate the effects of each change.

Social Flights was very much launched with this in mind. We prioritized the rollout of game features in order to form a player priority profile that will drive this Value Game.  Nobody can simply invent such a thing, it must be observed empirically.  This means that the right conditions must be in place to reveal the right data without bias.  The data can then be used to improve the incentives that drive the game.

Resistance is futile

One of the most daunting challenges has been to identify the skill set for what makes an effective community leader.  The Value Game is a value-based economy that is modeled after the mirror image of a dollar-based economy.  It’s like driving on the left hand side of the road for the first time.  Of course, you need someone who can drive a car – but in a very significant way, you need someone who has never driven a car.  In either case, resistance is fatal (figuratively) and futile (literally). The willingness and ability to iterate is essential.

We do expect the results to surprise us.  We went through many candidates for our social media distribution and engagement office before we found the right skill set; not in a marketer, or in an MBA, or in social media guru – we found the skill set in a Linguist.  This makes perfect sense now – but we did not know that before we started the iterative process.

Easier Said Than Done

A travel community leader needs to solve a simple equation.  Find 18 people to share an 9 – passenger jet (9 flying in each direction) within a certain span of time.  This is much easier said than done – in fact, it’s like trying to solve a big Sudoku puzzle where all the rows, columns, and regions need to add up to the same number with no duplication.  Of course the puzzle gets easier as more people join the community because the probability of finding 9 people that want to go to the same place improves.  But still, someone needs to be on the ground to solve the puzzle.

Help us find the gamers

With that, I invite our readers to help us imagine what skill set would be the starting condition for an iterative process of finding hundreds of entrepreneurial community leaders that can solve this puzzle in diverse communities. I am leaning more and more toward the Gaming community on sites like http://gamification.org to find this skill set.  Any thoughts?  Thank you.

Control The Information And Control The Game

Social media is progressing in a direction where the SM application controls your information – not you.  This is a game that you cannot win unless they let you win.  Social Flights changes the rules by letting you control your own information.  As such, we are growing in popularity among entrepreneurs who are looking for a game they can win playing by a new set of rules.

Social Flights is comprised of 2 components; Social Flights Corporate and Social Flights Travel Tribes.  The corporate application provides vertical integration while the Travel Tribes provide horizontal integration.  Each is hugely dependent on the other, but the travel tribe is where the value is.

Vertical Integration involves information technology; the collection and formation of system data.  This is the information that helps groups stay in contact with each other giving the origin community a portal into the destination community (and vice versa) for a given flight.  This helps airplane operators schedule flights, and it helps communities become attractive to entrepreneurs and other communities.

The horizontal integration is where information originates and terminates.  The Travel Tribe disseminates information on the ground at both the origin and destination.  What happens in a Travel Tribe, stays in a Travel tribe.

The most important aspect of data and information control is the ability to restrict it from communities who are not part of the transaction. Nobody else can know where you are going except you and the airplane operator – that’s what makes the game private.  Nobody needs to know how much you are paying for a hotel room or travel service except you and the service provider – that’s what makes the game valuable.  Nobody needs to know what you are doing on the ground except you and your friends  – that’s what makes the game social.

A Value Game depends on the control of information.  If someone else controls the information – they control the Value and there can be no game. They also control the use of information and the information technology.  Don’t take this point likely; whoever controls the use of the information also controls the technology (vertical integration), not the other way around.   Technology is deployed to the game – the game is not deployed to the technology.  So, if you control the game, then you control the usage and the deployment of the technology; i.e., you control the value.

(Diagram credit and reference:  Seven Faces of Information Literacy in Higher Education by Christine Bruce)

How To Use Data Correctly

There is a raging debate about data usage, privacy violation, and even epic technology data hacks.  The reason is simple – data has value.  Ultimately, data are convertible to value – in some form or another, including money.  That means that data are a convertible currency.  This is not necessarily bad, however, there is a right way and a wrong way to convert data into value.

The wrong way is to steal it from it’s rightful owners

You and I, by our motions, movements, communications and the pursuit of freedom and happiness create a huge amount of data.  This belongs to each individual.  When two or more   people interact with each other – the data they create belongs to them, and nobody else.  This is a very powerful relationship that others seek to exploit.  Equally culpable are those who don’t protect their data and the data they share with people around them.

The right way to use data is to play a game

If you observe any game that people play – from children’s games to sports, and even gambling – they all have one thing in common.  Each player has the same information as all the other players.  The game is largely the ability to influence the information with data. Kids know the probability that a they will be tagged and influence their strategy accordingly – but they all play on the same field. In a basketball game, gravity behaves exactly the same for every player on the team. Poker players know the probability that their opponent will draw a flush – there are only 52 cards.   Stealing Data is like slanting the playing field, stealing cards from the deck, or changing the influence of gravity.

Fair Market Value is a Value Game

The underlying assumption of market capitalism is that everyone has the same information.  Two people holding the same Carfax report can have a rational and fair negotiation about the value of that used car.  As such, the used car market is efficient.  Package labeling, truth in advertising laws, and pharmaceutical disclaimers are an attempt to keep a market efficient so that the market can arrive at a “Fair Market Value”.

The Value Game

The Value Game being tested now at Social Flights is a real life game where real people fly to real places to do real things on real nice airplanes.  There are no badges, tokens, little pink cows, wiggly worms, mayorships, or leader boards.  The Value Game is a real economic game built on real data that real players create, own, and share only with other real players.

How to use data correctly

The Value Game will process a great deal of information to make Social Flights operate efficiently.  Data must be normalized to calculate the probability that a flight will fill so that everyone can make a rational decision about price.  Normalized data can be used to create a seat cancellation insurance policy to reduce price volatility.  Normalized data can help travelers buy an option on game 7 of the World Series, before game 5 has ended. Normalized data can be applied so the player knows exactly how much of a discount to require from a vendor for accepting a coupon. Etc.

The Value Game does not need to know your name, address, phone number, or credit score to compile useful information.  The Value Game does not even need to know such information about your friends, family, or professional relationships.  Nobody needs to know your private information –  unless they intend to use your data incorrectly.  After all, thieves need to know who to restrict your data from – you.

Data: The Ultimate Shared Asset

People always ask me how The Value Game will work and how The Value Game will scale, and how The Value Game will make money.  These are great questions, albeit straight from the b-school crib sheet; good questions nonetheless.

At first glance, The Value Game as we are deploying in Social Flights looks like a rich kids party barge.  The idea is that people can share an airplane just like they did with that stretch limo on prom night.  Yes, the idea is the same – the jet is a shared asset and status on prom night is special.

The Value Game also produces a lot of very important data that is owned by the players.  So when the passengers arrive at their destination, their data can now transform the hotel into a shared asset. As such, a new Value Game plays again.  If the players own their data, and they only share it with the other players in the associated Value Game, they can command substantial value for the collaborative purchase of hotel rooms – or any shared asset.

Likewise, the players will need restaurants, tour guides, golf courses, concert tickets, entertainment, etc.  Their data – if they own it – is their discount coupon…like a Group Coupon, except relevant to the need and exercisable on-demand.  By the time the trip is over, their Value Game data can result in hundreds or thousands of dollars in discounts for the individuals in a travel tribe if, and only if they own their data.

The next time they want to take a trip, their data is not only a discount coupon; it becomes a passport to opportunities that money cannot buy. In the End Game of the Value Game, data are the shared asset.  This works if, and only if people own their data and they can share or restrict it from view of others.

Seriously, think about that for a minute.

You give your data away for free.  Companies collect this data and they have no intention of sharing it with you.  Data is a multi-billion dollar industry.  Why?

Aren’t most life lessons about figuring out who is NOT playing The Value Game and avoiding those people and situations?

The Value Game Plays The Valley Game

(The following is a draft of the unveiling presentation for The Value Game at The Future of Money and Technology Summit in San Francisco on February 28th 2011)

Hello;

The Ingenesist Project is developing a new class of business methods that convert social value into financial value, and vice versa.  The premise is that when people cooperate to do useful things, they can also create an amazing amount of social value.

Historically, we have seen how each of the great eras of human civilization was derived from the prior era when the tools of that prior era became integrated.  Like when the wheel, wedge, and pulley integrated to become the printing press.  Great social transformation followed.

So it is that integration of tools that we are most interested in.

Today, we can see this drama playing out across the Globe as people integrate the tools that were created over the last 30 years. People are reorganizing and in doing so they are directly challenging the power of financial currency with equally powerful social currency.

So it is inevitable that a conversion factor between social currency and financial currency will arise.  And that, we believe, will mark the next economic era.

So we developed something called The Value Game that we believe will help build the social infrastructure for the creation, storage, and exchange of social value.

The Value Game is a new class of business methods designed to specifically create social value.  The rules of the Value Game are very simple.  The Game Starts and Ends with money but all of the new value created in the game is denominated in Social Currency.

A Value Game is created by assembling 3 or more communities around a single shared asset in such a way that their interaction with each other relative to the asset creates social value.  In this form, social value can then be more readily converted to a financial value.

To demonstrate this, we helped launch a new company called Social Flights.  The objectives of Social Flights are to aggregate a large fleet of Private Turbine powered Aircraft and deploy them to the Social Graph instead of the Hub and Spoke system used by the Commercial Airlines.

The Shared Asset is the jet.  Player 1 is the traveler community.  Player 2 is the community of private aircraft operators. ,  Player 3 is the community of entrepreneurs at the flight destination.  The True Value Calculation compares the true door-to-door cost of using Social Flights versus other alternatives such as commercial airlines.

For example, flying between two smaller cities like Bellingham Washington and Vail, Colorado.  A Commercial flight would take close to 14 hours traveling through two hubs.  A fully utilized private flight would cost about twice as much but can make the flight in 3 hours.  So right off the bat, the True Value Calculation issues a par value between alternatives.  So if your time is worth less than, say, 70 dollars per hour, you are better off taking commercial airlines.  But if your time is worth more than 70 dollars per hour – for whatever reason – then you should take the private flight.

Now, a hotel in Vail may say – wow, here is a group of 10 people staying 5 days. They can divert advertising budget and issue a 100 dollar “discount coupon” to everyone in the group. Now the par value of the private flight is reduced to 60 dollars per hour. Next, Ski slopes, restaurants, bars, and services will deploy Coupons against the airplane lowering the par value toward closer to middle class incomes and certainly well within the business class of a commercial airline.

Things will get really interesting as people start gaming the game. The more demographic information that the traveler provides, the greater the likelihood that more and more vendors will issue them a discount coupon – which they can even resell on Craigslist.

In effect, why would someone let Facebook sell their information when people can sell it their selves?  Why would vendors pay for advertising when they can find the perfect customers directly?  Why would a manufacturer pay a retailer when the community can sell it for them?   Here we see a great deal of financial value can also be articulated in a Value Game.

Theoretically, we could build a Value Game around any shared asset from zip cars, public infrastructure, energy production, education, natural resources, even the totality of human knowledge, etc.

But for now, let me introduce Allen Howell, Chairman of Social Flights who will discuss how this new business method is developing in practice.

Social Flights should be very interesting to many of the people here because it integrates several of the hottest properties in the Valley; Travel, Coupons, Gaming, and Social Media.  Each of these communities have seen astonishing valuations lately so it will be interesting to see what happens when they, in fact, become integrated.

So please welcome Allen and I can take questions while he sets up.

Game Over

The first law of Gaming: If you can’t win a game playing by the rules, stop playing the game, or change the rules. It would seem that Egyptians would add a corollary “Change the Rulers”.

This is not trivial.

Billions of people are walking the planet Earth with the nagging feeling that they cannot win their game playing by the rules they are given.  If America was once the shining beacon of opportunity where hard work and perseverance were the main ingredients of success, and Americans are feeling that they can’t win playing by the rules, then you can expect two things to happen:  People will stop playing the game, AND the rules will change.

Interactive Entertainment

Looking on the sunny side, we see Gaming companies achieving astonishing valuations in Silicon Valley.  What is even more remarkable is that a similar thing is happening concurrently with Travel, Coupons, and Alternate Currencies.  Many people stand back aghast at the sheer size of some of these bets; $120M for Tripit, $5B worth Zynga, $6B for Groupon, $50B for Facebook.  The Market capitalization of Apple ($320B) is almost 2 times greater GDP of Egypt ($188B).

It would be foolish to underestimate the value the gaming component – now called “Interactive Entertainment” – as enabled by the Internet.  Gaming is an extremely mathematical science where designers predict the probabilities that a player will favor one strategy over another.  The better these prediction become, the more interactive and, ostensibly, the more entertaining a game becomes – at least to some people.

The Calculus of Gaming

It is no coincidence that the calculus of gaming and the knowledge assets deployed to the gaming industry are functionally identical to financial and marketing industries such as banking, insurance and demography.  Banks set the price of money based on the probability that you can pay it back (credit scores).  Insurance companies set the price on premiums based on the probability that you will experience a loss (actuarial data).  And Demographers predict what you will buy and who you will vote for. After all, a Bank is really just a game that bets that you will win and an insurance company bets that you will lose, and demographics keeps the game, well, unfair.  But together, they all hedge each other’s risk, not yours.

Watch The Integration, closely

From prior articles; The Travel industry is a proxy for how and where ideas are spread.  The Coupon Industry influences human behavior to accelerate the disruptive innovation and to create new value simultaneously. The Gaming Industry will define the rules by which the new game will be played and provide the ability to predict when, where, and how to value social capital. When the integrated is complete, the ability to capitalize and securitize a new social currency (next article) will emerge to hedge, and then replace, the dollar.

Game over.

***

(Editor’s note: The above post is #4 in a series [1][2][3][4][5] introducing The Value Game to a new class of business methods.  The first real world application is Social Flights; a collaborative production / consumption game being deployed to the market.  If this works, the new business method class will be generalized throughout the economy to catalyze the convertibility of social currency.  Please join us at The Future of Money and Technology Summit in San Francisco on february 28th 2011 where we will unveil the work to the technology community)

When Everyone has a Coupon, They Will Innovate

It is extremely important to recognize that, for better or for worse, Discount Coupons can have an extraordinary influence on people and their behavior.  This influence is what makes a discount coupon very powerful and extremely valuable. Coupled with social media, a coupon can be leveraged to influence the behavior of whole communities in extraordinary ways.   The ability to manipulate coupon values is tantamount to the ability to manipulate the value of money itself.

However, coupons, in the marketing world, function as a form of price discrimination that enables vendors to offer a lower price to people who would otherwise go elsewhere.  Since coupon customers are price sensitive and not necessarily loyal to a brand, coupons tend to reward ambivalence in a community rather than trust, commitment, or long term relationship. Normally, one would seek to create incentives for loyalty, quality, and trustworthiness. Instead, such transient market can act against both product quality and new value creation.

Another use of the term “coupon” arises from finance where coupons are used as proof of ownership for a bond, “bearer certificate”, or similar financial instrument. Possession of the coupon is considered conclusive proof of ownership of a tangible asset.  Money, in fact, is simply a coupon representing ownership of a unit of a productivity. Ownership is a cornerstone of all forms of Capitalism, including Social Capitalism.

As such, it is of little surprise that the Internet Coupon industry is exploding with huge valuations of Groupon by Google, The emergence of Google Offers, and Yelp Coupons, and many more.  What is very interesting is that this explosion is happening concurrent with similar innovations in Travel, Currency, and Gaming deemed the “Great Integration”.

The next obvious step is for coupon exchanges to form where holders of one type of coupon can trade value with holders of another coupon not unlike one can now trade Coca Cola stock for shares in The Boeing Company.   Coupons today have limitations on their usage, but over time, continued innovation in “Coupon Currency Games” will result in powerful mechanisms for the storage and exchange of value.

There is a classic business game that plays out in markets everywhere.  Suppose that a vendor offers to discount all prices by 20%.  A competitor simple has to say “We’ll match any price”.  After a day or two, the resulting stalemate is inefficient because it simply resolves to both vendors losing 20% with no net shift in market allegiance, only increased transcience.   This is a the divergent force that weakens ties and introduces susceptibility to disruptive innovation.

Meanwhile, The Value Game uses coupons to leverage relevant communities around physical assets such as airplanes, zip cars, alternative energy, and public infrastructure.  This will be the convergent force that strengthens community ties and introduces huge opportunities for social entrepreneurs to create new value.

As a result, the strategic use of Coupons will play an important role in both the acceleration of innovation disruption AND the subsequent creation of new value. In fact, if used strategically, coupons may help usher out the old economy and bring in the new.  The Domino Effect.

***

(Editors note: The above post is #3 in a series [1][2][3][4][5] introducing The Value Game to a new class of business methods.  The first real world application is Social Flights; a collaborative production / consumption game being deployed to the market.  If this works, the new business method class will be generalized throughout the economy to catalyze the convertibility of social currency.  Please join us at The Future of Money and Technology Summit in San Francisco on february 28th 2011 where we will unveil the work to the technology community)

We Got It Backwards

The History of Financial Innovation

The invention of the wheel, wedge, and pulley came long before the invention of credit scores, CDO’s, and International Trade Agreements.

Technological Change must always precede economic growth – economic growth cannot sustainably precede technological change. If you throw money at a problem, you are not guaranteed technological change.  If you throw technological change at a problem, you are guaranteed money.

The Tiny Flaw of Market Capitalism

We are going about the process of globalization as if economic growth can precede technological change.  This is the tiny flaw of market capitalism and it is unsustainable.  In short, we’ve gotten it backwards and continuing on this course prevents us from seeing the future.

The flaw is easy to correct. The Ingenesist Project has specified two for-profit business methods, “The Value Game” and “Zertify.com” which if deployed today in Social Media could accomplish this.  These business methods are committed to the public domain.  The only thing standing in the way is a social agreement.

Let me know if you agree

Will Social Capitalism Replace Market Capitalism? (Parts 1&2)

This video describes a set of predictions for 2020 based on an entirely new form of capitalism whose velocity and voracity will take the world completely by surprise. Nothing is sacred and nobody is immune, not Facebook, not Google, not Wall Street, not even Governance itself….

Part 1

Part 2:

Is the Credit Score Obsolete?

The Ingenesist Project prides itself in making certain predictions that often seem to manifest in some small way every day.  One of our most enduring suggestions is that social media will begin to replace failing institutions of government and industry.

OK, that’s pretty far out, or is it?

The Wall street Journal reported recently that new bond issues – sort of like collateralized debt obligations – are being developed without consideration for the credit rating of the assets forming the bond.  The justification is that credit rating did not predict or help avoid the last crisis, so what good are they?

Now here is the twist – a surprisingly “Social Media” style solution is proposed – and accepted by the market.  The bankers put their personal and corporate reputations on the line.  If you trust the banker, you can trust their bond.

Is the Credit Score Obsolete?

This sets up an interesting new game now that many bad banks are gone and public sentiment is turned against them. The new game is playing out in interesting ways.

  • The bank does not want to put their reputation in the hands of a 3rd party credit rating agency.
  • Investor wants to put their money into the hands of the person who actually hangs if the deal goes bad.
  • “Inside Information” has become so systematized; the banker knows things long before the rating agency.
  • A system had been built to “game” the credit agencies…lose the game and lose the risk?
  • Avoid government vetting regulation in favor of “social network” vetting.
  • Tactical advantage over corrupt competitors
  • It’s easier for everyone to understand – including the banker, investor, and bond asset.

This is a profound shift in thinking from only a few years ago and almost seems like a return to a bygone era; remember the old days when the banker was actually a member of the community where the bank invested their money?

There are some lessons to take home.  If don’t need credit ratings for corporate bond issues, do they need credit ratings for people?  What if all of these institutions adopt a social network based credit score?  What would that look like?  Social media by and large rewards high integrity and punishes low integrity.  The value of social media includes a component of risk reduction.  You would think that Banks, Insurance, and even homeland security would be all over this game.

Innovating Disruption:

What happens if your credit rating is divorced from your finances?  What good is your social security number?  How does this effect all the downstream users of credit ratings like insurance, employers, credit card companies, social security payments – if any? Much of what we’ll associate with the innovation economy is the disruption, if not outright destruction, of an impossibly unstable system of finance.

Is the Credit Score Obsolete?

Are we competing with the truth?

The blogs are going wild, the headlines are snappy, and late night comedians bristle with glee.  First it’s a $165M payout to AIG executives, now it’s AIG’s $75M lobbying campaign and payout to the politicians who were supposed to vet them in the first place – and the majority of the beneficiaries were Democrats!

Far greater crimes have been committed in the financial meltdown, but this one is catching fire and it’s trying to burn the house down.

As if fanning the flame, Obama loosens the reigns on the Freedom of Information Act, publishes bailout beneficiaries, identifies stimulus projects, opens doors to Iran, health care, education, and forces earmarks front and center. He is taking political bullets from all corners, but so is everyone else – nobody is safe.  Not even Rush Limbaugh; now neutralized and tossed in the surf like a beached whale.  People flood to social media, traditional media fails. When everyone is to blame, the finger points backwards.

So the competitors are actually cooperating; with the right information everyone has the incentive to make the game fair (and the highest probability of surviving).

By far the most important job in any sport is a referee.   The referee wears the black and white stripped shirt in order to contrast with visual information in the field of play.  They blow a whistle in order to contrast with the audio information in the field of play. They stop the game if the rules are violated in order to contrast with the dynamics of play.  If a violation is too close to call, they consult the slow motion replay.  Both sides agree to play fair and to obey the referee or else they get thrown out of the game. Contrast is good.

Obama is relentlessly pushing as much information onto the playing field as he is pushing money.  Could it be that information and money are related in some inherent way?

Innovation is the science of change and economics is the science of incentive.  Information, knowledge, and innovation are profoundly related.  High rates of change of information yield higher rates of change in knowledge inducing still higher rates of change of innovation.

There is nobody to blame except the truth.

What Obama is doing is irrelevant to a manufacturing economy because market forces are a sufficient vetting mechanism for product quality.  It is also irrelevant to the knowledge economy because that is destined to be outsourced.

However, Obama’s actions are definitive for an innovation economy.

Not unlike the financial meltdown; the only ones who don’t see it coming are the ones who don’t want to.  Are we competing with the truth?

Oh, What a Semantic Web We Weave

Innovation Economics:

is the conscious practice of investing in innovation as a method for driving economic prosperity.  Innovation is the science of change and economics is the science of incentives.

Money is fictitious:

Money does not represent gold or silver, it represents your productivity.  The value is held in the productivity, not coins or bank notes.  Debt represents future productivity and savings represents past productivity. It’s very simple.

So if the word “money” and the word “productivity” mean the same thing, they should be interchangeable. Right?

As a test, try the following:

Every time you hear someone use the word “money”, simply insert the word “productivity”.  Try it with the kids, your boss, the news broadcast, or your favorite politicians.  If their statement still makes sense, then it is likely a logical statement.  If the statement is confused, reversed, or makes no sense whatsoever, then this is where we need Innovation Economics.

The Reversal:

  • “Mom, can I have some [productivity] to buy an ice cream cone?”
  • “We don’t have enough [productivity] to invest in R&D”
  • “There isn’t enough [productivity] in the budget so we must cut education programs”.

The Confusion:

  • “It concerns me that Facebook has yet to find a [productivity] model that seems likely to secure its future.”
  • “Icelandic [productivity] collapse is heard around the world”
  • “Global Warming costs too much [productivity] to solve”

The Ridiculous:

  • “Wall Street Executives earned excessive [productivity] in 2008”
  • “State of Washington opens more liquor stores to raise much needed [productivity]
  • “Lawmakers from both political parties have criticized banks for failing to use the taxpayer [productivity] for lending to help stabilize the hard-hit U.S. economy”.

It’s really fun to play this game when you start getting bored with the endless dribble of spin.  You can even go backwards; hear “productivity” and insert “money”. Pour yourself a glass of wine, sit back to the nightly news and you may start noticing some interesting trends.

Discussions related to engineers, infrastructure, airplanes, teachers, doctors, police and firefighters, etc., tend to get The Reversal. Discussions related to innovation industries such as social media, environment, and social causes tend to get The Confusion.  Discussions related to gambling, marketing and advertising, money shuffling, law suits, Wall Street, and various forms of speculation, are simply The Ridiculous.

It will make you wonder why we would need a Web 3.0 Semantic Web.  We really need a Web 3.0 de-Semantic Web.

(Picture from Charlotte’s Web; a story about a dinner pig who makes friends with a spider who comes up with a plan to save the pig by writing words in her web.  All the town’s people thought that the pig was special and his life was spared. The farm animals knew that it was really the spider who was special – she was an innovation economist)

The Great Convergence

Hey Kids, It’s 3D:

The objective of this article is to discuss the Great Convergence of computer enabled society. Social media must not be allowed to converge to a single apex – rather, it must converge to 3 distinct and tangible dimensions.

The factors of production for the industrial economy are land, labor, and capital.  If you lose one, you can’t use the other two to build an SUV, for example.  The factors of production for an innovation economy are social capital, creative capital, and intellectual capital. All production in the new economic paradigm will result from the allocation of a “secret sauce” of social capital, creative capital, and intellectual capital.  Again, if you lose one, you can’t use the other two to build anything meaningful.

The congregation of congregations:

In order to find The Great Convergence, we simply need to examine Social Media to discover where social capital, creative capital, and intellectual capital tend to congregate.

One of the more obvious illustrations appears to be playing out between LinkedIn, Facebook, and Myspace.  Many people use Linkedin for professional contacts (intellectual Capital), other people use Facebook for friends, family and more diverse associations (Social Capital), while many others use MySpace to post videos of their rock band, Artwork, or to discover the latest Mash up (Creative Capital).  Of course there are many more social networks, lots of cross talk, different demographics, rants and raves, etc.  I intentionally leave this analysis sparse as these conditions simply reflect the nature of The Great Convergence.

The Next Economic Paradigm:

We need to watch The Great Convergence with laser focus and deep personal interest because it will be extremely important for the development of what comes after the knowledge economy.   Whatever form this next economic paradigm takes, globally and locally, will depend upon The Great Convergence.  The Innovation Economy is the only wrench left in the toolbox for resolving the vast global problems that we face today.

The Innovation Economy must end global warming, restore financial accountability, enact sustainable enterprise, and institute renewable energy – or not.  This is a huge burden to ask of the next “greatest generation”.  It is clearly in everyone’s best interest to identify, encourage, and support The Great Convergence to form in 3D, before the old single-apex game “resets” and starts all over again, perhaps for the last time.

[The Ingenesist Project discusses this concept at length and identified various predictions, methods, and scenarios, including specifications for an Innovation Economy.]

2008 Financial Crisis – The End Game

The year is 2020, no burning cities, no mass hysteria, no bread lines; the economy is on an exponential growth curve.  The financial crisis of 2008 ended in an anticlimactic sort of way.  Sure, lots of hedge fund bankers were unemployed for a while and many companies once deemed titans of industry have disappeared, but nobody seemed to notice much.

Government debt has been eliminated and Wall Street has become the steward of what has become an Innovation Economy rising from the ashes of debt economics.  The transition, in fact, was surprisingly smooth.  Social Networks figured out a way to make knowledge tangible outside the construct of Wall Street, the central banks, and the traditional corporations.

When the dollar started to fall, people began trading a different currency called the rallod.  The rallod was backed by future productivity resulting from innovation rather than future productivity supporting debt.  The vicious cycle of debt economics was reversed just in time.  When the dollar finally crashed, it pegged to the rallod and the economy began to grow again with an astonishing, yet peaceful, transfer of wealth and power to self-regulating communities, society is general.  It’s still hard to believe what happened.

Today the engines of economic growth are millions of hot new start-ups that exist in the form of “Communities of Practice” related to specific technology areas rather than the old corporation model.  They automatically cluster around a technology and spin off other start-ups at an incredible rate in a strange nesting arrangement called the “tangential innovation” market.  Most innovation is open sourced because the “Patent” (and protectionism in general) is no longer the center of the innovation finance universe, rather, the “secret sauce” of social, creative, and intellectual capital is the most valuable player today.

About 10 years ago, something resembling the human genome project mapped all knowledge in the form of social, creative, and intellectual capital that exists in society to a very high granularity.  A programming language was invented to represent knowledge assets like packets of code that are processed by a community algorithm (The CV/resume is a bar joke now). Thanks to a visionary government, 1st amendment protections were built into this inventory with anonymity laws.

Part of Google was democratized in a public takeover and spun off to design an open source percentile search engine to help entrepreneurs build unique collections of knowledge assets and predict the probability that various combinations of these assets could successfully execute a business plan.  These unique combinations then induce hyper-innovation around a technology and the resulting innovations get spun off to be reabsorbed by different and diverse communities of practice in continuous iterations forming a virtuous vortex of new systems, methods, and solutions.  Sketched out, these arrangements looked like electrical circuits.  Wealth creation is intense.

Instead of having jobs, many people in a geographic area are pinged by a Percentile search engine which calculates the likelihood that their interaction together will increase the probability of successful execution of a business plan when combined with other knowledge assets.  Instead of earning wages, people are paid with micro-royalties specified by contracts on capital asset sub-sections. These micro-royalties add up to substantial residual income enjoying a multiplier effect as their work continues downstream. The government funds social security through it’s own innovation ventures. Service workers such as police, teachers, fire fighters, nurses, local merchants, etc., are key beneficiaries because of their impact on the community is directly associated with productivity.

Many of the senior knowledge workers have determined that they can earn more money by taking an equity position in their students, and the students of their student – such pyramids are in fact sustainable and generate astonishing returns.  Mentors have entered the landscape in vast numbers and apprenticeships have become abundant.  The income potential for the “creating creators” boggles the imagination.   Again, a virtuous circle has formed between the mentor and the student. In aggregate, wisdom is being retained, refined, and transferred efficiently throughout social networks.  Universities have begun doing the same forgoing tuition in exchange for an equity position in students.

University “degrees” have disappeared in favor of unique combinations of knowledge assets that are continually SEO’d for best Percentile Search Engine Placement.  People do not compete directly, rather, they compete with the Percentile Search Engine in the local market place – although virtual work is becoming popular again.  As owners of their knowledge assets, the entrepreneurial spirit is ubiquitous.  No individual has either a monopoly or an identical knowledge set as anyone else.  Everyone has perfect information about the knowledge assets in a market.  People are pinged for different reasons at different times for different rates depending on supply and demand.  Continuous education is a social event in itself often mistaken for recreation!

Since the knowledge inventory has mapped all knowledge and the Percentile Search Engine calculated probabilities and scenarios, the Innovation bank formed to make most worthy and optimal matches between knowledge surplus and knowledge deficit in a community.  Since the probability of innovation success has become predictable, innovation risk is now diversified away.  Innovation insurance products abound. With near-zero innovation risk the cost of venture capital has approached 5-7 % instead of 500-2000% of less than a decade ago.  Banks now issue innovation bonds on the public market to finance innovation in society.  For an investment of such high return and such little risk, participation is near universal.  This created another virtuous circle; the more innovation that occurs, the more money is created.  The more money that is created, the more innovation occurs.

Even the poorest areas of the planet are getting into the action because, by definition, parts of an economy with the highest potential for technological change are the same places that return the highest dividends in an innovation economy.  Arbitrage opportunities between master and oppressor have disappeared worldwide.

Like a neural network, the economic system of tangible knowledge is self-correcting, fault tolerant, and self-regulating.  Governments across the globe tried to stop the social network driven innovation economy – but they eventually gave up.  It was like water; it flowed between the cracks and simply eroded the barriers. China learned to show it’s sense of humor exporting some of the funniest jokes ever conceived.

Oil production has been replaced by superconducting wind turbines, global temperatures have stabilized, all cars are electric or “water leakers” (as the hydro’s are affectionately known), many diseases have been cured, and the list goes on.  It is hard to believe this happened in only 12 years.  Then again, the Internet had only been widely used 12 years prior to 2008.  Did I mention, we’re finally sending a multinational expedition to Mars…

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