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Tag: monetization

Social Value Creation; A Blank Canvas

The evolution of money

Money has evolved from coins to paper to electronic accounts. Now we see the emergence of mobile electronic accounts. Money may represent value but does it actually represent the value creation process? If not, then what does and which is more important?

PayPal wants to be like the electrical socket that all mobile payment innovations plug into.   In fact, they have a standing invitation for all technology partners in the mobile payment space to integrate with them. This is called an externalization strategy (much like Facebook, Twitter and Windows), where there are so many developers, users, and participants that NOT being on the platform becomes the competitive disadvantage.

The PayPal offer represents the separation of money from the value creation process.  This exposes a very interesting point to consider.

The Frictions of Monetization

The assumption is that PayPal et al will store and exchange dollars, and only dollars.  As such, they are contained within the financial system: credit score system, a person’s name, birth date, and the social security number as a personal identifier, the IRS reporting jurisdiction, and commercial code vetting mechanisms, etc.

Similarly, the drive to monetize in Social Media is pushing applications toward the same containment within the financial system.  Not surprisingly, the complaints of privacy and data security in Social Media stem precisely from association with credit scores, IRS, personal identifiers, Social Security Numbers, etc.  But “Big Social” presses on – they know not another way. Ironically, this is precisely the battleground; the source of all intermediary tactical and social friction that hinders monetization in the first place.  It has little to do with the creation of value – only containment of value.  To win is to lose.

A Better Proxy for Value

The reality of governance dictates that all business ventures begin and end in a standard currency of commerce such as the dollar.  However, there are NO restrictions on which currency must be traded in between to “create value”.   Nor is there any schedule that determines when a venture must begin, end, or be liquidated to dollars.

While The Social Value Game may start and end with dollars, the value creation process is carried out in a social currency using a “Social Credit Score”, an anonymous “Unique Identifier”, and a collection of “Social Vetting Institutions” independent of government or corporate jurisdiction.  The Value Game is a frictionless, tax-free and self-regulating environment without the guy wires of the financial industry.  The game simply leverages existing value socially to make new social value.

Social Value Specifications

The Social Value Creation Process is a blank canvas and we are writing the specifications today.  If a social currency becomes a better proxy for productivity – it may also become a stand-alone currency fully capable of capitalization and securitization. Theoretically, a social currency may never need to be converted to financial currency any more than a dollar ever needs to be convertible to silver or gold – it simply becomes another ledger entry on an accounting balance sheet.

Is Money Irrelevant?

The value creation process is the hard part.  Transformation of Social Currency into Financial Currency will become easy – anyone can do it.  In other words, if PayPal becomes irrelevant, the money evolution chain will be broken and money will become obsolete.  The market is wide open for a money competitor who can simply transcribe a social currency transaction into a ledger entry for financial currency. It’s a lot easier and closer to reality than many people think.

Please Vote for The Ingenesist Project; SXSW

TagCloudPhotoThe Ingenesist Project has submitted the following presentation to the South By Southwest Conference in Austin Texas on March 2011. We sincerely encourage our readers to vote for this presentation. It promises to be hugely compelling, deeply controversial, and boldly disruptive. This is for a 60 minute solo presentation to the Advanced Technical Track – the competition is impressive. Voting ends Friday August 27, 2010

Please select the following link to vote

Thank you very much for your support

The Ingenesist Project

Description:

Today, we have one of the most extraordinary opportunities in human history playing out before our eyes. Social Capitalism is no longer merely a band-aid for an amoral Market Capitalism, it is a new form of Capitalism in it’s own right.

In the age of social media, many entrepreneurs no longer allocate land, labor, and financial capital as a primary means of production. Rather, they deploy social capital, creative capital, and intellectual capital to the production of a vast amount of “value” that is stored and exchanged in communities. The objective of The Ingenesist Project is to make this value tangible outside the constructs of government and corporate interaction.

This presentation identifies the five essential components of Market Capitalism and demonstrates similar elements emerging in social media. It then specifies how these elements can be integrated to perform the essential analogous functions of financial institutions. Next, we specify three relatively simple social media applications that may create a new class of business plans enabling millions of social entrepreneurs worldwide. Finally, a new financial instrument is described which can be capitalized and securitized to form the basis of a fungible social currency to hedge the dollar.

The net result could create a condition where Wall Street priorities are subservient to social priorities rather than social priorities being subservient to Wall Street priorities.

Questions Answered


What can replace market capitalism when it finally runs out of steam?
What exactly are people producing when they engage in Social Media and why does it create value?
What characteristics must a social currency have in order to be fully convertible or even a replacement for the dollar?
What is a knowledge inventory, how should it be formed, and why should every community have one?
What would be a powerful strategic plan for the Internet in the absence of one today?


[Level Advanced Category Entrepreneurism / Monetization Tags monetization, Social Capitalism, Social Currency Type Solo Event Interactive 2011]

The presentation will mirror some content found in the following video series

Photo credit:


The Old Economic Paradigm Breaks Down

childmillworkerAs the economic crisis unfolds before us and a paralyzed government, we must seek to understand the forces still acting upon all of us. When cause and effect have become a “complete mystery” to our most prominent thinkers and leaders, they need to look at history.

Does the Merchant Class allocate land Labor and Capital to the a great extent in an Innovation economy? The accepted statistic is that 70% of a company’s value comes from human capital and the creative solutions that they produce.

Land, labor, and capital are ineffective proxies for human creativity and intellect – end of story. The road to new monetization is not paved upon on the roadmap of the industrial revolution.  Something new needs to happen:

The simple truth is that humans have not evolved to the point where they will organize themselves as knowledge assets in a financial system – they still need to use a proxy for their productivity controlled by a master, a corporation, an idealism. It’s called money, politics, and fear.

The reality is that opportunities are endless if we can simply shift away from history and build a new future; a new economic paradigm.

Pssst … Wanna Get Wasted?

dont_worry_get-stoned

Many Social Media Gurus are espousing a new culture that their clients should forget about blogging (adding meaningful content) in favor of the ubiquitous widespread “updates”.

Using automated apps, you no longer need to waste time creating content that teaches or expresses, you can populate across social media space carefully wedged in between someone else’s creative content. I find this appalling.

The new marketing mantras go something like these:

  • “Go where your customers congregate”.
  • “Gain their trust by sharing your stuff”
  • “Soon, you can start to influence their behavior”
  • “Once hooked, they will do your deed for freeeee!!”

This is starting to sound more like the neighborhood drug dealer than any sustainable economic paradigm.

Slavery on Steroids

Slavery is a term characterized in part by the coercion of another person to perform or act without compensation. The effects of slavery are not only physical, but mental as well.  The effects of oppression manifest themselves in addictive behaviors.

Social acceptance is an extremely powerful psychotic that can be cleverly turned against any person. The techniques of social media are getting increasingly sophisticated in hijacking and consuming the social capital of others.

Green Marketing

It does not take long to see that the marketing professions are defining the social media space regardless of what anyone says about user-generated content.  The danger is that social media will become just as unsustainable as the economy that it replaces.  People will soon lose the ability to produce the currency that the media demands to support itself.

Ban advertising

t would be high temple sacrilege for any social media monetization strategist to suggest that advertising of any kind must be banned.  Well, not exactly, but the objective of advertising can be redefined if there were a means to do so.

The only sustainable monetization strategy (of which there are terribly few current examples) are the deployment of social media applications that empower people to discover their own individual talents, to pursue what they are naturally best at and enjoy doing most – while also eliminating the clutter and irrelevant messages that distracts them from their personal life goals.

This means that brands should communicate more and not less.  They should identify, educate, and promote the talents and abilities of a million customers instead of 1 superstar athlete or celebrity.

The proverbial sports analogy:

Advertisers should sit in the bleachers and cheer on their favorite customer, but they should not be in the game, blowing the whistle, or running the scoreboard.  Let them pay admission, see my logo, and buy my overpriced beer.  Let them sell to each other on their own dime – but under no circumstances should they be allowed on the field, in the schools, or in the home without explicit and expressed permission of the customer.

The Monetization Mystery

maritimeMystery

OK, the social media buzz is getting a little stale folks.

  • Yes we know that social media is valuable.
  • Yes we know that lots of folks are doing it.
  • Yes we know that the predictive web is predicted.
  • Yes we all know that all this activity will mysteriously “monetize”

Show me how everyone is related and I’ll show you a new economic paradigm. Here is how they are not related:

  • They are not related by “earning” people’s trust today so you can shove your product down their throat tomorrow.
  • They are not related to collecting thumbnails.
  • They are not related to giving the g00gle alg00rithm an 00rgasm.
  • They are not related by “The 6 Steps to [Fill in The Gap]”.

The next economic paradigm is related to transformation.

  • People transform data into information
  • People transform information into knowledge
  • People transform knowledge into innovation
  • People transform innovation into data

Under a set of fundamental assumptions that:

  • All people are socially talented
  • All people are intellectually talented
  • All people are creatively talented
  • All people are good at something
  • Nobody is good at everything

This is how value is generated. This is where the mystery of monetization hides.

Predictions for 2010 and Beyond – Nothing is Sacred

transparentIt looks like everyone is buffing up their predictions for another year of astonishing growth by social media. The last several years have brought so many surprises that the next several are promising to yield a bumper crop of “I told you so” fodder from the “pithier than thou” crowd.

My prediction for 2010 is that nothing is sacred, including the onslaught 2010 predictions. Therefore, I’ll will go way out on a limb and make my 2011 predictions in 2009.

In General:

The interest coming due on our national debt will consume increasingly more of the money that institutions need to provide basic services. As these institutions weaken, they will increasingly be replaced by social media enterprise. These structurally weakened institutions will drive social media innovation more than any other factor.

Specifically:

  1. Social vetting will catch everyone by surprise. Google buying Yelp is the game changer that will shake markets to the core. A market can only be as efficient as its vetting mechanism. To control vetting is to control a market – ask any despot. Where the vetting institutions of the old paradigm break down, they will be replaces by social media vetting. Nothing is sacred – the SEC, AMA, Federal Reserve – everything is vulnerable. Google knows this and will usher in an era of social media applications that will completely disrupt the gatekeepers.
  2. Everyone says that social media will monetize. It will, but not like anyone expects. 2011 is the year of the Deep Web; the deep web is the vast universe of unprocessed data that exists like dark matter in the Google-verse. Social media will monetize around data because data is the only thing that corporation, governments, and other people are willing to pay for. Google created economic initiatives for legions of entrepreneurs to create information content. The new Deep Web Search engines will create economic incentives for legions of entrepreneurs to create databases.
  3. The convergence of data will create the “new monetized innovation economy” defined by the way people interact with data. Highly localized data that will reflect the knowledge inventory of a community and will be represented by a virtual currency.
  4. It will become increasingly apparent that many of the functions of a corporation can be duplicated outside a corporation by new vetted social media applications. Networks of people will become “corporations” and trade knowledge assets through the trade of virtual currency contracts.
  5. Corporations will become technology centric rather than industry centric with open source architecture liberated to armies of diverse entrepreneurs. For example, breakthoughs in one industry will shoot across all industries like iphone apps – especially effective in environmental and “community organization” innovations. Nothing is sacred.

So there it is and be assured that 2012 will not disappoint even the hardiest eschatologist!

Sorry for not repeating the “real-time is king” mantra or singing the “people will finally pay for content” tune, or reciting the “every department is the marketing department” manifesto. Something much bigger is about to happen. The evolution away from the current financial system will drive social media more than any other factor.

Dark Net and the Economics of Mutual Anonymity

In 2001, Michael K Bergman, an American academic and entrepreneur and one of the foremost authorities about the Internet, published a paper estimating the “Deep Web” to be 400-550 times larger than the known Googleverse.  What does this mean for everything we claim to know about the web, social media, and social influence marketing?

Andy Becket wrote an excellent investigative piece called  The dark side of the internet that I highly recommend reading.  Among many great points, Andy describes the deep web:

“The darkweb”; “the deep web”; beneath “the surface web” – the metaphors alone make the internet feel suddenly more unfathomable and mysterious. Other terms circulate among those in the know: “darknet”, “invisible web”, “dark address space”, “murky address space”, “dirty address space”. Not all these phrases mean the same thing. While a “darknet” is an online network such as Freenet that is concealed from non-users, with all the potential for transgressive behaviour that implies, much of “the deep web”, spooky as it sounds, consists of unremarkable consumer and research data that is beyond the reach of search engines. “Dark address space” often refers to internet addresses that, for purely technical reasons, have simply stopped working.

The implications of the Dark Web are subtle.  Like “Dark Matter” in space, the dark web may behave as a multiplier to account for that which cannot be explained except by some invisible, albeit, constant force.  We can assume consistence because the common thread that transcends the entire Internet is still conversation. The ability to have a conversation as well as the ability to reject a conversation is part of the Dark Web and still a conversation nonetheless.  The opposite of publicity is anonymity – if the universe seeks balance so too can we expect the web to equalize around the average anonymity of conversation.

Entrepreneurial factors also appear rational when applied to the Dark Web, specifically true ownership.  Ownership includes the right to restrict access from others.  In the Googleverse of search rankings and old economics, watered down and largely unenforceable copyright laws create a wasteful game of Cease and Desist among content providers – not exactly a safe place to converse.  The inability to establish ownership and boundaries of user generated content is a primary constraint on monetization.

Meanwhile, the Dark Web utilizes a knowledge inventory where trusted people of known affinity are given free access to share freely – and anonymously.   Ironically, anonymity improves the quality of a conversation by eliminating the irrelevant data that often constrains conversation.   It is worthwhile to consider anonymity as a possibles monetization factor – pay to hide?

Not all anonymity is corrupt and perverse.  People spend a great deal of time and effort developing a database that represents a knowledge inventory and they don’t want someone to just copy it.   Trade secrets are the great competitive financial instrument of capitalism and depend on secrecy.  For better or for worse, political activity in non-free countries such as China, Iran, and Afghanistan also rely on anonymity. The more time people spend on the web, the more of their personal life that would want to keep to themselves – the ability to avoid Google bots is a tangible conversation.

The phenomenon to consider is that people with mutual anonymity are able to share more freely.  Ironically, anonymity improves the quality of a conversation by eliminating the irrelevant data that often constrains conversation.  Conversely, efforts to constrain anonymity destroys freedom of the web.  Tell that to your web analytics team.

Social Isolation Funnel

You don’t stand a chance.

Social Influence Marketing (SIM) is becoming more sophisticated at finding you in your social space than you are in avoiding Social Influence Marketing (Advertising).   A new set of theories and systems have been deployed on how to engage you in conversation, grab your response data, funnel you into the pitch, induce credit card labor, and draw out your social broadcast.  Guess what, your social media sites are helping them….

Flirting with the enemy

The greatest problem that social media created for advertisers was to disperse the crowd from the once treasured “captive audience” of the radio/TV days to millions of individual affinity outlets.  Blasting the message home is no longer a function of Ad spend.    However, marketers are smart and social media sites are corporations too – now these forces are converging with unimaginable voracity.

They have you figured out.

In a quest for monetization, popular sites now provide “data services” to the brands. Such data empowers, once again, the advertiser over the viewer.  Why not provide “data service” to the users about what the brands pay for and what information they are mining about users?  If Brands are not comfortable with disclosing such information – should we be comfortable about teaching our “human nature” to them?

As social sites increasingly develop stickiness applications to retain the audience, new innovations are directed to that old business TV/Radio model rather than reinforcing the reason why social media emerged in the first place.    At some point, it becomes the best interest of the social site to meet the Wall Street expectation of “tangible output” over the user expectation of increased productivity. In other words, keep people glued to the LCD and don’t empower them to enter their communities to innovate social change.

Once users lose the ability to reject a brand message, we’re all right back where we started from.

People need to meet each other in real life to do real things. The best way to retain the original power of social media is to disperse once again.  Micro-social networks reflecting communities of interest need to form in proximity to each member.  Each community of interest must combine with other highly local social networks to share ideas, create local innovation, and enforce social priorities.

Hide your data in your own data:

Each time a different affinity group meets with another affinity group, the demographic data changes – it becomes renewed, refreshed and remains in the possession of the community.  This is where the value is, people can own it of they knew it’s theirs – and Brands can access far more value by supporting communities rather than by isolating communities.

Banks In The Future

 

Bankers don’t care about money, they care about the rate of change of money. At The Ingenesist Project we are not entirely interested in change – we are entirely interested in the rate at which things change. As you can imagine, we get all giddy when we see the rate at which the rate of things change…that’s all that banking is and all that banking ever will be.

Each of the Facebook Applications posted below are to Facebook what The NYSE is to Commercial Banking. Note that Facebook is growing at an astonishing rate. Now, these applications – on top of Facebook – will increase the rate of change of the rate of change in how people communicate, transact, organize, and deliver conversation.

You are hearing it here; these innovations are the most significant disruption that Wall Street can’t possibly imagine. Money is a social agreement and these are the banks of the future. Although many come from the gaming industry, many games are modeled after the real world, therefore, transition back to the real world is not as difficult as one may think. If people are willing to trade it, it becomes money. This is serious business. While many of these new innovations are on the right track – not all of them will survive.

What If The Dollar Fails?

I have been hearing a great deal about an inevitable collapse of the dollar.  Not today or tomorrow, but more likely over the course of the next 10 years.  The failure will probably not be a stupendous crash since politicians would avoid this as a means of self-preservation.  Rather, it would simply be a slow and grinding inability to “afford” many important things using cash.  Note that this has little or nothing to do with your human ability to produce important things.

Few people disagree that a 50 Trillion dollar debt obligation cannot be paid back without at least 50 Trillion dollars in increased human productivity.  Traditional productivity usually means taking stuff out of the ground, air, ocean, or the forest and making things that eventually wind up back in the ground, air, ocean, or the forest. Today, we are encountering constraints on the planet’s resources.  Something has got to give.

The ONLY technological change that is happening at anywhere near the rate that can conceivably deliver a substantial amount of “increased productivity” is Social Media. But how do we turn it into dollars?  Maybe we shouldn’t.

Here is the problem; the trends for monetizing social media actually slow it down.  People use social media only because of the prospect for increasing their long term productivity as relationships prosper. Entrepreneurs trying to get paid for their innovations invariably need to introduce “friction” by attempting to convert “short term” user productivity into cash.  There is no business case on short term productivity making their innovation nonviable.  Therefore, the monetization problem introduces a threshold over which most great innovations simply cannot reach.

The purpose of this article is to consider what people will use for trade if the currency becomes ineffective AND their productivity does not.   If the dollar does fail, people will attempt to meet their daily needs until a financial system is corrected.  Many countries that have experienced currency problems and the most common result are the emergence of a black market where Levi’s, Cigarettes, or other commodities serve as a de facto tax-free currency.

While on-line gaming industry is pioneering virtual tax-free currencies with extraordinary results, back in reality, people will begin trading services.  Plumbers will find dentists, farmers will find laborers, and teachers will find landscapers.  Matchmaking will become a financial instrument. People will use Facebook and Twitter, Linkedin and many others in new ways in order to keep the game in play.

In fact, perhaps they already are.

Twitter Vetting = Twetting?

twitter-money

Picture Credit

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

Tangibility of knowledge:

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

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

Twitter to becoming the vetting mechanism for business intelligence.

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

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

By Brian Solis:

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

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

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

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

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

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

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

Ponder this:

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

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

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

At what point will Wall Street Priorities reflect Social Priorities?

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


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The New Reverse World Order

Bank-of-Wal-Mart-Note--40279The New Reverse Order

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

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

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

Profound Issues Arise.

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

A Vetting Zoo

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

A Steep Departure

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

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

Trust as a Social Currency

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

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

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

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

by Shefaly (please see her Bio here)

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

Definitions

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

Social currency – some characteristics

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

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

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

Determining the value of Trust as social currency

a) Verifiable Identity and antecedents

b) Consistency

c) Reliability

d) Peer recognition

e) Value of the network

f) Individuality and collaborative consciousness

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

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The Culture of Buying

My wife and I visited Istanbul a few years ago and met a very nice person who offered to take our photo in front of an ancient building.  Afterward, he gave us a history lesson about the area we were visiting.  He then invited us to his shop to look at some carpets.

Before we knew it, he was entertaining us with stories about the history of carpet making as a young boy pulled down stacks of carpets and displayed them one by one as we sat in comfortable chairs.  The shopkeeper identified attributes, color combination and traditional design patterns with an enchanting story for each one.

After a while, the shopkeeper from next door walks in with a tray of hot tea as we continued learning about the carpets.  A bit later, we all went across the street for a traditional Turkish snack and more tea. Then back to the shop for more carpet viewing.

Hey buddy, not so fast.

My wife and I decided to make a purchase but instead of taking our money, he took us back across the street to smoke the Hookah, sip real Turkish coffee and listen to live traditional musicians.

The whole process took many hours but it was like traveling in time.  Istanbul has been the crossroads of commerce between two continents for thousands of years.  We ended up paying too much money for the carpets – but to this day they are among our fondest memories and most prized possessions.  They represent an indescribable experience in an exotic and comfortable setting.  Now they look beautiful in our home.

Human Nature

It is human nature to trade.  People want to do it.  People want to meet other people.  People want to learn.  They want to share. People want to buy things and people want to sell things.  They want to congregate.  They want to travel.  People want new experiences.  They want to laugh, smile, sip tea, and listen to music. They want fond memories and beautiful carpets.

So why is monetizing social media so complicated?  What is the big secret?

The transaction of conversation, relationship, and knowledge:

With social media, people are invited by friends, family, or associates to walk through an electronic door and into their inventory of relationships.  Few people realize that this is a profound act of friendship, kindness, and trust.  Think about it, people trust you with their relationships. How do we manage that?

However, neither party is fully aware of the conditions upon which the relationships present their self.  The cultural infrastructure of introducing people, assisting in the exchange of conversation, and transaction of knowledge in social media is not established.  The idea that a transaction can and should take place is not fully recognized.  The introduction of the people to each other does not have a process, taxonomy, a location factor, or a time function.

Then again, social media has not been around for thousands of years

No buyer, no seller:

•    If social media develops a culture of sales – it will fail.

•    If social media develops a culture of buying – it will thrive for thousands of years.

If It Ain’t Broker, Don’t Fix It.

The function of the innovation economy is to improve information.  This has the derivative effect of improving knowledge which, by definition, fuels more innovation.   Monetization is easy if we simply improve information between any buyer and any seller in any market, anywhere.

…If it is, please do

For example, the job of a broker is to mediate the transaction between a buyer and a seller.  There are real estate brokers, mortgage brokers, stock brokers, etc.  Unfortunately, it is not always in the best interest of the broker to provide perfect information to both sides of the transaction.  Rather, the broker provides the minimum amount of information needed to complete the transaction, within which they build their commission for rendering such filtration services.

Any B-school undergrad can tell you that a market is most efficient when the buyer and the seller have exactly the same information as the other when making a transaction; this is called “perfect information”.  As such, “supply and demand” can do its magic.  Resources of production can be perfectly allocated in the glorious capitalist system.  The financial meltdown has shown us that the more complex the product is, the greater the deficiency in perfect information becomes.

The Holy Grail:

The great opportunity for social media is the ability to improve information in almost every transaction conceivable and create wealth.  The next generation of social media strategists will rise to tremendous heights in this domain of the Innovation Economy. However, the Holy Grail of information improvement is the knowledge asset market itself:

For example: Corporations have a great deal more information about employees than employees have about corporations.  People are encouraged to compete with each other, not to cooperate, for that carrot on a stick. They are trained to keep their salary a secret.  The “job statement” is in a secret code language that is only understood inside the company, not in the general work force.  Managers “broker” information by filtering it on the way up and on the way down the corporate structure.  It is little wonder that corporations are having a tough time with the social media stuff.

When the layoff comes, the outsourcing begins, or the life change happens, the resume is often no better than a bingo card in a key word lottery.  By the way, customers have even less information than the employees. Peanuts anyone?

The mothers of Invention

The knowledge market is the mother of all imperfect information markets.  Social media is a single iteration away from greatly improving information in all knowledge markets. Nothing happens without applied human knowledge, as such, the potential capitalization of the next generation of social media applications is as big as the market itself – and it will challenge the very structure of the traditional corporation and associated filtration services.

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