Think Bigger. Aim Higher. Go Further.

Tag: travel

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….

The True Economy, The True Value

I am reading The New Capitalist Manifesto by Umair Haque in preparation for SIBOS 2011 where I will have an opportunity to join in a common conversation. I will be speaking on a panel called New Economies along with several other distinguished presenters (see Below).

New Economies = The Values

The most important thing about the discussion of new economies is the idea of Value.  It is essential that we define Value much more completely than just those things that can be articulated with money and shift to include all forms of Value in our entrepreneurship.  The Sun delivers value to the Earth. Parents deliver value to their children.  Communities deliver value to society.  A true accounting of all value is essential to the discussion of new economies.

The New Capitalist Manifesto is a hugely important book; Here are a few of my thoughts.

First; it provides a vital framework to begin accounting for what we call “True Value”; an accounting of real net value creation as opposed to borrowing, transferring, or destroying value that is not necessarily represented on a financial balance sheet.

Second; the new economy and emergent new accounting system will happen whether we like it or not.  There is little that people can actually do to avoid it. The new economy is a matter of survival – it will happen at the speed and drive of survival (hence “Capitalism”).   So make your choices now as these will define your future.

The third observation is that nobody is immune from the new economy.  The more one resists, the more it will persist.  The stronger that a country, corporation, or traditionalists hold to legacy ideas about linear value and forest-to-dump consumerism, the faster and more dramatic will be their demise.

So what does this have to do with Social Flights?

Social Flights is attempting to replace the horrific concrete wasteland of the command and control “Hub & Spoke” system with a Democracy.  Our premise is that people can self-organize around two points and efficiently share an airplane that flies directly between them from smaller airports.  In effect, we replace the infrastructure with cloud data to accomplish the same thing with a far superior customer experience, and therefor, greater true value.

Think about it; all of the world’s airlines are competing with each other in a race to the bottom around the Hub and Spoke system.  The two largest aircraft manufacturers are beating each other up around the strengths and limitations of the Hub and Spoke System. The whole system is limping along on razor thin margins. Yet, the vast majority of “true and complete” Value of travel is the human experience and the value of relationships, communities, and their actions together.  The only reason that Travel exists is being unceremoniously tossed out on the tarmac….

If you don’t listen to your customers, then at least listen to Umair Haque.

So, if you are a university, a corporation, government, or any institution dependent on physical infrastructure in order to match supply and demand while insulating yourself from competition, then you should be very concerned about the new economy.

New economies
Is money the only form of transaction value and wealth? What about social currencies? We will expose you to new thinking on new economies such as the trust economy, the intention economy, the relationship economy, the social economy and the ethical economy.

Already confirmed:

OWN Your Travel Game

Social Flight is unique in its purpose of organizing communities of people into powerful collectives who can influence markets, vendors, and especially prices. This opportunity arises because of extraordinary inefficiencies in the airlines, but also in advertising, communications, marketing and every industry where a broker stands between your intentions and a market for goods and services.

Why Google Plus?

It may take a while for most people to catch on to what Google already knows: nothing economic can happen until people get together to build something.

Suppose you set up Google Circles by Geographic location.  Essentially, collect your home town friends, your college friends, your family branches, your company headquarters, etc., by geographic location.

Of course, each place where you have been has it’s own set of circles for things to do, places to go, and events to attend.  Each place that you go is a market of goods and services that is willing to accept your patronage as well as the patronage of people in your circles.

Now suppose you overlay your data on your personal “interests” data: 

This data set can include National Parks, affinity conferences, your Alma Mater “away” games, and seasonal recreation, for example.  This affinity data may also include concert tours of your favorite bands, speaker tours of your favorite authors, sibling birthdays, or promotional campaigns for your company, etc.

These form your intentions:

By far the most powerful business intelligence data is for the product that you will buy next, the person who you will talk to next, the place you will go next, and the impression that you will receive next.  This data belongs to you – like physical property – and YOU should be able to determine who sees.

YOU OWN your intentions data. 

Now overlay your intentions over a map of services and vendors such as hotels, or NASCAR races any other Goods and services that someone may want to sell to you.  Today, these vendors are paying a great deal of money to advertise their message to people who may never buy the product or create an unnecessary, and possibly negative, impression on those  who would not use the product in the first place.

$400 Billion dollar yearly advertising spend

These vendors pay and extraordinary amount of money on business intelligence, Groupons, and social media campaigns trying to discover YOUR intentions data.

They want to know where you are, but NOW, you know who THEY are.  You have every bit of information that you need about them to sell them YOUR product: your intentions.

Now you can simply ask them to bid for your intentions data and bid for your business – this is exactly what a print ad or TV commercial hopes to accomplish. 

Who is ready to build these applications with us?

The Raw Material of Social Org Games

Fibonacci Trust Curve

Trust Scarcity?

This article is a loose argument related to trust scarcity in social organization games.  Rewarding trust in a social game is a difficult thing to do unless certain agreements and institutions are in place.

The Social Value Game

Social Flights will be introducing some game mechanics to provide incentive for people to interact with each other to form  specific flight plans  This will also include vendors and operators who would support their travel intentions with goods and services.

We want to dis-aggregate the incentives from a specific flight; in other words, a player does not necessarily have to be on the flight in order to receive a benefit from organizing it.

As the game develops, all players will simply keep an eye out for travel opportunities for trusted others in their social media experience.  By helping their social circles to find travel opportunities, they will receive rewards which they can use when their own “perfect flight” begins to form.

Technology is not yet here, but getting close…

I would like to think that the technology has arrived which will allow people to form flights in social media, unfortunately, this is not the case.  The problem is that big data has become big business.  Social media platforms are funded with Data Dollars – that is, organizations who capture, combine, sell, or otherwise exploit personal data and trends in exchange for money.

Spiral of trust

When a person states their intention to fly to a distant place, this creates immensely valuable data.  Such information is highly specific and even quite intimate because people share their hopes, dreams, and aspirations when they meet, travel, learn together. For this reason, Social Flights game data will be scarce, remain private, anonymized, or normalized so that it can remain in play indefinitely.  There needs to be a great deal of trust in that network and, in fact, a disincentive to casting a broad public net.

Trust as Raw Material: 

  • Social Flights has an internal social network that allows people to communicate anonymously
  • Travel Tribe Leaders are trusted members in a community who operates with trust, integrity, and respect
  • Game mechanics can dis-aggregate intentions from specific flights
  • Game data will normalize outcomes into “probabilities” that mask mask social data as numerical data for future games
  • New Social Media applications allow users to form travel circles of trusted persons with whom they are willing to share flight plan intentions
It is fairly easy to see that no single social network device will serve every requirement of a social economy – nor should their be. Instead, the integration of several devices which identify, create, and deploy trust as the raw material, will allow people to go wherever they want to go and build whatever they want to build together.

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

Are We Hard Wired?

Hardwired Control Matrix

It has been a challenging month at Social Flights.   Our soft launch story was broken by FAST COMPANY, then it was quickly picked up by  THE NEW YORK TIMESBLOOMBERG TV,  FORBESINC. TECH,  WASHINGTON POST, and MASHABLE, then picked up by various other magazines and bloggers across the web.

Huge Interest in The Business Model

Social flights picked up tens of thousands of hits and several thousand members within a very short period of time.  We also received almost a thousand RFQ’s for charter service and our web traffic rank according to Alexa.com is under 20,000 – better than any other private jet broker in the country, including NetJets.

I personally communicated with dozens of 3rd party entrepreneurs that want to plug into our value proposition and we are discussing multiple high value partnerships in North America and around the world.

Are We Hard Wired?

Introducing such a radical approach brings many challenges, especially in the area of customer expectation.  People are hard wired to schedules, and lines, and pat downs, and waiting, waiting waiting. Social Flights was never conceived to dictate on a market how they should fly and to where.  Social flights will certainly not take people someplace where they don’t want to go – like an airport hub for transfer.  Social Flights will never hold a passenger’s dignity hostage behind some hidden cost or irrelevant regulation.

Losing The Hard Wire

We estimate that Social Flights will optimize at about  2.5 Million members – or roughly 5000 people in each of 500 locations across North America.  At that point our service model will begin to “simulate” the selection and convenience of the commercial airlines.  Keep in mind – this system will “simulate” scheduled service except without hard wires.

5000 people X 500 places model

  • This is the point where there will be a high likelihood that 8-10 people will all want to go to the same place from the same place within reasonable intervals of departure times.
  • This is the point where fluctuations in price and schedule such as de-icing costs, landing fees, fuel cost, or seat cancellation policy can be absorbed across the whole system rather than an individual passenger load.
  • This is the point where ground support vendors will commit substantial discount incentives to controlled bundles of passengers.
  • This is a point where the data that is generated by The Value Game and held solely by the players becomes valuable enough to predict the outcomes of future Value Games.

Not An Easy Puzzle to Solve:

Social Flights is attempting to do something that has never been accomplished in social media with such high value shared assets.  We seek to answer the question: Can people organize themselves around the concept of “Value” much like we have organized ourselves around the concept of “Money”.  Based on our earliest readings, the answer is that people are not as Hard Wired to money as those who control money would like us to believe. Looks like they’d jump the first plane out of Dodge if given a chance.

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)

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?

Collaborative Consumption Is Here To Stay

There is a persistent myth that a “financial deficit” is looming to destroy all that fall in it’s wrath.  The only deficit is the inability for Money – as we know it – to articulate the value that is created in and by communities.

Social Flights is a new venture that combines cutting edge social technology with the universal truth that collaborative consumption of even the most complex system increases the efficiency of that system.

Social Value as a financial instrument

Social Flights attempts to demonstrate the inevitable – social value can and will be convertible to financial value. Social value can and will enter the balance sheet.  Social Value will not only impact the bottom line – it will become the bottom line.

The Invisible Hand of Social Capitalism

Social media is emerging as a dominant force behind economics, global politics, innovation, and community organization. Meanwhile; it is the art and science of finance that has failed to keep pace with technology.  Social Flights introduces a new class of business methods that can close this gap.

Social Flights sorts people and airplanes with data, not financial infrastructure.  The Value Game provides incentives for communities to organize themselves around travel and transportation assets.  So instead of forest-to-dump consumerism, a shared asset is preserved by a community for the greatest service life possible.  Social Flights demonstrates this with an airplane; however, a hotel, car, tour package, or a trade show/convention are quickly pulled into their own value game cycle given the airplane game playing out in proximity to them.  In fact all “assets” – social, intellectual, creative, or financial – can be pulled into their own value games in response to those acting around them.

Travel: An Ideal Benchmark Industry

We are starting with travel. Specifically, air transportation because of it’s complexity, high profile, and significance to most people and industries. Furthermore, corporate jets are beautiful, awe inspiring, controversial, and conjure the image of power and grace.  Most importantly, travel is pivotal enterprise and the best system for the diverse high-value transfer of new ideas to occur.

Nothing economic can happen until people get together to build something

The value of most commercial activity may ultimately become dependent on the quantity and quality of the data emerging from the millions of Value Games playing out in communities across the globe. Any and all shared assets – from public infrastructure to money itself – can be shared collaboratively in hugely profitable Value games.

New to the Public Domain

Nothing like this has ever been put together before so there is certainly much to learn.  Many people will fail to recognize where we are going with this. However, the rewards will be high and the implications will be vast if we are successful. There will be an extraordinary amount of knowledge to be share to the public domain.

Collaborative consumption is here to stay because it represents a higher value economy than forest-to-dump consumerism.  The financial deficit is simply the inadequacy of Money to articulate Social Value – not the inadequacy of people to be happy, creative, and productive in their communities.


Can Advertisers Curate Themselves?

 

Get Real by Playing for Real

At the end of the day, any ad campaign needs to get real people to take real and tangible action.  Ideally, the advertiser wants to see the real effectiveness of a campaign in real numbers.

The Value Game is applied to a new jet charter start-up called Social Flights and offers an opportunity for advertisers to become part of the experience of the traveller, rather than a distraction to everybody. Instead of paying a website for click throughs, the vendor can pay the traveler directly to “click through” a catalog of products.  As long as your product is relevant to the travel experience, the traveller will be interested and engaged.

The Game is to be relevant and this is where Social Flights helps create the playing field.

Social Flights will collect data about a travelers intentions in a fully open agreement.   Travelers submit this data to the game with the explicit understanding that vendors will compensate them with relevant discount coupons.  Data are normalized so that the traveller is anonymous in every respect while still providing very rich intentions to the vendor.  Vendors can now target their value proposition with great precision.

What’s a Travel Trader Game?

This sets up a game where the traveler, when presented with many options, will plan their trip and influence their friends based on the perceived value of the options presented to them – it’s like holding properties on a Monopoly(TM) Board.   As the travelers play the game, the vendor is being discussed, researched, and propagated all across the web in real time and in real context with a tangible experience as the travelers decide what activities to pursue.

Win twice: Let People Game the Game

When someone “clicks” on the vendor proposition from their “experience environment” of travel, their intention to be interested, informed, entertained, and fulfilled by your product is much higher than in a off-experience “forced” impression.  When they compare, and even trade, coupons with their friends, a negotiation happens which influences a group of people.  These negotiations lead to discussions all across the Internet.  These discussions mean different things to different people so a fresh pool of customers is always on tap for the next round of play.

Why let Facebook own YOUR game when you can own it yourself?

Social Flights allows travelers to sell their data to vendors who, in effect, compensate the traveler with discount “option” that can only be exercised if the traveller (and their friends) makes a purchase.  Advertising is essentially FREE until the traveler exercises their discount option.  Even then, the advertiser has all the information that they need to determine the quality of the effectiveness their campaign and the effectiveness of a competitor’s campaign.  No matter whether you are the traveler or the vendor, how you play the game becomes YOUR intellectual property.  Patent that Facebook!

Crowdsourcing The Brokerage House

The broker/trading model is a familiar class of business methods.  The broker advertises the availability of someone else’s inventory of assets but withholds information from the market as a means to control the transaction.  The broker does whatever is needed to pay the supplier as little as possible while also charging the customer as much as possible. The Broker  can then collect a fee for producing absolutely nothing of value except control over a transaction.

The Value Game introduces a new class of business methods that disaggregates the broker/advertising model by increasing information delivery to a community rather than withholding it.

The Value Game Revenue Model

For example; Private aircraft charters are held under the weight of a powerful Broker Industry that scrapes 30-40% of the value of created by thousands of hard working professionals who actually operate the airplanes. By deploying The Value Game,  Social Flights was created as a new air transportation company that organizes four types of communities and enables them to interact with each other around a shared asset (an airplane).  During this process of interaction, complete information is provided to each party, rather than being withheld, and everyone plays towards their convergent goals rather than divergent goals.   As a result, the Social Flights application creates Social Currency, which is then readily converted to money.

Social Flights Revenue is derived from the interaction of four communities:

The Travelers

The Operators

The Partners

The True Value Data

Traveler:

Social Flights brings travelers of similar intentions together in Travel Tribes to share flights at wholesale market value.  Air transportation is deployed to the social graph rather than the airline hub & spoke system. Communities that are underserved by commercial airlines are now empowered to interact in new ways.

Operator:

In the past, an aircraft operator would pay a listing service, a Broker, and a marketing department to sell charter services.  Instead, an operator would simply reallocate some of their marketing budget to Social Flights in return for a high volume, reliable, and risk free marketing venue.

Partners:

The cornerstones of the value game are 3rd Party entrepreneurs who scour the community for inventory of hotels, entertainment, recreation, business opportunities, and anything else to support travelers playing the game.  Not unlike Groupon, Social Flights facilitates the application of discount coupons that can be applied to the passenger’s itinerary corresponding to their normalized travel intentions.

True Value Data:

Social Flights creates a valuable and unique form of business intelligence defining how much value, in dollars, that people place on their time.  This results in a conversion factor between social currency and financial currency – something that has never been achieved before. Such data will induce a huge amount of innovation as time/money currencies fuel new Value Games around many other shared assets.

Winners and losers

  • The traveler wins with complete information, point-to-point time travel, and an empowered community.
  • The operator wins with less overhead, less risk, and steady cash flow.
  • Thousands of social entrepreneurs are empowered to deliver support inventory to a new community market.
  • All communities win as such information about the time-value of money helps people reallocates their intentions in the emerging new economy.
  • Social Flights earns their revenue by empowering communities in Social Currency.

OK, so what exactly does the Broker Produce?


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)

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