The Next Economic Paradigm

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A 100 Billion Dollar Value Game

By deploying Intangibles, The Ingenesist Project offers a simple Value Game worth upwards of 100 billion dollars.  This value is currently underwritten by the insurance industry as water damage risk that can be reassessed at pennies on the dollar and transformed to liquidity in the real estate market.

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The Problem: 

The condominium maintenance and reconstruction industry is enormous.  Condominium associations are challenged to manage modern maintenance and construction practices. The insurance industry covers perils such as water damage through the roof, building envelope, ground water, or plumbing system.  Many of these critical systems are coming of terminal age. 

Magnitude of the problem:

In 1990, there were about 4.5 million condominium units in the US.  41% were built before 1980.  The US has added approximately 1,000,000 condominium units per decade.  Water intrusion failures can cost up to $10.00 per square foot per exposure.  The insurance industry covers over 10 billion square feet – a $100 billion risk pool.   

Innovation:

The vast majority of water failures can be avoided with minimal and timely engineering interaction for a wise and engaged community.   Unfortunately, this is not the natural course of events in shared asset communities.

The Value Game can help the condominium community to self-manage as a collaborative social network instead of a collection of competing interests.  This may eliminate negligence, substandard maintenance, construction defects and associated litigation. Arguably, these are the most significant cause of water intrusion failures.

Technology:

The Value Game, in essence, creates a social network for the building.  The Game creates a system of incentives where stakeholders are rewarded for acting in the best interest of the shared asset.  Players include residents, engineers, maintenance personnel, insurance carriers, bankers, real estate market, as well as the larger neighborhood community.  All collaborate to preserve the asset.  The Value Game is infinitely scalable using existing Internet technologies. 

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100 billion dollars is the amount of money on the game table being adjusted, pooled, and diversified against risk exposures.  The value game causes the “plays” to be modified by any of the players.  When hedged with Real Estate valuation, liquidity can be substantial for all of the players changing incentives strongly in favor of collaboration rather than competition.

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What If It’s Too Late?

My greatest doubts about The Value Game stem for the evidence that our scarcity based competitive economy is so deeply rooted in our being, that we would be unable to extract ourselves from our self-inflicted wounds.  What if we have crossed some unknown threshold and it is too late to turn back, to learn, to improve our understanding of the impact of social value?  This thought crosses my mind more that I am willing to admit.  I am afraid.    

I have spoken recently about our work deploying The Value Game to the construction industry where we have been contracted to replace the plumbing in an occupied high-rise condominium building.  Here is a recent post discussing the work

Keep in mind that this is only the beginning and I am just probing the environment for pulling together a broad and comprehensive Value Game.  So far, it seems like this will not be easy.  I struggle with deep internal distrust among many of the key players.  Trying to get them to share more information with each other has been very difficult. 

When Players Don’t Trust Each Other – it’s called gambling

The construction management firm that I am using has a deep, almost obsessive, fear of litigation.  They are paralyzed by the possibility of getting sued.  They are very careful to not take on any liability, to distribute liabilities among other people, they keep secrets and seal up their contracts, while also brisk to collect as much money for themselves as possible.  They will not submit themselves to audit by anyone.  In doing so, they create a distrustful environment with me.  

Fully 2/3 of the contractors that I encountered heard the word “Condo” and immediately declined my invitation to bid on the project.  But they did not stop there; many proceeded to tell story after story about failed governance of condos, litigious attorneys, flaky bankers, and years of their lives wasted fighting over pennies.  The emotion in their voices told a story of anguish and resignation that I have never heard.  They don’t trust their fellow citizens.

The back stabbing among contractors is fierce.  Everyone seems to have worked for everyone else at some point in the past.  They know each others’ financial situations and problems and they are willing to throw each other under a bus. I tried to contact the material manufacturer, and the wholesaler stepped in and curtailed my discussion – presumably to protect commissions and territory.  The distributor railed one contractor over an old debt. They don’t trust their collaborators.

The homeowner’s association is very lucky to have a wise and strong leader guiding the project; other than that, there is no great social fabric the community.  Like most HOA’s meetings can often devolve into arguments or chaos and uninformed members feel left out by others who are forceful.   People are certainly cordial, but largely indifferent to the project and the impact it will have on each other.  There is no great urgency to get involved or deep curiosity about this important project.  They don’t trust their shared asset community.

I called several Real estate agents to see if they would like to place their advertisements on the website in exchange for touting the new remodel project; I have not received any calls back.  Vendor interaction has been sparse and stingy. They don’t trust any process other than their own. 

The project is taking the form of a strict and linear monetary transaction.  That means that no social value is inferred or implied by the participants and that value not articulated by money does not exist, or it is intangible.  They Dollar extracts trust form the community.

Reality Check 

We are performing a full re-pipe of the drinking water system of an occupied structure.  Water is a life source. People will be asked to leave their homes for short periods of time, we will be tearing up walls and corridors, and bathrooms in order to replace plumbing.  The entire structure will be completely shut down to water service for several hours at a time many times for almost a year. This project will cost each resident over $10,000 dollars each.  This is serious disruption to happen without trust.

The opportunity to create social value is immeasurable, but nobody sees this.  Nobody sees a huge shared asset.  Nobody sees mutual best interests.  Nobody sees market value responding to social value.  Instead, they see a  collection deeded cubes in the sky sandwiched between hypothetical concrete walls.  They see that they need to go to work everyday to find dollars in order to pay the HOA dues.  They see the day before and the day after the project – but not the process of engagement itself.  

Social value lives in the present – it lives in the moment of discourse and engagement; when people feel a shared emotion, a shared condition, a shared asset. Social value then opens up opportunities to not work so hard, to laugh more, to be treated better, to have friends, to love.  It would be a shame to let this opportunity pass without extracting the social value that these magnificent people owe to themselves.

I would lying to say that I did not consider at many times that our society was beyond saving – that distrust of each other has reached a point of no return.  Mutually assured distrust seems to form a stasis in time when people just endure their life rather than live it; “to take it like a man”. The opportunities to engage each other and to build resilient communities pass us by without a wink – and we let it.  Life is a game – it is fun, why would anyone squander that!

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What If We Got It Backwards?

What if the human species was SUPPOSED to evolve to a social organization system where everything that we now call ‘intangibles’, were in fact ‘tangible’; and, everything that we now call ‘tangible’, were in fact, ‘intangible’.  What would that world look like?

This not so far fetched actually because our species has already created an incentives based economy that rewards people who act in their own best interest.  We also created Calculus – one of the greatest achievements of the human mind – to keep track of all the moving bits of an integrated economy.  So, why is the world falling apart?

In the following video, I am interviewed by Jay Deragon for Smarter Companies Productions where we begin to unravel a new form of capitalism where everyone acting in their own best interest is acting in the best interest of everyone else in a community.  In effect, tangibles and intangibles are swapped.  

 

 

Tangibles and Intangibles

 
Please feel free to contact me with any comments.

 

 

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Introducing The New Capitalism

You don’t need to know Calculus to catch an Apple. Not surprisingly, when I tell people that The Value Game is a multi-agent algorithmic game derived from a 5-order differential equation – their eyes immediately glaze over … as if I just hit them over the head with an apple.

In Practice, value games are extremely easy to create and once the observer sees how easy it is to envision value games, a whole landscape of opportunity opens up before their eyes in that proverbial Ah Ha! moment of the entrepreneurial spirit.  

In this post, I will try to explain The Value Game in the simplest words possible, but be forewarned; you can’t read a blog post about riding a bicycle and then hit the tracks on one.  The same is true for The Value Games – practice, iterate, start again, iterate, practice, etc.    

All value games must start by identifying a tangible asset that people share.  This could include a building, a road, a school, a teacher, energy production, food production, etc.  Or it can be a car, bicycle, lawnmower, civil service, or anything that can exist in a modern market.  A value game can also be build for a corporation or a department within a corporation.  If people share it – then it can become the object of The Value Game.

The next step is to identify all of the people for whom it is in the best interest that the asset is preserved rather than consumed.  For example; a fitness trainer could be an asset to a community in a value game.  Obviously, the people seeking fitness would benefit from the asset, however, so would health food markets, clothing stores, health insurance providers, sports equipment vendors, recreation purveyors, employers, and even extended family members. 

Driving Economic Incentives

The local Whole Foods Store spend 20% of their revenue on advertising and can realize a net gain on subsidize the Value Game.  Clothing Stores compete vigorously for customers, insurance companies profit from lowered risks, Ski Slopes, bowling alleys, and sports equipment manufacturers all benefit from the preservation of the healthy and active community.  Most players would be more willing to support the aerobics instructor than pay taxes or jump into bed with Facebook because their taxes would become more relevant and their Facebook exposure would become free as a result of supporting one aerobics instructor.     

The next step is critical:

Today we build websites for people, products, “influencers”, and ideas. Media barons build social networks around advertising, and companies violate people’s privacy to steal their information for direct targeting.  This is oppressive and destroys social value – it does not create social value.  

Instead, we must now build the social network functionality around the shared asset – not the people who share the asset.  This is the critical  missing piece to the next level of value creation. 

Now, as all of these players interact with the shared asset, they will be interacting with each other to preserve and improve the asset because it is in everyone’s best interest to do so.  In this process, they create something called “social value”.  This is a broad term that includes all of the most desirable aspects of social media; influence, resilience, activism, trust, cohesion, co-creation, knowledge, innovation, and wisdom, etc.  These things cannot be bought at any price.  Yet, in The Value Game, social value converts back to financial value as more assets are pulled into the game or as various games begin to merge.  A virtual circle is formed creating “New and Abundant Value” as everyone seeks to maximize their benefit in relation to the shared asset. 

This is the new Capitalism.

There are literally infinite ways to play The Value Game – as there should be. Each person’s unique knowledge inventory qualifies them for their own value game and subsequent prosperity. All of the social media tools exist today.  The art and science of social networks applies directly.  Existing financial and accounting systems can  articulate the Value Game profits at the bottom line.  The Value Games can be deployed by anyone and merged with other value games organically.  Value games can be iterated continuously. 

The Ingenesist Project is a pioneer in the development and creation of value games. We have deployed Value Games in industries as diverse as Aviation, Construction, and Education. Let us show you how to build Value Games in your community, institution, or corporation.  

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Hacking The Financial System With Intangibles

The Financial System is vulnerable only to human adaptation in creating a replacement. The white paper attached below, Hacking The Financial System, describes how this may happen in the near future.

Money is the medium by which people store and exchange the value of physical objects – we call these object ‘tangibles’.  Money does not articulate ‘intangible’ value very well, except as a proxy for the physical things that people make and exchange for money.   The intangibles community is quick to point out that there is no currency that directly represents intangibles (hence the term ‘intangible’)….and,  that there should be. 

Actually, there is a currency of intangibles – it’s called “everything that happens inside a corporation”.  The corporation converts intangibles into tangibles, which are then exchanged for money.  As constraints in the global monetary system amplify – it is not surprising to see so much political reverence paid toward corporations for performing this essential conversion. 

What if so-called ‘intangibles’ could be articulated in its own currency, without the over-reaching construct of a corporation?  What if this new currency were fully convertible with the dollar, not unlike gold, oil, or Yen?  Could markets become more efficient?  How would such a currency impact financial institutions? 

It’s a very simple idea, but with profound consequences.   The following white paper begins to form a construct for a social currency based on how all currencies are formed.  After reviewing this white paper, it is not a huge leap to argue that the next generations of Social Media tools may be forming the infrastructure upon which a fully convertible social currency could be established.

In addition, the reader may notice that it is not hard to see that fluctuations in the “tangibles” currency would have inversely proportional reaction in an “intangibles” social currency.  In other words, they hedge each other.  Whoever figures out how to introduce a fully convertible social currency to global production markets will undoubtedly release extraordinary wealth by any measure.  

White Paper:  Hacking the financial system with Intangibles

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The Value Game Corrects Market Distortion With Intangibles

(The Value Game is a powerful tool for deploying Intangible Capital to distorted, corrupt, or dysfunctional markets.  The following case study describes a current project that our team has won against substantial mainstream competition.  This case study is about real money, real projects, real people and real markets where the Value Game converts social capital directly into financial capital and converts financial capital into social capital – without the construct of an over reaching corporation.)     

Application Of The Value Game to the Building Reconstruction Industry

For many condominium associations, the maintenance, repair, and reconstruction industry has devolved into a minefield of distrust and dysfunction.  Countless lawsuits have taken the industry to the point where many contractors simply walk away from condominium projects for fear of litigation.  The worst form of “capitalism” ensues where everyone acting in their own best interest is in fact acting in the counter-interest of their community.  The Value Game promises to upset this negative incentives condition while enhancing community resilience.

Here’s How The Problems Start:

The board of directors of a homeowner’s association is entrusted by the residents to hire a contractor to perform a complicated reconstruction project.  Unfortunately, condominium board members are not very good at writing contracts or issuing requests for proposal or collecting bids.  When a contractor is selected, the scope of work is often poorly established.  The expectations between the community and the contractor begin to diverge.  Soon, a law firm is engaged by some residents to sue the contractor for damages.  After a long battle, a settlement is awarded, but it is not enough to fix the problem after paying the law firm. 

A chain reaction:

Fortunately, the contractor in the suit was insured, but this does not cover the personal, professional, and opportunity hardship of defending against the suit – “it’s just not worth the trouble”.  The insurance company then jacks up the premium for condo projects.  As the pool of available contractors dries up, and the price for reconstruction increases, many condos are forced into deferring maintenance in a distorted market. 

Cascading failures:

After a while, a condominium springs a few leaks in their piping system.  Each leak results in relatively small water damage claim.  When the insurance company notices several claims in the same building, they begin to fear that a mainline is about to rupture next and threaten the condominium with cancelation of their policy unless they replace the entire system immediately.  Now the insurance industry is in a double jeopardy: they force the contractor out of the market and they force the condo out of the market to basically avoid suing their self. 

The dysfunction deepens:

Banks will not make construction loans to condominiums that are not insured.  Likewise, they will not make mortgage loans to buildings that are not insured.  The property values plummet and the owners are sent under water.  Soon they begin to default on the mortgages that the banks already hold.  More maintenance is deferred as buildings fall apart and become unsafe.  Banks pull out of the market to avoid defaulting on their selves.

The wider community suffers.

The Value Game   

The Ingenesist Project is currently deploying a Value Game to the condominium reconstruction market with remarkable success. The Value Game is a new class of business methods that alters the incentive structure of a distorted market such that everyone acting in their own best interest is, in fact, acting in the best interest of the community. We are currently at about 30% game time and about 50% implementation in the case study described below.  

Here is how the Value Game is formed:

The first thing is to identify the shared asset.  This is the single thing in which it is everyone’s best interest to preserve.   In this case, the shared asset is the physical condominium building. 

If we look at each of the players individually, we see that it is obviously in the best interest of the residents to have a safe and well-maintained home.  It is also in the best interest of the contractors to have a successful and profitable interaction with the building.  It is in the best interest for the Insurance industry to reduce the risks that they underwrite.  The banks also benefit from a viable, organized, and disciplined community with strong real estate valuation and complete insurability of assets.  Finally, the broader neighborhood benefits from the presence of a viable condominium community.   It is in everyone’s best interest that the others are successful. 

About the game board

The first rendition of the Internet was populated by static websites built for a person, or to sell a product, or to deliver entertainment, or to provide information.  The next level of the Internet included social media where users actually create the content that populates a website such as Facebook and Twitter, etc.  The third level of the Internet is a Value game where a social network is built ABOUT an asset that communities share.  For this project, we set up a website for the physical building with its own social network where all of different players interact with each other to preserve their best interests.         

Case Study; The Value Game. 

The current case study is a condominium re-piping project in the Pacific Northwestern US.  The community consists of about 200 units (400 residents) who occupy a single high-rise tower that must undergo a major reconstruction project that will impact everyone.  The total value of the project is about 3 million dollars.  This is real money in a real Value game.

The first thing is to reduce the likelihood of diverting incentives that can result in litigation. This may be accomplished by introducing strong community building management. In this particular case, a professional engineering firm was hired to represent the best interest of the asset. Together with The Ingenesist Project, they represent the needs of the HOA, they select construction technologies, define project scope, write the RFP, write the contracts, select the contractors, and manage the project.

The Social Network Dynamics

The website used in this case study is a common open-source Word Press platform with a Buddy Press backend to provide “Facebook-like” features – except private.   The engineering firm submits all reports, surveys, test results, assessments, photographs, schedule, pipe products, accessories, and plans onto the website for all members to see equally (there are some exceptions to protect financial data).  Very few secrets are hidden from view and everyone is encouraged to discuss the project among each other.

Individual residents are invited to form “groups” and start “threads” in topics for which they have an interest or a concern.  People naturally migrate toward other people with similar interests and they build relationships. 

Contractors are able to see all of the assessments, conditions, and work scopes directly from the website instead of paper submittals.  They can ask questions and post ideas of their own for community review.

The engineering firm can monitor discussions and collect ‘frequently asked questions’, which are posted in an FAQ.  Everyone gets the same correct answer to their questions without rumors or speculation. 

When community meetings are held, there is no bickering or infighting because everyone is educated and prepared to ask unique and relevant questions of the presenters.  When a community is unified, they can easily come together to make important decisions that impact the quality, cost, and schedule of the project. 

The insurance company is given limited access to the website which demonstrates that the community is acting to mitigate the risks that the insurance company underwrites – this keeps the policy in force. 

With website access, the insurance industry can also see that licensed engineers professionally manage the project in a vibrant community.  This greatly reduces the likelihood of litigation.  The insurance industry can now classify this project among “commercial” insurance pool instead of the litigious condominium insurance pool. 

Contractors feel comfortable with this professional engineering management and insurability, which brings more contractors to market thereby increasing the talent pool and reducing costs.  At the end of the project they get 400 likes on Facebook, YELP!, and Angie’s List

The bankers will have access to the website to monitor progress.  With insurance policies fully enforced, banks will lend favorably to the HOA who needs to fund a major reconstruction project.  Banks will also lend favorably to mortgages in this structure because it is well maintained.   

It is in the best interest of the community to be civil and thoughtful in their discussions knowing that they are being observed by some of the other stakeholders.  This eliminates the incentive to be disruptive and increases the incentive to be engaged and productive in the project. 

Over time, the website becomes a forensic record of all matters associated with the project.  Everyone knows who said what, when, where, and why with an electronic time stamp.  There is little to be disputed

Interaction with the Wider Community:

Real estate agents always describe property in poetic hyperbole.  The RE market rarely tout the improvements that a community works so hard for.  The website could be a place where a real estate agent can advertise their services in exchange for a promise to mention the re-piping project and intangible values of the community.  The market will respond to a well-maintained building and an engaged community (ref: Jane Jacobs externality), which will drive real estate valuations up. 

Hotels, restaurants, theaters, art galleries, service groups and civic organizations all benefit from prosperity and resilience in their community.

In the end, the shared asset is preserved and everyone is profitable. 

The Ingenesist Project is currently in the middle of this above case study / scenario.  Real money is being exchanged in a real project with real players.  It is a significant fact that our team won this contract and is being well compensated.  We are deeply confident that The Value Game can be easily built and deployed throughout a 200 billion dollar condominium reconstruction and maintenance industry at great benefit to communities, insurers, bankers, contractors, and homeowners using existing technology and community sourced intangibles values.    

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Is The Patent System Relevant?

HuffPost; new legislation passed by house of representatives

 

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I was recently interviewed by Dr. Amy Vanderbilt for the TrendPOV show.  The question was “Is The Patent System Relevant”.  The directness of the question is interesting; where the null hypothesis is that the Patent System is irrelevant.  Second; it is interesting that she would interview me! After all, I own no successful patents, not for lack of trying and perhaps as a result, I commit my work entirely to the public domain.   Also surprising is that I neither encounter other people’s patents nor do I require patents of my own for what I do.    

Here is a link to that Interview with Dr. V 

The following are some supporting research and preparation material that I put together for the Interview

As a matter of perspective;  The software industry claims to have a net negative monetary relationship with the patent system.  While my work is not directly associated with software, it is directly associated with the “soft” assets such as knowledge, innovation and wisdom of people and teams of people which are served by “software”.  Maybe this chart explains a few things.

Here’s a growth plan; Let’s Argue!!

There are many arguments for and against the patent system, the most compelling argument in favor include the notion that in a Capitalist system, the guaranteed monopoly is somehow an incentive for entrepreneurs to innovate. 

Arguments against the patent system include the idea that unfair advantage is given to wealthy corporations and has little to do with innovation; except innovation in the means and methods of stifling both competition and collaboration.  In many industries such as automotive and aviation, everyone is suing each other uniformly.  One would suspect that collaboration must be more efficient.

It’s especially worrisome when you hear both arguments stated by the same person.  Most corporate CEOs will fight valiantly on the field of patent litigation in protection of profits.  However, the source of those patents – the creative people who actually invent things are given the choice of either abandoning their IP rights or their jobs, in perpetuity.  It is important to consider the incentives.

Incentive to Dictate, not Innovate

The idea of a monopoly position is clearly more consistent with the art and science of dictatorship and oppression than any recognizable form of Capitalistic incentive to innovate.  I say this somewhat in jest, because corporations are a very important for of community organization for producing things that people need (or not).  However, corporations may no longer be the only form of social organization that can produce things that people need.  

Patents are important for transforming intangible assets into tangible assets.  Tangible assets are a class of financial instrument that can be capitalized, securitized, diversified, and used as collateral on debt.  Patents are also dependent on a functional legal system and associated enforcement tools – which are ALL public institutions funded by intangible asset production.  Funding of patents is dependent on money; which is also a “public traded” institution.

The irony is that patents support tangibility of intangibles, but those intangible are what actually support the patent system.  Herein lies the vulnerability of the patent system as we now know it – whoever figures out how to bypass this loop will release value directly into an economy eliminating friction and delivering immense efficiencies of scale.  As soon as someone figures out how to transfer intangibles directly into a value creation framework, then the idea of a corporation, and the assets that they securitize will be altered forever.   

So what if people could organize themselves?

Like the first Goddard Rocket, Occupy Wall Street was a trial run at the moon landing.  All the tools and technologies are emerging in social media like scaffolding.  Open source innovation is hanging all the parts on this scaffolding that emulate the functions of corporations.

The Ingenesist project has developed a novel business method called the value game which flips Capitalism over on it’s back.  It’s still Capitalism because everyone is playing to win an outcome in his or her own best interest – but flipped none-the-less.  The primary difference is that the competing elements of capitalism are simply converted to cooperating forces of Social Capitalism.  The resources wasted in producing losers, is converted directly to efficiency gained in net productive output.

Converting social capital to financial capital; and vice-versa

This is significant.  We are currently deploying a value game to a high-rise condominium renovation project where the home owners, the contractors, the engineers, and even the neighborhood are interacting in a value game where it’s in everyone’s best interest that the others are successful.  The project is valued at 2.5 million dollars so real money is in play and real people are playing what would formally be called a Multi-Agent, Algorithmic Game. 

The Value Game sets up a new body of incentives that drive data, information, knowledge, innovation, and wisdom towards preservation of a shared tangible asset.  When everyone depends on everyone else and they share data instead of trying to form some sort of monopoly, they create “the secret sauce” that “produces” things.  This is the exact same outcome as a corporation except without the corporation….or all those pesky patents. 

This is real, this is happening today, we have been able to convert social capital directly into financial capital and convert financial capital directly into social capital – now listen closely; we do this ALL without an overreaching corporation in place. 

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The God App

David Chacko’s newest mystery novel, The God App, is a story about a detective tracking down the killer of the professor who invented a computer program that anticipates major moves in the financial markets. Whoever holds The God App is far above the law as the people who rule the world come calling for their guaranteed returns. It would seem that the only problem with The God App is for those who don’t have one…sound familiar?

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If everyone had The God App then no one would have a God App. Today we are at a point where the only way to beat the disease is to lose the patient. As long we are competing with each other, we’ll never figure out how to predict the future, let alone fix it.

First, we seriously need to reorganize ourselves:

Instead of ranking, rating, and organizing each other as winners and losers of things, we need to organize ourselves as students and teachers of things.  This would allow us to exchange value with each other in a pre-dollar proto-economy without necessarily competing with each other.  Teachers would represent supply and students represent demand in a collaboration market.  Here is what the teacher/student scale may look like:

Second, we need to create an inventory

In order to build anything useful or meaningful, we need to have an large inventory of parts that can be easily combined, assembled, exchanged, and inter related.

Today, Wikipedia has grown to become the most comprehensive collection of definitive information about the world around us.  Everyone should rewrite their résumé as a set of Wikipedia URLs that most closely represent their talents, interests, experiences, skills, and abilities.  People will locate their selves on a knowledge graph.

A Wikipedia Cluster Ballcourtesy of Chris Harrison (click to enlarge)

The dimensional résumé:

When we combine Wikipedia Tag with the teacher/student scale, it forms a 2-dimensional array.  This new form of résumé/CV allows communities to store and exchange value among each other.  The CV array may look something like this (etc):

The Personal API

In this 2-dimensional form, everyone would own and control a string of code that represents their willingness and ability to build and collaborate economically in their community.

[tag1](-3), [tag2](+2), [tag3](1), [tag4](-2), [tag5](3),….,etc.  

This string can be processed computationally more like an API than a résumé. Most importantly,  anonymity can be preserved until the point when a transaction will actually take place.

Additionally, people can represent themselves by partial strings to create separate personas. Individual APIs can be combined among many people, and their personas, to create productive teams, communities, and corporations.

Adding dimensions to your API: Attributes such as location, schedule, context, and equipment can be attached in real time or travel dynamically wherever the persona is traveling.

The API Economy

With anonymous source data; everyone can conduct surveys of communities that would likely resemble the proverbial “Bell Curve” or, a normal distribution.  This is important because it would allow everyone the same ability to predict the likelihood that a collection of knowledge assets can execute a particular business plan.  People could see exactly what they need to do next in order to achieve a reliable probability of success in an economy.

Sounds Like Big Brother?

If this scares you, then consider this:  The God App is already here. Everything you do is captured electronically in a very similar form in order to create a predictive profile of you; what you will buy, who you will associate with, who you will vote for, etc.

Political campaigns, advertising agencies, Facebook, Google, Linkedin, corporations, government, Wall Street, and even organized crime (not to be redundant) use big data to gerrymander their way into your productivity potential.  The difference is that 99% are excluded from the predictive process, shackled behind the curtain, detached from their hopes, dreams, and intensions…mindlessly posting résumés, guessing, reacting, etc.

And the Good Lord said unto thee….

Hey dumb ass, wake up.  You can cut them all off at the nub with a simple app that a bunch of hackers could probably code-up during detention hall. Get this sucker viral and build the better FB already. The only way THEY can cut you down would be to cut themselves down.

Now THAT’s a God App.

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(The implications of this app are vast – everything changes without changing anything. Follow-on articles will discuss these various nuances.  Any builders out there?)

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Look Who Is Stockpiling Knowledge

Preppers were once considered among the more radical fringes of American Society, but now they are coming up with some of the more interesting ideas in sustainability.

Suppose that some financial calamity were to bring the economy to a standstill,  would  your education, intellect, wisdom, civility, and knowledge evaporate along with it?  Of course not, but that is exactly the danger that we face.

The inability to access, coordinate, and deploy our vast endowment of American knowledge assets may be the cause, not the effect, of that proverbial breakdown in social institutions for which the Preppers prep.  

Why wait?

While today’s Preppers are busy stockpiling survival gear, food, water, ammo, fuel, and even gas masks, the rest of us should be asking “where are we stockpiling community knowledge?”  Who will keep the water clean?  Who knows how to restore electricity or grow food? Who knows how to protect citizens?  Who knows how to remove a set a broken bone? Who knows how to teach children to read? Who knows how to fix stuff?

The Sequestration of Knowledge

The greatest danger to human survival may be the corporate sequestration of knowledge assets.  For example; corporations hold “knowledge” behind trade secrets, arcane job titles, and rigid processes where nobody from the outside can ever find or apply it.  Obviously, a company without knowledge cannot produce anything so understandably – whether we realize it or not – our most productive knowledge assets are locked up pretty tight behind the guilded walls of Wall Street.   This is not anyone’s fault – it is just the way we are organized.

It is time to evolve.

On the surface, a company that makes airplanes and a company that makes electric cars have very little in common.  An airplane company could never hire an engineer from a car company (and vice versa) because the job descriptions, production processes, and definitions of responsibility are cut from entirely different performance regimes.  Yet, as far as the engineer is concerned, the methods, systems and techniques for creating, say, graphite composite structures, are identical everywhere on Earth. If many industry could share engineers, not only would a great deal of diversity of new ideas be exposed, but cyclical layoffs could be avoided.

The Knowledge Commons:

What if a central knowledge inventory would represent all skills, talents, passions, and intentions of a community?  What if companies were to index their own skills ontology to a public knowledge commons instead of isolating their workers to the silos of internal processes?  Employees and companies would be more mobile and collaborative instead of secluded, protective, and competitive.

Social Equity Swaps

Suppose that a community could analyze their knowledge commons such that people could swap jobs so that everyone worked in the most qualified job that was also closest to their own home?  Billions of dollars worth of productivity could be preserved, billions of dollars worth of infrastructure could be preserved, and billions of units of energy could be saved.  Worker retention would rise and community unity would improve.

Free Market Enterprise

Suppose a company could read the knowledge commons of a community and produce the things that a community is naturally talented and interested in producing?  Quality would improve and costs would be reduced.  Innovation would increase and strong community collaboration will discourage competitors.

Everyone is an entrepreneur

Suppose that people (and companies) could locate to areas where there is a known deficit (or surplus) in their particular interest and passion? Risk and financial volatility would be reduced where people know that they will have a prosperous and interesting career / workforce.  Population density could decrease as people and companies locate to rural settings.  Countless billions will be saved on infrastructure as food and energy production can coexist with enterprise centers.

How to change everything without changing anything

These are just a few of the advantages of having a knowledge commons that is open sourced and readily accessible to markets instead of sequestered knowledge assets that force people to question their ability to survive in the future economic environment.  The next several blog posts will specify a possible system and structure for a public knowledge commons.

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The Hack-plications That will Change Everything

Zertify, Gamidox, and Exoquant (ZGE) are NOT the applications that will change everything.  Rather, the hack-applications that follow on the ZGE data suites will, in fact, challenge the idea that periodic economic collapse and hard-fought restructuring is a necessary inevitability of the human condition.

The current financial system is vulnerable to disruption.

One reason is that it is becoming unstable.  However, by far the more important reason is that it is very inefficient.  The underlying notion that competition alone can determine a winner is wasteful because the time, energy, and resources required to battle, kill off, and dispose of an opponent may exceed, many times over, the value of a win.

What exactly is the nature of winning and losing?

Can truly winning only happen when the opponent is truly dead?  Can a student win by learning even if they can obviously be vanquished by their teacher?  Does a teacher win by living among productive citizens, as they themselves become vulnerable elders?  Can such an exchange form without there necessarily being a financial, or even governmental, intermediaries.  Today, quite the opposite is happening in companies and communities facing both knowledge gap and layoffs.

How Stable are The Stabilizers?

The legal system is very expensive to maintain.  Global military projection is certainly not cost free nor are the subsequent defenses.  Even the so-called competitive “college degree” and “intellectual property” are outliving their accessibility, and therefore, usefulness. Ironically, it will be the financial system itself that is undermined by the scarcity of the lifeblood money.  People will adapt to new forms of enterprise as they have for millions of years.  This is what Zertify accellerates.

What are the alternatives?

It would be vastly unfortunate for civilization if the financial system were to become ineffective prior to  human’s natural evolution to a high order of economics.  In fact, it seems that the failure of society to evolve is the only thing keeping the current financial system in play – there is no other game in town.  Think about it; if money does not represent your productivity, why would you work in exchange for it?  When you can no longer “harvest” your own productivity, why would you sow that field?  People would sow a different field. This is what Gamidox provides. 

Let’s Measure Ourselves Into Existence

History shows that the darkest depths of re-organization preceded prior leaps of human civilization.  But is that ultimate, inevitable competition and sacrifice actually necessary, except to measure the old system out of existence.  People are already quite organized, why do they need to be re-organized except to fit within a measurement system that has outlived it’s usefulness, applicability and relevence.  Exoquant allows the new humanity be measured into a new existence. 

Let’s get it right this time

The ZGE applications provide the intermediate step that never existed at any other time in history.  ZGE are built and structured upon trust networks and Internet connectivity.  Why not start rebuilding now while we still have a chance to get it right, very right.

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How To Change Everything Without Changing Anything

Today, I am releasing an outline of the first of three sections of my upcoming book release called:

Hacking The Financial System; How To Change Everything Without Changing Anything.  

This book will be a step-by-step instruction manual for correcting the relatively tiny flaw in Market Capitalism that is driving civilization into an unsustainable future.  All the tools that we need to correct this flaw (and consequently most of our planet’s most pressing problems) exist today and are readily available to everyone.   Does it sound too good to be true?  There is a hitch:

It is easier done than said.

For example: it was not until human civilization was “ready” to realize that the Sun was the center of their universe, and not the Earth, were we able to access all of the science and technology that resulted from that profound knowledge.  Yet all the facts were clear and present to humanity for millions of years prior.

The same may be true for the next economic paradigm, as I will describe in this book.  All the fact are clear and present today, it is only our ability to shift a simple observation that will determine the advent of a sustainable future that seems so daunting today.  I am confident, with reservations, that we can do it.

I would appreciate your feedback

Please find the table of contents below for the first section of the book. Section 2 and 3 will be posted later.  The appendix will have case studies of how we are deploying The Value Game in the Construction, Aviation, software development, and Philanthropic industries.  I hope that these early demonstrations will help the entrepreneurs among us realize that there may be an alternate business method that is, in a very tangible way,  vastly profitable.

***

Find PDF link below:

Hacking The Financial System:

How to Change Everything Without Changing Anything

Table of Contents

 

Preface

Introduction

Factors of Production

Part 1: Hacking The Financial System

Part 2: The Accounting System Hack

Part 3: The Institution Hack

Part 4: The Wall Street Hack

Part 5: The Currency Hack

Part 6: Evading The Antigen

Conclusion

Next Whitepaper: How everything changes

Final Whitepaper: How Nothing Changes

Appendix: Progress to date

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Evading The Antigen

Over the last 20 years or so, I have spoken all over the United States and many parts of the world about the idea that there may be a single and relatively easy way to correct very evasive flaw in market capitalism.

Fixing this flaw could correct many of the biases and divisions that plague relationships and communities in an otherwise functional social organization system.  The work of the Ingenesist project, of course, is precisely to correct the flaw.

From past experience, I always get one of three reactions to our work:

  1. Some people get it immediately, and engage deeply.
  2. Some people don’t get it and ignore completely,
  3. Some people attack it, sometimes dangerously.

I learn a great deal from each type of response.  In fact, the vast majority of ideas in the Ingenesist Project come from hundreds of brilliant people who have participated in one of these three ways.  The first two types are self-explanatory. This post is about the third type – I call them “the antigens”. As the term implies, when an Antigen perceive a threat to the existing body they react strongly to neutralize it.

The Flaw in Capitalism is well protected

The antigen is not just a person who disagrees with a fact or feature of our work.  They hold a deep visceral objection that is personal, emotional, physical and always disproportionate to the level, scope, or even the topic of conversation.

Much to our astonishment, the antigen is always someone who would be expected to embrace our work and ideas.

The problem, I have come to realize, stems from the suggestion that the Zertify knowledge inventory strategy seeks to increase the efficiency of matching the supply and demand of knowledge assets in a community. The antigen has a vested interest in this same goal and does not believe that there could or should be a better broker than themselves.

If it’s not Broker, don’t fix it

Several examples of antigens that we have encountered:

One was the economic development agency for a less developed country.  Our proposition was to present their engineers as world class quality.  They saw this as an emigration threat more than an off-shoring draw, and shut the program down.

One was a celebrity author and lecturer that champions the cause of the common man against the oppression of corporate tyranny.  This individual makes his living selling books, lectures, and endorsements. His scathing misinterpretation of our work hurt us badly.

Another recent  antigen was a person who runs an “accelerator” for start-up companies whose passion is to identify promising start-ups and match entrepreneurs to funding in the spirit of high tech titans of the past.  He saw us as a threat to his “God’s Eye” approach to the garden of money.

On the surface, it would seem that these people or entities would embrace a comprehensive knowledge inventory and machine enabled means of matching supply and demand for knowledge assets.  Instead, they saw us as a threat to their vested interests.

It’s not about right and wrong

The point of this article is not to make the antigen wrong about their response –  it is quite natural and we have all done it.  The Flaw in Market Capitalism is the antigen behavior/reaction itself – not the person demonstrating it.  Our challenge for the future will be to amplify mavens and community organizers to become better at connecting people in collaboration with each other while also identifying and redirecting the antigen response before it is activated.  Because once it emerges, it cannot be put back in the bottle.  

The corollary:

Those who would embrace this work likewise have little or no vested interest in “controlling” others and would therefore appear to be the least likely to accept our work.  So by definition, those who accept the ideas that we present are those who would perform well in such an environment.  This further demonstrates the counterintuitive nature of The Ingenesist Project.

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The Currency Hack

This is the final post of the Financial System Hack Series.  Contrary to conventional wisdom, the currency is the last hack, not the first.  Only after Zertify, Gamidox and Exoquant are established would it be possible to introduce a currency that could compete, if not hedge the dollar.

With Zertify we can estimate the probability that a collection of knowledge assets will be able to execute a business plan some time in the future.

With Gamidox, The Value Game is played where several communities interact around a shared asset such as a condominium, airplane, school, hospital, road, car, or any “product” that has socially redeeming value.

These interactions are measured such that we can assign “value” to the game with the Exoquant algorithm.

So taken together:

If we can predict the probability that the interactions carried out by communities of people (relative to a product) will have a known value in the future, we can represent it as a “cash flow” with a known volatility (risk).  Now, combining many interactions carried out by many communities around many products with known volatilities, we can pool the predicted cash flows into one large diversified cash flow.  Next, we can  cut the large flow into “bonds”, which we can extrapolate to net present value and to fund the community activities.  This very similar to the way that corporation form and raise money – except without the corporation.  While banks continue to issue Debt Bonds, communities will issue Innovation Bonds in parallel

Here is the hack:

In the old days everyone carried gold around with them to engage in trade.  Since gold was heavy, bankers let people keep the gold in their vaults and they wrote little chits that represented the gold.  After a while, people just traded the chits and it was no longer necessary to convert back to gold with each transaction.  Eventually, the gold standard was eliminated altogether and people just traded the paper that now represents their future productivity (debt), not necessarily gold.

The currency of abundance

Likewise, after a while it would no longer be necessary to convert the community currency into dollars.  As the dollar slowly starts losing it’s value under the weight of the debt load people will just trade community currencies.  All of these values are made visible and validated from Zertify, Gamidox, and Exoquant data.

The antigen will not be triggered because this is exactly the same way that corporations interact with banks to capitalizes and securitizes dollar debt, the difference is that we are capitalizing and securitizing community innovation by measuring data, information, knowledge, innovation, and wisdom.  A currency of abundance can then replace the currency of scarcity.

Nothing Changes and everything changes

Corporations and government can continue activities to the degree that they produce socially redeeming value by simply purchasing innovation bonds from the people with their dollars – if they’ll accept them.

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The Wall Street 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 ultimately being adopted completely.

In this post we will identify the hack on the Wall Street Financial instrument regime.  Although exoquant is a bit technical, the basic hack is quite simple:

  • Everyone knows that money is created through the creation of debt.
  • Everyone also knows that debt is a promise to produce something more in the future.
Likewise:
  • Everyone also knows that innovations increase human productivity.
  • Everyone also knows that innovation is a promise to produce something more in the future.

Here’s the hack:

Therefore, a currency backed by debt and a currency backed by innovation are both backed by future productivity.  As such, two currencies backed by the same underlying asset are fully convertible with each other.  Water dissolves water and innovation dissolves debt.

Here is how the Wall Street algorithm works: 

  • People produce stuff in exchange for money
  • Bankers do not care about money, they care about the rate of change of money over time.  This is called the “interest” rate.
  • Stockholders do not care about interest rate, they care about the rate of change of interest rate over time, this is called growth rate.
  • Hedge fund managers do not care about growth rate, they care about the rate of change of growth rate over time, this is the margin on their bets; options, and derivatives, etc.
  • CDOs and other financial exotica become increasingly divorced from the fact that people produce stuff for money.

The Exoquant Analogy:

  • The value of information is derived from the rate of change of data over time
  • The value of knowledge is derived from the rate of change of information over time
  • The value of innovation is derived from the rate of change of knowledge over time
  • The value of wisdom is derived from the value of innovation over time.
In order to “see” innovation before it happens, all we need to do is identify and measure rates of change of information in communities…and so on. Technically, this is a derivative, i.e., something whose value is derived from the value of something else.   All of these metrics can be seen quite readily in the Zertify, Gamidox data sets.  Each is a “derivative” backed by the stuff that people produce rather than the fiction of debt.  The ability to predict future productivity is superior with an innovation backed currency and therefore superior to debt forced productivity – often compared to slavery.

The Silver Bullet

Innovation is a magic word.  The hack is true to the Wall Street math as well as American culture.  Anyone running for public office would not attack the proposition of an innovation backed currency.  Therefore, the hack will not trigger an antigen.
 The next and final post, The Currency Hack, will formulate this innovation currency in more detail.

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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.

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The Accounting System 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 taking over completely.

In order to accomplish this, we need to start with an accounting system hack. Fortunately, standard accounting practices are quite robust with double entry balancing of assets and liabilities.  Luckily, the problems only arise with the definition of what is an asset and what is a liability.  That is a relatively easy jailbreak.

The Price Is Wrong

The problem is that we “price” assets from low to high, from bad to good, and from loser to winner, etc., with little regard for proximity, environment, community, or time, etc.   The financial system needs to artificially create losers in order to price the winners.  This is fairly obvious for tangible assets like cars, tomatoes, and real estate, but not so much for so-called intangible assets like people.  This is hugely inefficient on so many levels and therefore vulnerable to attack.

The collaborative advantage

Zertify classifies human knowledge assets on a scale of 1-6 beginning with “teacher” and ending with “student”.  Students and teachers do not compete with each other and therefore intermediate levels represent various degrees of collaboration, not competition.  The teacher bias represents supply of knowledge and student bias represents the demand for knowledge, this establishes a trade vector in our proto economy.

Technically, the 6 segments represent 6 standard deviations on a normal distribution.  This allow for communities to organize around their diversity rather than recoil among their similarity. This arrangement also allows the for the usage of an important body of predictive mathematics.

Benign.

This simple hack is important because it is benign to the current economy and will not trigger an antigen. Corporations, governments, and communities already seek to match the right knowledge asset to the right demand asset for knowledge – this is actually improved under the new accounting system.

Therefore, the hack is true to the math because it provides the existing financial system with an equivalent predictive asset while eliminating irrelevant bias and costly competition.

The Resume Must Die

The objective would then be to move away from the resume system and establishing a community knowledge inventory system under a commons based ontology.  Everyone would have their individual API which they own, manage, control and transact. A person’s CV would be expressed as a string of code that  is anonymous until the point of transaction. A tremendous amount of data will be derived from Zertify which will feed into the next hack called The Value Game.

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Hacking the Financial System

Hacking The Financial System is not about some doomsday scenario for the end times, it represents the natural ability for humans to adapt to constraints in their environment.  Right now, the financial system is vulnerable to many new systems and technologies that are reorganizing society. This series hopes to describe the meta dynamics behind these trends and offer ways for all people and institutions to adapt.

The financial System is made up of 5 components; they act as a system.  If any of these components falters or is corrupted, the whole system becomes unstable.

These 5 components are:

  • Markets (demand)
  • Entrepreneurs (supply)
  • Accounting System (inventory)
  • Institutions (to keep the game fair)
  • Currency (storage and exchange of value)

For example:

The dot.com crash was a problem with the accounting system failure. The 2008 crisis was a vetting mechanism failure. Devaluations across the globe are currency failures. Poverty is a market failure.  Corruption is an entrepreneurial failure.   All of these forces are interrelated and any one will have an impact on all of the others.

Curiosumé, The Value Game, and The WIKiD Tools Algorithm are specifically designed to replicate major functions of these 5 components – but in a different way.  Since Finance and Economics are mathematical, and natural systems are also mathematical, we cannot escape the math – our hack needs to be true to the math. For this reason, the work may seem fairly technical.

On the other hand, we have an incredible opportunity to correct many flaws of the old economy.  Anything that has no direct impact on the math also has no impact on performance and function of the 5 components – and can be easily designed OUT of the system.

For example:

  • We have an opportunity to swap out competition for collaboration
  • We have an opportunity to swap out scarcity for abundance
  • We have an opportunity to swap out mass consumption for mass sustainability
  • We also have the opportunity to eliminate a wide range of biases such as gender bias, racial bias, physical bias, social class bias, political bias, and many many more factors that may be irrelevant.

Where’s the Hack?

Every time there is an economic instability of any magnitude, black market currencies tend to form.  We have all heard stories of Levis, cigarettes, or even tulip bulbs being used as currency.  Black market currencies can also be quite subtle, yet no less tradable.

With 21st Century technology and social media, we are witnessing the emergence of what we can only now call “social currency”; such as reputation, referrals, vouches, influence, SEO, community, groups, and various other domains.  These are all black market currencies because they are used for the storage and exchange of the value that people create…what they lack is the rest of the “system”.

The difference now – and perhaps this is the first time in human history – should the so-called black market currency become systemized to the same extent and actually perform better than the currency that it hedges,  “a flip” will occur and the old system will fail to re-boot back to it’s current form as it has after every preceding economic crisis.

That’s the hack.

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New Value Movement Session Primer

Thank you for participating in the New Value Movement discussions.

I have compiled this post to help our panelists refresh the basics of The New Value Movement. This is the body of content that we are trying to improve:

If you find them difficult to follow, then that is what needs improvement.  I’ll do a quick review at the sessions as well.

We need to tell an epic story.

New Value Movement Session Primer – Total viewing time is about 33 minutes.

***

SIBOS 2011 (6:39 minutes)  this video is the Launch presentation for the NVM delivered to financial industry professional at SIBOS Innotribe sessions in Toronto 2011.  It introduces ideas corresponding to the Zertify, Gamidox, and Exoquant applications.

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This next video describes The Knowledge Asset Inventory (5:30 Minutes) and corresponds to the Zertify Application concept.  However, the actual methodology is masked and I have not published this openly the web – this is the only secret we keep at this point. The actual methodology will be revealed at the session.

***

The next video describes The Value Game; a system for accounting for new value (12:17 minutes); and corresponds to the Gamidox application. This was originally used to launch a start-up called Social Flights. However, there are several layers of informative examples in this video.

Next: The algorithm for monetizing (making tangible) of intangible value is described in the video below (5:30 minutes) and corresponds to the Exoquant Application.

Finally; predictions 2020 begins to lay out the scope of influence that alternate economics may have if done correctly. As such, this video (3:30 minutes) suggests the scope of audience that the New Value Movement narrative should access.

Again, thank you for your time, effort, experience, and intellect participating on this panel. Dear regular blog readers: please continue to leave comments or connect with me to get involved with the New Value Movement.

New Value Movement Session Primer

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A New Conversation About New Value

Most people who know me, understand my tendency to go into “Professor Mode”; or deep dive into the Calculus of financial instrumentation; or just geek out on macro-sustainability issues.  Communicating to the public about what we can and should do next, is NOT my specialty. To this, I trust my friends.

In celebration of friendships, we are coming together around the conversation of The New Value Movement and the a plan to launch an open source development project that will facilitate an alternate economy backed by so-called “intangibles”. If you will be in the Seattle Area on this date and have a deep knowledge or interest to share in this subject, please contact me through this blog post.  Thank you

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A New Conversation About New Value

The New Value Movement is a worldwide meme that recognizes that not all valuable things can be articulated with dollars – and that vast stores of value remain economically invisible as so-called “intangibles”.  These include social, creative, and intellectual capital as well as environmentally sustainable enterprise.

A New Class of Business Methods

The Ingenesist Project is developing a new class of business methods and metrics that convert intangible assets into tangible assets, which then become visible in an alternate economic system in an expanded form of currency:

  • Curiosumé – An analog to digital converter for knowledge assets
  • The Value Game – A novel business method for converting intangibles to tangible
  • WIKiD Tools – The capitalization and securitization of New Value ‘currencies’

A new Conversation about financial systems

This 3-hour meeting seeks to develop a narrative that will bring the possibility of the New Value Movement to a broader audience.  Secondary, this narrative seeks to attract the development community to participate in an open-source development project that could augment the existing financial system of value scarcity with one of value abundance.

Meeting of the minds

We are seeking 10-12 people with knowledge in relevant areas to help us set the course for an alternate economic system backed by New Value Currency.  Please consider sharing your intellect, creativity, and wisdom with this important project.  Some familiarity with ZGE is requested (and can be provided in advance).

For more information about The Ingenesist Project:

Please visit our website http://ingenesist.com , visit our YouTube Channel, visit our blog, or review the site map for various articles and videos related to the “New Value Movement”.   Feel free to contact me through this blog for a review of ZGE

Thursday, August 23, 2012

6:00 – 9:00 PM

The Hub Seattle

Temp Location: @BGI Seattle Campus

Please RSVP 

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The Rango Prophesy

When I asked my friend and highly respected Seattle consultant Joe Brewer for advice, he simply says:

“Tell an Epic Story”

Rango is a hapless Chameleon in a classic “fish out of water” tale and unlikely hero who finds himself in a “Dust Bowl” meets “Spaghetti Western” hardship scenario. His only preparation is an active imagination and a lot of luck.

All of the characters are similarly encrusted desert animals doomed to a life of subservience to a central banker in an economy where water is the currency of trade.

The Mayor of the town first appears as an almost spiritual leader who provides his flock with hope that their suffering will soon be relieved on the day when water flows again from the shrine of the Holy Spigot.   The analogy to modern religion is hard to miss.

When Rango arrives and accidentally stumbles upon an act of valor, he is anointed sheriff of the town.  Meanwhile, the mayor is, in fact, the person causing the hardship by secretly constraining the supply of the water so that he can buy up all of the failed farms for commercial real estate development.

Upon providing guidance to the new sheriff, the mayor inadvertently slips that proverbial libertarian battle cry  “whoever controls the water (currency) controls the people.”   This sparks suspicion in Rango, who then ventures off on an adventure with some of the town folk to find out what is happening to the water.

After plenty of twists, turns, predators, mistakes, and a whole lot of ironic/comical symbolism, Rango and his gang finally learn that the mayor simply shut off the valve tapping the Las Vegan water main.  Once Rango’s gang opens the tap, water becomes abundant again and the protagonists meet their appropriate demise (suitable for young viewers).

The metaphor for the real world is a no brainer, for most reading this blog anyway.  Bankers artificially control the currency tumbling communities into bankruptcy, unemployment, and despair.  Meanwhile politicians, corporate interests, and legislators conspire to offer fasle hope to the wallowing masses as each person, one by one, hands over their fortunes and freedoms to the powerful elite.

Of course the plan is foiled when a group of brave citizens form alliances with their previous adversaries acting in unison toward a common goal.  It then becomes readily apparent that an “abundance” of productive currency, such as water, is precisely the solution to ridding desert society of crime and corruption thereby enabling peace for all – not the other way around.

This is the story that I want to tell.

There is a very simple task at hand – find the main line and open the valve.  Human knowledge, like water is constrained behind artificial barriers called “intangible” asset accounting.  To build an accounting system that makes knowledge assets “tangible” will open the floodgates of the most valuable currency civilization has ever known.  Not surprisingly, the protagonists will meet their appropriate demise –  suitable for young viewers, of course.

 

 

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How To Overhaul GDP

Self-imposed exile, or land of opportunity?

Gross Domestic Product (GDP) refers to the market value of all officially recognized final goods and services produced within a country in a given period.  Simon Kuznets first developed the concept of the GDP for a US Congress report in 1934.  He immediately said not to use it as a measure for welfare. He later elaborated:

“Distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run. Goals for more growth should specify more growth of what and for what.”

Sheer Madness at best

Today, the concept of Gross Domestic Product is vastly flawed to the point where the tail now wags the dog.  GDP now determines what we produce, who produces it, where it is produced, when and how it is produced.  Further, GDP snuffs out vast amounts of intangible value simply because it cannot be measured as GDP.

Global Policy is not enough

Recently, The G-20 meetings resolved to a very interesting point; to redefine GDP by a new set of metrics.  This will be a long hard journey if done solely in the political domain.   However, if we can make a business case for it, the entrepreneurs will jump on board.  Then, and only then, can the landscape change as rapidly and drastically as will be required to turn civilization around equitably and peacefully.

Corporate Policy is not enough

The irony is that those who perpetrate GDP metrics may be those who would benefit the most from dumping it.  In the following article from FastCompany, How Intangible Corporate Culture Creates Tangible Profits, companies who learn to transform intangible assets to tangible value become more competitive over companies that do not.  The article cites Southwest Airlines as the first airline to strip down all “tangible” amenities, yet they succeed by replacing them with intangible value such as superior customer experience.

Policy, Corporations, Culture and Entrepreneurs need to act as one:

Interestingly, the FastCompany article talks a great deal about culture.  They also use the terms; “information, knowledge, innovation, and wisdom” liberally throughout the text.  This is very inspiring to us at The Ingenesist Project because we use similar language to design and deploy business methods in industries as diverse as Aviation, Construction, and Philanthropy that readily convert between tangible and intangible value.

For Example:

  • The objective of Zertify is to replace the competitive incentives among communities and replace them with a knowledge inventory that matches mentors to protégé.  Teachers and students do not compete, they collaborate in order to be successful.
  • The Value Game creates an environment where one acting in the best interest of their collaborator, acts in their own best interest of value creation.
  • Our Exoquant algorithm provides a direct relatedness between information, knowledge, innovation, and wisdom.

The New Value Movement

When we talk about the New Value Movement, we are trying to specify a new class of business methods that can literally “manufacture” the things that people actually need without any distinction between tangible and intangible.  People need a game that they can win playing by the same set of rules. People need food as much as the need love – there is no walled garden of human needs, except the planet we share.

Then we can measure what people actually produce with it

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Gyroscopic Effects And The Tangibility of Intangibles

Countless examples abound where the forces of INTANGIBLE assets align is ways that allows them to detach from their shackles and float like a gyroscope. Invisible internal forces allow new social entities to organize, travel, produce, and consume seemingly without structure or anchors. Yet they influence the most tangible of assets in their path.

Next Economic Paradigm

The next step is to harness this social energy toward sustainable productivity.  Then, and only, then can we arrive at the new economic paradigm (albeit one that may be largely unrecognizable from what we know of today).

The United States has a skills crisis

Millions of smart, motivated, and skilled people are out of work. Meanwhile companies complain that they cannot find the skills that they need to fill open positions.  Predictably, the arguments rage polarized; companies are unwilling to train, the education system is unwilling to teach, etc.  But I don’t think that is the problem.

A Function of Time

The lag time in the traditional competitive cycle remained the same; measured in months for a marketing campaign, or years with a product development cycle, or even decades as with an aircraft program.  Government is also slow to act with election cycles, public debate, and assorted diversions. Likewise, education system curricula can take 3 to 5 years to go through the release process.

Like car crashes, bubbles pop when the system is too slow to respond.

Meanwhile machine enabled social technology is developing so fast that companies do not have time to respond in competitive manner.  Everything becomes a bubble as companies find themselves playing in a game that can crush them at any moment by any number of forces; financial, economic, political, regulatory, public relations, wiki leaks, Facebook, YouTube, Smart Phones, etc.  Even strategic partnerships can unnecessarily and irrevocably tie an institution to the possible misfortunes of associates, with no prior predictability or analysis – until it is too late.

The Tangibility Of Tangibles

The corporate structure that is supposed to be the MOST TANGIBLE assets that an institution can hold is what effectively nails them to the floor.  The bottom line is exactly that, the bottom of the value barrel.  Companies that cannot see past the bottom line, can only see the bottom – and that is where they are staffing today.

The Value Game

Although developed independently, The Value Game (described herehere, and here) resembles a form of Michael E Porter’s 5 forces of corporate competition – except moving at hyper-speed to generate internal forces like a gyroscope.  Players have neither the time nor the incentive to compete with each other, rather, they compete with a game that produces both tangible and intangible assets in a common accounting system creating new value at an astonishing speed.

Of course, the corporation will not disappear any more than industrial revolution eliminated the agrarians. However, you can bet that the differences will be equally profound.

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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.

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Where Competition Has Met It’s Match

(update; as of November 2012, The Monitor Group headed by Michael E. Porter, the subject of this article, declared bankruptcy ending an era of C-Suite omnipotence strategy thinking.  This article compares competitive strategy to collaborative strategy)

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The B-School staple “Porter’s 5 Forces” has been the mainstay of corporate competitive analysis since it’s creation in 1979 by World regarded Harvard Business School Professor, Michael E. Porter. Porter developed a model of industry analysis in his seminal book,  Competitive Strategy: Techniques for Analyzing Industries and Competitors

In short, a competitive company’s position in a market is threatened by five main forces acting on the corporate asset:

  • new competition,
  • substitute products or services,
  • bargaining power of customers,
  • bargaining power of suppliers,
  • intensity of competitive rivalries.

Any changes in these 5 forces would be cause for the company to re-evaluate their place in the market … thus leading to healthy consulting practices for strategists the world over.

The Rate of Change

In the 1990’s critics began to argue that Porter’s 5 Forces thesis assumes that the forces are static and non-related.  At the time, the world was becoming more dynamic and more interrelated. For example:

  • Buyers, competitors, and suppliers can interact, and even collude.
  • Value cannot be created in the long run by constantly introducing barriers to entry
  • Participants in a market have the ability to plan and respond to competitive behavior.

As a result, they added another Force called “complementors” while introducing rudimentary game theory to explain the role of strategic alliances to the analysis.

Constant Change

Now in the year 2012, we routinely assume that all players can instantaneously access the same real-time dynamic market information from the cloud.  We readily accept that all players will collaborate massively with whomever they want from anywhere in the World.  As a result, we must assume that all five forces will change constantly and rapidly in real time.

Now imagine how 1990’s game theory would manage conditions where the company AND their competitors must continuously re-evaluate their position in a market under the circumstances of continuous change.  In effect, nobody has the ability to compete with each other, they are competing with the game, therefore, they are cooperating to keep the game in play.

Is Collaboration Underrated?

If any player tries to introduce a barrier to entry, THEY risk get knocked out while the game continues without them. In fact, value is created by applications that remove barriers … and brokers are punished. All of these factors cause the game to self energize and improve as players preserve the asset rather than consume it.

The Value Game

It should not be surprising therefore that Porter’s 5 forces now resemble what we call the Value Game that we have described here (and here, and here).  In the ultimate manifestation, however, The Value Game will play automatically through multiagent algorithmic game applications where tangible and intangible assets would be accounted equally in a Value Game. Individual would own, manage, and deploy their secret sauce of knowledge assets through their personal API that interfaces with the game that is most relevant to their highest abilities.

Where competition has met it’s match

Remember that little regarded fact of Capitalism: Markets are efficient where there is perfect information.  This means that if everyone involved in a transaction has the exact same information as everyone else, the true supply can meet the true demand.  Nobody ever said that this must be accomplished through competition especially if collaboration can do it better.

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A Value Game For The Aerobics Instructor

In yesterday’s post, we outlined The Value Game for University Outreach where the graduate was the shared asset and the school administration, the alumni association, the entrepreneurial community, and the wider community were the players. Now let’s presume that the shared asset is a small business owner specializing in aerobics instruction.

Using the same players:


A Value Game For The Aerobics Instructor

Suppose that a popular aerobics instructor has 20 students and charges 40 dollars for an 8 class sessions. The local health food store will place 10% coupon on store purchases against the 40 dollar tuition for the duration of the class. If the student bought 400 dollars worth of food from the health food store in 8 weeks, their tuition for the aerobics course would be free.  If they spend more, then the aerobics instructor is paid more.

The health food store already spends 10% of sales on advertising.  As such, the coupon is a superior incentive because it provides 100% ROI on the store’s ad spend.

Social Value Outcomes:

  • The health food store gains loyal repeat customers without advertising or spamming
  • The aerobics instructor earns an entrepreneurial wage making similar coupon arrangements with other health services, sporting goods stores, hotels chains, airlines, adventure tourism companies – anyone whose best interest it is to support her clients’ aspiration. They too benefit from loyal customers (anti-Groupon)
  • The Alumni Association would represent a network of clients, business owners, and database of persons likely to provide contacts, references, coupons, and advice to the aerobics instructor
  • The University can provide gym space, sponsorship, health education classes, and collect data such as; which coupons produce the highest yield for a given alumni product or service and player profile.

The Value Game Filters:

This particular value game automatically filters out the players that are not appropriate for the client.  In effect, the donut shop, tobacco store, or video game outlet would not likely benefit from playing this particular value game as their offering would reflect poorly on social values of the instructor and their coupons would not perform well enough vs. traditional advertising.  Instead, these products would find their own value game, if any.

Social Value Index (SVI)

The Social Value Index is a public statistic that compares the economic value (cost/benefit) of the socially integrated value game with the cost/benefit of the disaggregated advertising/spamming model which robs people of their time, passions, and quality of life.

Data as a shared asset

The SVI provides data that rewards this entrepreneur for doing what she is most passionate about; being knowledgeable and supportive of available health resources. The SVI rewards the store for enabling entrepreneurs in exchange for loyal repeat customers.  The Social Value Index rewards the network of alumni who align with their members (aerobics instructor) to deploy social currency to a community instead of spamvertising. The SVI rewards the University Outreach effort for organizing critical data, information, knowledge, innovation, and wisdom in the community.

At the end of the day: 

The Value Game is important because it allows entrepreneurial business plans that would not normally be viable under a purely monetary model, become highly viable when intangible Social Value (New Value) is added to the bottom line.

 

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