The Ingenesist Project

The Next Economic Paradigm

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Watching The Birds Play The Value Game

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On February 23, 2011

In General Information

To some entrepreneurs, the problems with the aviation industries signal many insurmountable obstacles.  At  Social Flights these challenges portend an extraordinary opportunity for a new business method to bring efficiency, order, social value while eliminating artificial barriers.

Social Flights value proposition is very strong for travel ranging from 200-1000 miles between smaller airports. Social Flights can deploy quickly in response to specialized market needs, environmental condition, opportunities, or events. Social flights adapts the mission of the aircraft to meet the opportunities presented to the market.

Conversely, commercial aviation struggles dearly in this segment because they try to get the market to meet the pre-ordained mission of the aircraft. The entire air transportation system would be best served if commercial aviation concentrated on the long haul/high volume “migration” service.  There is no reason why private aviation cannot perform the job that gridlocks commercial aviation.  This would make both industries more efficient.

Commercial Aviation’s Race to Nowhere

The Deregulation Act of 1978 in the Commercial Aviation system led to the development of the Hub and Spoke system whereas commercial carriers would fly people from small locations into a one or more large “Hub” cities where they would transfer on to the next destination – usually another hub, or on to the final destination.

Deregulation undermined point-to-point service regardless of market demand, ignoring social objectives of the passengers, having no regard for the final destination of the passengers, and blowing off the “time-value” of their passengers.  Recently, the ever expanding security layer has reached the point of personal privacy invasion.  With the age of the Internet, sites such as Travelocity and Expedia diluted the “service class” market segmentation of the airlines in favor of the “price class” segmentation of airlines.  These forces caused the commercial airline experience to become a deceptive, deeply invasive, and physically strenuous experience.

Private Aviation’s starvation diet

Meanwhile, the private aviation sector has fallen under the thumb of listing agents who tie up the industry behind the gilded walls of Charter Brokerage Houses.  FAA regulation hampers the ability to attract passengers on a per-seat basis, which gives private operators a hugely limited marketing position.  Brokers took over to mark-up the price of chartered flights far beyond the reaches of a mainstream market.

For these reasons, the private aviation sector has had difficulty organizing itself into a self-sustaining cooperative, until now.  In Fact, the smaller the airplane and the more widely distributed the airports, the simpler and more efficient the whole social system can become.

Social Flights changes the Game by Changing the Mission.

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How To Play The Value Game

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On February 22, 2011

In General Information

The Value Game is a new class of business methods that converts financial currency into social currency and vice versa.   The benefits of the Value Game are innumerable since social currency is the only true alternate means of storage and exchange for value that can hedge a weakening dollar.

The rules of the game are really quite simple

  1. The Value Game Starts and ends with Dollars (financial currency)
  2. All new value is created within the game is denominated as “Social Currency”
  3. Value is created from 3 or more communities interacting with a shared asset

How to build a Value Game

In order to build a Value Game, the social entrepreneur finds an asset that people are willing to share, and then identify three or more communities whose interaction with the asset creates social value.  The following are 3 Case studies currently under development at The Ingenesist Project:

Example 1: Social Flights is a new startup that aggregates private jets and deploys them to the social graph.

  • The shared asset is the Jet.
  • Player 1 is the traveler,
  • Player 2 is the charter operator
  • Player 3 are Local vendors who issue discount coupons against the airfare.

The traveler creates “time-value” by avoiding commercial aviation and developing their social graph.  Charter operators penetrate underserved markets.  Entrepreneurs supply relevant services to a known client instead of advertising.

Example 2:  High Net Worth Individual (HNWI) Reputation Management System. This business method helps influential persons improve their reputation in a community.

  • The shared asset is a shared reputation.
  • Player 1 is a HNWI.
  • Players 2 are the community organizers associated with a social cause.
  • Player 3 are social media gurus.

The HNWI adopts a social cause by exerting their political/financial influence in favor of the cause.  The Social media guru uses this content to demonstrate their ability to move search engine results, which enhances their on-line influence.    The community organizers receive social influence, managerial knowledge, and financial support for social cause.

Example 3: Collaborative Production. A Socially Important Film Project needs $250K to fund production and estimates 5 Millions views at distribution.

  • The shared asset is the final product film
  • Player 1 are the film producers
  • Player 2 are the Community that will benefit from the film’s production
  • Player 3 are product vendors selected by the community

The community provides detailed demographic information about themselves and their buying habits and the film producers processes these data for anonymity.  The film producers sell $1K options to 250 select corporate vendors for the right to issue a “Groupon-like” device to the 5M viewers of the film. Select vendors use the demographic data to target their message. The people who fill out the demographic surveys can purchase the Coupon for themselves or sell to other people for profit. Sales occur in lieu of advertising. The interaction between these communities produces social value in favor of the vendors, the film producers, and the benefit community.

Gaming The Game

As people learn to build The Value Game, they will innovate new and increasingly creative ways to leverage shared assets and interact with communities for profit.  Given the magnitude of the financial problems in the US, several hundred thousand Value Games will be needed to provide people with their daily needs for education, health care, municipal services, energy, transportation, food, etc.  After a while, the need to return to dollar currency will diminish as the value of the dollar itself diminishes under the weight of the impending debt burden.   As such, The Game will be Gamed by The Value Game.

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The Value Game Cracks the Monetization Paradox

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On February 20, 2011

In General Information

The Value Game is becoming increasingly generalized as more entrepreneurs seek to learn how to apply it to new economic realities.  The first company to launch is Social Flights.  Quickly funded, in full operation, booking jets and signing contracts, the Social Flights success trajectory has been truly remarkable.

The Ingenesist Project is deploying several more applications of The Value Game.  Our next venture is to develop Reputation Management for High Net Worth Individuals (HNWI).  Here’s how it goes.

The Social Influence Game:

Player 1: At some point, the government is going to stop supporting many very important social programs such as schools, health care, child care, retirement benefits, and possibly even close the charitable tax deduction.  In order to survive, social causes will need to come up with new forms of support or fund themselves with a new form of currency.

Player 2: Many politically and financially influential people in communities are finding that their “Google Results” often tell a story that is less than flattering.  Some have old lawsuits, unpopular business associates, or just too much personal information that presents a skewed picture of how they actually feel toward their community.  It is risky, difficult, and expensive to change Search engine results and it is nearly impossible to “control” what other people say.

Player 3: Legions of Social Media Gurus have long learned to aggregate and influence markets using social media platforms.  They have learned to match knowledge surpluses to knowledge deficits as a means of building their own online reputation and influence.  Many Social Media Gurus have achieved a strong Social Media Presence, which supports book tours, lecture series, personal brand image, or corporate clients and sponsorships. They constantly seek new content.

Converting Political Currency to Social Currency

The Social Influence Game will match HNWI with Social Causes where the HNWI can exert their political and Corporate currency in exchange for Social Currency.  Many HNWI have a powerful lifelong network of other influential people from whom they can find advice, mentorship, assistance, or discover goods, services, or physical inventory that may become useful and available to a struggling social enterprise.

Social Media Gurus who make these connections will blog, comment, and promote their ability to match power surplus to power deficit.  Internet Search results will redraw the Social Graph.

Holiday Shopping For the New Millennium

In practice, HNWI can “Go Shopping” for social causes.  When they find one that suits their talents and passions, they will be able to see what that organization needs; beds, food, heating oil, legal advice, CEO mentor, someone to lean on the land lord or even exert a position with the local government, etc.  The HNWI then will pull out their lifelong Rolodex of powerful persons and exert their influence in favor of the social cause through the interpretation of the Social Media Guru.

Winning The Game:

After a short while, Google will start pushing the old search results of the HNWI farther and farther down the page as the tweets, comments, and blog posts accumulate.   The Social Media Guru will find gold in their own backyards instead of Corporate Astroturf.  Social Causes will achieve their mission while managing new resources and earning important new friends.

Perhaps most importantly, the HNWI community will collaborate in order to sustain their Social Currency in the community.  They will begin to bias their personal and professional actions in favor of social priorities over Wall Street priorities.

In Short, everyone acting in their own best interests benefits the interests of everyone.  This is Social Capitalism.  If it works well enough, maybe we can finally put those pesky social causes out of business.

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Crowdsourcing The Brokerage House

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On February 15, 2011

In General Information

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

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

The Value Game Revenue Model

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

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

The Travelers

The Operators

The Partners

The True Value Data

Traveler:

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

Operator:

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

Partners:

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

True Value Data:

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

Winners and losers

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

OK, so what exactly does the Broker Produce?


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May The Best Currency Win

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On February 10, 2011

In General Information

If I was a very wealthy person and I wanted to put my money in a hedge fund that protects me from all possible future outcomes or perils in the financial industry – I would be looking for a fund denominated in social currency.  Should things go wrong, the only place you can go for support will be your immediate community.  After all, you can’t eat Gold.

The Cradle of Civilization, again?

Egypt has demonstrated with astonishing clarity in a remarkable twist in human social evolution how this game plays out.  The dictator may have all the money, but the military has all the social currency – domestic AND international.  What do you think every dictator wishes that they had more of right now: guns, money, or social currency?

What would happen in the U.S. if…

…government austerity measures stop funding education, health care, police protection, and the legal system?

Social media applications will move in to fill the void.

….if inefficient industries like the travel industry, publishing, advertising, politics, academia, and financial services hold their customers hostage by acting as the gatekeeper?

Social media applications will pull the gate down.

…if government, industry, and academia can no longer innovate ways to increase the productivity of people in their community?

They will become irrelevant as people will adapt to manage their own productivity on a platform of social media.

The Great Conversion Factor

Off on the horizon, a truly remarkable new financial system is taking shape.  This system will accomplish one very important task – it will provide a conversion factor between financial currency and social currency.

Every political gridlock, corporate controversy, wikileak, and dictator challenged by their own people is adding one more piece of infrastructure to this new financial system.  Each piece will soon join together to complete the chain required to define the social currency and the form of human productivity that will support it.   Hang on grandchildren, we are getting close.

The effectiveness of this currency will not be in it’s ability to replace the dollar, rather, it will be in the ability to convert between Dollars … and Yen, Euro, Pounds, Renminbi, Dinar, Rupee, etc., in the same Game within which world currencies exchange with each other today.

May the best currency win.

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

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Game Over

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On February 2, 2011

In General Information

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

This is not trivial.

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

Interactive Entertainment

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

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

The Calculus of Gaming

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

Watch The Integration, closely

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

Game over.

***

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

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When Everyone has a Coupon, They Will Innovate

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On January 31, 2011

In General Information

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

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

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

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

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

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

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

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

***

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

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Ideas Travel Where People Travel

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On January 28, 2011

In General Information

Good ideas travel easily and far along trade routes.  Ideas like irrigation, Apples, grapes and wine spread along the Silk Road. The paper and writing spread new ideas leading to increased literacy, the scrapping of old philosophy and the creation of new social orders. The printing press then led the way for today’s mighty publishing Industry.  But don’t forget a simple fact, travel is the substrate of the next economic paradigm.

Ideas: A Chain with many Weak Links

Seth Godin wrote a wonderful article about the publishing industry called The Domino Effect.  He observes that:

1. The middlemen (bookstores) have too much power to limit shelf space.

2.Authors are separated from their readers and don’t have the data to contact them directly.

3. Pricing is based static, slow, and largely irrelevant of content or any form of supply and demand which is of little benefit to the reader or the author.

4. Ideas from books travel much farther and faster than the book itself which does not translate into book sales.

Mr. Godin’s point is that given how important books are, the Chain has many weak links between the author and the audience. Publishing is due for an extraordinary disruption and Seth is going to change it with The Domino Project.  But how many other industries suffer from the same weak-chain syndrome?

Travel: A Plane with many Weak Links

Well, if Books and Travel spreads ideas along the Silk Road, then they must have a lot of other things in common.  If we apply Seth’s observations to the commercial airlines:

1. We see that Airports and airlines have tremendous power to limit gates, times, and availability of routes.

2.  Airlines have no idea why they are carrying all those people around.

3. Pricing is static, segmented, slow, and has very little to do with the actual supply and demand for travel.

4. Travelers are transporting ideas which move faster and more broadly than the aircraft itself and which does not translate into more airline tickets sold.

Where ideas spread; value is created

What is so powerful about ideas?  Most innovation gurus discount raw “ideas” as the useless drivel of idle minds. “Show me the money, not the ideas”, they bark.  If ideas are not innovation, then what are they?  If Ideas are not valuable, then what are they?

The Travel Economy

Travel technologies and applications are being sold for incredible sums of money.  Every airline merger is big news and every geolocation application is huge business.  Travel data is a lightening rod for everything from pricing to privacy.  Social Media applications are getting that migration routes are an excellent marker for “value flow” and therefore, cash flow.  Airline Travel is still the most favored mode political disruption because the links in the economic chain are so weak.  Travel is serious business.

The “New Value” Integration:

Every industry with weak links between production and end use are candidates for disruption in the great integration. Any idea that can strengthen the link in the chain between origin and the destination of an idea is a product of the great integration.  The Social Value creation process and astonishing opportunity will happen at the weak links between origin and destination of any product or service.

***

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

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The Future Of Money And Technology Summit 2011

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On January 26, 2011

In General Information

In my opinion, The Future of Money and Technology Summit is among the most important conferences in America.  FOM&T is not the usual parade of polished celebrities selling books, consulting, or seminars.  Here you’ll find the people who work deep in the caldron of innovation enterprise bringing together some of the most important ideas in the world today.

The Moment is now

The challenges for the future are immense, the technologies unfolding before us are extraordinary, and the people on the front lines are visionaries.  For better or worse, future generations will look back on several key moments that marked the beginning of a new era.

Last year I was deeply humbled by the quantity, quality and razor sharp intellect from the audience and the speaking panels alike.  The panels were great, but the audience was just as awesome.  Every question asked of the panelists was as profound and inspired as the panelists themselves.   One common thread binds this conference like no other that I’ve attended:  we’re all in it together. I consider myself privileged to be a participant in this event.

A Portrait of The Future

For me it seemed like 800 pieces to a huge jigsaw puzzle walking around finding their place in a yet unknown portrait of the future.   Everyone has part of the answer and nobody has all the answers – this makes for an extraordinary collaborative learning environment and likely the best place to peer deep into the future.

I strongly recommend that anyone who engages in this conversation of the ‘future of money and technology’ in their work, research, blog, or start-up must attend this historic event.  This is truly an example that the whole is far greater than the sum of the parts, and there are some great parts!

Fight your reservations with your reservation

The Future of Money and Technology Summit will be held on February 28th 2011 at the beautiful Hotel Kabuki at 1625 Post Street, San Francisco, CA.  More details can be found here.

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The “New Value” Integration Begins

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On January 24, 2011

In General Information

The New Integration begins; Travel, Coupons, Gaming, and Currency

Each stage of humanity’s social evolution did not replace the prior social order; rather, it integrated the tools created during the prior social order. The agrarian economy is going strong and feeding the world. The industrial revolution integrated the tools of the scientific revolution – both still exist.  The knowledge economy integrates the tools of the information age as we speak. The next economic paradigm will result from the integration of tools developed from the technologies of the knowledge economy. So what’s happening out there now?

Travel: Nothing economic can happen until people get together an build something.

Tripit acquired for 120M, DoJ Mulls anti-trust suit for purchase of ITA, Travel sites gang up against ITA Sale, American, Expedia, Orbitz in 3-way dispute, Facebook buys Nextstop,

Coupons: Hey, who exactly is subsidizing all that discount value?

2 y.o. Groupon rejects 6B offer, mulls IPO.  50 top Groupon Copy cats, “Google Offers” Groupon Competitor, Groupon Bachlash builds, Foursquare and Groupon go after “Local Social”

Games: A business as old as money.

Zynga valued at up to 5B. Zynga goes on a buying spree (8 acquisitions in 8 months); Google buying spree in mobile gaming and invests 100M in Zynga,  8B in virtual goods sold worldwide – china leads. Facebook Credits become mandatory for games.

Currency: storage and exchange of social value.

Google buys Social Gold for 75M – social gaming/virtual currency platform. Alternate Currency Movement gains popularity,  Zeitgeist Movement goes on the defensive.  Symbionomics to organize the “new value” conversation. Facebook rolls out new currency. AMEX launches “social currency” with “geolocation”……..

Bringing us back to the beginning: Travel:,  

Unveiling The Catalyst

The Value Game developed by The Ingenesist Project will be unveiled at The Future of Money and Technology Summit on February 28th 2011. We will demonstrate how a high value asset such as an aircraft, zipcar, renewable power, or even public infrastructure can be massively leveraged to create New Social Value.  This represents a new class of business methods designed to integrate the tools of the knowledge economy and produce a closed-loop prototypical innovation economy.

Leveraging fixed assets, socially

The Value Game uses the example of how entrepreneurs can leverage an under utilized asset such as a corporate jet fleet and match routes to the Geographic Social Graph at small airport (Travel) instead of competing with an inefficient Commercial Airline model.  Vendors could join social networks to subsidize airfares with contingency (Coupons) for related products and services. A true value calculator would compare door-to-door social value of private travel with the financial value proposition of commercial airlines.  This comparison creates a conversion factor between social currency and financial (Currency) which monetizes social value.  The resulting interactions between traveler, vendor, and 3rd party entrepreneurs creates an “Intentions Game” in social media where it is in everyone’s best interest to create social value and deploy it to the (Game).

The game starts and ends with money, but all the “New Value” is created inside the game and denominated in social currencies. Entrepreneurs will game the game, the planes will get bigger, the coupons will get stronger, and the social currency will out-perform the financial currency in new value creation.  This business method is now being tested in a live venture. What we learn from this may help catalyze a new and more sustainable economic model called Social Capitalism.

Don’t miss this historic unveiling at The Future of Money and Technology Summit on February 28, 2011

***

(Editors note: The above post is #1 in a series [1], [2], [3], [4], [5] introducing The Value Game to a new class of business methods.  The first real world application is Social Flights; a collaborative production / consumption game being deployed to the market.  If this works, the new business method class will be generalized throughout the economy to catalyze the convertibility of social currency.)

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The New Value Movement

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On January 19, 2011

In General Information

I believe that it is important to make a distinction between New Currency and New Value. The potential for confusion is high but the implications of getting this wrong could be catastrophic.

The Storage and Exchange of Value

A currency is a social system designed to store and exchange value.  Value is what people make when they do things together.  Not so obvious is that a particular type of currency may not be very good for storing and exchanging a particular type of value.  It is obvious that dollars may adequately representing the physical value of a computer, however, those same dollars may not be very good at representing the social value of a community using computer systems to interact with each other.

The New Value Movement:

From yesterday’s post: I have encountered hundreds of people developing social currencies with increasingly creative and constructive methods because their community is important to them. People are trying to solve the great puzzle of  human division because their community is important to them. People are trying to resolve the constraints in natural resources and the limitations on our planet, because their community is important to them.

The New Value Movement is precisely that; a movement to articulate, store, and exchange New Value arising from technological advances and NOT adequately served by the existing financial system that enabled those technological advances in the first place.

The Total Value is the True Value

The idea of New Value is not to replace the current financial system, rather, the net total of value articulated by both systems exceeds the maximum value that traditional money alone is capable of processing.  Convertibility between New Value and old currency will be conducted using a yet unknown New Currency that many now call “Social Currency”.  When the total monetary system can articulate the total value of the Earth AND it’s human resources, only then can an organic set of priorities be delivered to a market.

The New Currency Movement:

On the other hand, the image of a New Currency often evokes the wholesale replacement of an old currency brought about by the collapse of a financial system, hyperinflation, destruction of the factors of production, the introduction of some unforeseen peril, induced volatility, political risk, nationalization, war, terrorism, famine, plague, pestilence, etc.,…Obviously, the differences between the two movements could not be more stark…

A Clear and Present dAnger

It is also apparent that the traditional financial system has become fragile and it must never be in the best interest of anyone to benefit from increasing this fragility. The Internet and emerging social media technologies have finally integrated the tools that people need to organize themselves into New Value economic developers. However, during the transition, individual people or groups will hold the power to both stabilize and destabilize.

The danger is that a new currency ideal may seek to benefit from the premature collapse of the old currency system. This is not creating new value, this is the transfer of value by the abuse of power against the very system that supports that power. This is precisely the flaw that the new value movement is trying to correct.

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The Spirit of The Age

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On January 17, 2011

In General Information

I read the mainstream media headlines about how the Arizona Assassin was influenced by the Zeitgeist Movement and wondered, ironically, which of these four parties represents The Spirit of the Age?

The Future of Money

There are many people questioning the past, present, and future of money. For the first time in human history, there is substantial access to information and scalable social technology that can enable people to create, store and exchange new value in their communities.  I believe that the act of people building community, in itself, creates new value that may be exchanged through many forms called social currency.

Economics happens when people do things that are important to them.

I have encountered literally hundreds, (I am certain that there are hundreds of thousands), of people developing social currencies in increasingly creative and constructive ways because their community is important to them. People are trying to solve the great puzzle of  human division because their community is important to them. People are trying to resolve the constraints in natural resources and the limitations on our planet, because their community is important to them.

The New Value Movement

It is also increasingly clear that social-economic systems that may have once served well in prior times are operating sub optimally with today’s technology and social order.  What I do NOT see in the New Value Movement are people intentionally trying to benefit from the wholesale failure of others – regardless of whom. However, herein does lay the danger.

Disruption is good, destruction is not so good.

It is easy to form a utopian ideal where humanity’s presence on Earth is redesigned into the system of one group’s design. It is easy to say that all problems are technical or spiritual, and not political.  It is easy to call to action a confrontation of culture as a requirement for building future society in one’s own image.

The problem is when the urgency to realize a utopian vision can result in actions that are destructive to the support system upon which that vision must depend. As such, it should never become the best interest of one ideal to force the collapse of the old system in order to create the new system.  This is the nature of the same “competition” for resources that is clearly inconsistent with natural synergy.

This is the story of much of our human history, unfortunately with predictable results

I believe that it is precisely such a failure that can make the new ideal impossible to attain. To bring about the end of the old era before the new era is sufficiently developed is the great technical challenge we are faced with. No sustainable stage of human evolution has ever been brought on by the wholesale demise of the prior – there was always an integration of the tools developed in the prior paradigm that resulted in the new.  That is the discussion that we need to occupy ourselves with – this is our Zeitgeist.

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Fungible Coupons And Collaborative Production

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On January 13, 2011

In General Information

When we think of coupons, we imagine that most contradictory statement “Buy now and save money”.  Obviously most people recognize that spending is NOT saving but the objective of this apparent contradiction is to project the idea of “value”.  So what is value and exactly how valuable is someone’s the idea of value?  Is Value Fungible?

Inventory management tools

A coupon is a powerful inventory management tool that is made up of several parts.  The first part is the face value, often called “retail price” – this is the price that the retail market is willing to bear. The second part is the discount value which is the actual price of the offering based on a vendor’s need to move inventory.  The difference between the two numbers is the “Value Proposition”.

Public Stock Exchange

Alone, that would be a very simple form of currency creation.  By limiting the number of coupons precisely to the amount of inventory that is subject to liquidation, the coupon becomes a fungible instrument.  If the supply is limited, then people will trade the coupon value that they hold (but don’t need) with people who hold coupon value for other items (that they do need).  Or, since the value proposition is denominated in dollars, they can trade the coupon for dollars up to, but not exceeding, the retail price.  After a while, people will literally form a “stock” exchange out of the community inventory of goods and services represented by coupons.

Most enterprise can expect to spend 10% – 30% of their revenue on advertising.

The third and often misunderstood component of a coupon the friction value – a negative number.  This is the cost of producing the coupon campaign (marketers and printers) as well as the cost of advertising, distributing, and processing the coupon. Finally, there is a certain amount of social friction associated with redeeming a coupon such as clipping, organizing, and presenting the coupon to the vendor.  Rebate schemes will often introduce so much friction that the buyer gives up or forgets the expiration date, etc. On the other end of the spectrum, Groupon often exceeds the inventory intended to liquidate and increases cost of liquidation.

Social Currency

In a coupon economy, we can initially define social currency as the absence of an “anti-social” currency.  We can say that social currency is equal to the coupon’s original value proposition (denominated in dollars) minus advertising friction.  We can make this assumption based on the fact that social capital can be deployed in a community INSTEAD of advertising.

Collaborative Production – when the community decides what to produce

When advertising friction is removed, it becomes a very simple matter to make coupons fungible. In the event that the dollar collapses, people can easily switch from the discount currency to the value proposition currency, i.e., social currency.  After a while, social priorities will drive wall street production priorities instead of wall street production priorities driving social priorities.

Believe it or not, the key to financial sustainability may just be in the wholesale elimination of advertising. The Value Game by Ingenesist project is designed to correct this market friction.

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Collaborative Production, Consumption, or Destruction?

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On January 11, 2011

In General Information

Many important ideas are emerging related to collaborative consumption and the sharing of physical assets.   The primary idea is that communities can save money and conserve natural resources. The most powerful byproduct of collaborative consumption, in my opinion, is that communities can organize around physical assets to produce what they actually need, not what they are told to need.

The idea of collaborative production is generally referenced around a host of enterprise collaboration tools.  However, many of these tools are designed to benefit the for-profit enterprise allowing them to collect high value knowledge assets while eliminating high risk employment liabilities under the noble flag of “Crowd Sourcing”.

Collaborative Production

True collaborative production is related more to the idea that communities decide what to produce. In classical economics, the merchant class allocates land, labor, and capital and largely decides what will be brought to market but also what can be withheld from a market.  Collaborative Production starts with the idea that a community allocates it’s own knowledge resources to produce what they need and withhold what they don’t need.

This distinction is actually quite important.  Combining some sugar with fat and stirring in a lot of advertising to produce candy is much faster and easier to do than raise carrots, for example.  While the farming community may prefer to raise carrots, profit margins on carrots are driven by supply and demand for calories – as such, carrots compete directly with candy.

Have you ever seen a commercial advertisement for Carrots?

Ultimately what gets produced is that which is easiest and cheapest to produce, store, and transport – not necessarily what a community needs to be cheaply and easily produced.  Eventually the knowledge assets required to grow carrots begin to atrophy by the process of collaborative destruction.

Collaborative Destruction

Today, many communities are trapped behind closed doors.  People do not know their neighbors.  They are unable to reach an agreement about what they can build together.  When they lose their “Jobs” they lose their identity and direction and they attach to whatever idealism crosses their fear threshold.

The greatest challenge ahead of us – and the greatest opportunity as well, will be to interact with each other.  We need to know what the other people around us know and find a place for our own knowledge assets in our community.  Communities need to collaborate outside the construct of a corporation and produce the things that they need.  Social Media provides an astonishing tool for a new form of social organization if and only if it can be used to beat the effects of collaborative destruction.

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Creating An Intention Currency

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On January 7, 2011

In General Information

In the last few articles, I’ve discussed the importance of Intentions as a superior means of storing and exchanging value because of the ability to predict economic outcomes.  Only from these conditions can we construct an alternate currency.

For all Intents and Purposes….

Suppose that we suggest that one’s knowledge inventory is a good representation of their intentions to do things.  You can test this by strolling through the aisles your neighborhood Barnes and Noble book store and observing your own reactions to the titles as they flash by.  Notice how your tendency to act  (stop to read the byline or even pick up the book to read the cover) correlates to your organic knowledge, passion, interest, or experience.  Notice which sections you tend to linger in and how your eyes float up and down through the shelves, etc.

So let’s say that you studied business in college.  We can then say that you have an intention to conduct business.  The same holds true if you studied math, engineering, art, music, creative sciences, and/or social sciences. So we can say that a knowledge inventory is an intention inventory – assuming that you are not distracted by ADVERTISING.

Let’s make some predictions:

If you have low knowledge and high interest, your intentions would correlate to those of a student. If you have high knowledge and high interest, your intentions would correlate to those of a teacher.  If your have low knowledge and low interest, you would register no intentions.  If you have high knowledge and low interest, your intentions are ambivalent.

One step deeper:

If we were to assemble a community’s knowledge and interests on a few bell curves, we could make predictions about what a community intends to produce. If a community has high knowledge and high interest to build airplanes then we can place a value on those intentions in a market.

Now here is where the fun starts:

If we can predict future value, we can create and “intention currency” and capitalize it.  That means that we can turn it into a debt instrument and make a promise to pay back the today’s intention currency with future intentions.  If we can capitalize an intention currency, we can securitize a combined pool of many intentions and sell “Intention Bonds” that finance today’s intentions with those of tomorrow. Meanwhile, as we build the airplane, we have the incentive to innovate and create new knowledge that we can use to pay off the intention debt in the future.

Preoccupied or unoccupied?

If is sounds crazy, be assured that it happens all the time by corporations, marketers, demographers, politicians and even among some prison inmate populations.  Of course they will never tell you this, but unfortunately communities of people, social networks, and all the knowledge inventory sequestered inside corporations or messing around on Facebook have not figured out how to monetize all these intentions for themselves.  This is because they are preoccupied by an influence currency called – ADVERTISING

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Walking Into The Trap Of Influence Currencies

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On January 5, 2011

In General Information

My earlier post about influence vs intention created several interesting conversations on several blogs where it had been re-posted [1], [2]. My assertion is that an influence based currency may be an easier path to forge but a dangerous path to follow.

Any new currency that claims to improve on the current financial system must ultimately be able to be capitalized and securitized.  Indeed, people should be influenced to use Zipcars  – but how exactly did the Zipcar get there?

Influence goes nowhere

Sorry folks, I know that the Klout people are working awful hard to become the standard of online influence. Fueled by corporate marketers, It is also clear that those who have influence in this domain are going to try to keep it at nearly any cost.  It is obvious that there is increasing pressure to monetize social media and Twitter is easy to scrape into loads of data that must mean something economic if one were to look at it hard enough.  The end game on influence, however, is Politics – influence currency will ultimately resolve to a state of mutually opposing forces.

Skipping stones

Assume that the pond is calm.  My influence causes ripples that cause others to react or take action.  Likewise, the people around them react as well, and so forth into a set of infinity consequences.  By definition, consequences are not intentions.  The only intention is to influence and the only influence is to induce consequences to an otherwise calm place.

Intension Currency is a far more difficult nut to crack, but crack it we must.  Intensions are organic – everyone has them.  They originally appear in a person’s God-given natural interests, talents and passions.  Intensions appear in what a person studies, the collection of knowledge that they choose to accumulate and subsequently act upon. Unfortunately, far too often the influence of the few interferes with the intensions of the masses – again, allow me to make a reference to politics.

Intention lives in our knowledge inventory

Rational people act on a basis of what they know how to act upon. Predicting intensions is a function of reading a person’s organic knowledge inventory.  Unfortunately, the human knowledge inventory remains sequestered behind the corporation, HR file cabinets, and the deeply flawed and archaic resume system.   There is not, however, an inventory of what people know in a community, what they are passionate about, and what they intend to do with their lives.  Knowledge is the most basic storage and exchange of value – but where is the inventory?

Goldman Sachs knows this well

There is no economic system that capitalizes and securitizes the intentions of a person, a community, or a network of persons except the “Corporation”, which happens to be the ultimate political influence machine.  We need to be really really careful about falling down the vortex of “Influence” currency – we may just be walking into a trap.

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Printing Social Currency; Influence vs. Intentions

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On December 29, 2010

In General Information

What is more valuable, their Influence or their intentions?

The heat is on to discover a new currency

Obviously, money is supposed to represent productivity otherwise why would people work for it?  But, everyone is pretty much resigned to the fact that the dollar – and indeed most global currency – is irreversibly divorced from actual productivity.

No Alternative  Algorithm?

The reason why people must trade dollars is that there is no other alternative, and the computer algorithms that control the value of the currency have yet to tell us otherwise.  That’s it, really.  The questions remain, how, why, and when will people stop working for it and what will they work for which can replace it?

This will not be as simple as living in yurts, trading cheese cultures and tweeting about it. Complex infrastructure like a judicial system, transportation, medical care, clean water, energy and food production rely on a financial system that can capitalize and securitize whatever the replacement currency may be.

Influence vs. intention

The latest twist in the new currency movement is the idea that on-line influence can be used to support a currency.  There is no shortage of noble leaders aspiring to “define the standard” in their own image as a service to the lesser masses who seek their respective place in the great new economic void.  PeerIndex and Klout are the two main players that promote a social score based on influence, obstensibly to mimic the credit score upon which all currency depends.

Bad Influence is worse than no influence

Unfortunately, influence is a flawed measure.  Marketers are the target beneficiaries of such influence which is clearly defined as the ability to get other people to take action on a marketing message. My ability to influence others to buy Twinkies does not an economy make. In other words – influence is a consumption currency, not a production currency.

A far better marker is “intention”

For comparison; today, money is conjured into existance by banks based on the signature of a loan candidate who states in writing their intention to produce enough value by their future words and actions to exceed the value of the currency being borrowed (created from thin air) plus interest.  That’s how debt works.  That “intention” is then capitalized, combined with the intentions of others, and securitized into bonds that finance important social services and institutions that support those intensions.

Likewise, a social currency may be similarly conjured into existence – based on a person’s promise to increase human productivity in the future, not however, to increase human consumption in the future.  The social marker for the next currency must be an intension to produce something, not an intension to consume something.  The real danger, of course, is if we define the next currency as just another consumption currency or whether it can truly be married to productivity.

Obviously, it would be helpful to have an inventory of what value an individual is willing and able to produce in the future since this is the best marker of intensions.  It would be even more helpful if there were a public knowledge inventory of what value people in a community are able and willing to produce together.  I’ll stop here because a knowledge inventory for communities does not exist – and curiously, none of the great minds in Social Media are clamoring to define that standard.

Likewise, that is where the great opportunity for the future resides.

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Who Needs Anti-Social Travel?

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On December 28, 2010

In General Information

I recently returned from a trip from Seattle to Nashville. I am involved in launching a new airline applying The Social Value Game to a legacy industry.  The objective of this venture is to match a fleet of 15,000 private jets to social media networks for efficient door-to-door travel. The start-up is largely founded on the premise that a dismal travel experience is a dismal social experience.

Here is how my trip from Seattle to Nashville went using Commercial Airlines:

11:00 I get in my car and leave home for a 1:00 Boarding
11:45 Drive 25 miles through heavy traffic and bad weather, arrive at self-park car lot near Airport.  I get into a cold shuttle bus.
12:00 Arrive at Airport Security and strip down to last layers of clothing
12:15 leave airport security after long line after harassment over 3 oz of toothpaste remaining in a 6 oz tube and a telephoto lens that obviously resembled a printer cartridge.
12:30 Arrive at gate. Airline took my baggage away because it did not fit in the “Impossible box” and charged $25.00 baggage fee. (95% of all carry on bags would never fit in the “Impossible Box” so why me?)
1:00 Flight was full.  Poked, bumped, cramped, body complies to shape of existing space
1:30 departure was late. Connection in Salt Lake City was tight
3:30 Lands in Salt Lake city, late. No attempt to release tight connections first
3:50 Exit aircraft with 10 minutes to use restroom, grab sandwich, and run 1/2 mile to the next gate
4:20 Board flight to Nashville. Crowded. Window seat. Poked, bumped, cramped, body complies to shape of existing space
4:30 Flight leaves. 30 minutes into flight, I drop my Ipod under seats. Absolutely impossible to recover until airplane lands. No music, sucks.
8:00 Airplane arrives at Nashville (10:00pm Local time). Baggage claim took forever
9:00 (11:00 local): Finally get into rental car
10:40 arrive at hotel near location
11:00 (1:00 local) set alarm for 7 am local (5:00 am Seattle time) head hits pillow
5:00 am wake up sore, tired, and feeling oppressed.

Total Travel Time 12 hours one way and 24 hours RT door to door.

One complete day of productivity wasted. One day of life squandered. Zero time spent with my family or friends. Zero personal time to enjoy or reflect. Zero moments feeling secure, healthy, or self-worthy. 24 hours of confrontation with my surroundings. Zero moments of inspiration. Zero opportunities to be exposed to new ideas. Zero interesting people to learn from. Zero trees, flowers, sunshine, or fresh air. Zero fresh food; no fruit, vegetables, or raw nuts. Zero memories – except bad. No laughter, no friendship, no community. No exercise except running in fear.

The opportunity of the next economic paradigm is the ability to articulate the social value on all of these things – the ability to predict into the future the True Value of all the things that are squandered by an anti-social experience.  That is the essence of The Ingenesist Project.

Who Needs Anti-Social Travel?

With a private airplane, I could leave my home at 11:00 for a 11:30 departure at a small local airfield 6 miles from my house. The flight would have been about 4 hours long and I would arrive at my destination for dinner reservations with my colleagues. The flight would cost less than 1400 dollars round trip and I could return a full day earlier (eliminating 2 nights) than the the commercial flight for the same set of meeting objectives.

If a person’s time is worth 50 dollars per hour, the difference between 10 hours of flight time is 500 dollars off of a 1000 dollar ticket. The commercial flight costs ($300), including parking ($100), airport taxes($50), extra airline fees (50 dollars), car rental ($300), 2 extra hotel night ($400) for a total of 1200 dollars (I have the receipts to prove it).

So if 10 hours of your life is less than 200 dollars, then fly commercial. If your time, family, community – your life – is worth more than 20 dollars per hour, then you should consider taking America’s newest airline.

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My Christmas Gift

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On December 24, 2010

In General Information

This year, I send my Christmas greetings from Mexicali, Baja California, Mexico.

Besides seeing all of my wonderful in-laws and cousins, I had the opportunity to meet with a couple of my students from many years ago.  They are now entrepreneurs, business owners, and influential leaders in the complex web of Mexican and International society.

I knew them when they were just kids struggling through engineering school – I saw them as gems in the rough, now I get to marvel at the diamonds.  Wow, what an incredible experience.   Of course, they can’t see how I view them nor can I see how they view me.  One thing is certain, these are very special relationships.  I managed to hold back tears of joy.

The trust is instantaneous and profound.  We hang on each other’s words as incalculable truths pour from our experiences.  We cite each other’s nuances and we recall quotes long ago lost.  I remember the extraordinary challenges of getting 250 of them through the US Engineering Board exams.  We spoke of the early days of NAFTA and the oppression of the Maquiladora Industry.  We spoke with the wisdom that we wished we had 17 long years ago.

I wonder what happened to the others.  I know a few that have also become quite successful.  The only thing I gave them was proof that they were equal in every way to any engineer on earth.  As such, they managed their careers with that single data point lodged in the back of their mind.  Now they are proving to me what I had only suspected then.

In return, they gave me everything that I am thankful for today as I celebrate Christmas with my wonderful family.  I met my wife while working with these kids.  I found my own ethnic identity working with these kids.  I learned Spanish working with these kids.  I earned the wisdom to represent a fortune 100 company around the World after working with my kids. In fact, my blog and all supporting research is a direct result of a flaw I observed in market capitalism while working with my kids and their interaction with NAFTA. The courage to leave corporate life and take a leadership role in an hugely disruptive start-up company is a direct result of working with these kids.

These kids (men and woman) are among the greatest gift I could have ever imagined receiving.  My advice to others is to always have students.  Always teach people what you know.  Always elevate others and you will find yourself elevated to astonishing heights. Be a student and provide this joy to those who wish share themselves deeply with you.  This is where true happiness is found.  This is the gift that Christmas celebrates – be a teacher

Merry Christmas.

Please Support The Symbionomics Project on Kickstarter

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What Is An Ingenesist?

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On December 22, 2010

In General Information

Eric Rosenblith 1920-2010

I have been putting off writing this blog post until I could find a simple answer to the question “What is an Ingenesist?”.  I invented the term “Ingenesist” to capture the creative, intellectual and social nature of human ingenuity without falling back on current definitions and the silos that perpetuate them. Something has gone wrong with the world and the solution could not be found in the current world view – I needed a new word for my work.

Ingenesist comes from the Latin (ingeniare), French (ingénieur), and Spanish (ingeniero) word for Engineer.  These words, of course, were created long before an engineer was defined by such alphabet soup as BSME. MSCE, IEEE, ABET, NCEES, EIT, PE, etc…  The term ‘Ingenesist’ was meant to represent people whose ideas and actions increase the productivity of other people.

A friend of mine lost his dad yesterday.  I read the obituary and could not help but realize that this person lived through what were likely the darkest and the brightest hours of modern human civilization.  He was an artist and a teacher.

Then I hit the quote in Mr. Rosenblith’s obituary:

“We truly need to be thinkers, poets, painters, engineers, and philosophers.’’ – Eric Rosenblith

And that is how I found my simple answer.  With humility and simplicity, he captured the creative, intellectual and social nature of human ingenuity. The least I could do was finally write this blog post.

My sincere condolences to Alan and his family.  Please support the Symbionomics Project on Kickstarter

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Groupon: 93% Off Sugar Calories

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On December 18, 2010

In General Information

Finding Groupon for LCD monitors

I’ve been collecting Groupon Spam in a special folder in my email box. I guess that it is technically not Spam since I did sign up for it.  Or is it?

Up to 83% Off Laser Hair Removal (depends on how much laser hair you have?)
Up to 52% Off Eco-Friendly Water Bottle (Is the bottle 52% full or 52% empty)
65% Off Canvas on Demand (I demand Canvas!)
Half Off Brazilian Blowout in Bellevue (not going there)
52% off Body Scrub and Facial in Georgetown

I am really trying to root for Groupon. I am desperately waiting for the value proposition to emerge. Someday soon, Groupon will come up with a proposition that truly delivers something that I really need to increase my personal productivity and elevate my community to true collective power status. I feel it coming.  If not, then surely Groupon will innovate with new ways to understand what the market really needs during times of financial hardship and leverage their near-6B dollar influence and pending public stock offering to champion the plight of the masses.

51% off Rowing Class (in the winter?)
60% Off Spider Vein Treatment (My Spider is very sick indeed)
$10 Off custom mixes from My Mixed Nuts (seriously?)
$10 dollars off Mexican Fast Fare at Taco Time (a Cultural Insult to all Hispanics)
53% Off Woman’s Clothing at Pitaya (what happens to the other 47%)

After all, Groupon is the next paradigm in influence advertising – fighting for the little guy to deliver true value. Everyone is looking for a bargain so what more social pursuit could any morally conscious social media enterprise endeavor to deliver to the vast population of consumers?

Up to half off Quest Field Tour (“Up to half off” statements always worry me)
$10 for wine at Vermillion Art Gallery (I’d pay $10 for Art at the Wine Gallery)
$10 for Custom Smoothies (I wonder what the original price was)
Half Off Executive Dry Cleaners (somebody’s got to take ’em to the cleaners)
67% off at Transformation Boot Camp (is there a money back guarantee on that?)

Instead of empowering people to pursue what they are most talented, passionate, and interested in, Groupon seeks to modify human behavior to adapt to the availability of surplus inventory dumped into the desperation market.  Companies are struggling to keep their doors open and people are not sure if their today dollars will buy anything in tomorrow’s dollars.  Instead of exploiting the throes of financial decline, surely our great social media innovators can do better than Groupon.

Ref: The Value Game

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Intrinsic Banking

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On December 16, 2010

In General Information

Paper money does not have intrinsic value

Paper money has no intrinsic value. The word “Intrinsic” means: something that belongs to the essential nature or constitution of something else. The ‘intrinsic brightness of a star’ is a common definitive statement.  Synonyms of the word include: built-in, constitutional, hardwired, immanent, indigenous, integral, inherent, natural, etc.

“Society” is intrinsic to economics

The Bank is an important institution for vetting social value. Despite the observation where it seems money is created out of thin air, traditionally a bank looks into a community of people and their talents to identify “social value”.  This is the likelihood that a person or group of persons can execute a specific economic outcome in the community.  Then the bank provides them with a tool called money to represent and facilitate future productivity in the present time.  So it is not really “thin-air” – it is simply invisible social value.

Little Bank on the Prairie

In the old days, the banker was a member of the community and could judge social value on any number of intrinsic social characteristics such as social status, leadership, family values, education, personal habits, and community participation. Later, the credit score became a proxy for social value through the analysis of public data (where “public” became the proxy for “social”). The credit score was then assumed to convert social value directly into financial value.

The terms “proxy” and “intrinsic” are not the same thing.

“Brightness” is not a proxy for stars any more than “stars” are a proxy for brightness.  Yet, the distinction between intrinsic banking and proxy banking remains indistinct. An Intrinsic bank would be characterized where social value is intrinsic to the creation of financial value.

It’s all about Value

We created The Value Game as a new class of business methods to transform financial value back into social value – The Value Game performs the mirror-image effect in an economy as the credit score.  The value game increases the social value of the community enterprise by converting monetary value into social value.  Only then can the Credit Score sustainably convert social value back into financial value.

Who wants to become a Trillionaire?

The point of this discussion is not to slam banking, rather, it is to demonstrate that intrinsic banking does not formally exist – yet is must exist as a direct balance to traditional banking.  As such, intrinsic banking is at least as “Valuable” as the banking industry itself. Today we are entering an age where society MUST come up with a NEW way to store and exchange VALUE. Whoever really get’s this and pioneers Intrinsic Banking today (what it means, what it creates, and why) will become as mega-wealthy as traditional bankers, in the future.

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Social Currency Derivatives Trading

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On December 13, 2010

In General Information

The New York Times published an article yesterday about derivative traders being controlled by 6 powerful banks whose influence serves to keep out competitors and decrease the transparency of transactions. What struck me was the graphics that the article used to demonstrate both the problem and the solution for derivative trading:

The Problem:  Murky Market – no transparency

The Solution: Introducing a clearinghouse for transparency and correct pricing

The second diagram demonstrates how the introduction of a vetting mechanism inserted directly at the spot of least transparency greatly increases socially valuable attributes such as transparency, true pricing, reduced risk, open sourcing, elimination of conflicts of interest, and increased sustainability, etc – many of the attributes demanded by the new generation of activists seeking their place in the discussion that they struggle to understand. Hedge funds are indeed important tools for reducing volatility if, and only if, they don’t themselves introduce new risks.

The Value Game:

The second diagram looks a great deal like The Value Game developed by The Ingenesist Project for the monetizing social currency. By introducing a leveraged asset in the middle of a series of transactions, true value of the whole transaction system can be established eliminating volatility and reducing systemic risks.  The Value Game works in a manner quite similar to a hedge instrument.

The Airplane Game:

The Airplane Game deployed by the new start-up called Social Flights, for example, introduces a jet airplane transaction as a clearinghouse for the balance of the transactions in the game of door-to-door travel.  When all the players put their money down on a jet flight, they convert the financial currency to social currency, the true value of the transaction can be established when compared to an alternate market such as commercial airline, driving, train, etc. – not necessarily to dollars in the bank.

Financial Currency is a derivative of social currency

It is not surprising that social currency will become a hedge instrument for financial currency in markets.  After all, nothing economic can happen until people get together to build something.  Nothing of any significance can be built unless people exchange social currency. Only after all of that, can it be converted into money.

Intrinsic Banking

As such, every broker in every market can be replaced by a Social Value Game providing intrinsic banking services.  Can you see it?


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Social Currency Takes Flight

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On December 6, 2010

In General Information

Private Aviation is the first of several industries planning to launch a new class of business methods built on a “Social Value Game” developed by  The Ingenesist Project .  Social Flights is a virtual airline which aggregates communities according to their interests, knowledge assets, and social graph.  Social Flights matches people with mid-distance transportation options that deliver them exactly where they want to go in a shortest period of time and the least amount of harassment.

By the time you factor in Social Value, the price of private air travel becomes highly competitive.

In this variation, The Airplane Game has 4 players; (1) A traveler, (2) accredited private jet operators throughout the US, (3) travel services vendors, and (4) a 3rd party entrepreneur.  The objective of the game is for each player to act in their best interest to ultimately produce a door-to-door cost of traveling between two geographic points on a private jet equal to or less than the cost of making the same trip on comparable modes of transportation. The true door-to-door cost will be denominated in social currency and then converted to financial currency to establish a par value.

The Airplane Game scheduled for departure in 2011

The game starts when a traveler states a anonymous intention to geolocate between their zip code and any distant zip code.  This intention will be sent to a private jet carrier who will establish a price for each seat based on a full plane.  Next, vendors for products and services matched to the traveler’s intensions – such as ground transportation, hotels, restaurants, interests, and tourist attractions at both zip codes – will assign a contingency coupon of known face value against the airfare of the private jet seat thereby lowering the cost of the seat.

Enter Social Entrepreneurs

Next, 3rd Party Entrepreneurs will use social media to locate seat inventory to put in play.  Then, they will locate product/service inventory to put that into play.  Finally, they will locate “Social Inventory” in each zip code to fill the jet and drive down the ticket price even further in what amounts to social arbitrage. The Social Flights Algorithm will compare the social value such as time savings, carbon footprint, airport congestion, and experience quality against the comparable modes of transportation, such as car/bus/train/commercial aviation, and provide a par value for each option.

Social Value Conversion Factor

Social profits can be maximized where people are empowered to travel point to point consistent with their social graph rather than car, train, or hub and spoke commercial aviation modes.  Decreasing social friction increases social profits.  This launch further demonstrates how any asset, from jets to zip cars to public infrastructure, can be leveraged to create abundant social value.

The aggregate effect of such businesses will  establish a conversion factor between social currency and financial currency from which any number of social productivity applications can be built and monetized.

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Zertified Knowledge Assets

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On December 2, 2010

In General Information

The wisest people in history have been saying the same thing over and over again, yet we fail to listen and act: People are an asset, People are the greatest asset.

So Then, Watch your assets

Meanwhile, our “risk based” capital structure accounts only for the observed randomness of individual human nature rather than trying to securitize the potentially infinite wisdom of crowds.  This is a problem, this is our very serious problem.

Everyone is Committed to The Public Domain

Anyone familiar with The Ingenesist Project knows that we commit a new class of business methods to the public domain for other people to use for building the next economic paradigm. For example, The Value Game developed by ourselves, is being used by at least 3 new start-ups as the value creation mechanism of their business plan.  We likewise consult to social entrepreneurs across the World to help them build a new form of capital structure where knowledge assets are the basis of fungible social currency.

Zertify.com

Zertify.com is a business plan that will convert social currency to financial currency and make money for you, dear reader. Zertify.com can employ well over 40,000 people directly (and tens of millions indirectly) in the US alone within months, not years. Zertify.com is a knowledge inventory system that accounts for knowledge assets as they reside in a community – not necessarily as they reside sequestered within a corporation.

Zertify business plan

Here is a downloadable PDF of Zertify.com Sample Business Method. The word “Zertify” comes from the combination of the words “Certify” and the statistical Z-test.  These two things correspond to “Social Vetting” and “Predictive Modeling Capability” – these are the two ESSENTIAL elements for the capitalization and securitization of any asset.  Of course, I have made certain assumptions regarding taxonomies and proficiency criteria – my intention is simply to re-deploy existing market infrastructure as best as possible in this Example.  But go ahead, change it, modify it, understand it, build it, and let us help. Become a billionaire – see if we care.

Why?  because we do care.

In case you were wondering who all those wise people are, flip through this presentation (great to see Tara Hunt among such luminaries !!)

The Great Promise

View more presentations from Oscar Berg.
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