Tag: Facebook

Got a Life?

On February 23, 2009

Geographic Compatibility:

In the early 1990’s, traffic in Los Angeles was so horrendous, it could take hours to travel a dozen miles. Commuting was a nightmare and the last thing anyone wanted to do was sit in more traffic. As a single professional, every time I met a prospective lady friend, I had that elemental question in the back of my mind – and so did she: are we Geographically Compatible (GC)?

The sweet spot:

I recall many a magical conversation ending with that mutual inevitable shrug of the shoulders; a secret code for “have a nice life”. In Los Angeles, GC peaked in the sweet spot of 1-6 miles. After that, GC diminished roughly proportional to the square of distance with 20 miles as an absolute maximum. Any more was no closer or farther than, say, Nashville.

The cost of ownership:

Today, not only must we contend with traffic and the cost of owning a car, we must attend to a warming planet were every gallon of gas burned spews 19 lbs of CO2 to the atmosphere. In addition, we have a deepening deficit of the most valuable asset in our lives and the lives of those around us; time, bandwidth, productivity, sleep, money, innovation; it’s all the same convertible currency. All are wasted equally behind the wheel of an automobile.

Social Experiment:

With this in mind, I did a little experiment. I went to Linkedin and conducted a search for everyone within 6 miles of me. All that they offered was a 10 mile range and with keyword search too. The results were very interesting; not ideal but not too shabby. I tried the same with Facebook, and the best I could do was search by zip code. It was very awkward and the profile search feature only allowed me to query my existing contacts. I am guessing that there is some sort of security issue that restricts this type of searching. Too many nuts, flakes and stalks in that granola, I suppose.

Not unlike the LA dating scene, the future of innovation economics, global sustainability, quality of life, social support structure, family values, and money management will rely increasingly on GC; and the constraints will not end soon. Social Media must understand the monetization potential of GC and develop robust applications to support it.

If that is not enough convincing, try this:

‘The Jane Jacobs externality’ named after a transformational sociologist of the same name, suggests that concentrations of educated and skilled people attract companies and investment to a geographical area. The presence of such investment attracts more educated and skilled people to that area; also referred to as “intellectual capital”.

Harvard Professor and Author, Dr. Robert Putnam concluded that people acting in groups can produce far more economic growth faster and better than corporations and government combined. This is called “Social Capital”.

Carnegie Melon Professor and Author, Dr. Richard Florida, suggests that artists and engineers think more similarly 24/7/365, than managers and production workers. This is called “Creative Capital”.

Factors of production:

All three; intellectual capital, social capital, and creative capital are wholly and utterly dependent on GC. These are the factors of production of an Innovation Economy.

Evidence of these effects can be demonstrated by the civil rights movement, woman suffrage, neighborhood watch, Silicon Valley, Seattle, Greenwich Village, Austin Texas, Boston, Hollywood, Chicago, NYC, and many more locations where ‘wealth’ is located. What came first, the money or the people?

So, what part of monetization is Social Media having difficult with? The sweet spot is 1-6 miles, so get the hint and get it fast. Meanwhile, billions upon billions of magical conversations end with that inevitable shrug of the mouse; a secret code for “have a nice life”. I say, get a life.

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Who Owns Your Content?

By Admin

On February 21, 2009

In General Information

The epiphany:

Something very interesting happened when Facebook changed their terms of service. People who use the Facebook platform (for free) organized themselves using the (free) platform to threaten the core validity of the same (free) platform. This could not happen in any other industry.

Saving face?

Ownership is largely characterized by the ability of one party to restrict the access of another party. Judging by the results of this uprising, it seems that for all practical purposes, the users own their content and their impressions no matter what the TOS says. This is a very strong argument for the tangibility of social, creative, and intellectual capital.

Ownership Economics:

The fact that people own and care for their content is what makes Facebook work. Ownership is an extremely powerful force that drives intense participation and innovation. People will attend to their property, improve it, make it valuable, and create value for themselves and those around them. Really, when was the last time you washed a rented car?

Historical perspective:

Most history books present the Homestead Act of 1862 as the product of a wise and benevolent government seeking to reward worthy citizens of a great young nation for populating the vast Western territories. But that is not really true. Most of the land was already occupied by squatters who arrived disheveled, found a nice spot, built their small cabin, and farmed or hunted to sustain themselves. They could not be evicted or charged with trespassing because a “jury of their peers” was also composed of squatters.

Problems arose when squatters could not borrow money to improve the land because they did not hold a title to it. Legitimate landowners could not value their property if the land next door was untitled. Border disputes resulted in gun battles. Stealing was rampant. The children of squatters could not inherit the land without proper title. There was little incentive to produce anything beyond sustenance. When services and capital projects were required to support the increasing population, there was no tax base. Not unlike Facebook, this new frontier could not be monetized.

Wisdom in Government; not always an oxymoron:

Perhaps the greatest moment in government came with the realization that it is impossible to change the behavior of people, rather, the best strategy would be to accommodate what they are going to do anyway. So they legalized the squatters and gave them deed to their land. The occupants could sell or capitalize as they wished. Investment capital flooded the region and entrepreneurs improved the land and created enterprises. The government could then collect taxes proportional to the productivity of the citizens. The result was the development of the Western States as economic powerhouse that we know today.

Use it or lose it:

A very similar opportunity is presenting itself to Facebook and now the road to monetization should be crystal clear. They should go out of their way to create terms of service that protects the rights of each and every member to own and control their content in its entirety, forever.

Next, Facebook should develop applications that allow advertisers to bid for impressions directly with the users compensating them for their time. Users will build profiles that attract those seeking opinion, knowledge, feedback, wisdom AND SALES related to their products. Users should be able to control every aspect of their content including any means that they can dream up to legally create revenue from their social capital, creative capital, and intellectual capital. Facebook should develop a knowledge inventory of what users know and make it available to others like a “Public Library or knowledge assets”. Then they should develop applications to match knowledge surplus to knowledge deficit, etc. Let the trading begin.

The answer in their face:

If smart people can make money using Facebook just by doing what they are going to do anyway, they will flood the system with the most tangible forces in nature; social capital, creative capital, and intellectual capital. If Facebook can’t figure out how to monetize the asset staring them in their face, they will soon encounter a more powerful competitor – their own users.

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Social Media; The Engine of New Economic Growth

By Admin

On February 19, 2009

In General Information

Click image to activate

Business Models of the Future:

The great new social media business models of the future will be in the areas of “The Last Mile of social media” and “Social Vetting mechanisms”. I have written about these two elements in the past. However, this article will attempt to focus on how the future engine of economic growth can use social media platforms to power social capitalism.

The Last Mile:

The Last Mile of social media is where the rubber meets the road. I can chat with people all over the world on Twitter and Facebook, but nothing happens until I walk out of the house and meet real people in real time to create a real business that really increases real human productivity. If I can accomplish that, monetization is simple matter.

If everyone is harvesting ideas from all over the world, Last Mile technology is the key to bringing these ideas to the ground. The new social enterprises will develop, support, enable, and service the structure for innovation in neighborhoods and communities.

Feel the Burn:

To understand the power of this paradigm; there is little doubt that the leader of the free world was elected by the Last Mile. That is huge. Now, when the Last Mile is in trouble with mounting layoffs, foreclosures, and wealth destruction, eyebrows are raised, headlines make the first page, and everyone is wondering what will happen in to the Last Mile. In 1992, this author saw Los Angeles burn over a whole lot less than what’s coming down the pipes today. This is not a game, this is very serious stuff.

Social Vetting:

Social Vetting, on the other hand, is less understood, but like a tornado there is nothing subtle about the forces that it can impart against the darkness of secrecy. All markets become more efficient in the presence of an effective vetting mechanism, as such, monetization is a simple matter. Conversely, the absence of vetting is the root of all corruption – as we are now painfully aware.

Begging for Mercy:

To understand the power of this paradigm; Facebook was recently brought to its knees by Social Vetting. First, a social watchdog group noticed the change in the terms of service and set the dials on “viral”. Facebook users organized immediately and lay siege to the core validity of a 3.5 billion dollar new media titan. Within hours, Facebook was backpedaling. The 300 billion dollar marketing industry, ravenous for viewer impressions, was sent back to the drawing boardroom. Meanwhile, legacy media spin took pot shots at Facebook’s inability to monetize the value it claims to create. Again, this is not a game, this is serious business.

Role play

In each of these examples social media responded effectively to an existing injustice. This presents the dire question: If the Last Mile and Social Vetting can have such a profound effect in the REACTIVE role, what would be the underlying dynamic if applied in the PROACTIVE role ?

The Engine of Economic Growth:

Consider this: Social media has no problem scaling up, rather, it has a problem scaling down. The Last Mile and Social Vetting represents the compression cycle of the new economic engine. The spark of innovation ignites the secret sauce to scale upward. With a repeatable cycle, we can literally create an engine of economic growth cycling from down-scaling to up-scaling, and back to down-scaling, and so forth, forever. Each combustion cycle literally pumps value into an economic system.

Master of Puppets:

I’ll let the reader now ponder the cause and effect sequences of this proposition. But I will leave one hint: Wall Street becomes the servant, not the master. As such, monetization becomes a simple matter.

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The Global Financial Crisis; The End Game

By Admin

On February 18, 2009

In General Information

The year is 2024, no burning cities, no mass hysteria, no bread lines; the economy is on an exponential growth curve. It took a while, but the financial crisis of ended in an anticlimactic sort of way. Sure, lots of hedge fund bankers became unemployed, some went to jail, and many companies once deemed titans of industry have disappeared, but nobody seemed to notice much anymore.

Government debt has been eliminated and Wall Street has become the steward of what has become an Innovation Economy rising from the ashes of debt economics. The transition, in fact, was surprisingly smooth. Social Network applications such as Facebook, Linkedin, G+, and many more, developed a clever way to make knowledge tangible outside the construct of Wall Street and the traditional corporations and people began trading knowledge like currency.

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

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

About 15 years ago, something resembling the human genome project mapped all knowledge in the form of social, creative, and intellectual capital that exists in society to a very high granularity. An API standard was created to represent knowledge assets like packets of code that are processed by a community algorithm. The CV/resume is an old bar joke now. Thanks to a visionary government, 1st amendment protections were built into this inventory with anonymity laws and privatized TOU; creators own what they create.

An open source percentile search engine was created to enable entrepreneurs to build unique collections of knowledge assets and predict the probability that various combinations of these assets could successfully execute a business plan. High diversification induced hyper-innovation around technologies and the resulting innovations are spun out to be reabsorbed by different and diverse communities of practice in continuous iterations forming a virtuous vortex of new systems, methods, and solutions. Sketched out, these arrangements looked like electrical “integrated” circuits. Wealth creation is intense.

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

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

Many of the senior knowledge workers have determined that they can earn more money by taking an equity position in their students, and the students of their student. Unlike a decade ago, pyramid schemes in innovation economics are sustainable and generate astonishing profits. Mentors have entered the landscape in vast numbers and apprenticeships have become abundant. The income potential for the “creating creators” boggles the imagination. Again, a virtuous circle has formed between the mentor and the student. In aggregate, wisdom is being retained, refined, and transferred efficiently throughout social networks.

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

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

Like a neural network, the economic system of tangible knowledge is self-correcting, fault tolerant, and self-regulating. Governments across the globe tried to stop the social network driven innovation economy – but they eventually gave up. It was like trying to stop water; it flowed between the cracks and simply eroded the barriers. The most incredible outcome is that innovation now reflects long term social priorities instead of short term Wall Street priorities.

Oil production has been replaced by superconducting wind turbines, global temperatures have stabilized, all cars are electric or “water leakers” (as the hydro’s are affectionately known), many diseases have been cured, and the list goes on. It is hard to believe this happened in only 12 years. Then again, the Internet had only been widely used 15 years prior to 2009. Did I mention, we’re finally sending a multinational expedition to Mars…

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The Great Convergence

By Admin

On December 8, 2008

In General Information

Hey Kids, It’s 3D:

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

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

The congregation of congregations:

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

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

The Next Economic Paradigm:

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

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

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

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