Tag: Innovation Economy Page 3 of 5

Many people know that the events that inspired what now has become The Ingenesist Project originated with my personal observation and experience of the Mexican Peso Crisis as a visiting professor. Very few people in America realize the implications of a real financial crisis and associated currency collapse. Unfortunately, many people in the World have – perhaps we should listen to their ideas.

The Good, the Bad, and the Ugly

As recently as 1999-2002, Argentina experienced the type of worst-case financial collapse that America narrowly avoided only a few months ago – but that may eventually happen. The simplest reality is that when things go really really bad, people need to continue trading among each other for basic needs using a functional and relevant currency. When things are really good, people need a currency that reflects productivity, not debt – i.e., social capitalism priorities, not necessarily Wall Street capitalism priorities.

Ground Zero

It is not surprising to me that great applied currency applications would be coming out of Argentina today. The Whuffie Bank is an exciting new project that introduces a reputation based currency inspired by several science fiction authors of the past, specifically Cory Doctorow. Likewise, the founders of the Whuffie Bank demonstrate the perfect combination of humility, openness, and inquisitiveness that is required in the emerging social media space. Everyone realizes that the Whuffie is not a perfect currency, but the story has to start somewhere and TWB has something important to say.

It’s Time for a Reputation Based Currency

I’ll talk more about the Whuffie Bank as I learn more. First, it would be best to describe the origin of the term. I lifted the following description from Wikipedia:

Whuffie is the ephemeral, reputation-based currency of Cory Doctorow’s science fiction novel, Down and Out in the Magic Kingdom. This book describes a post-scarcity economy: All the necessities (and most of the luxuries) of life are free for the taking. A person’s current Whuffie is instantly viewable to anyone, as everybody has a brain-implant giving them an interface with the Net. (Cory’s Blog)

The term has since seen some adoption as a synonym for Social capital, including its use in the title of the Tara Hunt book The Whuffie Factor.

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The Six Discovery Skills for Innovators

By Admin

On October 5, 2009

In General Information

Harvard Business Review contributing editor Bronwyn Fryer conducted a six-year study surveying 3,000 creative executives and conducting an additional 500 individual interviews. During this study she identified five “discovery skills” that distinguish them (reference article here)

The 5 Discovery Skills

1. The first skill is what we call “associating.” It’s a cognitive skill that allows creative people to make connections across seemingly unrelated questions, problems, or ideas.

2. The second skill is questioning — an ability to ask “what if”, “why”, and “why not” questions that challenge the status quo and open up the bigger picture.

3. The third is the ability to closely observe details, particularly the details of people’s behavior.

4. Another skill is the ability to experiment — the people we studied are always trying on new experiences and exploring new worlds.

5. And finally, they are really good at networking with smart people who have little in common with them, but from whom they can learn.

Encourage Childhood Curiosity

The study was further associated with an enriched childhood experiences and early development of the child’s curiosity. It is difficult to disagree with any of these findings and it is of dire importance to duplicate at any expense these conditions for our children the sake of their future and the world that they will inherit.

What troubles me is the following:

The persons interviewed in the study were all outliers – the top .01% of success stories. These are innovators who had performed according to prevailing business theory for a 20th Century American definition of “innovation”. The probability that any single person has all 5 skills in synergistic quantity is extremely low.

The 6th Discovery Skill; discovering the missing pieces.

Suppose that a person has a high surplus in skill # 1, #2 and #4 and but an extreme deficit in #3 and #5 ? The profile can then be just as easily associated with a sociopath destined for incarceration. So what do we do with the other 99.99% of people? Are they incapable of Innovation? Are they not the ones to “bet on” in the race for a cure from ourselves?

Mirror Mirror on the Wall…

It is not surprising that Harvard, the bastion of top .01% humans would, in fact, find themselves in the proverbial mirror. However, they do leave us a hint in skill #5; the ability to network with smart people who have little in common but from whom they can learn.

The great opportunity for an innovation economy built on social media is the ability to purposely match most worthy knowledge deficit to most worthy knowledge surplus so that teams of people can be designed to simulate the ideal top .01% human and thereby vastly increase the innovation and entrepreneurial capacity of society.

Let’s rethink this

Such as structure for an innovation economy built on a social media platform is specified by the Ingenesist Project and others. It includes a revised definition for innovation, a knowledge inventory, a percentile search engine, a system for matching knowledge assets, and a feedback system to capture and duplicate desirable outcomes – all integrated and securitized in a financial instrument. Will the secret sauce resemble the 5 discovery skills that made the morning headlines? Who knows? After all, that’s exactly how I wrote this article.

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Dollar Pressures Force Talk of New Currency

By Admin

On October 2, 2009

In General Information

I am heavily quoting an article below from the DOW JONES NEWSWIRES written By Tom Barkley because this situation leads us into a discussion about alternate currencies in which Conversational Currency is applicable.

We predict that the structure for an innovation economy will be built on a platform of Social Media where conversational Currency is the currency of trade. We admit that this is a far cry from a declaration of government foreign or domestic, sorry about that. We also admit this is a far cry from what Corporations, Banks, Insurance Companies and traditional media barons would espouse, Ooops.

The best management policy is to accommodate what people are already doing. People are ADOPTING Social Media in a frenzy of applications which were not even predicted by those who developed the platforms – this is a reality, not a fantasy or a blip in the radar screen. Social Media will have an extraordinary role in the value of currency – if people don’t like it, they won’t trade it; Game over. The next Global Currency will be represented by human productivity traded in social media. The most productive country will hold the most currency – this is a game that the US can still win.

WASHINGTON (Dow Jones)–U.S. Federal Reserve Chairman Ben Bernanke waded into the international debate over the fate of the dollar Thursday, pledging to do his part to avoid what he sees as a longer-term risk to the dollar’s status as the world’s predominant reserve currency.

[China and Russia have been the major drivers behind calls for an alternative reserve currency, blaming the U.S. for the global crisis and worried that its growing debt load could pose a further threat to stability. That view gained some additional force this week when World Bank President Robert Zoellick predicted that the dollar would face increasing as a reserve currency and its status would depend on how well the U.S. can manage its debt.]

Here is the Social Media Pitch:

[The G-20’s plan to reinforce country measures to address imbalances through peer reviews “would perhaps strengthen the mechanism” for enforcement, he said.]

Social Currency?

At the end of the day PEER REVIEW will be the global vetting mechanism that supports the value of a currency. What part of Social Currency are we not understanding here?

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Marketing in the Age of Social Capitalism

By Admin

On September 30, 2009

In General Information

Family Recipe?

The recipe for selling great products to great customers in the age of Social Media resides first in helping people find their highest talent and passion. Advertisers need to offer something to the community that they target. The best place to start is in understanding the challenges and opportunities that a modern community faces.

The great innovations of our time were created by people doing what they enjoyed most by using their talents to the highest potential. Disney, Boeing, Apple, Mattel, and nearly every other ground breaking venture had the secret sauce of people doing what they were best at and most passionate about – and it was not about collecting “stuff”

The passion play

Computer Enabled Society is in the midst of a struggle to reorganize itself outside of the construct of the traditional corporation. It seeks to develop methods and systems that allow for the reallocation of social capital, creative capital, and intellectual capital to match a person’s natural talents, passions, and abilities with those complementary to other people. This is as true for communities as it is for corporations. The result will be a profound new paradigm of Social Capitalism reflecting social priorities and community values.

Do no evil:

If marketers have the foresight and talent to “get ‘em while they’re young” or to “sell ‘em what they fear”, they certainly also have the foresight and methods to “develop ‘em to their highest potential”. Advertising agencies are full of real smart people who know how to deliver a hidden message – why not use that talent to empower people?

Instead, mass marketing pays mass money for mass audience from which to draw mass revenues – the message gets debased to play on mass fears, anxieties, and insecurities because this is the least common denominator. As a result, actual products are designed to be marketed, sold, and thrown away; not to be particularly useful, productive, or even healthy. Unnecessary innovation wastes human effort and natural resources while mass marketing of unnecessary innovation wastes the time and bandwidth of those for whom the product is irrelevant. Yes, the majority of advertising is just Spam.

Advertisers as community organizers?

Few realize that advertising can become a highly useful component of the Innovation Economy. In many professional practitioners look forward to hearing from vendors, educators, and fellow practitioners for trends, news, and developments that can strengthen their community. Bad products are rejected quickly and good ones are elevated quickly. This is how the great innovations are found. This is where the early adopters congregate. This is where brand loyalty is unyielding. This is where wealth is created. This is efficiency that society wants and needs. Social Media can deliver this audience but advertisers need to adapt by losing the CPM (cost per mille) model (more on that later).

Marketing to communities is fluid, dynamic, specific, and it takes some work. The dynamics of communities will replace the statics of demography and CPM. Fulfill those needs of a community and your products will win forever. It is not difficult to see the future, only to act on it. That is innovation.

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Building a Better Entrepreneur; Google 10^100

By Admin

On September 27, 2009

In General Information

Google 10^100 award voting is Launched. There are two sectors that we believe would have the greatest impact on the greatest amount of people; building a better banking system and funding social entrepreneurs. You can’t have one without the other – if Google funds these two sectors in concert, the outcome would be incredible.

Build A Better Bank

In the old banking system we assume that we have the knowledge to execute a business plan and we go to the bank to borrow the money. In the new banking system, we will assume we have the money and we go off in search of the knowledge. Social Media is an excellent “public accounting system” for knowledge assets.

Our current banking system has gotten it backwards.

Technological change must always precede economic growth. The supranational currency may be backed by productivity and not debt. Social media provides an excellent platform upon which to design such a banking system. People trade “social currency” at a tremendous rate. This is evidenced by the amount of destructive innovation is occurring in many legacy sectors due to social media.

Better Banking Tools for everyone

“Partner with banks and technology companies to increase the reach of financial services across the world. Users submitted numerous ideas that seek to improve the quality of people’s lives by offering new, more convenient and more sophisticated banking services. Specific suggestions include inexpensive village-based banking kiosks for developing countries; an SMS solution geared toward mobile networks; and ideas for implementing banking services into school curriculums”.

Suggestions that inspired this idea

1.   Enable prepaid cell phone bank accounts for millions of people working in the informal economy
2.   Create a community-level electronic banking system for rural areas
3.   Build IT-enabled kiosks which provide access to financial services
4.   Create a single world bank or supra-national currency, uniform rules and transparent public accounting

Fund Social Entrepreneurs

Venture Capital is ridiculously expensive. Corporate innovation serves shareholders value over social priorities. Some say that the financial risk of funding innovation is too high. The top ten reasons why start-ups fail are due to knowledge deficits, not money deficits. A new banking system that trades knowledge as currency would solve this problem.

The key is to match most worthy knowledge surplus to most worthy knowledge deficit. Google is perfectly able to build a search app for knowledge assets if there were an inventory of knowledge assets. With the most worthy match, Risk can be reduced and new financial instruments can be developed such as the innovation bond, innovation insurance, tangential innovation markets, and destructive innovation transition contingency options, etc.

Help social entrepreneurs drive change

Create a fund to support social entrepreneurship. This idea was inspired by a number of user proposals focused on “social entrepreneurs” — individuals and organizations who use entrepreneurial techniques to build ventures focused on attacking social problems and fomenting change. Specific relevant ideas include establishing schools that teach entrepreneurial skills in rural areas; supporting entrepreneurs in underdeveloped communities; and creating an entity to provide capital and training to help entrepreneurs build viable businesses and catalyze sustained community change.

Suggestions that inspired this idea

1.   Provide targeted capital and business training to help young entrepreneurs build viable businesses and catalyze sustained community change
2.   Create a non-profit, venture capital-like revolving fund to invest in high-impact local entrepreneurs
3.   Send young American entrepreneurs to underdeveloped communities to help create small businesses that would economically benefit those communities
4.   Create schools in rural areas to teach local people how to become entrepreneurs
5.   Create a private equity fund to help immigrants in developed countries finance business development in their countries of origin

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The New Reverse World Order

By Admin

On September 9, 2009

In General Information

The New Reverse Order

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

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

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

Profound Issues Arise.

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

A Vetting Zoo

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

A Steep Departure

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

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

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Trust as a Social Currency

By Admin

On September 8, 2009

In General Information

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

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

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

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

by Shefaly (please see her Bio here)

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

Definitions

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

Social currency – some characteristics

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

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

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

Determining the value of Trust as social currency

a) Verifiable Identity and antecedents

b) Consistency

c) Reliability

d) Peer recognition

e) Value of the network

f) Individuality and collaborative consciousness

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

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Creative Capital; The Hidden Hero

By Admin

On September 7, 2009

In General Information

Social capital, intellectual capital and creative capital are the factors of production for the Innovation Economy; next economic paradigm. Few people realize that Silicon Valley arose from a perfect storm of social capital from the 1960’s, the music and arts scene of the same era, and the proximity of academic centers Stanford and Berkeley. The Bay area corporations may have been the beneficiaries, not necessarily the originators of innovation.

Creative Capital remains the least understood, yet most important element of the Next Economic Paradigm. As we continue our march into the regime of social media it is imperative that we understand, support, and develop this critical factor. We cannot “take it for granted” that creativity exists and will always exist. It must be recognized, developed, and integrated into the fold of Social Media.

Here are some stats:

Wikipedia:

Social Capital has it’s own page with 6816 word article
Human Capital (Intellectual Capital) has it’s own page at 2597 words
Creative Capital does not have a page of it’s own on Wikipedia

Twitter:

I found 20 Tweets referencing “Social Capital” in the last HOUR
I found 20 Tweets references to “Intellectual Capital” in the last 6 HOURS
There were 20 Tweets that referenced the term “Creative Capital” in the last WEEK (mostly as a trade name)

Facebook Groups:

Social Capital Groups: 2000
Human Capital/Intellectual Capital Groups 1000
Creative Capital: 412

Linkedin Groups:

Social Capital: 69
Human Capital (intellectual Capital): 272
Creative Capital: 12

While the ratios vary, the trend is fairly clear. Creativity is not often interpreted as a financial instrument otherwise it would be associated with the term “Capital”. There are other factors as well that may play into this. Artists are often self-actualized outside of the trappings of material possessions and therefore less visible as economic or political power brokers. As a professional class, they may be under-represented in social media space. In addition, creativity does not punch a clock and is likely not working for wages as such. Or they may be running around dressed up like Engineers

I’ve made the point that was intended so now I’ll leave the remaining analysis to a person who has done a great deal to advance the modern understanding of the field of study related to creative capital; Richard Florida – an unsung hero for whom Wikipedia does have a page:

Richard Florida (born 1957 in Newark, New Jersey) is an American urban studies theorist.

Professor Florida’s focus is on social and economic theory. He is currently a professor and head of the Martin Prosperity Institute at the Rotman School of Management, at the University of Toronto. ^[1] He also heads a private consulting firm, the Creative Class Group.

He is best known for his work in developing his concept of the creative class, and its ramifications in urban regeneration. This research was expressed in Florida’s bestselling books The Rise of the Creative Class, Cities and the Creative Class, and The Flight of the Creative Class. A new book, focusing on the issues surrounding urban renewal and talent migration, titled Who’s Your City?, was recently published.

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Creative Capital in Austin (SXSW)

By Admin

On September 5, 2009

In General Information

The SXSW Music and Media Conference showcases hundreds of musical acts from around the globe on over eighty stages in downtown Austin. By day, conference registrants do business in the SXSW Trade Show in the Austin Convention Center and partake of a full agenda of informative, provocative panel discussions featuring hundreds of speakers of international stature.

We at TIP find this combination of music, indi films, and Geekdom to be extremely interesting. According to the work of Richard Florida; Engineers and scientists think and act more like artists and musicians than like production workers. This calls into question much of what we assume to be true in corporate America (specifically 9-5 work weeks, wages vs. royalties, and who manages whom).

The mashup of music, film, and social media/technology is the basis of the most under-recognized factor of production for an innovation economy; Creative Capital. All the academics and corporate outsourcers thought talk about Intellectual Capital. All of the marketers and PR experts talk about Social Capital. But the SWSX is reflecting something very different.

As such, there are some interesting Filters in play. The following observation by Janet Fouts points out the curious absence of known superstars on the panel list. It’s not the all-star game that traditional media loves so much. I would also encourage the reader to look at some of the Hot List Ideas that Janet Links to below. My mini-rant: For the parents among us, the addition or elimination of Arts from any curriculum should not be under estimated. Thanks Janet:

***

With all the talk about Twitter grades and the social media elite it’s sobering to look through the “hot” list form SXSW and see the proposals currently in the top of the voting. Sure, I looked for my proposals first and no, they weren’t on the hot list, but more importantly neither were many of the social media superstars I expected to be at the top of the list. After all, it is the interactive division of SXSW and that’s not all about social media folks.

There’s some pretty cool stuff in here for the web developer part of my brain too. A few people I recognize like Jason Wishnow from TED, Adam Pash from Lifehacker , Peter Shankman from HARO, and Skylar Woodward from Kiva, but there are a a lot of people I don’t know, and that’s pretty darn interesting. I spent an hour or two this morning finding some new information resources, and isn’t that really the point? Why not take a few minutes to browse the hot list to see what people are voting for and find next year’s superstars?

***

It is crucial to watch how events evolve and to recognize how people organize themselves. Austin is not NYC, Silicon Valley, LA or Chicago – they are largely disassociated with traditional media, financial, and political power centers. The purity of this disassociation cannot be underestimated.

Janet is right – events such as SXSW may be the best way to predict the future – and with surprising and uncluttered clarity.

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You Can’t Eat Gold

By Admin

On September 3, 2009

In General Information

The following is a question and answer that I responded to on a Linkedin economics forum. This question still occurs in so many forms when it is also abundantly obvious that Social Media is driving so much value in so many directions. The irony is that the question is asked within the currency that it fails to recognize.

Art credit

Question:

Fiat money is the cause or always the main cause of financial crisis. Reverting back to gold standard can give stability. How can this be implemented?

Answer:

It cannot. Everyone agrees that money needs to be backed by something tangible. However, gold has a host of problems as well that are discussed extensively on-line and cannot be ignored.

A successful and stable currency must be backed by the productivity of the [citizens of a country] users. So these two words should be interchangeable; i.e., a country spends productivity to fight a war. A country spends productivity to fund universal health care, etc.

The cause of financial crisis is when the money becomes divorced from the productivity. Debt is a transaction that exchanges current productivity for future productivity – assuming that productivity will increase at least by the so-called ‘risk’. CDOs and other exotic financial instruments further obscure true productivity until money becomes driven irrationality and emotions completely separated from productivity.

If people lose trust in the currency, they will no longer trade it – they will find something else. Your hope is that they will find Gold.

Note clearly that innovation is also a transaction that exchanges current productivity with future productivity (due to the innovation). As such, a currency backed by innovation is of the same species as a currency backed by debt. Therefore, the entire financial system does not need to be torn down and rebuilt to serve a new non-debt backed currency.

The answer to your question is to look toward the places where extraordinary innovation is occurring today, right now. It is clear that social media is developing this new currency. The problem now is fairly simple; making human knowledge tangible. This is where the innovation is. Here are some resources of people working on this problem:

http://ingenesist.com

http://relationship-economy.com

http://conversationalcurrency.com

Our deepest concern should be to feed the Goose what’s been so good to the Gander all these years. Of course one argument in favor of gold is it’s scarcity. However, it is difficult to imagine that in an era of scarcity of so many resources, the basis of a currency ought to be more scarcity. Knowledge, conversation, and innovation are scarce relative to the problems that they must be deployed to solve. We’re in this together.

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When The Kids Arrive – from MySpace

By Admin

On August 29, 2009

In General Information

Several articles have come out refuting the death of MySpace as researchers try to make sense of the continued persistence of what many people consider last-year’s news. Here is an interesting article by Misiek Piskorski from Harvard Business Review answering the question “Where are all those My Space Users”?

“Both traditional and social media have declared MySpace dead. Even a brief scan of articles reveals that media mavens “don’t know anybody who uses MySpace anymore,” which reportedly is not a huge loss as the site “is ridden by spammers” and “its atrocious HTML, bLiNgY graphics, and horrific backgrounds” are offensive. Many of you reading this post probably do not know anyone who uses the site either.

Yet MySpace is the 11th most visited site in the world, with unique 60 to 70 million U.S. visitors every month. Even though the site is not growing, it is a far cry from “dead” if you ask me.”

But wait!

Notice how the “Media Centers” Los Angeles, Chicago, New York are in Facebook territory. Also note how the technology power centers; Silicon Valley, Seattle, and Boston are also in the Facebook territory. Academics from Harvard, Yale, Stanford are taken by surprise in Facebookville. The great financial centers; Wall Street, LA, SF and Chicago are all Facebook. Maybe the prognosis for the future of social media is skewed by the proximity to major media, academic, and financial centers. Centralized power is the antithesis of social media, Right?

Looking for Disassociation.

Here at The Ingenesist Project we have long been looking for a disassociation between main stream media and social media. MySpace may be the social experiment that indicates a deeper and most promising trend. Is it a requirement that a social media analyst be located in Silicon Valley? Do celebrity endorsements really mean anything tangible? Does editorialized news always provide what people need?

MySpace Demographics:

The resulting sample is representative of the MySpace population. 53% of users identify themselves as women. Of all users below the age of 50, half are 21 years old or younger, and 30% are between the ages of 22 and 30. Everyone knows that Kids don’t Tweet and late adopters to Social Media are also later-in-lifers. The population of the world is finite, so when will Facebook level off as Twitter has?

Looking for reversal:

Next, we are looking for a reversal where Social Media drives s0-called traditional media – not the other way around. Can a blogger in Arizona drive the great branding strategies of the future? Can a Webinar from Montana introduce the next age of enlightenment? Can Nashville become the next great Venture Capital hub? Can a community of children in Florida band together to sustain the next great social movement. Will democracy, voting, and public opinion be driven by youth culture? Will corporate innovation respond to social priorities rather than Wall Street Priorities?

Ideas whose times are coming:

There are many examples of the above miracles of social media, however, a disassociation and reversal with traditional media will be an event of flip-floponomics of great significance – a watershed moment in the history of the next economic paradigm. Traditional media, understandably, may inadvertently be assigning a premature death to many great ideas yet to come.

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Social Media and Flip-floponomics

By Admin

On August 28, 2009

In General Information

Flip-floponomics is a term that I just coined with this post which means:

1.    A traditional business method flipped on it’s back to reveal a new business method
2.    A mirror image of a previously accepted economic paradigm
3.    sing. n; flip-floponom; A phenomenon of flip-floponomics.

Let’s demonstrate how this works.

Flip-floponom A:

Twitter has announced that they will mine user generated data and process it into business intelligence which they will sell to corporations for a whole lot of money. As such, corporations who were unable to figure out how to charge people a whole lot of money money to “watch” social media can now be charged a whole lot of money to “watch” social media

Flip-floponom B:

YouTube can’t make money on ads because viewers don’t care. But with user generated content such as Jill and Kevin’s wedding (with 12 million views), Chris Brown landed a land slide of sales for the song “Forever”. The audience is now the Brands positioning themselves to be “user-generated”.

The Mother of all Flip-flopona:

Before flip-floponomics: entrepreneurs assumed that they had the knowledge to execute a business plan and they went to the bank to borrow money.

After Flip-floponomics: entrepreneurs assumed they had the money to execute a business plan and they go to social media to borrow the knowledge.

Next economic paradigm:

With the continuing integration of social media, every single business transaction has the potential to be re-invented in the mirror image if itself using the principles of flip-floponomics. The opportunities for future entrepreneurs who figure out this class of business activity can be described as nothing short of astonishing.

Image Credit Picasso

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Does Social Relevancy Matter?

By Admin

On August 18, 2009

In General Information

The Ingenesist Project Community concerns itself with the value of social reach since this will most certainly impact he relevance of those conversing as well as the relevance of the conversation to some business activity. Obviously, innovation is about having the right team in the right place at the right time.

Furthermore, business activities such as marketing and advertising need to make their communications more relevant and less wasteful of their audience’s limited bandwidth – lest they risk being perceived as “anti-social”.

Stated somewhat more clinically; the most worthy knowledge surplus must be matched with the most worthy knowledge deficit in order to produce the most valuable outcome.

Brynn Evans offers the following observation:

The future of search involves social networks, social graphs, or social filtering in some capacity. Companies will live or die by whether they get the “social” part right: creating the right level of intimacy, trust, reliability, social connectedness, and accuracy in their results listings. Of course, this specifically means that their user experience must at least meet or, preferably, exceed that of Google’s.

To achieve this, we must first stop arguing over the different flavors of search.

Real-time search. Social search. Semantic search. These distinctions are essentially meaningless, especially when we can’t even agree on definitions and when each of their boundaries remain undefined. Instead, we should recognize that they’re all part and parcel of personalizing and contextualizing search for individual users. Let’s stop playing the “name game” and start thinking holistically about how each (and all!) affects and improves what we think of today as “search.”

Defies analysis, defies control:

Ms Evans’ excellent analysis continues to identify numerous problems with attempting to classify Social Relevance – each system is merely trumped by new issues related to semantics, context, and proximity. It seems as if the more you try to “control” social media, the more it defies control. The more you try to study it, the more it shows you a mirror of yourself. Introspection is the irony of extroversion.

The great big Sucking Sound

While nobody, including Ms. Evans can tell you how to increase your social relevancy, we can probably all agree on what does not. If your message sucks, your social relevancy will also suck. If you are trying to sell a product that does not actually save people time and increase their net productivity, your product will fail and your social relevancy will suck. If you are in any way trying to match unworthy knowledge surplus with unworthy knowledge deficit, your social relevancy will suck.

Give up Control in order to gain control:

Business intelligence is the science of knowing what sucks and what does not. Let Social media carry your message wherever it wants to carry it. The sooner the market tells you what it wants, the sooner you can adapt your products and services to meet the needs. Things happen fast in social media space and the corporation needs to be faster. This may mean corporations need to give up control in order to gain control of both the threats and opportunities of the future. After all, even by the playbook of Corporate America : survival of the fittest is the only relevant social rank.

(Ed: Brynn Evans is a PhD student in Cognitive Science at UC San Diego who uses digital anthropology to study and better understand social search)

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If it Quacks like a Buck…..

By Admin

On August 13, 2009

In General Information

If it looks like a buck, and talks like a buck, and quacks like a buck – it’s probably a buck.

So when your money gets “free will” and starts walking out the door door, that’s bad enough. When flies out the window en mass enabled by the same social media that brings money in the door – serious management issues arise. Should organization choose fight, flight, or cooperation?

Battle lines are being drawn:

“Among large U.S. companies, 33% have employees on staff to monitor e-mail messages — up from 15% last year, one survey found. The Proofpoint study also found that 31% of companies had fired workers who breached confidentiality via e-mail, and 8% had fired someone over a social-networking leak. The survey found 41% of respondents are worried about potential leaks via Twitter. ZDNet (08/10)”

“Marines banned social networking sites from their computers Tuesday due to security concerns, and the Pentagon announced a policy review. But Pentagon’s top officer will still tweet (Christian Science Monitor 08/05)“

“A great way to keep up with the latest Navy news is through the MyNavyMyFuture Twitter handle: https://twitter.com/mynavymyfuture. Just FYI for anyone who’s on Twitter. The handle is based off the Navy Officer site www.mynavymyfuture.com. (NavyNima – recruiter)“

The New York Times reports, “The N.F.L. has identified the enemy and it is Twitter.”

There are literally thousands of articles on this subject but none of the few that I read came to any conclusion, so I will:

Money is becoming intangible (cannot be contained) and Social Media is becoming tangible (has become the container)

The very structure of organizations is changing. Trying to control the temperature of the room when the windows have been blown out will only destroy existing controls faster. A completely new economic structure is emerging complete with new factors of production, incentives, institutions, accounting, and currency.

Swap or swamp?

Easier said than done? Not really; all we need to do is swap the same methods that we use to manage tangible assets with those same methods that we use to manage intangible assets. There are in fact people and organizations trying to do this (specifically this author) but you won’t find then in corporations anymore.

Companies have no choice but to understand migration patterns, flock actualization needs, motivation, and environmental issues. Going from an economy where the corporate charter is only “to deliver shareholder value” to one of safeguarding the health and welfare of people and their property” is a huge leap.

The discussion of Conversational Currency is required to understand the underlying economic forces that drive social media and the emerging institutional structure for corporations to create value in a computer enabled society.

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It Takes Currency to Make Currency

By Admin

On August 11, 2009

In General Information

If you’re a Flash game developer, you are concerned with how you can make a living from your creative and intellectual services. Fortunately there is a payment system so workable, that it may actually work. Game developers can charge money both for their games, and for things within their games.

Here’s how it works:

1.   Player pays real money to buy fake money within the game.
2.   Player spends fake money on virtual stuff.
3.   Virtual stuff increases the value of the game.

The game developer can technically charge for whatever they like: level packs, hats, extended versions/director’s cuts, etc, etc. The sky’s the limit.

These types of transactions have been very popular in places like Korea for a long time, and it was amusing to see the initial resistance and resentment in North America to the idea. Meanwhile, North American Pioneers of such systems are drowning in money.

The Right [virtual] Stuff:

Now, suppose that Social Media could be modeled after a huge game where people act based on a set of incentives like, say, connecting with friends, accumulating followers for their blog, finding proverbial “gold rings” like employment opportunities, business opportunity, spiritual growth, professional advice, cheap airfare, fun things to do, product reviews, or political activism…just to name a few.

Suppose that in order to get from one level of the game to the next, they need to engage in conversation with another player. Anyone who has been on Linkedin, Twitter, or Facebook long enough knows that the “right virtual stuff” is sometimes hard to acquire. Twitter finally broke the mold with applications that now “sell” followers (I wonder if there were any Flash Developers behind this innovation).

A Mutually Inclusive Game:

Now, suppose the game was mutual such that some players need you a little bit more than you need them and they are willing to invest in your connection. Similarly, suppose you need some players a little more than they need you and you too are willing to invest for their connection. Finally, all players know that a mutual link between two appropriate players substantially increases the value of both players relative to the game.

It Takes Currency to Make Currency.

Immediately the engine of entrepreneurialism will ignite as people figure out new ways to play the game. With a trillion dollar advertising industry, a trillion dollar Professional Placement industry, and a trillion dollar recreation/leisure/entertainment/family industry on the ropes, you can guarantee that innovation will be absolutely intense. Welcome to the Innovation Economy.

(Editor’s note: This article was inspired by a piece authored by Ryan and can be found here)

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What is the Current of Currency?

By Admin

On July 26, 2009

In General Information

There is not much more ‘federal’ about the “Federal Reserve” than there is about Federal Express. Except, the Fed is a private company for whom the US government is the “Legal Tender”; literally and figuratively.

We could analyze this cozy relationship or we can realize that the value of any currency is a social agreement among people who trade it for goods and services. There is nothing keeping each and every one of us from “legally tending” a currency in communities to exchange for goods and services – as long as there is a social agreement.

The Semantic Web:

The word “currency” has several meanings. It can mean a “medium of exchange” such as “bank currency”; or it can mean a placement in time such as a “current edition”; or it can mean the flow of something such as the “river’s current”. Money is, in fact, all three; it is exchanged, it changes with time, and it moves things. Therefore, anything that does these three things can be used as currency.

Social Media space has awarded civilization with an extraordinary capacity to create, maintain, and design social agreements. Social agreements are founded on conversations between people. Conversation is the medium of exchange for the trade of goods and services long before the money is distributed (or not).

The Value of Value:

The value of the dollar is not changing, but the value of the social agreement is. Conversations about Land, Labor, and Capital are transcended by conversations about environment, health care, social justice, human rights, and global freedom. The social agreement that once supported the value of a dollar is now supporting something else. The value that the dollar once contained is being transferred someplace else. The people that once controlled the value of currency are being replaced other people. The social agreement is being replaced by another one.

To understand the new social agreement is to understand the currency of currency. To support the conversations that define the new social agreement is to support the value of social currency. To support the value of social currency is to support the value of money.

Humility: The New Economic Paradigm

In order to intersect the flow of money people need to be trading a conversational currency. In today’s economy, in order to find value, we need to ask someone else where it is. In order to create value, we need to tell someone else where it is. In order to stay “current” we must engage with others. In order to preserve value, we need to preserve the value in others.

Most importantly, especially for those who want to hold a great deal of money or power or control: in order to hold value, they must give it away. In order to hold power, they must empower others. In order to hold control, they must give up control to others.

Conversely, Humility is the new gold standard and the bad guys will always try to steal it. Does this sound familiar?

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Is a social contract legally binding…and who cares?

By Admin

On July 13, 2009

In General Information

Trillions of dollars in play:

Trillions upon trillions of dollars worth of value that once coursed through the veins of Market Capitalism is being transferred to social media from the legacy economy now stifled by insurmountable debt. These numbers are indeed spectacular because they account for the invisible value “lost”, and most importantly, the calculations provides clues on how to “find” it again.

What is a Social Contract worth?

According to Legacy Economics, the term “social contract” describes a broad class of theories that try to explain the ways in which people maintain social order. The notion of the social contract implies that people give up some rights to a government or other authority in order to receive or maintain social order. Otherwise, we would each have unlimited natural freedoms, including the “right to all things” and thus the freedom to harm all who threaten our own self-preservation; there would be an endless “war of all against all”.

Take me to your leader

By contrast, Social Media begs the questions: who or what exactly is that authority? Isn’t the greatness of the Internet the lack of an all powerful authority? So why aren’t we at a war of all against all? What keeps social media at peace instead of an endless flame war? Whatever this alien is, it is capturing and storing trillions upon trillions of dollars of value away from the legacy economy, but where?

Separating facts from fiction

According to the old economy, it is a “fact” that human knowledge is an “intangible asset” of which there are only two types defined:

1. Legal intangibles such as trade secrets, copyrights, patents, and goodwill (brands).

2. Competitive intangibles such as knowledge activities, collaboration activities, leverage activities, and structural activities.

However, when we consider social media;

1. There is no law governing the phenomenon – so there are no legal intangibles.

2. Collaboration, leveraging and structural activities are not being conducted in a competitive environment (the context of one “Company” against another).

So, the definition fails to account for knowledge assets in social media. The Ingenesist Project discovers the lost trillions simply by treating the social contract like a legal contract.

Tangible assets are managed by contracts

Technically, any oral agreement between two parties can constitute a binding legal contract. The legacy economy limitation, however, is that only parties to a written agreement have material evidence (the written contract itself) to prove the actual terms uttered at the time the agreement was struck.

But social media, email, and blog posts, etc., all constitute vast “written” agreements and material evidence as far as most people are concerned. So what is missing? Are we waiting for permission from government, Wall Street, corporations, attorneys, or the Federal Reserve to say it is OK for people to stop competing with each other or to renegotiate the terms of the social contract (and currency of exchange)?

The mystery is no mystery

Guess what, there is nothing there. Absolutely nothing except philosophical barriers carried over from legacy economics built upon political division. The mystery is that there is no mystery except using social media to unite people. After all, the biggest Brand in the world is a Community Organizer. Such calculation provides clues on how to “find” value again.

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The Value of Social Currency

By Admin

On July 9, 2009

In General Information

How big is this opportunity?

Roughly 10% of the US gross Domestic Product can be attributed directly to the process of evaluating or examining transactions. This represents a 1.4 Trillion Dollar of value in a system that may be better organized, captured, and preserved through social networks and the conversations that they produce.

Social vetting on a scale that would allow social networks to monetize would require that communities organize their knowledge assets specifically for deployment to a market. All that an entrepreneur needs to do is fill this need.

What happens if they don’t?

The true cost of vetting may be calculated by what happens in the absence of oversight, transparency, and disclosure. When the vetting process fails, so too does the industry. The continuing financial crisis of 2008 was fueled by a failure to regulate mortgage backed securities. The financial Crisis of 2002 arose from a failed accounting (CPA) profession.

The losses due to the absence of vetting mechanism exceeds by many times the cost of having a system in place. The financial crises of 2002 and 2008 have together wiped out nearly 20 Trillion dollars of value and incurred high volatility to financial systems due to failed vetting mechanisms. The people who held the knowledge about the impending doom had no effective medium to share.

Who vets KNOWLEDGE assets?

The flow of money lives and dies by the vetting mechanism. CarFax, Experian, Ebay, Google owe their existence to the ability to vet information – However, they do not vet knowledge. The ability to deliver the right knowledge asset to the right place, at the right time for the right price is tantamount to being able to “manufacturing innovation”, that is, to print money. Inversely, the ability to foresee the result of specific knowledge assets deployed to specific business conditions is the Holy Grail of entrepreneurs.

Social networks can carry out this very important function of the Innovation economy; organize, locate, and develop knowledge assets in a form which can emulate a financial instrument.

How are things changing?

Emerging ideas such as conversational currency, relationship economics, innovation economics,. nd new ways to value intangibles are appearing in research blogs across the web. Disruptions to Global finance, environmental policy, and the emergence of global currencies are setting the stage for a huge transformation in how society organizes itself. Traditional industries such as print media, advertising, and banking are failing. Nothing is sacred except change.

Where are these communities, and what do they want?

Many communities exist today in a variety of forms and functions such as communities of practice, fellowships, service organizations, professional societies, trades groups, affinity groups, etc. Increasingly they are moving to Social Media such as Facebook groups, Linkedin groups, Affinity groups, aggregation groups, and political action groups. Communities are using social media technology to engage the knowledge domain contained within them.

As such, they will soon have ability to foresee the result of specific knowledge assets deployed to specific business conditions. This is the Holy Grail of modern civilization.

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The Vicarious Search Engine

By Admin

On July 7, 2009

In General Information

The search engine wars continue as both Google and Bing develop more exotic ways of arriving at the wrong answer. Both commit the same error as all declining industries in social media space; assuming that they can predict what people want without engaging them in a conversation.

The first development is the predictive search notably pioneered by Amazon.com for predicting future purchases based on past purchases. While predictive search is an improvement, the next step is the “vicarious” search, that is, when the search engine sees the world through your eyes – or someone Else’s – for your benefit.

The Web is Flat

The Ingenesist Project specifies a standard knowledge inventory that may be represented as a packet of code. If someone wanted to see the web through the eyes of another person, they could buy a packet of their knowledge inventory. Likewise, a web article would be tagged with the representative knowledge inventory code of the author. Each comment or re post to a blog article would contain the knowledge inventory of its aggregated vetters.

The search can be done in reverse as well. If I find an idea on the web and want to know who can execute it locally, I can simulate the knowledge inventory in one or more local people. This is not trivial. It literally allows an entrepreneur to manage knowledge assets that they did not know exists and predict content that does not yet exist.

Been there, done that?

Obviously there are privacy, security, and ethics issues related to others seeing the world through your eyes. But what if every American was told 20 years ago that their identifier number for an insolvent social security program would be attached to their personal, medical, financial, and civil records then spun through Wall Street algorithms, sold worldwide to advertisers, politicians, banks, insurance companies, demographers, and ultimately hacked? The cities would have burned.

So why can’t social mediators monetize?

The difference today is that if packaged correctly, we can own and control our knowledge inventory. We can allow or decline access and we can revoke access – it happens all day long on Face Book, Linkedin, Twitter, and My Space. On-line communities represent collections of knowledge assets. The 400 Billion dollar per year advertising budget is on the table – up for grabs. The 100 Billion dollar “head hunting” budget is up for grabs. The multi-billion dollar election budgets are all up for grabs. What are we thinking?

The likelihood of Innovation

The innovation economy will depend on business intelligence related to society’s knowledge inventory to match most worthy knowledge surplus to the most worthy knowledge deficit. Entrepreneurs must know supply and demand for knowledge assets as well as where to find them at what cost. Entrepreneurs need to predict competition, disruption, risks, and volatility in knowledge assets. They need to conduct scenario tests before expending money. They need to predict the likelihood of innovation and all of the options that they have in the future related to those innovations.

The Securitization of Knowledge Assets

Entrepreneurs need to securitize knowledge assets in order to finance innovation on the scale that will be required to offset our massive debt. This is how the innovation economy must play out. We cannot depend on corporations or governments to do this for us. People must control, regulate, anonymize, and manage their own knowledge inventory. If only they could see their world through the entrepreneur’s eyes – perhaps they need a vicarious search engine more than anyone.

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Social Media Staffing: $3 Trillion Opportunity

By Admin

On July 1, 2009

In General Information

As the World Churns:

The cost of placing an employee approaches 30% of that employee’s salary. In fact, most head hunters charge roughly 30% of the employee’s salary to find the right person to fill the job opening for a client company. Sometimes the employee is recruited from a competitor causing a net productivity loss in a market due to disruption or “churning”.

The company also has a choice of hiring with the internal HR department. In this case, they are paying HR personnel to place ads, review resumes, check references, and conduct interviews. These costs can also run into a substantial percentage of the new employee’s salary. From previous articles, The Ingenesist Project suggests that these methods may not even result in the best employee selection:

The Unnecessary Market Friction

Text only Résumé is no longer adequate in our complex business environment due to subjectivity, semantic inconsistency, and the time and resources required for fully interpreting the content. The cost of delivering a résumé has been decreased by computers and the Internet while the cost of reviewing the résumé has remained constant. Keyword search programs often eliminate excellent and creative candidates based on criteria not related to the candidate. Managers tend to hire what reminds them of themselves – from world that no longer exists.

Estimated wasted productivity:

Suppose that 50 Million professionals; doctors, lawyers, engineers, professors, administrators, managers, and directors are employed in the United States. Suppose that the average salary is 70,000 per year. Suppose that they change jobs 3 times in their career and that the cost of placement is 30% of salary, or $21,000 dollars per placement.

The total cost is $ 1 Trillion dollars multiplied by 3 placements in a career equals nearly 3 Trillion Dollars. Now, divide this by 30 years in a career and we can see that 100 Billion dollars worth of human productivity are spent every year not necessarily matching the most worthy employee to the most worthy employer. This does not include moving expenses, salary increases, disruption costs, or inflation.

The probabilistic electronic résumé system

The Ingenesist Project specifies a vetted knowledge inventory that resides in Social Media. The knowledge inventory, probabilistic electronic résumé system, and innovation bank together would make the paper and language Résumé obsolete. The percentile search engine would scan the knowledge inventory of the corporation and scan the knowledge inventory of the labor market and seek matches with high probability of increasing net productivity – not unlike Amazon.com predicts what book you would like to read next.

Options, options, give the market its options

election criteria can be adapted to reflect social priority such as reduced traffic congestion or to reflect strategic objectives such as incremental or blue sky innovation requirements. Trades across companies and industries can occur opportunistically not unlike interdepartmental transfers or even like trades in professional sports are conducted today.

Companies can manage peaks and valleys in employment by trading across diverse industries. avoiding layoffs all together. Employees that can stay productive in diverse industries transfer new ideas and discover transferrable efficiencies. Experience gained would be added to the knowledge inventory to enhance the probabilistic résumé inventory available for continuous improvement and tangential applications of innovation enterprise.

A virtuous circle? … A 3 Trillion Dollar opportunity nonetheless.

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1.3 Trillion Dollar Professional Contact Market

By Admin

On June 30, 2009

In General Information

“Hey, I know a guy who owes me a favor …”

It is only a matter of time until professional contacts will be for sale. The problem is that the ROI (return on investment model) is such a poor valuation tool for social media. Another valuation tool used in finance is called Real Options. An option is the right, without the obligation, to act on an opportunity at some time in the future. Social Networks, friends, family, and professional contacts behave much more along these lines.

Five Easy Pieces:

While the calculation for the value of an option is complex, the things we need to plug in are fairly simple in the context of social media:

1.    There must be an inventory of the assets
2.    The future date when the asset can be acquired must be known
3.    The cost of acquiring the asset must be known
4.    The value effects on the enterprise must be estimated
5.    The uncertainty related to the asset must be estimated

The term “asset” in social media space may include: Knowledge, skill, an undertaking of a new project, or the generation of a new idea, etc.

The Social Networking Manifesto:

The objective of the building a social network is to know where the knowledge assets are, how much they can help you, how much they cost to exercise, and the certainty that they will be applicable, available and useful when you need them. Conversely, the best way to increase the value of a social network is to be visible to others, tell people what you can do for them, tell people what you need from them, and establish a reputation for reliability.

Most importantly, everyone must have the right, without the obligation, to accept or decline the opportunity. This is what jump starts ‘supply and demand’ and makes a market a market

Let’s consider all options:

To estimate the value of an option to call on anyone in your network use a financial option calculator tool on the web and plugged in social media numbers. Let’s use Linkedin as the knowledge inventory; 40 million knowledge assets also hold options with their contacts. Say that the expiration date is 1 year (for tax reasons). Assume the market value of their skill is 100 dollars and that at some point in the next year, the value of their skill relative to yourself becomes 200 dollars. The right to buy the asset at the earlier price is worth a premium. Suppose that the volatility of the asset is 50% and the interest rate is 7%.

The value of the “call” is worth about $3.47 dollars. The Call is an option contract that gives the holder the right to buy a certain quantity of an underlying security from the writer of the option, at a specified price up to the specified expiration date.

The value of options in a network:

For the above scenario assuming all assets are equal in price of 100 dollars; if someone has 10,000 1st and 2nd level contacts on Linkedin, the value of their implied call option is about 34,700 dollars. If Linkedin were a stock market, the value of the social contracts that people have with each other is 34K x 40M = 1.3 Trillion Dollars market value for the contracts that people hold and trade.

This is not even the value of the transaction – only the right to have a transaction. The value of the social contract is in the conversations that they hold. Contracts are a financial instrument that can be traded, combined, diversified, and aggregated for real money. It’s only a matter of time.

The Ingenesist Project specifies the structure of an innovation economy where a knowledge inventory, a percentile search engine, and an innovation bank will facilitate and aggregate the 5 components of Option Valuation. Social media applications form the operating system for the market in options.

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The 2.3 Trillion Dollar Mentor Market

By Admin

On June 29, 2009

In General Information

Mentors provide expertise to less experienced individuals to help them advance their careers, enhance their education, and build their networks. In many different arenas people have benefited from being part of a mentoring relationship: Freddie Laker mentored Richard Branson, Bach mentored Mozart, Dr. Dre mentored Eminem, Aristotle mentored Alexander the Great, and Obi-wan Kenobi mentored Anakin Skywalker.

Mentorship: a Valuable 2-way Conversation

Suppose that mentorship could be monetized like financial instruments. Within the structure of an innovation economy specified by The Ingenesist Project; a knowledge inventory, a percentile search engine, and an innovation bank will match the most worthy student to the most worthy mentor in the respective market structure. The mentor would take an equity position in the protégé, not unlike taking a stock in a corporation.

For example: A single mid-career mentor could take on 10 protégés with an option to exercise, say, 1% of the students future salary for every year mentoring upon predetermined retirement date. Say that the average mentorship lasts 10 years. Likewise, each of the protégés also becomes a mentor taking on 10 protégés of their own. The Master mentor will collect 1% of the revenue that each of the 100 sub-protégés provide to their middle mentors per year.

The Educational Pyramid Scheme

If each protégé becomes at least as successful on average as the mentor, the master mentor can collect the equivalent of their average salary for the duration of their retirement. If each of the protégés become equally effective mentors, then the master mentor can double their average salary for the duration of their retirement. A third tier adds another salary to the master mentor.

This is what actually happens in an informal way within companies, government, and Jedi Knighthood; the exception is that social media will enable this to occur outside the construct of a corporation – and such.

Game Theory for the Rest of Us

An interesting social game emerges: It becomes the best interest of the mentor that each of their protégés is successful in their field and practice high integrity. It is in the best interest of the mentee to learn as much as they can and become as proficient as they can. It is the best interest for mentees to pick appropriate mentors and it is in the best interest for mentors to take on appropriate mentees. It is efficient for mentees to form a social network among themselves and for Master Mentors to form a network among themselves. A multiplier effect surges with cross-mentoring.

In aggregate, it is in the best interest for the membership in the social network to cooperate rather than compete because their income would ultimately benefit less from competition than from cooperation.

2.3 Trillion Dollars Market

The American Public education system is in disarray. Standardized education defies the diversity of the country. Teacher’s pay has been stagnant. Curriculum takes years to respond to new knowledge. Recent McKinsey research finds that a persistent gap in academic achievement between children in the United States and their counterparts in other countries deprived the US economy of as much as $2.3 trillion in economic output in 2008

None of this has anything to do with the dreams of our children. None of this has anything to do with the intellect, motivation, and perseverance of our kids. It has everything to do with Political stalemate and failure of the economic system. All children can achieve their dreams, and ours, if there were a market for mentors.

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Social Media Strikes Back

By Admin

On June 26, 2009

In General Information

Money represents human productivity.

Recent headlines declare that 78 billion dollars worth of fuel and productivity are wasted each year by congestion on highways. 1.2 Trillion dollars per year in productivity is lost due to past failures in education. The US spends 7% more of our GDP on health care than the average of other developed nations leaving nearly 1 trillion dollars of unknown ‘productivity value’ in vapor per year. 200 Billion dollars per year is spent on war, whether necessary or not, that has not increased American productivity in an economic sense.

2.5 Trillion Units of Human Productivity

Without even trying hard, 2.5 Trillion Dollars per year in stuff not produced is wasted on activity that does not increase human productivity (stuff produced). Obviously debt is a promise to produce stuff in the future. But we’re wasting stuff now? At some point the logic falls apart but no matter how you look at it, money represents productivity and the only way out of this mess is to innovate at an astonishing rate.

Conversational Capital

In an earlier article, we conjured up a rough tabulation of productivity gains due to social media:

One billion messages are sent on Facebook every day. Suppose that each Facebook conversation has a net value of $1.00 per person. That comes out to 730 Billion dollars per year of human productivity saved.

Twitter is worth a cool 100 Million tweets per day. Let’s assign a net productivity gain of $1.00 per tweet delivered. That is $36 Billion per year in increased human productivity.

Suppose each blog article published increases human productivity by $0.50 each. With over 100M blogs, that is 10 billion dollars per day – or1.8 trillion dollars per year.

The grand total is 2.5 Trillion Dollars worth of conversational currency.

In Search of Waste Economics:

Now, return to the waste side of the balance sheet let’s reflect on the areas of impact that social media has on: transportation, energy, education, health care, and world Peace:

Social media reviews automobile quality and drives social priorities toward green industry. Social media allows people to find work close to home, social media vets energy systems such as wind, solar, nuclear. Social media is driving journalism to value added roles and away from corporate collusion. Social media provides richer and more current content than textbooks. Social media is driving social priorities over Wall Street priorities in health care, energy, politics, industry, and science. You Tube is seeing a 1700% increase in downloads as people set up video cameras all over the world searching and reporting injustice. Little Brother is watching.

Social media strikes back

In order to predict where social media will strike next all we need to do is look for the waste economy; areas where world governments, institutions, and corporations are inefficient, wasteful, co opted, or corrupt.

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Matchmaker, Matchmaker, Make Me a Match

By Admin

On June 22, 2009

In General Information

The $40 Billion Dollar Dowry

Every organization wants to attract the most qualified employees and match them to jobs for which they are best suited. The human resources department is responsible for matching a knowledge surplus to a knowledge deficit through the hiring process. Fortunately for them, there is no knowledge inventory in society and managers don’t necessarily know what they want.

Human resources, training, and labor relations managers and specialists held about 868,000 jobs in 2006. The following tabulation shows the distribution of jobs by occupational specialty:

Training and development specialists    210,000
Employment, recruitment, and placement specialists    197,000
Human resources managers    136,000
Compensation, benefits, and job analysis specialists    110,000
Human resources, training, and labor relations specialists, all other    214,000

An HR Generalist pulls an average income of about $50,000 per year; A Director earns up to $140,000 per year. The total HR national payroll is estimated at $40 Billion annually.

Commodity Management:

Human Resources creates the impression that people are merely commodities to be treated as expenses rather than assets; or at best, like office machines or vehicles, despite assurances to the contrary. The HR profession is built on the assumption that people cannot manage themselves, that human behavior is random and intangible, the independent variables for success are always known by management, and that the key words on a resume is the best predictor of a good match.

Innovation Economics; the science of incentives:

Social Media is providing systems for people to organize and manage their own career. True knowledge inventories are forming as social groups coalesce around standard taxonomies of professional practice outside the corporate construct. Knowledge assets are being vetted in communities of peers and the resume is being replaced by a Social Network Profile and “Search Engine Footprint” which more accurately predicts the quality and quantity of knowledge assets. In the near future, a predictive search engine will be able to predict the probability that various collections of knowledge assets can execute a specific business objective at a known cost. Scenarios can be tested and compensation will reflect true supply and demand.

Superior Value Comes in Many Different Packages:

So what happens when top management meets the new Human Resources Training and Content Development Manager who was sent by the Social Networks Search Engine to build the new corporate Blog and Social media strategy – sporting facial tattoos, a nose ring, and a black kilt, and dreadlocks? If the fact that a top manager is not comfortable with a person of a particular culture or lifestyle can be perceived as detrimental to the innovation capacity of the organization, that organization is threatening its own survival.

Don’t Shoot The Fiddler

The story of Fiddler on the roof centers on Tevye, the father of five daughters, and his attempts to maintain his family and religious traditions while outside influences encroach upon their lives. He must cope with both the strong-willed actions of his three older daughters—each one’s choice of husband moves farther away from the customs of her faith. The story resolves with a slow acceptance of the new world and creeping redefinition of what love is and what love can be.

In an Innovation Economy, the perfect match is no longer determined by those inside the construct of tradition, rather, it is determined by those entrepreneurs on the outside redefining tradition – and earning 40 billion dollars.

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Treating the consequences, not the symptoms?

By Admin

On June 10, 2009

In General Information

Problems and opportunities are moving very fast. Problems are often so complex and so integrated across the globe that no single person can accumulate in a lifetime the experience needed to manage effectively. The “top-down” management structure no longer has a statistically relevant sample of prior experiences from which to make essential decisions. Actions without wisdom have unintended consequences for yet unknown victims.

The Wisdom of Management

Managers manage through experience. After many years in an industry, they can observe a situation and compare it to prior situations that they have encountered either through experience or formal education.

An effective manager can identify an issue, determine the probability that it will become a problem, and discuss the consequences of action or inaction. Then they make similarly calculated decisions that either solves or manages the consequences of the problem. The depth and breadth of a manager’s experience is called wisdom.

Duplicating Wisdom

In order to duplicate wisdom in a laboratory, scientists generate statistical events. By duplicating a scenario 20-30 times, a range of outcomes becomes statistically relevant for predicting future outcomes and identifying the way things can influence the outcomes. The idea behind the peer reviewed journals is to display the experiment to everyone for vetting. If it survives vetting, it becomes part of the human body of knowledge until otherwise challenged.

Managing consequences

The rate of change has become extremely high and problems too complex to manage. Vetting mechanism are breaking down like levies against the dam in industries such as Banking, Insurance, automotive, medicine, education, environment, etc. We are in a crisis of consequences where we can no longer manage the symptoms, only the consequences – forget about curing the disease.

Social Media: The Operating System of an Innovation Economy

The business plan of the new millennium will be the art and science of making information “less imperfect”. In a condition of perfect information, everyone associated with an issue has the same information as everyone else. Perfect information is what makes markets efficient and decisions rational. Agreement is perfectly mutual, supply and demand are perfectly aligned, all risks are perfectly predictable and cause and effect are perfectly transparent.

Wisdom of Crowds

No single human can accumulate enough experience in a lifetime to manage the totality of human problems. Perhaps the wisdom of crowds could be used to simulate one person that does. This cannot, however, be a random collection of people acting in haphazard process. The challenge is in finding the correct group of people who collectively replicate a condition of “perfect information”. Then we must transform the perfect information into knowledge. Finally, we need to transform that knowledge into innovation through entrepreneurial activity.

The Social Imperative

Social Networks need to form complete and detailed inventories of resident knowledge cataloged on a ‘bell curve’. Social Networks must codify social capital, creative capital, and intellectual capital so that scientific methods can be used to predict and assemble unique collection of knowledge assets that capture statistically relevant collections of experiences. That unique set of knowledge assets must then be deployed precisely in a market.

By all indications, this is the direction that the integration of social media is trying to go. It is now our social imperative that it gets there.

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