The Ingenesist Project

The Next Economic Paradigm

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Is Freedom A New Economic Paradigm?

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On December 10, 2009

In General Information

A New Economic System of the country of Montenegro is based on complete and unfettered economic freedom; in other words, the elimination of all barriers to conducting business.  Is Freedom A New Economic Paradigm?

Veselin Vukotić ‘s paper titled Economic Freedom and New Economic Paradigm, offers a case study that enlightens us as to some of the core changes, some easy and some difficult, that any proclaimed ‘new economic paradigm’ would place on people, culture, politics, and the markets.  From this insight, perhaps we’ll see a new paradigm emerge.

Freedom; A competitive Advantage

Montenegro has achieved a competitive advantage in their Eastern European region by reducing international trade barriers, treating foreign and domestic concerns equally, reducing “contribution” fees and other taxes, reduction of public spending, affirmation of private property, and encouraging entrepreneurship.   Veselin Vukotić  also notes that the concept of economic freedom is a complete theoretical and practical expression of an idea.  He quotes Plato:

The difference between concepts is the difference between starting ideas!

Therefore, he concludes that the idea of economic freedom is freedom of an individual to conduct business (earn money), and that business is the key factor of a society’s development and individual wealth.  While we now know that unfettered capitalism breaks down at some point, he does accomplish something important – the elimination of all government as a defining element of freedom.

The Singularity Solution

We know it is often easier to solve a problem if we can remove certain elements, even temporarily, and analyze components individually.  Suppose we eliminate Government from the equation, corporations would rule.  However, corporations are made up of individuals, so individuals would rule…they would rule whom?  The logic also breaks down.

There is one exception: what if all individuals were corporations and they ruled only themselves? Corporations are keeping government out of their affairs by keeping people off the books.  The solution is for everyone to structure their existence as a corporation contracting to each other for every conceivable business arrangement.  Heck, it only costs 40 dollars to open a business in the the U.S.

Self-regulating Freedom?

Knowledge would be shared freely, people would be paid for their productivity, diversity and strategic combination of knowledge would be rewarded.  Everyone would own their knowledge and would seek to accumulate more.   Trade barriers would be eliminated, taxes would be reduced, private property would be affirmed, and entrepreneurship would be encouraged.  Like a family, no corporation could become wealthy at the expense of another corporation for very long.

Would you be willing to pay the government to leave you alone? Is that Freedom or a new economic paradigm or both?

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Why is college measured in “degrees”?

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On December 9, 2009

In General Information

 

(Editor’s note; This is the first in a series of articles that challenges the “degree system” of knowledge measurement as archaic and irrelevant to what is actually happening in the world today.  Like the resume system  – it is ridiculous if not outright damaging to the prospect of knowledge behaving, and therefore, trading like a financial instrument.  

Why do we still care about college ‘degrees”?

The information that fuels the next economic paradigm will not be captured in the form of college degrees; rather, it will be captured in extremely detailed granularity of unique collections of knowledge assets in diverse combinations of persons that solve complex puzzles – and then share the solution with others.

This begs the question, why do we still care about University Degrees?

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A Definition for Innovation Economics

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On November 26, 2009

In General Information

Innovation economics is an economic doctrine that reformulates the traditional model of economic growth so that knowledge, technology, entrepreneurship, and innovation are positioned at the center of the model rather than seen as independent forces that are largely unaffected by policy.

Innovation economics is based on two fundamental tenets. One is that the central goal of economic policy should be to spur higher productivity and greater innovation. Second, markets relying on price signals alone will not always be as effective as smart public-private partnerships in spurring higher productivity and greater innovation. This is in contrast to the two other conventional economic doctrines, neoclassical economics and Keynesian economics.

A Definition for Innovation Economics

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Can Twitter Fuel a Run On Banks?

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On October 30, 2009

In General Information

The Ingenesist Project is retained by corporate clients because we look at the world through a different set of filters. We are looking for possible disruptions on the horizon as far in advance as possible so that our clients can be aware of potential perils and modify their business plans accordingly.

One of our signature assertions is that Money is merely a social agreement – not a federal mandate of a democratic government. People will trade whatever currency they agree to trade. Increasingly, people, empowered by social media can impact the financial system far more that a bunch of Quants peddling CDOs.

People simply do not know how powerful they are.

Suppose someone puts together a Twitter/Facebook campaign for everyone the withdraw their money from a single financial institution who just handed out big bonuses? At best, those bonuses will have to be recalled to keep the doors open. At worst, people will find an alternate currency to store the “value” that is destroyed by a bank run. Virtual Currency? Admittedly, it’s far-out, but we need to keep our eyes on these trends because once started, they move very very fast. That’s why they call it a “Run”

Is this scenario really possible? Read on…..

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Counting Eyeballs

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On October 26, 2009

In General Information

The Advertising Industry has some serious problems. Ad agencies are having a difficult time understanding the modern advertising space with the limited, if not worthless, paradigm carried over from the days of radio; the CPM.

CPM stands for Cost Per Mille

CPM means: how much does it cost to penetrate 1000 heads?… or 2000 eyeballs, I suppose. They count the penetrated heads, like an act of war – the body count, the bullet shells, the napalm canisters…and that is the basis of their decisions. As Dr. Phil would say “How’s that workin’ for ya?”

The CPM is however, a great way to kill off creativity, highlighting the flashy crap while burying the good stuff. Maybe it works well in the counter insurgency of Afghanistan, but it does not work in social media space. What happens after the mommy blogger gets a look at that Spiderman drinking cup that melts in the dishwasher?  Imagine the blog post about that cool new GM retro rod that smells like formaldehyde to the undertaker enduring their midlife crisis.

What’s the CPM for the blogger?: zero.  Can advertisers compete?: no.  Should they stop?: yes.

People are not stupid and they do not work for free. Yet, the entire web advertising model tries to get them to walk through a rat maze of links and pages just to hit more banner ads (impressions).  Advertisers keep doing it, ad after ad, page after page, year after year.  They wonder why the rat don’t hunt.  The most important thing to a rat is food, family, and friends.  There must be a tangible economic incentive for people to do what you want them to do.  Even after that, not all impressions are equal, or favorable, or lead to sales – but every one is valuable to your product and your brand if you know who I am.

Foresight is 20/20

It is always very expensive to change people’s behavior and the best management policy is to accommodate what people are going to do anyway.  If  I want to drive a retro rod, help me do enjoy my friends with it – don’t pull the emergency brake.  If I want to spend time with my family, don’t interrupt me.  If I want to walk in the park, don’t whack me on the head with a billboard.  That’s not a great way to start a conversation.

Open letter to Pitchmeisters

Dear CPM mongers, I have learned to ignore you. Like the paint blots on a Monet, I have learned to see the image despite your distortions.  Your “fear” pitch is comical to me.  The buy-me-love pitch is goofy.  The lifestyle-threat angle sounds as ridiculous as an old like Archie Bunker re-run.  The most fun I can have is using my ability to walk away leaving you talking to yourself like a deranged chimpanzee at the zoo.

Measure what I measure

Help me do what I’m going to do anyway even if I still ignore you – all data is data.  If you want to understand me, measure what I measure; health, happiness, productivity, laughter, family, friends, hope, vision, safety, music art, quality of life.  Help me make friends, empower my community, and care for my family. Don’t try to take these away from me – you will lose.

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You’ll Know It When You See It

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On October 20, 2009

In General Information

I’ve been publishing my research freely all over the net, in the creative commons, and several blogs.  I am passionate about this work and I want to tell everyone about it.  It’s my playground.

Not unlike a playground

Then one day another kid comes over and says, “Hey, that’s an interesting game you are playing, what are the rules”?

So I tell him; “Well, it’s part economics, part innovation, and part social media. Now sprinkle in some differential calculus with finance theory and garnish with a modern analogy or two”.

The other kid responds, “Wow, I know someone you should talk to…..”

Boomerang effect

Unrelated, this morning I received a phone call from a major brand that wants to “innovate” everywhere in their business but are not quite sure where to start.    They came across one of my blogs and essentially said “Hey, that’s an interesting game you are playing, what are the rules and where can I find a short course on innovation that meets my schedule?”

I offered my opinion: Innovation is defined essentially as “you know it when you see it”.  As such, Innovation courses can only teach you to “know it when you see it”.  By the way, the game I’m playing is part economics, part innovation, and part social media. Now sprinkle in some differential calculus with finance theory and garnish with a modern analogy or two”.

You know it when you see it

Then we had an idea. I can find a University in Seattle that will sponsor a seminar and we’ll invite a group of known Seattle innovators and some corporate folks and we’ll all brainstorm for a few days.  What better short course in innovation is there?

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The Invisible People

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On October 16, 2009

In General Information

There is no knowledge inventory.  There is no knowledge inventory.  There is no knowledge inventory.

This is a stunning omission for a society that intends – no, a society whose future is irrevocably dependent on it’s ability to innovate it’s way out of inevitable monetary collapse.

America does not know what Americans knows.  Entrepreneurs do not know what knowledge is available to them.  Markets do not know the supply and demand of knowledge assets.  The self-correcting magic of market capitalism is utterly unavailable if people and their knowledge assets are invisible.

  • There is a story out of the past mayor (someone who performed their civic duty to run for elected office) of Bennett Colorado who is one eviction letter away from living in a Ford Explorer with her 4 dogs.
  • Thousands of older Engineers are unemployed when Congress is crying for more Engineers.  This is the reason why there are none – the career has been reduced to a lousy bet.
  • Experience is knowledge, yet older workers also have a tougher time finding new jobs once they become unemployed. The average duration of unemployment for those age 55 and older is almost 30 weeks.
  • About 38 percent of the older workers and 26 percent of the younger workers had been out of work for 27 or more weeks in June.

Our economy needs to be able to efficiently match knowledge surplus with knowledge deficit in order to produce things and educate each other.  Diverse knowledge assets need to be combined in new and strategic ways.  Knowledge assets need to be matched by proximity as well as innovation potential.  Investors need to know the probability that a collection of knowledge assets can execute a business objective in order to decrease innovation risk.

Nothing can be accomplished without a knowledge inventory.  We have empowered corporations to be the stewards of the US knowledge inventory and the associated innovation economy. Information, knowledge, and innovation act as a system.  Without one of the pieces, you cannot have the other two.  If we outsource the knowledge economy, we lose the innovation economy.

The great promise of Social Media is that the knowledge inventory becomes a public reference. People need to know what other people know so that they can build things.

Once you are outsourced – you become invisible.  Who will be the next invisible person in your neighborhood?

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Taxonomy for Knowledge Inventory

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On October 15, 2009

In General Information

The library district in Adams County Colorado became the first in the nation to ditch The Dewey Decimal System in favor of something called “WordThink” or commonly known as “The Bookstore Classification System”.
Given that a great deal of literacy is reflected in our conversations, it is not difficult to accept that much of what we say can be traced back to some book or classified publication.  True, knowledge comes from experience, but knowledge is derived from information and information is classified by the Dewey system, WordThink, The Universal Decimal Classification System or any number of proprietary taxonomies.

The difference is that The Bookstore Classification system is attached to a huge multi-billion dollar marketing and production infrastructure.  Think Barnes and Noble, Amazon.com, Borders, etc.  Some would call it an egregious example of corporatism in the public library system.  Others would call it an astonishing opportunity for corporate subsidization of knowledge asset development.  I tend toward the latter.

Knowledge needs to be formatted to behave like a financial instrument. If this can be accomplished then entrepreneurs will innovate in the trade of knowledge assets.  If you want to build an airplane, you need an inventory of parts.  If you went to build a social media as a social infrastructure, then you will need an knowledge asset inventory. If you want to promote innovation, then you want to promote social media.  First and foremost, knowledge assets must look like a buck, walk like a buck and quack like a buck – then they will trade like a buck.

Conversational Currency, The Relationship Economy, and The Ingenesist Project have published on this matter.  But for now, let me leave you with the original article from the Denver Post (below).

Some say that WordThink dumbs it all down, others say it’s easier to browse – see article below for additional analysis.  However, as you read the article suppose you are an entrepreneur not shopping for a book on SEO, but rather, shopping your neighborhood for a person that knows SEO.  Then ask; what’ll it be; Dewey or WordThink?

 

Adams County libraries shelving Dewey Decimal

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Toyota Raises the Bar, Again

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On October 12, 2009

In General Information

Adapted from NY Times article here

Last week Akio Toyoda, president of Toyota Motor, apologized for his company’s poor financial performance and possible culpability in the death of an American family for faulty product.To this, I ask – what is the value of this conversation in the age of Social Media and where is the associated innovation?

I worked extensively in Japan and apologies from CEOs are not uncommon.  When All Nippon Airlines and Japan Airlines had a few runway incursions – both CEOs (competitive enemies) appeared together on national TV nearing tears and ending with a loooooooong bow of remorse.  US media does not often get a chance to see this side of Japanese culture because of it’s intimacy, sensitivity, and frankly, it’s a little bit strange since scandal and corruption in Japan can be truly world class.

A few interesting quotes from Mr. Toyoda:

  • Toyota was shamefully unprepared for the global economic crisis and now is a step away from “capitulation to irrelevance or death,” said Mr. Toyoda, the grandson of the car maker’s founder. The company, he added, is “grasping for salvation.”
  • Toyoda declared the automaker had gotten too arrogant on “the hubris born of success” and the “undisciplined pursuit of more.”
  • “I want Toyota to return to profit, so we can start paying taxes and go back to contributing to society,” he said.
  • And in a peculiar show of deference, even the reporters gathered were issued an apology.
  • “I’m sorry I am standing on a podium, standing above you,” Mr. Toyoda told the seated audience. “But my seniors always taught me that I must stand when addressing those who are above me.”
  • ….and they go on and on….

And on the other side of the pond…

I am still waiting for a single US Banker, Insurance company CEO, or Corporate executive to apologize for mismanagement and failing to sell worthy products.  Not one – Sure, they will kowtow to the Congress or the courts, but not the people – all they need to do is look straight at the camera. Seat belts were not even installed in US automobiles for the first 60 years because they did not want to give the “impression” that automobiles were unsafe.

The devaluation of conversation?

“Sometimes, this apology business is a way to avoid taking real action or responsibility,” said Robert Dujarric, director of the Institute of Contemporary Japanese Studies at Temple University’s Japan campus.

“When you hear these long apologies,” Mr. Dujarric said, “It makes you want to say: ‘Don’t be sorry, just do something about it.”’

Now, enter Social Media:

Toyoda again has set a new standard.  This story is covered throughout social media space – most other big Japanese apologies had not.  The difference between the US automaker and the Japanese is stark.    Toyota intends to be the standard by which all other competitors are compared.  When most are trying to lower the bar, Toyota raises it.

That’s the value of conversational currency.

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Entrepreneurs or Social Media Riff Raff ?

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On October 7, 2009

In General Information

I am noticing a recent backlash at the social media experts that are not actually experts.  In one such rant, a real social media expert proposes a few simple questions that can help separate the good from the not-so-good.

A few simple things:

  • Proof of experience and demonstrated results.
  • Business leadership, not necessarily thought leadership.
  • Dig deep into a consultant’s background and social media presence. Is he or she simply good at promoting him- or herself?

Bad Apples?

The chief complaint is that the bad ones are destroying the reputations of the good ones.  It is no mystery that any fair and competitive market has a vetting mechanism and the hallmark of protectionism is in promoting the absence of such vetting… “except my own”.

Subjectivity or objectivity:

The Real Expert certainly means well, however, they are reflecting on the profession in their own image.  This is entirely valid and correct, in fact, the CEO of the hiring firm is likely doing the same thing, saying to themselves: “Obviously, a social media consultant who is very good at promoting themselves would also be very good at promoting my company”. As such, the consultant that self-promotes is ironically casting the less selfish image.

A few not so simple things:

  • There is a dire shortage of social media consultants relative to the “adoption” rates needed to solve real problems.
  • Prices increase as demand increases and supply stays low.
  • There is too much social media work for the existing “good ones” to possibly do in their lifetimes.

What every expert should know:

  • Social Media is about engagement and sharing, inclusiveness, and empowerment.
  • Social media success is a function of critical mass – the more people doing it; the more social media consultants will be needed.
  • There are as many different levels of expertise as there are levels of need for such expertise.  The ability to match the correct knowledge surplus to the correct knowledge deficit is the hallmark of an expert.
  • A social media expert for a construction company is a lot different than a social media expert for an advertising agency – and it is unlikely that either would think of the other to be an expert.
  • The world needs lots and lots of social media experts covering a wide range of disciplines real fast – no holes.

Will the Real Social Media Expert please stand up?

Where are the social media experts who are devising the curriculum, certification, structure and ascension plan for all the emerging consultants?  After all, social media expertise is in itself the art and science of bringing mass quantities of people around a common goal, concern, message, or product, – quickly and efficiently using modern tools of mass influence – etc.  What expert(s) is bringing together ALL social media “experts” under a vetting mechanism that serves market efficiencies not subjective efficiencies?

A kettle and a stove walk into a bar…

In other words, if they are so good, why haven’t they organized themselves?.  The CEO says, “If they cannot organize their own “Social Network” industry, how can they organize mine?” Until then, the Riff Raff are entrepreneurs too and an essential ingredient in the development of innovations that will become standards that act in the best interest of the market, not necessarily in the best interest of the “real” Social Media expert.

Besides, who else would the Underdog go after?

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The Six Discovery Skills for Innovators

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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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Why Are Leaders Failing?

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On September 18, 2009

In General Information

People look for leaders that inspire them to achieve innovative breakthroughs. People trust, or so we think, CEO’s to effectively lead their organizations so that employees can continue to get paid.

The confidence in leadership is waning and a new “leadership” is emerging. The new leadership is from and by the people. The reason for a shift in leadership is as follows:

1. Politicians have failed us with self interest and politics as usual. Usual no longer works for the people

2. CEO’s and management have failed to listen to the markets of conversations

3. Greed is out, efficiency is in and the old market is not adapt at “lean, mean and fast”

4. The people has lost trust in media, politicians and old management schemes

5. Advertising and marketing methods of the past are dead. 96% of the online ads get no responses. A rate of 3% at best is the return on direct mail, coupons and broadcast ads.

6. The market is no longer listening to the old market rather the market is listening to the people

7. People have been empowered and engaged to create their own markets and they follow a new kind of market leader. A leader who enables them to learn, grow and share with others whom have an affinity to their interest and beliefs.

8. New leaders are now  conversing with their own audience and there are many of them.  There are also a few leaders who are enabling many to engage, converse and build our own audience.

9. Conversations have never been so fluid, so reaching and so powerful.  The irony is that the power of speech has always been and will always be disruptive. History proves it so but we are in an era of making history that reinvents itself daily from the conversations.

10. Old leaders either adapt very quickly or die. The old game is over and the longer you try and play it the more it will cost the market, your investors and the people whom supply the market with commerce, the people.

Admit It, You are Out of Touch And Blinded By The Past

For politicians and corporate leaders the downfall of your empires is directly related to markets changing and you denying the change. If you haven’t noticed markets are now transparent. There is nothing you do that the market won’t notice and freely comment on, good, bad and indifferent. When you do good the market with follow you. When you do bad or do the same thing the market will leave you. Unless you recognize this shift your dead in the water.

Time is your enemy and denial is your your deathbed.  Being dead in the water means the next wave will topple your boat because its force is too big, too large and you can’t move fast enough to navigate around or over it.

Then again you may simply not have time or attention to even recognize that it just may be true and real.  In that case, move over for the new leader to replace you sooner than later.  Leaders are failing because they fail to change and fail to listen. Sorry for being so frank but I don’t have time to be politically correct. Get it?

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Will Facebook Currency Intermarry with the US Dollar?

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On September 15, 2009

In General Information

Facebook is testing a virtual currency, because it’s cool and they can do it. They are not alone, the gaming industry has been at it for a long time for people who want to be more “productive” in the game space.

There is no mention, however, whether a Facebook currency could be used as a medium of exchange in the event of hyperinflation and the crash of the US dollar.  I can find nobody, writing anywhere today, that is willing to cross this proverbial line in the editorial sandbox.

I personally witnessed a devaluation in Mexico. Like a tsunami, the “adjustment” happens relatively fast as values ’snap’ fluctuate relative to other currencies.  Then very interesting things start to happen in the community. People will literally empty WalMart because most goods will be cheaper today than tomorrow.

As with other hyperinflation events, black markets form around various items such as gasoline, cigarettes, or Levis as people require some medium of exchange in order to buy necessities such as groceries and cooking fuel.

A Facebook currency may just be what communities will use to get through the event.  However, a Facebook Currency would likely be temporary because it could not be used in Banks to capitalize assets – or, by government who can’t figure out how to tax it.

Now the question becomes, what type of social currency could be intermarry with dollars?

Here is a hint; the dollar is backed by debt which is a promise to be more productive in the future. Conveniently, “innovation” is also a promise to be more productive in the future. Two such currencies are of the same species and can intermarry yielding new economic life.

The degree to which any ‘virtual’ currency is interchangable with the dollar is the degree to which it represents human innovation. Chew on that, Facebook.

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You Can’t Eat Gold

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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

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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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What is Viral Marketing Immunity?

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On August 24, 2009

In General Information

The great promise of social media marketing is the free viral sales force.  Magically, if one person can be made to love your product, they will tell all their friends who go off and tell all their friends.  Some PR companies even go so far as to promise to deliver the “viral sales” force.  What actually happens is quite a bit more complex.

Social Media Immunity to viruses

I recently met a very tech savvy person at a social media convention who had recently returned from overseas with her Acer notebook computer.  She proceeded to give me a detailed analysis of important features such as size, weight, battery life, connectivity, durability, replacement parts, customer support etc.   I was about to buy an HP until I heard about this hot new Acer.  As I listened intently, I realized which features were important to me and which ones were not.  With all this new information, I bought a Dell.

So how did someone touting an Acer actually convert me from HP to Dell?  Frankly, that’s not relevant, what is relevant is that Toshiba was not part of the above conversations – they were attacked by the virus.

Developing a vaccine:

Dell, Acer, and HP could have each dropped 1,000 dollars into a pool of money.  Those 3,000 dollars could have been used to sponsor a community of bloggers to write about the systems, methods, techniques, and products used by their community, just like they would do anyway.

The Next Marketing Paradigm:

Brands will commit funds to people who share active conversations in the areas that truly interest them.  Bloggers will be rewarded for bringing together the communities around natural affinities such as boating, gardening, woodworking, sports, or music, etc.  The names of the sponsors and the funding amounts will be public information, of course, but the funding will be disassociated from an actual purchase.

Just a new twist on an old marketing principle:

McDonalds spends a great deal of money figuring out the best street corner to put a franchise.  At first the franchise turns out 500 meals a day.  Then comes Burger King and together the street corner now produces 1500 meals per day. Next, DQ moves in and the intersection now produces 3000 meals per day.  Without competition a franchise may serve 500 meals.  With competition, each “competitor” serves 1000 meals per day.  The street corner has become a “destination” of choice; literally and figuratively.

Knowledge Malls:

The difference is that the Mall concept is “arithmetic” scaling with upper limits, while the social media mall is multi-exponential.

1. When diverse groups of people get together, they share information, exchange knowledge and innovate, innovate, innovate.  Innovation creates wealth exponentially.  Wealth creates customers exponentially. Every conversation is an event and every event presents multiple opportunities to carry a message far and wide, exponentially.

2. Tangential innovation are the opportunities that are enabled by the primary innovation – often called “Apps”

•    Bloggers help define the community allowing for superior targeting App.
•    Even if a brand does not “win” the sale, they will gain valuable business intelligence App.
•    The brand wins a first mover advantage on the next product development cycle App.
•    Brands win trust because they are supporting a community App.
•    Brands win loyalty – like insurance – if something goes wrong, they are readily forgiven App.

3. The cost of absence App. The worst brand message is to find one’s brand locked out of the game, maybe Toshiba will find this post on Twitter.

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The Social Media Resolution; From Monet to Blue Ray

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On August 14, 2009

In General Information

The Convergence of Knowledge

The Ingenesist Project and related blogs such as Relationship Economy and now Conversational Currency have long predicted that the resolution of social media space will vastly increase from  “Monet” to “Blue Ray”.  The segmentation and convergence of social media space will happen on two fronts: Knowledge Inventory and Proximity.

From Strategis:

“As Facebook balloons to over 250 million users, many voice their appreciation for Facebook’s small social network feel.  Unlike its so-last-year counterpart, MySpace, Facebook has successfully maintained a very personal feel, finding hundreds of ways to link the most relevant people, in the most relevant ways.

Even so, because Facebook has so many interesting people, useful content, and relevant apps available, many users would appreciate a broader search option that would enable the to quickly search ALL of Facebook’s content. Thus, Face says: “your wish is my command”. And so it is. Facebook has now announced that it will soon make the change allowing users to search the entire site, not to mention, do new things like share status updates with everyone, rather than just confirmed friends. Expect to see these changes in full effect some time within the next two months”

What’s in store for the next 2 years?

While the coolness of Social Media is still riffing through society as the late adopters drive huge growth, nothing “economical” happens until people actually get together and build something.  In order to build anything, there must be an inventory of parts.  All these parts need to be in physical or virtual proximity to each other. A financial system must support the initiatives of the entrepreneurs in any market.

The United States of Mind

We’re about 3% into this new paradigm today.  At 20% the corporate structure will become increasingly mushy as many corporate functions are now handled in Social media space. At 30%, cooperation will “compete” with competition as a business model.  At 40% a new currency emerges to hedge debt backed dollar with productivity backed “conversational currency”.  At 50% people convert general dollar backed holdings to ‘conversational currency’ holdings.  At 60% social priorities dominate corporate priorities. At 70% the Innovation Bond dominates financial markets. At 80% international borders become fuzzy as knowledge flows as easily as, say, avocados and T-shirts do today.  At 90% global currency backed by productivity, dollar, Euro, Yen all expire.  At 100%, the president is elected to a “State of mind”.

Hold on, not so fast….

OK, so that’s the problem with predictions, it’s hard to survive with one’s credibility intact.  Kudos to Strategis for showing us the future!!

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The 1.6 Trillion Dollar Waste of Time

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On July 15, 2009

In General Information

Countless blog articles and news reports complain about information overload in our society.  People are so occupied filtering information that they no longer have time to act on what is deemed important.  Every thought, idea, message, and picture that enters the human mind is stored somewhere by the magnificent human brain.  But the onslaught continues in spam, junk mail, billboards, pop-ups, aesthetic pollution, and road signs.

Endless War:

It’s a war that we cannot win so we just resign ourselves to the noise. Adult attention deficit syndrome is on the rise and I personally forget ideas quickly as they are replaced by new data appearing in my field of view.  I am increasingly aware of the huge time expenditure and the tremendous loss of productivity that is induced.

Money is time:

The underlying premise of Innovation Economics is that money represents human productivity and the only way to sustainably increase the quantity of money is to increase human productivity.  The only way to do this is to innovate.  This and other articles from the Ingenesist Project predict the value of innovation economics by the amount of productivity saved through the application of IE principles.

The Ad Spend and who really pays?

In the United States 2% of the Gross Domestic Product is spent on advertisements, not including the production cost of the ad. This is equal to 280 billion dollars per year.

Although direct response professionals usually project a response rate of less than 0.1% which means that 99.9% of the views are irrelevant noise. Time, energy, bandwidth and human productivity are consumed in seeing the ad, determining it is irrelevant and moving on (or sitting through the ad if you are captive such as TV commercials).

Pass Complete Ratio:

On super bowl Sunday, 90 million people will sit through a 30 second commercial that cost the advertiser 3 million dollars to air.  For an irrelevance rate of 99.9% , 375 man-years of productivity are lost.  For an average salary of 50,000 dollars per year; 18.8 Million dollars of productivity is burned by a single commercial.  For an 18.8M dollar productivity loss on a 3 M dollar ad spend, the ratio is about 6:1.

This means that for every ad dollar spent, 6 are lost in unrealized human productivity.  For a 272 Billion dollars spend at 6:1 irrelevance, then 1.6 Trillion dollars worth of human productivity are lost every year.

The most willing viewer is the most worthy viewer

The Ingenesist Project specifies a knowledge inventory system where a person’s knowledge inventory is represented by a packet of computer code.  Since the dissemination of this code is in the power of the owner, money spent on advertising can now be spent on compensating people for their time viewing and responding to an advertisement that they are actually interested in.

Economies of scale for advertisers can be produced by supporting groups that bring communities of people together in social media activity.

Spread the word:

So if media advertising disappears, what will the rest of us do with all of our spare time?  We’ll spend it with our families, friends, communities, and groups talking about what we know best – and the great products that empower us.

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The Vicarious Search Engine

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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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Is the Corporate Structure Obsolete?

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On June 24, 2009

In General Information

The Social Media Production System

Social Media has demonstrated in many ways capable of meeting or exceeding the deliverable output of many traditional industries such as advertising, marketing, journalism, human resources, design, community organizing, education, and social vetting.

We have also seen social media form communities that increase productivity in manufacturing processes, software development, and project management.  We have seen people self manage in social media to segregate and elevate good information away from bad information.  We have seen communities act with logic, tact, and precision previously thought to be the province of top management guidance.

In short, we have seen social media replace or duplicate almost every structural element of the traditional corporation outside of the construct of corporations.  Can social media provide a corporate structure in and among itself?

General Accounting Practices:

Corporations have an internal accounting system, internal processes, internal procedures, and often their own lexicon and unique job descriptions relative to their product.  This is how a corporation stores knowledge and trades value internally and defends itself from external influence.  The common thread is that each department is accounted, assessed, and compared in terms of money.  Standard balance sheets are compared by banks and investors.

Social media uses the exchange of information, knowledge and new ideas to store value.  Processes, procedures, job descriptions, and accounting are done in a public lexicon that everyone develops collectively.  People share, trade, and exchange information, knowledge, and new ideas like tangible property; and they trade options on futures in the same.  Increasingly, access to the community knowledge inventory is becoming a means be which people can convert productivity to money.

Standard Balance Sheet for Social Media

Most elements of a corporation can be duplicated in social media.  For those parts that cannot, the entrepreneur will soon figure out how they can.   The entrepreneur does not worry about money, they worry about productivity and the money always follows.  The next paradigm of economic development will reside almost entirely on a statistical game of managing risk and return, matching surplus to deficit, and increasing human productivity in the operating system of Social Media.  Every Newspaper that falls to Social Media is simply transferring its value to the new paradigm.  That value is still in play.  This trend will continue until a new currency representing that value is introduced.

Business Plans of the Future:

As you witness the progression of Social Media unfold, look for innovations that contain incentives for people to reorganize themselves.  Look for similarities between new social media developments and traditional corporate departments.  Look for businesses and institutions that support social vetting mechanisms, knowledge exchanges, and groups bringing together strategic combination of diverse knowledge assets, not just similar knowledge assets.  Most importantly; look for the “Last Mile of Social Media”; diverse groups of 5-10 people living within a few miles of each other forming new enterprise.

Threats:

Finally, look for the threats that can corrupt an innovation economy.  Social Media is currently responsible for trillions of dollars of productivity gains – all this money is still on the table for social entrepreneurs to monetize once the integration reaches a tipping point.  Be watchful for attempts at censorship, attempts to monopolize information nodes, and the corporatizations of social networks.   Wall Street was corrupted when the value of the currency became divorced from human productivity.  Don’t let the same happen to Social Media.

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Treating the consequences, not the symptoms?

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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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Change You Can Bank on

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On June 5, 2009

In General Information

The Earth changes – it always has and it always will.  The most interesting thing about Earth is not rock, it is rate of change of rock. Yet it is this rate of change in rock that created oceans, continents and geographical features.  The rate of change in the landscape is what created and affects all humanity; global warming not withstanding.

In fact, the rate at which things change is the root of all financial deals, social interactions, creative discovery, intellectual pursuit, even criminal activity.  All value is created and destroyed in response to the rate at which something changes.  Since change is relative to time, the rate of change is something, like death, and taxes, that you can bank on.

Money, Knowledge, and Power

As a corollary; the ability to measure rates of change in things is the ability to measure value.  The ability to cause rates of change is the ability to create or destroy value.  It is therefore in our interest to try and express our world in terms of rates of change.  For example:

1    Money, interest, and stock price are deeply related.  Therefore, the rate of change of money is related to interest.  The rate of change of interest is related to growth rate.  The change in growth is monetized through a public market for its stock.  Stock price affects money and the cycle continues.

2    Information, knowledge and innovation are deeply related.  Therefore, the rate of change of information is related to knowledge.  The rate of change of knowledge is related to innovation.  Innovation creates new information.  And, the cycle continues

3    Attention, attraction, affinity, audience, and action are deeply related to each other.  Therefore the rate of change of attention is related to attraction.  The rate of change of attraction is related to affinity, etc., until finally, the rate of change in action gets everyone’s attention.  And the cycle continues.

Achilles’ Octopus

There are a few problems however.  If you remove, corrupt, or disengage any of the components, the cycle fails.  To complicate matters further, our three examples are also related: money, knowledge, and audience; stock price, information, and action; etc.

Points of failure can occur at any part of the cycle and it is often difficult to identify which failure caused what effect.   Does a stock price fail because the public lost affinity or because information was corrupted?  Does an economy fail because there is no money to invest in innovation or because our society outsources its knowledge economy?  Does a school system fail to deliver the right knowledge to society because the stock market failed or because there is no public action?

Social Media and the next paradigm of economic development

Social media allows us to express the dynamics of our world in real time and at great speed.  Feedback loops are shorter and cause and effect can be more easily differentiated.  The data that will be generated through the integration of social media will allow entrepreneurs to identify rates of change of the rates of change! Armed with computer enabled search and analysis algorithms, they can mange these complex new relationships to create value for themselves and their community in a new era of social capitalism.  Social media is a higher order calculus.

It will take everyone to accomplish this together but we can create a new landscape for our Earth, ourselves, and our children’s future.   This is change we must bank on.

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The Next Global Currency

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On May 26, 2009

In General Information

Charging interest on money was at one time illegal.  The concept of “interest” was legitimized by the argument that lenders needed to be compensated for the risk that they assumed.  As such, currency is married to risk and not necessarily actual productivity.

Whoops.

Risk can never be negative because it is a measure of volatility where zero is the lowest possible value.  There is such thing as good volatility (winning the lottery) or bad volatility (my 401K) or zero volatility, but volatility can never be negative; hence the term “Breaking the Buck” which is considered a failure of the monetary system.  Interest rates respond causing inflation or deflation relative to other currencies, causing more volatility, thereby inducing more risk, etc.

Who wants to be a numéraire?

The dollar is a “numéraire” – the standard by which value is compared.  Recently there has been a strong call for a global currency to change the numéraire to something else.  Ideally, the numéraire should be able to manage negative interest rates to keep volatility pegged to real productivity and not speculative emotions.  This would keep the system from crashing in a whirlpool of volatility that incessantly feeds on itself.

So what are the practical implications?

With a positive interest rate, I am penalized for borrowing currency since I need to pay the risk premium to a lender while I produce something with the currency.  On the other hand, I am rewarded for lending currency because someone pays me the risk premium to borrow it.

With a negative interest rate, I am rewarded for borrowing currency (because the lender is deeply penalized for not lending it) so that I can produce something with the currency.  Then I am penalized for not lending (or spending) the currency that I made from the thing that I produced.

Enter Social Media:

The whole idea of risk as the justification for interest does not make much sense any more.  In fact, during periods of deep inflation or deflation, currency becomes divorced from actual productivity and people hold some other store of value instead.

People are flooding to social media because information, knowledge, and innovation are behaving like currency.  Social currencies are perfectly suited to accommodate negative interest rates.  For example: if information were a currency, I would be rewarded for giving it away and penalized for hording it.  If knowledge were a currency, I would be rewarded for sharing it with others and penalized for withholding it when it is needed.  If innovation were a currency, I would be rewarded for crowd sourcing and penalized for patenting.  Does this sound familiar?

The Next Economic Paradigm

Conversation and relationship are two of many denominations of the new global currency called the ‘rallod’ which is allowed to float against the dollar. Continual development of social media tools, systems, economics and aggregation will facilitate the exchange of social currencies by increasingly enabling the ability to store, form, access, and exchange them.  Social networks and communities of practice will allocate social currencies as factors of production: social capital, creative capital, and intellectual capital – for the production and dissemination of innovation.

The Next Numéraire; human productivity

Let countries compete in the economy where net human productivity is the standard by which all value is compared.  With the constraint on land, labor, and capital, this is the game we all need to play now.

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The Winners of War Write the History

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On May 20, 2009

In General Information

Every once in a while the debate on written history emerges through school textbook selection, a controversial act of legislation, or by a historic figure defending their legacy long into what should otherwise be a comfortable retirement.  Even in the age of Social Media, the tenet holds fast; the winners of the war write the history.

Enter Social Media.

Computer enabled society has a way of flipping ideas over on their head.  For example; if the winners of the war tell the history, then the inverse must be true. Those writing history are the ones that win wars.  As traditional news media gasps under the weight of a millions of bloggers, so goes one of the most prominent fortunes of war – the ability to define a culture.  The history still gets written.

“Extra Virtual” Education

Education, like traditional media before it, is encountering their nemesis in the Internet.  The content that kids get on the internet is superior in richness, diversity, and relevance than textbooks.  No longer can school administrators select the material that students must learn. If they don’t agree with the way history is written, they can easily find an alternate history.  They can live in “extra virtual” space – that is, outside the virtual world and inside a chosen reality.  People discover their own culture.  The history still gets written.

Historical Perspectives

Ultimately our new historians need to enter the workforce to decide what to innovate, what to produce, and what to be passionate about.   Where will they find perspective?

The study of history is essential to the three ultimate purposes of education in a free society: to prepare individuals for (1) active citizenship, to safeguard liberty and justice; (2) a career of work, to sustain life; and (3) the private pursuit of happiness, or personal fulfillment.

Expanding Conclusions

Many conclusions are based on a set of assumptions.  The more elaborate the assumptions the more risk there is at arriving at the wrong conclusion.  However, when two opinions are built on the same assumptions and yet their conclusions differ, that difference is a very valuable set of data because it now defines a range of possible outcomes.  As such, the inverse must also be true; there are many possible ways to achieve a solution within the range of desireable outcomes.  This is the domain of the innovation economy.

The True Value of Education

The next economic paradigm will be characterized by many history tellers multiplied by the number of ways to attain the goals of education in a free society; including, but not limited to active citizenship, safeguarding liberty and justice, sustaining life in a joyful career, and the pursuit of happiness and personal fulfillment.

There is only one way to travel a single known path.  However, from the ability to compare alternate histories, the purpose of education is greatly expanded and the value of education is multiplied many times over.  The teacher will become the ultimate entrepreneur.

Ignorance does not win wars, let that history be written.

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The Currency of Transformation

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On May 19, 2009

In General Information

The words “conversation” and “convertibility” are really quite similar.

Information, knowledge and innovation are distinct phases of human intellect which are profoundly related.  The vehicle for transformation across these phases is the “conversation”.  As the medium of exchange, the conversation acts as a currency.   The speed at which these exchanges take place defines the value of a market – a good party is where everyone is engaged.  A good time is of the essence.

Changes in the value of the market defines the potential for value creation through conversation – a great party pulls more people into engagement and becomes a social movement; i.e., a marketing success.

Currency (money) and Current (time) and Current (force) are similar too!

Conversations exist as a state of shared information tied to a common and progressing theme.  The internet enables the propagation of conversations from two persons to millions of people.  The propagation of conversations is dependent on interest rates of the audience.  The rate of propagation accelerates with the transformation of information into knowledge by others in it’s path.  People are driven to entrepreneurial action when the alignment of information matches the environment that they observe.

Conversation is Currency

Currencies come in many different forms and the best ones are convertible – or can be transformed – into other currencies.  Our objective is to convert social currency, creative currency, and intellectual currency into a universal currency such as, but not necessarily, money.

Anything of value such as an option to exercise an action at a later date, or an equity position in the actions of others, or a mentorship opportunity with a great teacher are all convertible currencies.  Of course, this is nothing new; we pay money to buy a book, take a class, invest in start-ups, and teach our children.

An End to a Means:

What is new is that social media allows us to convert the other currencies before, after, and in between the conversion to money.  The option to convert to money is simply an option like any other option, not necessarily a means to an end.

Obviously we could pay money to buy a book, use that book to teach our children and hope our children can start up a new company, etc.  However, suppose we could pay money to buy a book, improve the book by adding information shared by others, teach hundreds of other people how to apply the ideas to their start-up, take an “knowledge equity” position in those hundreds of start ups, have access to the data that they produce, and write a book that improves the likelihood of successful start-ups.

The Interesting Thing About Interest Rates

The next economic paradigm will introduce thousands of convertible currencies in the form of infinite conversations.  Those currencies will be converted in infinite combinations for infinite applications each adding value to the conversation.  Relational data aggregation will match most worthy currencies and social vetting will manage the production process. The corporate silo will no longer form; therefore the exploitation of the creativity class will end.  Interest is not measured in terms of risk, but rather in terms of productivity where deficit spending is impossible. This is the currency of transformation.

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