The Ingenesist Project

The Next Economic Paradigm

Tag: monetize

Creating An Intention Currency

By

On January 7, 2011

In General Information

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

For all Intents and Purposes….

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

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

Let’s make some predictions:

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

One step deeper:

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

Now here is where the fun starts:

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

Preoccupied or unoccupied?

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

Share this:

You Are The Algorithm

By

On May 4, 2009

In General Information

You are the algorithm.

Google is an information company. Their corporate charter is to organize the World’s information.  Their limitation is that Google cannot organize knowledge because knowledge exists only within the consciousness of a person.   Instead, busy little Google spiders scour the Internet looking for high rates of change of information and they use that as a proxy for “knowledge”.

An economy is crawled

Google Spiders favor blogs because of the high frequency of updates, postings, tags, comments and keywords in comparison to static websites.  The logic goes as follows; if there is a lot of activity, something must be happening.  As a result, an entire industry has grown around the blogging and Search Engine Optimization business; listings are counted, raw data are analyzed, comments provide feedback loops.  Most notably, money is exchanged.

B-school tells us that that ROI can only be calculated from long term future projections, not short-term-recent-past spider activity.  If this “economy” cannot be projected through ROI, then how exactly is it projected?

Dynamic, like life itself

People are figuring out that the rate of change of information is the best indicator of value as well as the best way to create value. The last mile of social media is the next frontier of value creation as people will emulate ‘Google Spiders’ and scour their community for changing information, new ideas, improved information, and feedback loops to organize, categorize, and distribute.  This action will ultimately play out in new corporations built upon perfect dynamic information markets rather than third party selective information markets.  Exit Boston Globe, enter Twitter.

Organize this:

The key to unraveling the Innovation economy will be in refining, restructuring and organizing the profound relatedness between information, knowledge, and innovation.

Information is facts and data – this is the medium of exchange or “the currency”.  The rate at which the facts and the data change is a proxy for new knowledge being created somewhere and somehow. After all, if there is activity, something must be happening.   All of the things that people do with the results creates even more new knowledge – this is innovation.  Innovation creates new information. New currency is created because new information is created.  Knowledge expands.

There is something in it; otherwise people would not do it

We are seeing the tip of the iceberg; social media is the new engine of the innovation economy.  Where information becomes more perfect, markets become more efficient.  Where markets are more efficient, knowledge becomes more tangible.  Where knowledge is more tangible, innovation is more predictable.  Where innovation is more predictable, the innovation risk disappears.  The lower the risk, the cheaper and more abundant the venture capital.

People increasingly use social media to improve information, everywhere, any way that they can dream of.  They increasingly act locally and share globally to create opportunities for themselves and their communities.  People and their behavior is the algorithm of the innovation economy; monetize that. Google did.

Share this:

Got a Life?

By

On February 23, 2009

In General Information

Geographic Compatibility:

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

The sweet spot:

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

The cost of ownership:

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

Social Experiment:

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

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

If that is not enough convincing, try this:

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

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

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

Factors of production:

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

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

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

Share this:

Who Owns Your Content?

By

On February 21, 2009

In General Information

The epiphany:

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

Saving face?

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

Ownership Economics:

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

Historical perspective:

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

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

Wisdom in Government; not always an oxymoron:

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

Use it or lose it:

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

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

The answer in their face:

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

Share this:

Social Media; The Engine of New Economic Growth

By

On February 19, 2009

In General Information

Click image to activate

Business Models of the Future:

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

The Last Mile:

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

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

Feel the Burn:

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

Social Vetting:

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

Begging for Mercy:

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

Role play

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

The Engine of Economic Growth:

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

Master of Puppets:

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

Share this:

Powered by WordPress & Theme by Anders Norén

css.php