The Ingenesist Project

The Next Economic Paradigm

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The Secret Weapon of Social Capitalism

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On July 9, 2010

In General Information

It should be fairly obvious that there are some extreme financial anomalies on the Global Horizon.  That legendary, but long-in-the-tooth social system affectionately known as Market Capitalism, is up against the ropes as the debt monster gobbles up everything in it’s path faster than any austerity measures can ever keep pace.  Take note that debt can reach infinity but austerity measures can only reach zero … you can do the math on a postage stamp.  If there ever was a need for a secret weapon, it is now.

The following 4-minute story-board video is part 3 to the series called “Will Social Capitalism Replace Market Capitalism?“.  The video introduces an important futures methodology and algorithm called WIKiD Tools for the management of Social Capitalism.   The next few videos will define WIKiD tools more fully while introducing a segment called “The Knowledge Inventory”.   Next, the SC>MC series will lay out scenarios for the capitalization and securitization of knowledge assets. Finally, we’ll revisit the Airplane Game to wrap it all up.   In other words, within the next few weeks, I should have published a fairly explicit set of functional specification for the next economic paradigm answering the question “What comes after Market Capitalism?”

Hold on to your hats and thank you for joining us on this wild ride.

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Independence Is A State of Mind

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On July 4, 2010

In General Information

Independence is a state of mind. Americans have always chosen independence – and they will continue to do so. It is often convenient to let ourselves trust elected leaders and the esteemed business titans to do what is in our best interest. Don’t be fooled, this is “trust”, not dependence.

It is likewise unwise to underestimate the independence movement – independence from corrupt currency, independence from fossil fuel, independence from corporate greed, independence from divisive politics, independence from endless war. Just when everyone thinks that Americans are up against the ropes, they come up with an idea so radical, so creative, and so astonishingly consciousness-altering, the rest of the world just shakes their heads in collective disbelief.

That is where we are today. Something extraordinary is about to happen in the way Americans organize themselves. Nothing is sacred, no one is immune. The next economic paradigm will alter the course of civilization.

All stages of human development were derived from the prior stage of human development by integrating the tools of that prior stage. For example, the agrarians integrated the tools of the hunter-gather such as using the chopping rock to till a field for planting – and so forth. Likewise, the industrial revolution integrated the tools of the scientific revolution; mathematics, chemistry, and engineering. Earlier this century, the computer age integrated the tools of the industrial revolution, etc.

The next economic paradigm will be derived from the Knowledge economy by integrating the tools of the knowledge economy; these are The Internet, Social Media, mobile communications technology, etc…

Americans will chose Independence every time.

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Will Social Capitalism Replace Market Capitalism? (Parts 1&2)

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On June 21, 2010

In General Information

This video describes a set of predictions for 2020 based on an entirely new form of capitalism whose velocity and voracity will take the world completely by surprise. Nothing is sacred and nobody is immune, not Facebook, not Google, not Wall Street, not even Governance itself….

Part 1

Part 2:

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Tangential Innovation Communities

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On June 14, 2010

In General Information

In an earlier article (Cluster Funk) I argued that Industrial clusters can lead to stagnation, vulnerability to external shocks, and the erosion of social capital. Since I’m not one to complain without also providing an alternative, this article argues that the future will favor technology clusters rather than industrial clusters.

Make it up as you go along

Technology clusters serve what we call the tangential innovation market – or diversity innovation dynamics. Don’t worry if you have not heard of these things, I’m making this up as I go along.

For example; composite materials technology is very useful in many applications like aircraft, medical devices, transportation, recreation, and even musical instruments. The airplane company has no intention of building cellos and the automobile company has no intention of building snow boards.

Why compete when you can collude?

As non-competing industries, they can readily share technology and people. The system is naturally diversified and inoculated against stagnation, shocks and silos; if one industry encounters hardship, people and capacity can shift easily to another industry preserving knowledge and expanding social networking benefit while the damaged industry heals or dies off. Corporations may not like this idea, but social networks should.

The Ingenesist Project goes a step further by modeling the business structure of tangential innovation markets as an integrated financial system. Suppose and Originator Company has a promising new composite technology idea but is unable to meet the ROI requirements of their stockholders? Today, such innovation would be shelved. In an innovation economy, tangential markets are factored into the business case.

New applications of social media will identify other industries that would be most worthy borrowers of your technology, if developed. The Innovation Bank can estimate the return on investment that can be expected through the tangential market as if it were another customer. The additional revenue projection would allow the originator to meet the ROI requirement prior to committing development funds.

Intellectual Property can be managed with contracts enforced through social network vetting. The originator can hold an option to see further development conducted by tangential users effectively multiplying their R&D reach and further adding to the expected return.

Then something magical will happen. At some point, the value of the tangential innovation market would exceed the value of the origination market. The originator will begin to specialize in pure innovation as a primary product and airplane applications as the secondary product. As all industries in the technology cluster begin sharing technology among each other, R&D costs and risks are effectively spread across industries. As risk is diversified away, the cost of venture capital approaches single digit rates.

Then, another magical thing will happen. As the mixing of people and ideas accelerates, the definition of corporate boundaries will become more fluid. Ownership will exist in the form of contracts among entrepreneurs now defined by social networks, options, and derivatives in a diverse innovation enterprise.

While the boom bust cycle of Industrial Clusters has brought us a great distance in economic development, technology clusters in an Innovation Economy supported by social networks may turn out to be vastly more efficient at economic growth without the perils of Cluster Funk.

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Crowdsourcing The New Exploitation

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On June 7, 2010

In General Information

The cadence of modern globalization has been set by the steady drive to lower labor costs across the world. Not surprisingly, the greatest threat to the global economy is social instability. As usual, political boundaries are drawn to keep people isolated from each other. The new twist is that Social Media arises because people are trying to reorganize themselves. Now, Crowdsourcing moves the eternal struggle to a new battle field.

There are two ways that the tools of the knowledge economy can integrate. 1. People are successful at reorganizing so that when the financial system does collapse, they can deploy a social currency to trade among each other. Or, 2. Social Media will become the new substrate of exploitation. Let me explain:

Turking is a phenomenon of crowdsourcing where people perform simple tasks on-line for money.  Highly intellectual tasks are broken down into small components easily managed by a simple human decision. Each of these simple human decisions are sent out to humans to perform. The results are then re-combined to become a high value knowledge economy product.

Even companies that perform this service for major corporations are astonished that people would work for so little money.  Academic studies declare that people are motivated by something other than money. Somehow Turking provides people with hope, self, validation, and all sorts of great personal benefit – otherwise they would not be doing it. This is good, right?

Wrong….people are desperate and turking is the last treadmill on the rat race to the bottom.

The idea that someone would work for free in order to gain “reputation” is built on the assumption that some “brand” is backing the reputation.  Brands don’t exist – they are fictitious.  Brands are what marketers say the are. Turking lets brands monetize their story line with cheap, invisible, and powerless labor force scattered around the world.

All the asset with none of the liability – and they call it a social miracle?

Most “turking” does not pay enough to cover the cost of the education required to complete the task. It costs a society countless thousands of dollars to teach and nurture a child to read and make good decision. Yet, the net payback is under 1.00 dollar per hour for the simplest turking tasks and net  5-10 dollars per hour for higher orders of analysis requiring specific and proficient skills.  If the turk work is rejected or they lose the “contest” they are not paid and their IP is stolen – no recourse, no rebuttal.

Worse yet, turkers from impoverished countries are valued relative to the disfunction of their economy, not their inherent intellect and creativity. This sets up a tragic dynamic where it becomes, again, in the best interest of some enterprise that the poor countries remain poor and dysfunctional. As such, the inherent intellectual and creative value of their people can be efficiently transferred to the shareholders.

There are social media alternatives under development by The Ingenesist Project and others that allow people to organize and sell their own information.  Applications are being devised that allow people to self organize into productive communities and to reward the nurturing and sharing of knowledge assets in community economic system. Dynamic business systems are under development that reward high integrity and punish low integrity.

The great question of our time is: Who will win, financial currency or social currency?

Photo source

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WIKiD Tools; A Futures Methodology

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On June 2, 2010

In General Information

The forecasting methods that we are developing at the Ingenesist Project have become sufficiently vetted and organized that I have decided to formalize them for review by others. The “WIKiD Tools” method is fairly simple to describe and demonstrate, but be assured, it is a powerful method for predicting futures outcomes.

WIKiD stands for:

Wisdom > Innovation > Knowledge > Information > Data

All five of these elements are related to each other – in fact, each is derived from the prior element by integrating the tools of that medium.  For example information is derived from data by integrating the tools of the data medium. Knowledge is derived from information by integrating the tools of information medium, innovation is derived from knowledge by integrating the tools of the knowledge medium, etc.

Likewise, if I want to predict innovation, I look for high rates of change of knowledge in it’s medium….and so on for all five elements as needed.

The chart below helps demonstrate the WIKiD Tools methodology.

The Hunter-Gatherer

About 50,000 years ago humans sustained themselves in a hunter gather economy. They would wander for food to eat and fuel to stay warm. Eventually they invented tools to trap their game and chop down trees so they no longer needed to expend as much energy and could remain relatively stationary.

The Agrarian

This led to the agrarian economy, the formation of towns, and the division of labor. A leisure class emerged to engage in philosophy and explore nature. New ideas were explored and the “scientific method” of observation and experimentation was invented

The Data Economy

With the invention of interchangeable parts in manufacturing, the industrial revolution became the dominant era of economic activity. The idea of industrialization separated production from assembly of parts. This allowed for greater efficiency and precision.

The Information Economy

The Industrial revolution generated a lot of Data and the invention of the integrated circuit turned these data into information – we now look back at the 60’s and 70s as the information age.

The Knowledge Economy

Widespread use of computers allowed humans to process the information in creative and unique ways – we now call this the knowledge economy.

Since there were many eras prior to this, we can expect that there shall be many eras following this – so we ask the question “what comes after the knowledge economy?

When we apply the WIKiD Tools Methodology:

We can say that each new era was derived from the prior era by integrating the tools developed during the prior era. We have seen the data economy in the industrial revolution, we have seen the information economy with Invention of the Integrated Circuit, We are in the midst of the knowledge economy with the advent of the Internet.

The next economic paradigm:

Now the tools of the Computer, software, and Internet connectivity are integrating around social media. From this we predict that an innovation economy will emerge by integrating the tools of the knowledge economy, specifically social media, mobile devices, software, hardware, and the internet.

The Wisdom Economy

Looking far far into the future, we can predict that the wisdom economy will emerge from an integration of tools developed in the innovation economy. The wisdom economy – with or without the current financial system – will have the greatest likelihood of achieving a sustainable human presence on Earth. Consequently, failure to achieve the wisdom economy presents an equally predictable outcome.

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Let’s Argue About the Definition of Productivity Instead

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On May 27, 2010

In General Information

Many arguments rage because of poor definitions to terms. If people cannot agree on a definition, they will not agree on much else. A definition should be definitive – here I will tackle 5 of the most elusive definitions that are at the center of much, if not all, global controversy: Data, Information, knowledge, innovation, wisdom

To state the obvious

It should be obvious that data, information, knowledge, innovation and wisdom are related. The test is simple: if you corrupt one of them, all the others become corrupted. The question becomes; how are they related?

Consider the following definitions

Allow me to provide the following 4 relationships:

1. Information is derived from the productivity of data

2. Knowledge is derived from the productivity of information

3. Innovation is derived from the productivity of knowledge

4. Wisdom is derived from the productivity of innovation

These relationships are very useful.

1. They include everyone, they exclude no one.

2. They are personal enough to reflect individual value system yet discrete enough to not contradicting the value system of another.

The question now resides in how we define productivity, that is a much simpler, more efficient, and far wiser problem to be arguing about. Besides, a singles solution solves 4 problems.

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Cory Doctorow In Seattle

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On May 18, 2010

In General Information

Activist, Science fiction writer, and blogger Cory Doctorow spoke at in Seattle to a full house at the Sunset Tavern in Ballard. He performed a reading from his latest book, “For The Win”. Cory has an interesting sense of abstraction. He’ll spot a trend – or collection of trends – and extrapolates them into the future dutifully revealing all the complexities of the human condition.

For The Win

His reading centered on the “exploitation” of young adults who are hired to play online games where they work to achieve levels, rewards, virtual currency, and game status which is then sold to rich Western players. Some players become highly valued for their knowledge inventory of game world monsters, strategies, power points, and the uncanny ability to assess the knowledge inventory of their opponents who’ll get suckered into a virtual dual with predictable consequences. The kids literally “mine gold”. As always, gold corrupts the most innocent hearts resulting in situations and behaviors at least as strange as the game itself.

The Activist

Cory has long been an activist for digital publication rights and rules. Not surprisingly, the Q&A was dominated by privacy, security, and exploitation of information issues. Cory recently closed his Facebook Account which caused quite a stir in the blogsphere. Ironically, every big name in world-class privacy violation had recently been in the news for Mr. Doctorow to eloquently spit roast on an open flame. It was quite entertaining.

There is a reason that it’s called Monetization

While Mr. Doctorow did not specifically mention this, what struck me most was hearing him talk around this emerging battle for control of people’s information. While this idea is not new, the reasons behind it may be new. As Money is losing it’s capacity to store and control value, human knowledge is increasing it’s capacity to store and control value – this is hugely accelerated by social media. The desperate attempt to control people’s information is really a proxy for the desperate attempt to control knowledge, therefore to re-control the value that money once represented.

Unfortunately, controlling information also destroys value.

People actively participate and share on social media to achieve levels, rewards, and status which is then sold to corporations in the form of predictive marketing by third party aggregators like Facebook. Some people become highly valued for their knowledge inventory of real-world game perils, influencers, and social mavens and become celebrities of the craft. Many develop the uncanny ability to assess the knowledge inventory of their opponents who get suckered into a virtual dual with predictable results.

Suddenly the News started sounding like one of Cory’s Science Fiction Novels…

Event Sponsored by: The Stranger

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Enterprise Prediction Markets Summit

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On May 17, 2010

In General Information

(Editor: I’ll be speaking at the following event on June 4th. If you are in the area or blogging issues in this genre of ideas, let me know and drop by. Look up the other speakers and you’ll find an extraordinary group of visionaries preparing to make this PM Cluster Summit a truly enlightening event.)

Enterprise Prediction Markets Summit:
Leading Enterprise Prediction Markets

Friday, June 4 2010 8:00am – 5:00pm

EVENT LOCATION: The Boeing Company: Integrated Aircraft Systems Lab Building 2-122, Conference Room #102L2 (Conference Center) 7701-14th Avenue South Seattle, Washington 98108 USA

EVENT REGION: US –Pacific Northwest


EVENT PURPOSE: This summit is for executives, directors, mangers, users and practitioners having immediate needs to apply collective intelligence networks and enterprise prediction market mechanisms to advance business outcomes through mastery of collective wisdom.


EVENT SPEAKERS: Dennis P. O’Donoghue (Boeing), Sharon Chiarella (Amazon.com), Arik Johnson (Aurora WDC), Dan Robles (The Ingenesist Project), Dr. Richard O. Zerbe, Jr. (Evans School of Public Affairs), Christel Alvarez, ConsensusPoint, George Neumann, George Daly Research Professor of Economics, (Iowa), Olav Opedal (Microsoft, Internet Security)


EVENT COST: $99

EVENT WEBSITE: http://pmclusters.com/Prediction%20Markets/SEA10.htm


EVENT CONTACT NAME: Jennifer Hulett

EVENT CONTACT PHONE: 714-784-0754

CONTACT EMAIL: Jennifer.Hulett@pmclusters.com


MUST ONE RSVP: Yes! No on-site registration

ATTIRE: Business Casual

BUSINESS CARDS: YES – Bring Business Cards


EVENT NOTES: The conference sessions are focused, practical and conversational. They are for executives, directors, mangers, users and practitioners having immediate needs to apply collective intelligence networks and market mechanisms to advance business outcomes through mastery of collective wisdom.


ORGANIZATION NOTES: The Prediction Market Clusters, founded in 2004, are the global industry commons and open community for prediction markets and collective intelligence networks worldwide. The open, agnostic network is a focused collaboration of vendors, academia, traders, users, developers, markets, regulators and stakeholders. The goal is to provide awareness, diffusion, adoption and pull-through for enterprise and consumer prediction markets. The Prediction Markets Cluster is the worldwide Next Practices network for collective intelligence networks practices, tools and theories.

PM Clusters

Prediction Market Clusters
http://www.pmclusters.com

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Future of Money and Technology Summit; Non-Quantifiable Exchanges

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On May 8, 2010

In General Information

The above video playlist consists of the full 6 parts of the expert panel discussing non-quantifiable exchanges as recorded on April 26 2010 at the Future of Money and Technology Summit in San Francisco. The complete video is about 55 minutes. I encourage you to watch it because very few discussions about the future of money approach the subject with as much experience, introspection, and clarity as this historic panel has.

This is not another doom-gloom room – but a truly optimistic model of a future financial system built on a platform of social media. These panelists represent some of the top thought leaders, visionaries, and practitioners in the area of “Local Social” – where nothing happens until the rubber meets the road. It was a great privilege for me to be a part of this esteemed group.

Panelists:

Tara Hunt; Social Media Strategist, Author: The Whuffie Factor
Daniel Robles, Director, The Ingenesist Project
Micki Krimmel, CEO; NeighborGoods
Chris Heuer, CEO, Social Media Club

Moderator: Tara Hunt

The future of Money and Technology Summit is one of the most important conferences to emerge as a result of the accelerated innovation and organizational re-structuring forming as a result of increasing constraints on the global financial system. We all look forward to another excellent conference next year!

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Facebook Derivatives

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On May 5, 2010

In General Information

It seems ironic that people are using Facebook to urge others to quit Facebook. If they take their own advice, they would no longer be able to give their golden advice to others. If we took their advice, we would not be able to heed the advice of others in this matter.

Is Facebook too big to fail?

The human race is becoming a super-organism of connectivity. Companies like Facebook are duplicating the functions that governments have performed – by various methods with diverse consequences – since the dawn of civilization. There is nothing new about Government organizing society and pandering to corporations. There is nothing new with people protesting governance. There is also nothing new with forms of governance being replaced by an evolution of human consciousness.

The Next Wave of Innovation in Social Media?

First; Facebook itself has no value other than the value of the people and their networks. As such, Facebook behaves like a financial derivative – it is not the actual item of value, it is simply a utility contract representing value.

Second; Facebook can only deal in information – it cannot deal in “knowledge”. Your information is a derivative of your “knowledge”, not the knowledge itself. The real value of a social network is in what lies between the ears of the members. Therefore, one way to encrypt the information is to encrypt the knowledge.

Third; Suppose that your “resume” were coded as a list of numbers and operations representing the quality and quantity of the things you know. Suppose the people in your network were also coded in a similar fashion. As such, your network, would be a combination of these codes. If you really “know” someone, it would be easy to find them. If you don’t know someone, it would be impossible to find them.

Fourth: The game changes because the incentive now is to “Mind Meld” with real people. Marketers can only then profit by telling the absolute truth about what the product is and the affinity that the product serves – anything else defaults to a “no-sale”. The person can then set filters to be notified of products and services that can make them more productive in pursuing the things that they love and care about – their community.

An Emerging Evolution

Many People cite Cluetrain Manifesto (1999) as the start of this higher consciousness. Cory Doctorow introduced a concept currency called the Whuffie (2003). Tara Hunt, Chris Brogan, Brian Solis, Seth Godin, Clay Shirky, Jay Deragon, and many others expanded the idea of trust and reputation in the formation of social capital and associated social reorganization. As these ideas are reconstructed, especially in a form that is independent of the construct of the Corporation, Social Capital is emerging as a highly complex instrument – not unlike a derivative.

If not human knowledge, then what?

Now we notice that Facebook, Whuffie, and Wall Street Dollars are all built on derivatives where the underlying value is human knowledge. That is where all the man-made value on Earth is stored, period. The value stored by Human Knowledge hedges all bets. Nobody has a monopoly on it, but everyone is trying to figure out how. To do so would be to destroy it.

Code knowledge to set it free.

Despite all of the grumbling about Facebook, Wall Street, and all issues Political, there is a clear path toward a higher purpose in all of this. We should ponder this and be quite grateful.

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m-Via; Social Currency and Technology

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On May 5, 2010

In General Information

If necessity is the mother of invention, then the Future of Money and Technology Summit 2010 was Paul Revere. There were many innovations that seek to change banking as we know it using a new denomination called social currency. This article (and more to follow) will identify the difference between two business methods – one that squanders social currency, and one that liberates social currency.

m-Via, is a money remittance company focused on allowing consumers to use any mobile phone to make international money transfers. m-Via focuses on the huge flow of remittances from the US to Mexico. I am personally directly aware of the challenges related to money transfers across international borders specifically Mexico; bank fees, extra ID, teller costs, time, risk, conversion fees, etc.

It is obvious to me that M-Via is looking very closely at how, why, and when people interact with a the banking system. The Banks are doing the same thing. The difference is that Banks seek activity thresholds and then design limits that seem to trigger artificial and exorbitant fees. Instead, m-Via seeks to reduce the friction in the transaction to meet the lives, schedule, priorities and concerns of the customer.

m-Via is trading in social currency

Banks are squeezing the least deserving by charging hidden fees for services that cost them nothing. For example; most people transfer small amounts of money on a steady cash flow schedule. Most people can’t spend the time to travel to a western Union on one side on each side of the transaction where travel expenses and security issues may be a constraint. Money is often redistributed among family members once in the target country. This is the reality of people, not an opportunity to set artificial thresholds to drive profit.

Paying money to a bank for the privilege of paying money to the bank…what?

m-Via drives a social currency by reducing risk, increasing yield, and helping people organize in the manner that suits their reality – not that of the banking industry. Most people who need money, don’t necessarily have the ‘money’ to absorb high transaction costs of time, risk, and inflexibility. Current banking practices extol a high social currency cost that amounts to “negative” interest rate against the consumer – in other words, people need to pay the bank in order to pay the bank to use the bank.

m-Via is already seeing a week over week growth of 15% in participation. I expect this growth to continue especially as many other technologies arrive to build out the infrastructure of transactions and business methods that are supported by a social currency.

Disclosure; m-Via was a sponsor to the Future of Money Summit and Technology but has no formal relationship or position in the Conversational Currency Blog.

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Who Is Quantified by Whom?

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On May 3, 2010

In General Information

What is a Non-quantifiable Exchange?

The term “Non-Quantifiable Exchanges” was the title of a panel session that I attended at the recent Future of Money and Technology Summit. In researching the subject, it appears that a “non-quantifiable exchange” is more notable for what it is not rather than what it is. Case in point – after the precursory Google Search, the term and a modern definition does not exist – but the room was full !?!?!

With all of the talk about cloud sourcing economies and romantic notions of emerging organic currencies, it would seems that people could just get along fine without a central mechanism for storage and exchange of value. Instead, each individual would assess the value of the transaction in terms of what it means to him or her. Currency could then take the form of a person’s reputation, productivity and general usefulness for assessing value and helping others to do so in their community (reference)

If it’s not an asset…or a liability, then what is it?

Traditional valuation systems for businesses immediately start tugging at a host of standard assumptions for measuring “performance” – many of which are no longer meaningful. Land, Labor, and capital cannot be deployed to the same efficacy whereas social capital, creative capital, and intellectual capital are being liberated to social media with astonishing results.

Nobody can produce an accurate ROI for social media, however, social media presence is becoming a substantial factor in the valuation of a company.

Likewise, reverse access to personal information about customers on Facebook is both the lifeblood and poison of new engagement marketing. The general public have become “external intangibles” to the business plan – where the heck is that on a balance sheet?

Goldman Sachs claims that those who bought their worst subprime products were sophisticated investors whose obligation it is to understand the quality of the underlying components. Their defense is that the customer failed, not the system of disclosure.…what? How long would Dell last if this had been their response for poor quality?

Cloud Economics or Inversion System?

Vapor is quantified by the balloon that contains it. A cloud is quantified by the weather system that surrounds it. The atmosphere is quantified by the mass of the planet and it’s proximity to a sun, and so on. Therefore, the term “non-quantifiable”, and the word “exchange”, are mutually exclusive. If there is an exchange, there is quantification.

Suppose I was to suggest that value stored in social currency may exceed the value stored by financial currency. The paradigm shift now becomes, who quantifies whom?

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Future of Money and Technology Summit

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On April 23, 2010

In General Information

I was invited to present at the Future of Money and Technology Summit in San Francisco on Monday April 26. Representing The Ingenesist Project, I’ll be seated on a panel with two very important futurists; Chris Heuer and Micki Krimmel discussing non-quantifiable exchanges. The ever esteemed and respectable Ms. Tara Hunt will be moderating the session.

From the FMTS website:

The Future of Money & Technology Summit will bring together the best and brightest thinkers around money, including visionaries, entrepreneurial business people, developers, press, investors, authors, solution providers, service providers, and organizations who work with them at the convergence of cash and commerce. We meet to discuss the evolving money ecosystem in a proactive, conducive to dealmaking environment.

What I find especially interesting is the incredible collection of technologies for the storage of value and the amazing group of entrepreneurs corresponding to the exchange of value in future markets. The definition of currency is something that is used as a medium for the storage and exchange of valuable. As such, it would be quite the understatement that the FMTS will be a valuable experience.

A great deal of thought, planning, and money has gone into these ventures and now they are together in one room. This can only be attributed to the increasing inability of the current financial system to function as an equitable means to store and exchange value that drives entrepreneurs to new conclusions.

When I witnessed the Mexican Devaluation, the social reaction was to empty out the local WalMart. Those “goods” such as clothing, appliances, and furnishings became an intermediate currency that stored the prior day’s peso value for exchange with tomorrow’s market. The same is true for most financial crises with significant devaluation events in recent history.

The clear and present difference is Social Media.

We now see people busy at work to replace the old currency with improved systems and tools for the storage and exchange of value before the actual calamity arrives. In effect, the new systems are hedging the old one.

It will take many years for the implications and importance of events such as the Future of Money and Technology Summit to make it into the case studies of the major B-school curricula. Ironically, that does not mean that real history is not being made – or shall I say, old history is not being re-made.

So please consider joining us at the conference (details). If you are attending, please, please, please, find me and let’s talk about everything. As always, thank you dear reader because ultimately you are the only reason that people want to talk to me 🙂

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Conversational Cannibalism

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On April 16, 2010

In General Information

I don’t often run a full repost from other people on this blog, but this post by Seth Godin was just too rich to leave alone.

I have been posting a lot lately on the irony of social media devolving to spammers spamming spammers, especially the recent Twitter plan to charge advertisers for jumping to the front of the line by exploiting data provided voluntarily by the users (Twitter Me Elmo).

All of this tells us that Social Media is up against the ropes on the monetization plan. As a result it is starting to consume itself. This may be the first indication that the Dollar is NOT the currency of trade in the social media space, it’s a yet unnamed Social Currency. This definitely tells us that something new must happen soon.

Of course, The Ingenesist Project specifies an alternate financial system that can accommodate a social currency, but the lure of the almighty dollar remains strong enough to blind the choir itself and out-pitch the humble whisper new economic paradigm evangelists.

Anyway, here is Seth’s post in it’s entirety. Buy his books and read his blog, get his feed for daily email enlightenment. Seth, I apologize in advance for posting without your explicit permission…etc…just trying to “keep the convo rolling….”

*****

Cannibalism and spam

By Seth Godin:

So, these two cannibals are eating a clown, and one says to the other, “does this taste funny to you?”

We don’t often have conversations about cannibalism. We don’t trade recipes or talk about health issues. That’s because it’s off the table, not permitted, inconceivable.

Marketers should feel the same way about spamming people. Spamming them by email, by text or yes, by calling their cell phones with a robot, repeatedly, just because it’s cheap and because they can.

If anyone should know better, it’s the Word of Mouth Marketing Association. And yet, not only did they spam thousands of people by phone, they want us to “keep the convo rolling”. And when I spoke to their Executive Director, she had a hard time understanding that what they were doing was spam.

Spam is unanticipated, impersonal, irrelevant junk I don’t want to get. Not only that, it costs them less to send it than it takes me to figure out what it is and deal with it. That doesn’t scale. In fact, it destroys the medium.

Why would anyone join, pay their dues, go to their meetings or want to engage with an organization that’s willing to cross a line like this? Even once? (and then brag about it!) Maybe I’m getting cranky, but the relentless march of marketers into our lives is really getting to me.

In case you missed the first part of our show, the future of marketing is based on permission. It’s based on sending messages to people who want to get them, who choose to get them, who would miss you if you didn’t send them. It’s not easy and it’s not cheap to earn permission, but so what? This is my attention, not yours, and if you want to use it for a while, please earn the privilege.

PS If I ran Twitter, I’d build my new ad service about a socially acceptable way for corporate users to build large lists of followers, people who would give permission to get news and discounts and insights from advertisers. Twitter knows who likes what and they have permission from users to be a bridge between the user and those that might want to talk to them. That’s a powerful place to be.

Using cheap technology to spam people is not.

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Twitter Me Elmo

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On April 13, 2010

In General Information

Dorothy the goldfish is imagining Elmo reading his Twitter stream… and what would it say? Who would he follow? And who would follow Elmo?

Elmo; “Computer, who’s following me on Twitter? Starbucks, Microsoft, and WalMart? Hey wait, Twitter is selling advertising. What’s up with that? Let’s ask Mr. Noodle.”

Mr. Noodle (in mime) “Everyone is promoting something on Twitter otherwise nobody would use it.”

Murray Monster: “Hey, I thought that Twitter was supposed to give everyone an even playing field. Otherwise, nobody would go to school to learn how to actually produce anything. Ovejita!!!

Ovejita (translated from Spanish): “Yeah, everyone spends time and energy building social capital in their community. Now Twitter lets rich guys can come along and just buy access. Why then should the rest of us work so hard?”

Big Bird: “Sponsored Tweets allow Brands to buy a seat at the head of the line. What about my Tweets? Does this build or diminish my social equity?”

Grouch: “Yeah, isn’t that great, Twitter is built on social currency. Now you don’t have to produce social capital, you can just buy in. Watch the social currency devalue!!”

Count Von Count; “ah ah ah, I can count the people leaving Twitter, ah, ah, ah… 50, 40, 30, 20 million,… ah ah ah”

Abby Cadabby; “I’m comfortable with who I am in a pink dress and can just cast a barrage of nasty Tweet spells on those unfair Tweeters”.

Baby Bear: “The only ones who really benefit are National and International Brands – what do they care about what happens here on Sesame Street, let alone in the forest where grandpa bear still lives?”

Grouch: “Quit complaining, the big Twitter moments will be revolutions, airplane crashes, assassinations, natural disasters, celebrity indiscretions, political extremisms, etc. I know that only the most respectable Grouchy brands will jump into any trash can that’s burning with eyeballs….can you say Voyeur?”

Burt and Ernie: “Who said Voyeur?”

Gordon the Shopkeeper: “Then there is the subject of conflict of interest. Can a brand dispel, displace, or disproportion negative Tweets by purchasing out the social media space? Will Mr. Hooper’s store have to buy tweets just to be stay in business?”

Elmo: “Thanks guys. If Twitter makes a little bit of money and goes public, they will eventually want to make more money and more money and more money until people are fighting over the next Christmas Toy Craze. Will this invite a competitor, a disruptive technology, or speculators? Let’s ask a Baby.”

Baby: [confused look]

Elmo: “Thanks baby, What does the future hold? Even Elmo has to worry about profit margins on character marketing. It’s only a matter of time before I will Tweet and my tweets will be followed – but the question becomes; by whom?”

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Innovation Suicide

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On April 9, 2010

In General Information

The following question appeared on a Linkedin Forum that I follow:

Complete this sentence: The ONE factor that is MOST important to innovation is… and here’s why…

I have said this in a few blog posts and I’ll say it again here: The current definition for “innovation” may be the single most disastrous eliminator of innovation.

Innovation Suicide:

Yeah, it kills itself. Really, look it up – it’s a horrible cacophony of buzz bits and weasel speak that amount to nothing more than “Ya know it when ya see it”.

Any definition is supposed to give the reader enough information to duplicate, recognize, and identify instances of the subject – Preferably before the event has ended. Think about it – if the definition for Innovation were clear, nobody would be asking this question.

I am always amazed at how simple the answers to complex questions – and how complex the answer to simple questions – can often be.

Question: THE ONE: Complete this sentence: The ONE factor that is MOST important to innovation is… and here’s why…

My Answer: The Definition of Innovation

Here is why:

Information, knowledge, and innovation are obviously related to each other.

1. You can’t have one without the other two.
2. If you cannot measure one, you cannot measure the other two.
3. where all three are integrated, the system becomes efficient.

Yet, the definitions of each term do not include the other two. Therefore, the current definition of innovation is insufficient to describe the condition. That is why this is the ONE most important factor.

Let me prescribe the following analogy; distance, velocity, and acceleration are obviously related.

1. You cannot have one without the other two.
2. If you cannot measure one, you cannot measure the other two.
3. where all three are integrated, the system is efficient.

This is because distance is the point between two facts, velocity is the rate at which the distance between two points changes. Acceleration is the rate at which the velocity of travel between two points changes.

Therefore let’s re-define innovation as follows:

Information are facts and data. Knowledge is defined by rate of change of information. Finally, innovation is defined by the rate of change of knowledge in a community.

If we can accept this definition, everything changes. Seriously, everything changes.

Now, that’s Innovation!!!

* note: If you are familiar with differential Calculus you may see how a new economic paradigm may arise from this algorithm.

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The Brain-Picking Economy

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On April 8, 2010

In General Information

I come across an increasing amount of posts and discussions related to alternate currencies, social currencies, and knowledge as a tangible asset, etc.  It is as if people are grappling with something that they don’t quite understand or can’t quite grasp – but, soon will.  Really, don’t lose heart – they are definitely on to something.

Sandy Jones Kaminski of Bella Domain provideds a well developed argument against letting people pick your brain by proposing the “no brain picking list”.   While somewhat tongue-in-cheek, the article portrays a common frustration felt by specially qualified people who get too many requests for “brain picking” and not enough turkey sandwiches to justify the time-value of the exchange.

[People who ask to pick your brain are either asking you to work for free or they are trying to bypass the very hard work required to build a social network by asking for your referrals]. While not quite a reason to end brain-picking, it certainly indicates a hugely inefficient market.

Taking some clues from the banking industry

A bank seeks to match most worthy money surplus  (rich people who will not pull their deposits abruptly) with most worthy money deficit (employed people with good credit history).  In order to accomplish this, the financial system has 5 essential components: a currency, an accounting system, a vetting mechanism, entrepreneurs, and business plans.

Now suppose we transpose the rules of finance on the rules of brain picking.

Currency

A currency is defined as a vessle that stores and allows for the exchange of value.  So it’s natural to expect that relationships, networks, “contacts”, “followers” and all the other accoutrements of social mediation are means by which we store value.  We invest time in developing our own knowledge assets and we invest those assets in our relationships.

Accounting System

The balance sheet needs to, well, balance.  The first assumption I make is that every single living breathing person on Earth holds value. It’s only a matter of whether they have a surplus in knowledge assets in that which I have a deficit and vice-versa. Since my deficits far exceed my surplus in the vast majority of human knowledge, I am always looking for a fat juicy brain to pick as well.

Vetting Mechanism

If the game isn’t fair, nobody will play.  Social media provides the most critical element of brain-picking economics.  Any time someone asks to pick my brain, I’ll do a Google search or conduct a social media profile on them. What I find will quickly determine what the initial contact will involve a courtesy email or a 3 hour golf game.

Business Plan:

Buy low sell high.  That’s the mantra of capitalism, but it remains “unspoken” in social media.  If a person is very successful at picking brains, there is an inherent quality in that which may be useful to me. I will study them. If other important people have allowed this person to pick their brain, why not me? If I’m getting a lot of pickers from a certain demographic, maybe that represents a business opportunity, seminar market, or speaking engagement.

An entrepreneur is as an entrepreneur does

Entrepreneurs do nothing more than identify assets and elevate them from a low level of productivity to a higher level of productivity.  I ask my brain picker who they have also discussed the matter with. I also ask them places and dates of those interactions.  I ask them about people in their social network, rumors, concerns, projections.  I ask them their goals an objectives in talking with me – exactly as I would do for any client….

…well before you know it, I’m picking their brain.

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Is Anonymity an Asset or a Liability?

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On April 7, 2010

In General Information

Facebook is delivering incredibly rich data about people, their activities, preferences and knowledge assets right to the doorstep of marketers, employers, and likely, Government.  Is Anonymity an Asset or a Liability?

Uhm…is this what the users had in mind?

“Local Social” is an absolute imperative for monetization of Social Media – every application needs some degree of local integration. Here’s why: Nothing happens until people get together and build something, produce something, or create something together. That is what “an economy” is, that is what “a company” is, that is what “a Market” is, that is what “a conversation” is.

Facebook knows this, but there is a catch; “Local Social” does not need a big platform like Facebook – a small one would do fine. However, Facebook needs the micro platform in order to monetize. In other words, Facebook needs Communities more than Communities need Facebook.

If Facebook is not careful, a huge opportunity awaits a competitor to disrupt the Facebook parade with high value, high segmentation, and high anonymity – and still monetize.

The irony is that Facebook Groups will empower the community to spin off and compete with it.

Here is what will happen:

Facebook must provides consumers with the same information about corporations as they provide to corporations about consumers. Corporations need to be willing to expose themselves to transparency. People will undoubtedly publish the names and addresses of the CEO of the corporations in their communities. Their names, prefered music, groups joined, and Farmville wiggly worms, etc.

If someone goes through extraordinary effort to not be seen, that too will become a data point – distrust.

People are not dumb, entrepreneurs will find a way to make the game fair. Facebook will find itself regulated by its own community. Only then can we expect the level of opportunity and accountability that is required to support a fully convertible universal social currency.

It’s up to Facebook now – I hope they know what they are doing.

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Engineers Are Money

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On April 3, 2010

In General Information

Engineers are money.

China and India are producing millions of engineers as part of their global economic dominance strategy. Engineers increase productivity and productivity creates wealth. Why? Because money is only a means for storage and exchange of value and engineers create the value.

America has no idea who the engineers are

I heard an interesting comment on a group discussion board recently; “there are so many engineers on the streets that employers have their pick of the crop”.

First, I find the reference to “crops” ironic. Second, why should engineers need to fit every nuance of a job description? Engineers tell us the things that we don’t already know – who exactly writes those job descriptions if they know what they don’t know? Or in practical terms, why isn’t an Aerospace Engineer immediately qualified to be an Energy Engineer?

The Ingenesist Project identifies 3 types of knowledge assets: Social Capital refers to one’s ability to organize, perform, and manage themselves in teams of other people. Creative Capital refers to the ability to relate seemingly unrelated concepts, objects, and perceptions into new and innovative ideas. Intellectual capital refers to the ability to deploy book learning, objective reasoning, and tactical experience toward specific objectives.

Everyone has ALL of the above asset categories, however, we each posses them in different proportions. People like Steve Jobs have all of these in very high quantities, but the rest of us are somewhere in the middle. Most have a surplus in one or two at the expense of the remaining asset categories. Engineers typically enjoy a surplus of intellectual and creative capital at the expense of social capital.

Social Capital

Should we, as a society, expect engineers to meet meet the same social standards as say, Baristas? The job market favors the young, socially adept, and politically wired people. But engineers are a different – we all need them to be exactly the way they are in order for the rest of us to be who we are. If engineers were “marketers” they would either cease to be engineers or marketing would cease to be manipulative.

Who’s your money maker?

Engineers are responsible for nearly every penny of value stored and exchanged in a modern economy. Roads, infrastructure, medical devices, food production, software, hardware, housing, transportation – anything worth anything is in some way touched by God and an engineer. Engineers are responsible for creating the tangible value we enjoy so dearly but is also so easily corrupted by others.

Who is squandering whom?

So when I hear comments like; “there are so many engineers on the streets that employers have their pick of the crop”. I ask myself, “how exactly did that employer become an employer without engineers”? How does any employer expect to remain an employer without the direct, strategic, and honorable deployment of engineering assets? How does a country expect to arise from financial crisis and insurmountable debt obligation without elevating their engineers to “First-Responder” status?

I heard a story that Haiti is so poor, they would chop down a fruit tree for charcoal. Squandering engineers is like killing the golden goose. Every single engineer in America should be cherished. Every single engineer should have their pick of most qualified employers, not the other way around. Every single engineer should have a job waiting for them as soon as the prior one is finished. Engineers should be paid money, real money – not some “proxy” for money.

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Does School Interfere With Education?

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On April 2, 2010

In General Information

I guess that is could be considered sacrilege for a college professor to suggest that higher education is inadequate in some way.  My position is that the college degree must go away in favor of strategic combinations of high resolution knowledge assets.  The irony is that those who really “get it” understand “school” better than the schools.

The price of college education compared to the value of college education in society is skewing toward obsolescence. The news reports are filled with stories of unemployed MBAs and Engineers.  Over qualified, out of date, over generalized, specialized into obsolescence are all risk conditions that can make college a liability, not an asset.

There are many articles in these archives that outline my opinions on the subject. So here is what the kids say….

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

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Criminals Steal Social Agreements

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On April 1, 2010

In General Information

At the end of the day, everyone is arguing over money. How are we going to heal the poor? How are we going to police the world? How are we going to bail everyone out? How are we going to preserve the environment? The answer is always the same…it takes money to solve all of these problems.

What people do not realize is that currency is a social agreement, not a disagreement. Money is whatever people agree to use as a storage container for the value of their time, labor, intellect, or other resources. A criminal can steal your time, labor, intellect and possessions, or they can just steal your social agreements and replace them with a social disagreements.

It is easier to steal from the poor than the rich

Stealing money is not as difficult as some may think. Whenever people are held below a certain economic level, they fail to organize in communities that would otherwise protect them from outside influences. These people are often too busy holding a job, paying off debt, or traveling in search of work, or worse, a place to live – they become easy targets.

Blind leading the blind

Currency, by fiat or black market, is just a way that everyone agrees to store and exchange value. So, when people are at each other’s throats over a system of beliefs, they are effectively blinded to their true opponent – their inability to make a social agreement regarding the storage and exchange of value.

The current political strains pulling at this country are dangerous. The real problem is not your colleague or neighbor who is in favor of universal healthcare. The problem is not your old classmate on facebook calling Obama a liar. It’s OK to oppose the government – it’s our right. It’s OK to oppose bankers, they are accountable to a social charter.

The problem is that people are opposing each other.

There is no way to pay off a 50 Trillion dollar debt. All politicians know this. You would need to harvest every fish in the ocean, pump every remaining barrel of oil, and cut down every tree to extract this amount of “value” from what is left of the Earth. To whom exactly would this value be delivered and how? It simply cannot and it simply will not be repaid without some magnificent productivity gains on the order of nuclear fusion or superconductivity.

I will not speculate exactly how the currency fails. There are plenty of examples in history. Instead, I will speculate on what will replace the failed currency in the age of social media.

Social media is taking on some very fortunate characteristics, especially in the area of organizing people and communities around a common goal. Too often that common goal is to oppose another force of social media. This will change, it must change. When the dollar fails, people are going walk out their front door, look at their neighbors, and introduce themselves.

So, There you have it – that’s where all the money went. It is stored and exchanged in our social agreements.

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