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The Next Economic Paradigm

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A Value Game For The Aerobics Instructor

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On June 1, 2012

In General Information

In yesterday’s post, we outlined The Value Game for University Outreach where the graduate was the shared asset and the school administration, the alumni association, the entrepreneurial community, and the wider community were the players. Now let’s presume that the shared asset is a small business owner specializing in aerobics instruction.

Using the same players:


A Value Game For The Aerobics Instructor

Suppose that a popular aerobics instructor has 20 students and charges 40 dollars for an 8 class sessions. The local health food store will place 10% coupon on store purchases against the 40 dollar tuition for the duration of the class. If the student bought 400 dollars worth of food from the health food store in 8 weeks, their tuition for the aerobics course would be free.  If they spend more, then the aerobics instructor is paid more.

The health food store already spends 10% of sales on advertising.  As such, the coupon is a superior incentive because it provides 100% ROI on the store’s ad spend.

Social Value Outcomes:

  • The health food store gains loyal repeat customers without advertising or spamming
  • The aerobics instructor earns an entrepreneurial wage making similar coupon arrangements with other health services, sporting goods stores, hotels chains, airlines, adventure tourism companies – anyone whose best interest it is to support her clients’ aspiration. They too benefit from loyal customers (anti-Groupon)
  • The Alumni Association would represent a network of clients, business owners, and database of persons likely to provide contacts, references, coupons, and advice to the aerobics instructor
  • The University can provide gym space, sponsorship, health education classes, and collect data such as; which coupons produce the highest yield for a given alumni product or service and player profile.

The Value Game Filters:

This particular value game automatically filters out the players that are not appropriate for the client.  In effect, the donut shop, tobacco store, or video game outlet would not likely benefit from playing this particular value game as their offering would reflect poorly on social values of the instructor and their coupons would not perform well enough vs. traditional advertising.  Instead, these products would find their own value game, if any.

Social Value Index (SVI)

The Social Value Index is a public statistic that compares the economic value (cost/benefit) of the socially integrated value game with the cost/benefit of the disaggregated advertising/spamming model which robs people of their time, passions, and quality of life.

Data as a shared asset

The SVI provides data that rewards this entrepreneur for doing what she is most passionate about; being knowledgeable and supportive of available health resources. The SVI rewards the store for enabling entrepreneurs in exchange for loyal repeat customers.  The Social Value Index rewards the network of alumni who align with their members (aerobics instructor) to deploy social currency to a community instead of spamvertising. The SVI rewards the University Outreach effort for organizing critical data, information, knowledge, innovation, and wisdom in the community.

At the end of the day: 

The Value Game is important because it allows entrepreneurial business plans that would not normally be viable under a purely monetary model, become highly viable when intangible Social Value (New Value) is added to the bottom line.

 

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The Reality Platform

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On May 10, 2012

In General Information

Today, we do not have a financial problem as much as we have a value problem.  The challenges that face our civilization are far too great to be solved on an “Advertising” platform.  Whatever happens next, it must start with a Reality Platform.

2012: A Space Odyssey

Back in the railroad days, a platform referred to the surface upon which passengers stepped in order to enter or exit the train.  Later, the platform became a computer operating system.

In 2012,  the “platform” refers to one of the big four space stations on the Internet; Google, Amazon, Facebook, and Apple.  On the backend, they each sort products and people into their appropriated categories.  On the front end, they deliver the consumer to the product and vice versa.  Everything is done electronically; wherever possible, even the product is electronic.

A Platform for Reality

Compared to the Big Four – which collect data behind secure walls, analyze with proprietary algorithms, then serve up  content that is most beneficial to the platform (not necessarily the user) –  The Value Game is revolutionary. In one application of the Value Game, a company called Social Flights collects four separate streams of data, converts the data to a single usable form, then shares the data back to the separate streams.

For example; an airplane operator submits data regarding the inventory of their aircraft.  The hospitality industry submits data relative to their inventory of support services,  Travelers submit data relative to their likely destinations, and event organizers submit data regarding their events.

Music is a combination of rhythm, sound frequency, and timbre

Social Flights captures all of these streams, organizes the data and feeds it back to the market in a more usable form.  Aircraft operators learn the optimum use of their aircraft resources.  Hospitality and tourism learn how to best allocate their inventory.  Event planners  learn to access their markets for attendees. Finally, Travelers learn the exact door-to-door cost AND TIME to achieve their objectives.  All the connections are made WITHOUT advertising.

Social Value is literally “manufactured” because it is in the best interest of each player that the other Players are successful.  Communities become vested in each other – not unlike an ensemble.

Advertising extorts passion

Today, nearly all social organization is now funded – and influenced – by advertising. People do not wake up in the morning aspiring to follow the Kardashians. If left alone, people aspire to follow their friends, to pursue their natural interests, and develop their natural talents.  The sole objective of the advertiser is to convince people to do something other than what they aspire to do naturally.

Manufacturing Social Value

The Value Game is a real and valid social value manufacturing engine. The same system deployed to aviation can also be used for any shared asset or experience; cars, roads, infrastructure, corporations, education, and even government, all with the New Value data platforms that are under development.

The problem can never be the solution – we need a new platform.

***

*2001: A Space Odyssey is a story that deals with a series of encounters between humans and mysterious black monoliths that are apparently affecting human evolution,

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Ideas Are The New Currency

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On December 20, 2011

In General Information

‘Tis the season for “The Year In Pictures” – the annual new year pictorial accounting of the events of the outgoing year.  Any rational collection for 2011 would include three events; Arab Spring, The Earthquake / Tsunami in Japan, and Occupy Wall Street. These three events eclipsed the Royal Wedding, Steve Jobs, the tenth anniversary of 9/11, the space shuttle retirement and even the end of the war in Iraq.

These three events tell a very interesting story of who we are and where we are going as a civilization.  

Classical economists such as David Ricardo and Adam Smith brought us the idea that a merchant class allocates land, labor, and capital in various combinations as “the factors of production” that match supply and demand for all that societies need via the invisible hand of market capitalism.

Yet, in a single hour, land, labor, and billions of units of Capital were wiped off the surface of the Earth by in Japan.   While we see the images of total destruction, there are hundreds of square miles that were untouched and where all seems quite normal – except for that invisible hand of radioactive cesium.  Land, labor, and capital failed as a an economic cornerstone for all those who had once called this land home.

In the Middle East, with few jobs and even fewer opportunities for youth, the quaint notion of “land and labor allocations” crumbled under the forces of people with mobile access to dynamic data, free information, community knowledge, innovation, and wisdom. Governments, with no relative shortage of money, were unable to challenge the opposing factors.  Again, the idea of land, labor, and capital as the economic cornerstone had failed.

Quite appropriately, Occupy Wall Street was executed on borrowed land, with borrowed labor, and borrowed capital.   The operation was peaceful so nobody died. The stock market did not even crash.  Politicians went largely unscathed and the attorneys stayed in their collective offices. Nothing physical was actually created, and therefore, nothing physical was actually destroyed.  However, a great deal was produced.

All three of these events had something in common – they all produced something very tangible.  They all produced an idea in the minds of others.

As we review the year we review it is increasingly evident that land, labor, and capital are inadequate to articulate what people actually produce.  It will be through these shortcomings of classical economics that a new economy will form.  The degree to which society actually produces the things that society actually needs, this new economy should not look much different.  The degree to which society does not actually need the things that capitalism produces, great new ideas will emerge.

What was once the land of opportunity can now become a planet of opportunity.

Photo Credit: David Shankbone via Mashable 

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The Human Infrastructure Game

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On June 25, 2011

In General Information

Social media is emerging as a tool that may replace corporate and physical infrastructure of market capitalism.  Social Flights is attempting to sort and match people, airplanes, and destinations with community organization and interaction rather than the massive infrastructure of Hub airports.

Social flight introduces a Community Leader to the “last mile of social media” who can interpret and manage Value Game data to drive social and financial revenue.  In order to articulate this real-life gaming system we need to specify a baseline game scenario such that all future “real-life” scenarios will simply be some unique variation on the baseline game.

The Baseline Scenario

Consider a condition where 4 persons (group A1) from a metropolitan area (point A) self-organize to initiate a flight plan to another metropolitan area (point B). An 8 passenger jet is available at the local airport near point A. The group seeks to return 3 days later. Price sensitivity is high.

The responsibility of the Community Leader at Point A is to:

1. Deploy social media strategies to find 4 more people to fill the remaining seats.

2. Contact Community Leader at point B to notify them of the empty leg that will originate there (when aircraft returns to base).

3. Coordinate with Community Leader B to promote vendor attractions that influence 8 new travelers to fly the jet back from Point B to Point A.

Three days pass and Group A1 needs to return home from point B:

1. Coordinate with Community Leader at Point B to determine who will originate the flight plan and who will own the resulting empty leg (the passengers are agnostic as to where the plane originates).

2. In either case, Community Leader B will deploy social media tools to fill remaining empty seats if any.

3. In either case, Community Leader A will use social media tools to fill the empty seats if any.

Variables:

In this scenario; 32 seats must be filled to support a flight plan for two round trips in an 8 person aircraft AND the 3 steps outlined for each and every flight remain relatively constant – only their order may change.  Most of the variables to the baseline scenario are factors of social influence and may therefore respond to game mechanics and rewards, i.e.; the number of initial passengers, social draw in each community, 3rd party vendor incentives, social influence of passengers, price sensitivity, traveler schedule, etc.

Re-introducing Human Infrastructure

Social Flights needs game data from which to match supply and demand of corporate resources.  The Community Leaders need game data to match supply and demand of social influence.  Finally, the passengers and support vendors need game data to match supply and demand of social value, etc.

By structuring the game around a baseline scenario and introducing “Human Infrastructure” responding to game data, we hope to increase our likelihood of  replacing physical infrastructure in the operation of point-to-point air transportation.

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The Art and Science of Social Sudoku

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On June 3, 2011

In General Information

It’s been a few months since Social Flights entered the market with our February 28th Soft Launch.  Since then we have grown at an amazing rate after getting picked up by a series of important news publications.  But for this article, I would like to talk about what we learned.

He who hesitates, iterates

Learning is a critical element in any organization.  The iterative process is a series of intentional steps that a group of innovators must invariably endure.  The iteration process requires a strategy for introducing new variables to a product or process in such a way that the experimenter can isolate the effects of each change.

Social Flights was very much launched with this in mind. We prioritized the rollout of game features in order to form a player priority profile that will drive this Value Game.  Nobody can simply invent such a thing, it must be observed empirically.  This means that the right conditions must be in place to reveal the right data without bias.  The data can then be used to improve the incentives that drive the game.

Resistance is futile

One of the most daunting challenges has been to identify the skill set for what makes an effective community leader.  The Value Game is a value-based economy that is modeled after the mirror image of a dollar-based economy.  It’s like driving on the left hand side of the road for the first time.  Of course, you need someone who can drive a car – but in a very significant way, you need someone who has never driven a car.  In either case, resistance is fatal (figuratively) and futile (literally). The willingness and ability to iterate is essential.

We do expect the results to surprise us.  We went through many candidates for our social media distribution and engagement office before we found the right skill set; not in a marketer, or in an MBA, or in social media guru – we found the skill set in a Linguist.  This makes perfect sense now – but we did not know that before we started the iterative process.

Easier Said Than Done

A travel community leader needs to solve a simple equation.  Find 18 people to share an 9 – passenger jet (9 flying in each direction) within a certain span of time.  This is much easier said than done – in fact, it’s like trying to solve a big Sudoku puzzle where all the rows, columns, and regions need to add up to the same number with no duplication.  Of course the puzzle gets easier as more people join the community because the probability of finding 9 people that want to go to the same place improves.  But still, someone needs to be on the ground to solve the puzzle.

Help us find the gamers

With that, I invite our readers to help us imagine what skill set would be the starting condition for an iterative process of finding hundreds of entrepreneurial community leaders that can solve this puzzle in diverse communities. I am leaning more and more toward the Gaming community on sites like http://gamification.org to find this skill set.  Any thoughts?  Thank you.

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Are We Hard Wired?

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On May 31, 2011

In General Information

Hardwired Control Matrix

It has been a challenging month at Social Flights.   Our soft launch story was broken by FAST COMPANY, then it was quickly picked up by  THE NEW YORK TIMES, BLOOMBERG TV,  FORBES, INC. TECH,  WASHINGTON POST, and MASHABLE, then picked up by various other magazines and bloggers across the web.

Huge Interest in The Business Model

Social flights picked up tens of thousands of hits and several thousand members within a very short period of time.  We also received almost a thousand RFQ’s for charter service and our web traffic rank according to Alexa.com is under 20,000 – better than any other private jet broker in the country, including NetJets.

I personally communicated with dozens of 3rd party entrepreneurs that want to plug into our value proposition and we are discussing multiple high value partnerships in North America and around the world.

Are We Hard Wired?

Introducing such a radical approach brings many challenges, especially in the area of customer expectation.  People are hard wired to schedules, and lines, and pat downs, and waiting, waiting waiting. Social Flights was never conceived to dictate on a market how they should fly and to where.  Social flights will certainly not take people someplace where they don’t want to go – like an airport hub for transfer.  Social Flights will never hold a passenger’s dignity hostage behind some hidden cost or irrelevant regulation.

Losing The Hard Wire

We estimate that Social Flights will optimize at about  2.5 Million members – or roughly 5000 people in each of 500 locations across North America.  At that point our service model will begin to “simulate” the selection and convenience of the commercial airlines.  Keep in mind – this system will “simulate” scheduled service except without hard wires.

5000 people X 500 places model

  • This is the point where there will be a high likelihood that 8-10 people will all want to go to the same place from the same place within reasonable intervals of departure times.
  • This is the point where fluctuations in price and schedule such as de-icing costs, landing fees, fuel cost, or seat cancellation policy can be absorbed across the whole system rather than an individual passenger load.
  • This is the point where ground support vendors will commit substantial discount incentives to controlled bundles of passengers.
  • This is a point where the data that is generated by The Value Game and held solely by the players becomes valuable enough to predict the outcomes of future Value Games.

Not An Easy Puzzle to Solve:

Social Flights is attempting to do something that has never been accomplished in social media with such high value shared assets.  We seek to answer the question: Can people organize themselves around the concept of “Value” much like we have organized ourselves around the concept of “Money”.  Based on our earliest readings, the answer is that people are not as Hard Wired to money as those who control money would like us to believe. Looks like they’d jump the first plane out of Dodge if given a chance.

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Data: The Ultimate Shared Asset

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On April 29, 2011

In General Information

People always ask me how The Value Game will work and how The Value Game will scale, and how The Value Game will make money.  These are great questions, albeit straight from the b-school crib sheet; good questions nonetheless.

At first glance, The Value Game as we are deploying in Social Flights looks like a rich kids party barge.  The idea is that people can share an airplane just like they did with that stretch limo on prom night.  Yes, the idea is the same – the jet is a shared asset and status on prom night is special.

The Value Game also produces a lot of very important data that is owned by the players.  So when the passengers arrive at their destination, their data can now transform the hotel into a shared asset. As such, a new Value Game plays again.  If the players own their data, and they only share it with the other players in the associated Value Game, they can command substantial value for the collaborative purchase of hotel rooms – or any shared asset.

Likewise, the players will need restaurants, tour guides, golf courses, concert tickets, entertainment, etc.  Their data – if they own it – is their discount coupon…like a Group Coupon, except relevant to the need and exercisable on-demand.  By the time the trip is over, their Value Game data can result in hundreds or thousands of dollars in discounts for the individuals in a travel tribe if, and only if they own their data.

The next time they want to take a trip, their data is not only a discount coupon; it becomes a passport to opportunities that money cannot buy. In the End Game of the Value Game, data are the shared asset.  This works if, and only if people own their data and they can share or restrict it from view of others.

Seriously, think about that for a minute.

You give your data away for free.  Companies collect this data and they have no intention of sharing it with you.  Data is a multi-billion dollar industry.  Why?

Aren’t most life lessons about figuring out who is NOT playing The Value Game and avoiding those people and situations?

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Collaborative Consumption Is Here To Stay

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On April 8, 2011

In General Information

There is a persistent myth that a “financial deficit” is looming to destroy all that fall in it’s wrath.  The only deficit is the inability for Money – as we know it – to articulate the value that is created in and by communities.

Social Flights is a new venture that combines cutting edge social technology with the universal truth that collaborative consumption of even the most complex system increases the efficiency of that system.

Social Value as a financial instrument

Social Flights attempts to demonstrate the inevitable – social value can and will be convertible to financial value. Social value can and will enter the balance sheet.  Social Value will not only impact the bottom line – it will become the bottom line.

The Invisible Hand of Social Capitalism

Social media is emerging as a dominant force behind economics, global politics, innovation, and community organization. Meanwhile; it is the art and science of finance that has failed to keep pace with technology.  Social Flights introduces a new class of business methods that can close this gap.

Social Flights sorts people and airplanes with data, not financial infrastructure.  The Value Game provides incentives for communities to organize themselves around travel and transportation assets.  So instead of forest-to-dump consumerism, a shared asset is preserved by a community for the greatest service life possible.  Social Flights demonstrates this with an airplane; however, a hotel, car, tour package, or a trade show/convention are quickly pulled into their own value game cycle given the airplane game playing out in proximity to them.  In fact all “assets” – social, intellectual, creative, or financial – can be pulled into their own value games in response to those acting around them.

Travel: An Ideal Benchmark Industry

We are starting with travel. Specifically, air transportation because of it’s complexity, high profile, and significance to most people and industries. Furthermore, corporate jets are beautiful, awe inspiring, controversial, and conjure the image of power and grace.  Most importantly, travel is pivotal enterprise and the best system for the diverse high-value transfer of new ideas to occur.

Nothing economic can happen until people get together to build something

The value of most commercial activity may ultimately become dependent on the quantity and quality of the data emerging from the millions of Value Games playing out in communities across the globe. Any and all shared assets – from public infrastructure to money itself – can be shared collaboratively in hugely profitable Value games.

New to the Public Domain

Nothing like this has ever been put together before so there is certainly much to learn.  Many people will fail to recognize where we are going with this. However, the rewards will be high and the implications will be vast if we are successful. There will be an extraordinary amount of knowledge to be share to the public domain.

Collaborative consumption is here to stay because it represents a higher value economy than forest-to-dump consumerism.  The financial deficit is simply the inadequacy of Money to articulate Social Value – not the inadequacy of people to be happy, creative, and productive in their communities.


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The Mashup of Gamification and Collaborative Consumption

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On March 25, 2011

In General Information

I found an interesting article by Kim Gaskins at Sharable.net titled: Where the Game Layer Really Counts: Sharing & Peer Communities.

I sensed some resigned frustration from her as she reflected upon a somewhat trivial nature of current innovation in this new social genre called “gamification”. Predictably, in the end, Gamification amounts to little more than feeding the advertiser’s insatiable addiction to that extra dose of personal data coursing through the veins of unbridled consumption capitalism.

She is not alone.

In reading her article, I was, however, stuck with a particular stroke of clarity. Kim provided the following diagram showing the intersection of Social, Economic, and Environmental reality that she calls the best gaming opportunity for business and societal benefit.

This is a very important observation. Kim identifies the intersection of three “communities” and suggests that a game opportunity may exist.  Even though the article appeared in Sharable.net community blog, she stopped short of saying “This is where you put the shared asset”.  So I’ll say it for her:

This is where you put a shared asset.

At the Ingenesist Project, we developed something called The Value Game that we are testing in several different business models. The value game is very simple: Three communities are brought together to interact around a shared asset.  Each community interacting with each other, while also acting in their own best interest, would be acting in the best interest of the asset.  The result, we expect, will be the preservation for optimum utilization rather than forest-to-dump consumption.

Meanwhile, the fact of interaction between these communities creates “social currency” that articulates the true social value of the asset. Where social currency is readily convertible to financial currency, the paradox of market capitalism is broken.

Kim’s observation is important – she is talking about a marriage between collaborative consumption and gamefication.  People need to watch this mash-up very closely and we must innovate in this domain very rapidly.  We will need millions of value games playing out in communities across the world if we are to hedge the inevitable implosion of financial currency while also preserving our most valuable shared asset for future generations.

Thanks Kim – you are on to something very important.

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A Grand Central Value Game

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On March 7, 2011

In General Information

Few people realize that there is nothing new about the Social Graph.  Facebook did not invent it – in fact, Graph Theory is a branch of discrete mathematics that was first developed back in the 1700’s by a Swiss Physicist named Leonard Euler.

Likewise, Zynga did not invent Game Theory.  Again, Game theory is a branch of Applied Mathematics with origins dating back to the 1700’s in a paper by James Waldegrave.

A Graph Theory and Game Theory Mash-up

It follows that The Ingenesist Project is not the first to mix graph theory and game theory to form A Value Game.  While I cannot pinpoint the first example of this, I did recently find an article in American Heritage Magazine Invention and Technology magazine about what appears to be an excellent early example of A Value Game.

Not So Grand Central Station

In the late 1800’s, New York City’s Central Train Station was clearly not so grand.  It amounted to a huge surface train depot with dozens of parallel lines and platforms covered by a huge structure that filled with smoke from the old steam engines.  The train yard bisected 17 blocks of neighborhoods where soot and ash rained everywhere.  The station created widespread urban blight and health issues for dozens of city blocks surrounding the terminal.

Politicians and the Railroad Companies tried to correct the problems but every proposed solution created ten more problems.  Too many trains, not enough land, technological struggles, funding, traffic, property values, pollution, safety, collisions, politics, noise, fires, were only a few of the problems in conflict.

A Grand Central Value Game

Today, Grand Central Station is a model of ingenuity resulting from a brilliant and engaging solution to a complex problem.  A remarkable Engineer named William J. Wilgus had created something that looks a great deal like a modern Value Game.

Three Dimensions to A Value Game

His first challenge was to pay for the construction of a new station.  His second challenge was to build the station without closing the existing station.  His third challenge was to not use any more land.

His solution was to bury the station.  He made the walls of his underground structure strong enough to support large buildings (now skyscrapers) above.  He then used the huge real estate market gains to finance the project

Grand Central Valley Game:

In this case, the very important railroad station was the shared asset.  Player 1 was the community (politicians) surrounding the station, player 2 was the real estate market, and player 3 was the railroads.  Each acting in their best interest collaborated to arrive at a solution to what was considered an impossible problem.

With the advent of Social Media and collaborative gaming technologies, “Value Games” may be created to solve many of the world’s most complex problems while also releasing vast amounts of value to a social system simply by reorganizing the same players on a three dimensional playing field interacting around any shared asset.

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The Value Game Plays The Valley Game

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On February 26, 2011

In General Information

(The following is a draft of the unveiling presentation for The Value Game at The Future of Money and Technology Summit in San Francisco on February 28th 2011)

Hello;

The Ingenesist Project is developing a new class of business methods that convert social value into financial value, and vice versa.  The premise is that when people cooperate to do useful things, they can also create an amazing amount of social value.

Historically, we have seen how each of the great eras of human civilization was derived from the prior era when the tools of that prior era became integrated.  Like when the wheel, wedge, and pulley integrated to become the printing press.  Great social transformation followed.

So it is that integration of tools that we are most interested in.

Today, we can see this drama playing out across the Globe as people integrate the tools that were created over the last 30 years. People are reorganizing and in doing so they are directly challenging the power of financial currency with equally powerful social currency.

So it is inevitable that a conversion factor between social currency and financial currency will arise.  And that, we believe, will mark the next economic era.

So we developed something called The Value Game that we believe will help build the social infrastructure for the creation, storage, and exchange of social value.

The Value Game is a new class of business methods designed to specifically create social value.  The rules of the Value Game are very simple.  The Game Starts and Ends with money but all of the new value created in the game is denominated in Social Currency.

A Value Game is created by assembling 3 or more communities around a single shared asset in such a way that their interaction with each other relative to the asset creates social value.  In this form, social value can then be more readily converted to a financial value.

To demonstrate this, we helped launch a new company called Social Flights.  The objectives of Social Flights are to aggregate a large fleet of Private Turbine powered Aircraft and deploy them to the Social Graph instead of the Hub and Spoke system used by the Commercial Airlines.

The Shared Asset is the jet.  Player 1 is the traveler community.  Player 2 is the community of private aircraft operators. ,  Player 3 is the community of entrepreneurs at the flight destination.  The True Value Calculation compares the true door-to-door cost of using Social Flights versus other alternatives such as commercial airlines.

For example, flying between two smaller cities like Bellingham Washington and Vail, Colorado.  A Commercial flight would take close to 14 hours traveling through two hubs.  A fully utilized private flight would cost about twice as much but can make the flight in 3 hours.  So right off the bat, the True Value Calculation issues a par value between alternatives.  So if your time is worth less than, say, 70 dollars per hour, you are better off taking commercial airlines.  But if your time is worth more than 70 dollars per hour – for whatever reason – then you should take the private flight.

Now, a hotel in Vail may say – wow, here is a group of 10 people staying 5 days. They can divert advertising budget and issue a 100 dollar “discount coupon” to everyone in the group. Now the par value of the private flight is reduced to 60 dollars per hour. Next, Ski slopes, restaurants, bars, and services will deploy Coupons against the airplane lowering the par value toward closer to middle class incomes and certainly well within the business class of a commercial airline.

Things will get really interesting as people start gaming the game. The more demographic information that the traveler provides, the greater the likelihood that more and more vendors will issue them a discount coupon – which they can even resell on Craigslist.

In effect, why would someone let Facebook sell their information when people can sell it their selves?  Why would vendors pay for advertising when they can find the perfect customers directly?  Why would a manufacturer pay a retailer when the community can sell it for them?   Here we see a great deal of financial value can also be articulated in a Value Game.

Theoretically, we could build a Value Game around any shared asset from zip cars, public infrastructure, energy production, education, natural resources, even the totality of human knowledge, etc.

But for now, let me introduce Allen Howell, Chairman of Social Flights who will discuss how this new business method is developing in practice.

Social Flights should be very interesting to many of the people here because it integrates several of the hottest properties in the Valley; Travel, Coupons, Gaming, and Social Media.  Each of these communities have seen astonishing valuations lately so it will be interesting to see what happens when they, in fact, become integrated.

So please welcome Allen and I can take questions while he sets up.

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How To Play The Value Game

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On February 22, 2011

In General Information

The Value Game is a new class of business methods that converts financial currency into social currency and vice versa.   The benefits of the Value Game are innumerable since social currency is the only true alternate means of storage and exchange for value that can hedge a weakening dollar.

The rules of the game are really quite simple

  1. The Value Game Starts and ends with Dollars (financial currency)
  2. All new value is created within the game is denominated as “Social Currency”
  3. Value is created from 3 or more communities interacting with a shared asset

How to build a Value Game

In order to build a Value Game, the social entrepreneur finds an asset that people are willing to share, and then identify three or more communities whose interaction with the asset creates social value.  The following are 3 Case studies currently under development at The Ingenesist Project:

Example 1: Social Flights is a new startup that aggregates private jets and deploys them to the social graph.

  • The shared asset is the Jet.
  • Player 1 is the traveler,
  • Player 2 is the charter operator
  • Player 3 are Local vendors who issue discount coupons against the airfare.

The traveler creates “time-value” by avoiding commercial aviation and developing their social graph.  Charter operators penetrate underserved markets.  Entrepreneurs supply relevant services to a known client instead of advertising.

Example 2:  High Net Worth Individual (HNWI) Reputation Management System. This business method helps influential persons improve their reputation in a community.

  • The shared asset is a shared reputation.
  • Player 1 is a HNWI.
  • Players 2 are the community organizers associated with a social cause.
  • Player 3 are social media gurus.

The HNWI adopts a social cause by exerting their political/financial influence in favor of the cause.  The Social media guru uses this content to demonstrate their ability to move search engine results, which enhances their on-line influence.    The community organizers receive social influence, managerial knowledge, and financial support for social cause.

Example 3: Collaborative Production. A Socially Important Film Project needs $250K to fund production and estimates 5 Millions views at distribution.

  • The shared asset is the final product film
  • Player 1 are the film producers
  • Player 2 are the Community that will benefit from the film’s production
  • Player 3 are product vendors selected by the community

The community provides detailed demographic information about themselves and their buying habits and the film producers processes these data for anonymity.  The film producers sell $1K options to 250 select corporate vendors for the right to issue a “Groupon-like” device to the 5M viewers of the film. Select vendors use the demographic data to target their message. The people who fill out the demographic surveys can purchase the Coupon for themselves or sell to other people for profit. Sales occur in lieu of advertising. The interaction between these communities produces social value in favor of the vendors, the film producers, and the benefit community.

Gaming The Game

As people learn to build The Value Game, they will innovate new and increasingly creative ways to leverage shared assets and interact with communities for profit.  Given the magnitude of the financial problems in the US, several hundred thousand Value Games will be needed to provide people with their daily needs for education, health care, municipal services, energy, transportation, food, etc.  After a while, the need to return to dollar currency will diminish as the value of the dollar itself diminishes under the weight of the impending debt burden.   As such, The Game will be Gamed by The Value Game.

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The Value Game Cracks the Monetization Paradox

By

On February 20, 2011

In General Information

The Value Game is becoming increasingly generalized as more entrepreneurs seek to learn how to apply it to new economic realities.  The first company to launch is Social Flights.  Quickly funded, in full operation, booking jets and signing contracts, the Social Flights success trajectory has been truly remarkable.

The Ingenesist Project is deploying several more applications of The Value Game.  Our next venture is to develop Reputation Management for High Net Worth Individuals (HNWI).  Here’s how it goes.

The Social Influence Game:

Player 1: At some point, the government is going to stop supporting many very important social programs such as schools, health care, child care, retirement benefits, and possibly even close the charitable tax deduction.  In order to survive, social causes will need to come up with new forms of support or fund themselves with a new form of currency.

Player 2: Many politically and financially influential people in communities are finding that their “Google Results” often tell a story that is less than flattering.  Some have old lawsuits, unpopular business associates, or just too much personal information that presents a skewed picture of how they actually feel toward their community.  It is risky, difficult, and expensive to change Search engine results and it is nearly impossible to “control” what other people say.

Player 3: Legions of Social Media Gurus have long learned to aggregate and influence markets using social media platforms.  They have learned to match knowledge surpluses to knowledge deficits as a means of building their own online reputation and influence.  Many Social Media Gurus have achieved a strong Social Media Presence, which supports book tours, lecture series, personal brand image, or corporate clients and sponsorships. They constantly seek new content.

Converting Political Currency to Social Currency

The Social Influence Game will match HNWI with Social Causes where the HNWI can exert their political and Corporate currency in exchange for Social Currency.  Many HNWI have a powerful lifelong network of other influential people from whom they can find advice, mentorship, assistance, or discover goods, services, or physical inventory that may become useful and available to a struggling social enterprise.

Social Media Gurus who make these connections will blog, comment, and promote their ability to match power surplus to power deficit.  Internet Search results will redraw the Social Graph.

Holiday Shopping For the New Millennium

In practice, HNWI can “Go Shopping” for social causes.  When they find one that suits their talents and passions, they will be able to see what that organization needs; beds, food, heating oil, legal advice, CEO mentor, someone to lean on the land lord or even exert a position with the local government, etc.  The HNWI then will pull out their lifelong Rolodex of powerful persons and exert their influence in favor of the social cause through the interpretation of the Social Media Guru.

Winning The Game:

After a short while, Google will start pushing the old search results of the HNWI farther and farther down the page as the tweets, comments, and blog posts accumulate.   The Social Media Guru will find gold in their own backyards instead of Corporate Astroturf.  Social Causes will achieve their mission while managing new resources and earning important new friends.

Perhaps most importantly, the HNWI community will collaborate in order to sustain their Social Currency in the community.  They will begin to bias their personal and professional actions in favor of social priorities over Wall Street priorities.

In Short, everyone acting in their own best interests benefits the interests of everyone.  This is Social Capitalism.  If it works well enough, maybe we can finally put those pesky social causes out of business.

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Crowdsourcing The Brokerage House

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On February 15, 2011

In General Information

The broker/trading model is a familiar class of business methods.  The broker advertises the availability of someone else’s inventory of assets but withholds information from the market as a means to control the transaction.  The broker does whatever is needed to pay the supplier as little as possible while also charging the customer as much as possible. The Broker  can then collect a fee for producing absolutely nothing of value except control over a transaction.

The Value Game introduces a new class of business methods that disaggregates the broker/advertising model by increasing information delivery to a community rather than withholding it.

The Value Game Revenue Model

For example; Private aircraft charters are held under the weight of a powerful Broker Industry that scrapes 30-40% of the value of created by thousands of hard working professionals who actually operate the airplanes. By deploying The Value Game,  Social Flights was created as a new air transportation company that organizes four types of communities and enables them to interact with each other around a shared asset (an airplane).  During this process of interaction, complete information is provided to each party, rather than being withheld, and everyone plays towards their convergent goals rather than divergent goals.   As a result, the Social Flights application creates Social Currency, which is then readily converted to money.

Social Flights Revenue is derived from the interaction of four communities:

The Travelers

The Operators

The Partners

The True Value Data

Traveler:

Social Flights brings travelers of similar intentions together in Travel Tribes to share flights at wholesale market value.  Air transportation is deployed to the social graph rather than the airline hub & spoke system. Communities that are underserved by commercial airlines are now empowered to interact in new ways.

Operator:

In the past, an aircraft operator would pay a listing service, a Broker, and a marketing department to sell charter services.  Instead, an operator would simply reallocate some of their marketing budget to Social Flights in return for a high volume, reliable, and risk free marketing venue.

Partners:

The cornerstones of the value game are 3rd Party entrepreneurs who scour the community for inventory of hotels, entertainment, recreation, business opportunities, and anything else to support travelers playing the game.  Not unlike Groupon, Social Flights facilitates the application of discount coupons that can be applied to the passenger’s itinerary corresponding to their normalized travel intentions.

True Value Data:

Social Flights creates a valuable and unique form of business intelligence defining how much value, in dollars, that people place on their time.  This results in a conversion factor between social currency and financial currency – something that has never been achieved before. Such data will induce a huge amount of innovation as time/money currencies fuel new Value Games around many other shared assets.

Winners and losers

  • The traveler wins with complete information, point-to-point time travel, and an empowered community.
  • The operator wins with less overhead, less risk, and steady cash flow.
  • Thousands of social entrepreneurs are empowered to deliver support inventory to a new community market.
  • All communities win as such information about the time-value of money helps people reallocates their intentions in the emerging new economy.
  • Social Flights earns their revenue by empowering communities in Social Currency.

OK, so what exactly does the Broker Produce?


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Ideas Travel Where People Travel

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On January 28, 2011

In General Information

Good ideas travel easily and far along trade routes.  Ideas like irrigation, Apples, grapes and wine spread along the Silk Road. The paper and writing spread new ideas leading to increased literacy, the scrapping of old philosophy and the creation of new social orders. The printing press then led the way for today’s mighty publishing Industry.  But don’t forget a simple fact, travel is the substrate of the next economic paradigm.

Ideas: A Chain with many Weak Links

Seth Godin wrote a wonderful article about the publishing industry called The Domino Effect.  He observes that:

1. The middlemen (bookstores) have too much power to limit shelf space.

2.Authors are separated from their readers and don’t have the data to contact them directly.

3. Pricing is based static, slow, and largely irrelevant of content or any form of supply and demand which is of little benefit to the reader or the author.

4. Ideas from books travel much farther and faster than the book itself which does not translate into book sales.

Mr. Godin’s point is that given how important books are, the Chain has many weak links between the author and the audience. Publishing is due for an extraordinary disruption and Seth is going to change it with The Domino Project.  But how many other industries suffer from the same weak-chain syndrome?

Travel: A Plane with many Weak Links

Well, if Books and Travel spreads ideas along the Silk Road, then they must have a lot of other things in common.  If we apply Seth’s observations to the commercial airlines:

1. We see that Airports and airlines have tremendous power to limit gates, times, and availability of routes.

2.  Airlines have no idea why they are carrying all those people around.

3. Pricing is static, segmented, slow, and has very little to do with the actual supply and demand for travel.

4. Travelers are transporting ideas which move faster and more broadly than the aircraft itself and which does not translate into more airline tickets sold.

Where ideas spread; value is created

What is so powerful about ideas?  Most innovation gurus discount raw “ideas” as the useless drivel of idle minds. “Show me the money, not the ideas”, they bark.  If ideas are not innovation, then what are they?  If Ideas are not valuable, then what are they?

The Travel Economy

Travel technologies and applications are being sold for incredible sums of money.  Every airline merger is big news and every geolocation application is huge business.  Travel data is a lightening rod for everything from pricing to privacy.  Social Media applications are getting that migration routes are an excellent marker for “value flow” and therefore, cash flow.  Airline Travel is still the most favored mode political disruption because the links in the economic chain are so weak.  Travel is serious business.

The “New Value” Integration:

Every industry with weak links between production and end use are candidates for disruption in the great integration. Any idea that can strengthen the link in the chain between origin and the destination of an idea is a product of the great integration.  The Social Value creation process and astonishing opportunity will happen at the weak links between origin and destination of any product or service.

***

(Editors note: The above post is #2 in a series [1], [2], [3], [4], [5] introducing The Value Game to a new class of business methods.  The first real world application is Social Flights; a collaborative production / consumption game being deployed to the market.  If this works, the new business method class will be generalized throughout the economy to catalyze the convertibility of social currency.  Please join us at The Future of Money and Technology Summit in San Francisco on february 28th 2011 where we will unveil the work to the technology community)

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The “New Value” Integration Begins

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On January 24, 2011

In General Information

The New Integration begins; Travel, Coupons, Gaming, and Currency

Each stage of humanity’s social evolution did not replace the prior social order; rather, it integrated the tools created during the prior social order. The agrarian economy is going strong and feeding the world. The industrial revolution integrated the tools of the scientific revolution – both still exist.  The knowledge economy integrates the tools of the information age as we speak. The next economic paradigm will result from the integration of tools developed from the technologies of the knowledge economy. So what’s happening out there now?

Travel: Nothing economic can happen until people get together an build something.

Tripit acquired for 120M, DoJ Mulls anti-trust suit for purchase of ITA, Travel sites gang up against ITA Sale, American, Expedia, Orbitz in 3-way dispute, Facebook buys Nextstop,

Coupons: Hey, who exactly is subsidizing all that discount value?

2 y.o. Groupon rejects 6B offer, mulls IPO.  50 top Groupon Copy cats, “Google Offers” Groupon Competitor, Groupon Bachlash builds, Foursquare and Groupon go after “Local Social”

Games: A business as old as money.

Zynga valued at up to 5B. Zynga goes on a buying spree (8 acquisitions in 8 months); Google buying spree in mobile gaming and invests 100M in Zynga,  8B in virtual goods sold worldwide – china leads. Facebook Credits become mandatory for games.

Currency: storage and exchange of social value.

Google buys Social Gold for 75M – social gaming/virtual currency platform. Alternate Currency Movement gains popularity,  Zeitgeist Movement goes on the defensive.  Symbionomics to organize the “new value” conversation. Facebook rolls out new currency. AMEX launches “social currency” with “geolocation”……..

Bringing us back to the beginning: Travel:,  

Unveiling The Catalyst

The Value Game developed by The Ingenesist Project will be unveiled at The Future of Money and Technology Summit on February 28th 2011. We will demonstrate how a high value asset such as an aircraft, zipcar, renewable power, or even public infrastructure can be massively leveraged to create New Social Value.  This represents a new class of business methods designed to integrate the tools of the knowledge economy and produce a closed-loop prototypical innovation economy.

Leveraging fixed assets, socially

The Value Game uses the example of how entrepreneurs can leverage an under utilized asset such as a corporate jet fleet and match routes to the Geographic Social Graph at small airport (Travel) instead of competing with an inefficient Commercial Airline model.  Vendors could join social networks to subsidize airfares with contingency (Coupons) for related products and services. A true value calculator would compare door-to-door social value of private travel with the financial value proposition of commercial airlines.  This comparison creates a conversion factor between social currency and financial (Currency) which monetizes social value.  The resulting interactions between traveler, vendor, and 3rd party entrepreneurs creates an “Intentions Game” in social media where it is in everyone’s best interest to create social value and deploy it to the (Game).

The game starts and ends with money, but all the “New Value” is created inside the game and denominated in social currencies. Entrepreneurs will game the game, the planes will get bigger, the coupons will get stronger, and the social currency will out-perform the financial currency in new value creation.  This business method is now being tested in a live venture. What we learn from this may help catalyze a new and more sustainable economic model called Social Capitalism.

Don’t miss this historic unveiling at The Future of Money and Technology Summit on February 28, 2011

***

(Editors note: The above post is #1 in a series [1], [2], [3], [4], [5] introducing The Value Game to a new class of business methods.  The first real world application is Social Flights; a collaborative production / consumption game being deployed to the market.  If this works, the new business method class will be generalized throughout the economy to catalyze the convertibility of social currency.)

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Fungible Coupons And Collaborative Production

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On January 13, 2011

In General Information

When we think of coupons, we imagine that most contradictory statement “Buy now and save money”.  Obviously most people recognize that spending is NOT saving but the objective of this apparent contradiction is to project the idea of “value”.  So what is value and exactly how valuable is someone’s the idea of value?  Is Value Fungible?

Inventory management tools

A coupon is a powerful inventory management tool that is made up of several parts.  The first part is the face value, often called “retail price” – this is the price that the retail market is willing to bear. The second part is the discount value which is the actual price of the offering based on a vendor’s need to move inventory.  The difference between the two numbers is the “Value Proposition”.

Public Stock Exchange

Alone, that would be a very simple form of currency creation.  By limiting the number of coupons precisely to the amount of inventory that is subject to liquidation, the coupon becomes a fungible instrument.  If the supply is limited, then people will trade the coupon value that they hold (but don’t need) with people who hold coupon value for other items (that they do need).  Or, since the value proposition is denominated in dollars, they can trade the coupon for dollars up to, but not exceeding, the retail price.  After a while, people will literally form a “stock” exchange out of the community inventory of goods and services represented by coupons.

Most enterprise can expect to spend 10% – 30% of their revenue on advertising.

The third and often misunderstood component of a coupon the friction value – a negative number.  This is the cost of producing the coupon campaign (marketers and printers) as well as the cost of advertising, distributing, and processing the coupon. Finally, there is a certain amount of social friction associated with redeeming a coupon such as clipping, organizing, and presenting the coupon to the vendor.  Rebate schemes will often introduce so much friction that the buyer gives up or forgets the expiration date, etc. On the other end of the spectrum, Groupon often exceeds the inventory intended to liquidate and increases cost of liquidation.

Social Currency

In a coupon economy, we can initially define social currency as the absence of an “anti-social” currency.  We can say that social currency is equal to the coupon’s original value proposition (denominated in dollars) minus advertising friction.  We can make this assumption based on the fact that social capital can be deployed in a community INSTEAD of advertising.

Collaborative Production – when the community decides what to produce

When advertising friction is removed, it becomes a very simple matter to make coupons fungible. In the event that the dollar collapses, people can easily switch from the discount currency to the value proposition currency, i.e., social currency.  After a while, social priorities will drive wall street production priorities instead of wall street production priorities driving social priorities.

Believe it or not, the key to financial sustainability may just be in the wholesale elimination of advertising. The Value Game by Ingenesist project is designed to correct this market friction.

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Who Needs Anti-Social Travel?

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On December 28, 2010

In General Information

I recently returned from a trip from Seattle to Nashville. I am involved in launching a new airline applying The Social Value Game to a legacy industry.  The objective of this venture is to match a fleet of 15,000 private jets to social media networks for efficient door-to-door travel. The start-up is largely founded on the premise that a dismal travel experience is a dismal social experience.

Here is how my trip from Seattle to Nashville went using Commercial Airlines:

11:00 I get in my car and leave home for a 1:00 Boarding
11:45 Drive 25 miles through heavy traffic and bad weather, arrive at self-park car lot near Airport.  I get into a cold shuttle bus.
12:00 Arrive at Airport Security and strip down to last layers of clothing
12:15 leave airport security after long line after harassment over 3 oz of toothpaste remaining in a 6 oz tube and a telephoto lens that obviously resembled a printer cartridge.
12:30 Arrive at gate. Airline took my baggage away because it did not fit in the “Impossible box” and charged $25.00 baggage fee. (95% of all carry on bags would never fit in the “Impossible Box” so why me?)
1:00 Flight was full.  Poked, bumped, cramped, body complies to shape of existing space
1:30 departure was late. Connection in Salt Lake City was tight
3:30 Lands in Salt Lake city, late. No attempt to release tight connections first
3:50 Exit aircraft with 10 minutes to use restroom, grab sandwich, and run 1/2 mile to the next gate
4:20 Board flight to Nashville. Crowded. Window seat. Poked, bumped, cramped, body complies to shape of existing space
4:30 Flight leaves. 30 minutes into flight, I drop my Ipod under seats. Absolutely impossible to recover until airplane lands. No music, sucks.
8:00 Airplane arrives at Nashville (10:00pm Local time). Baggage claim took forever
9:00 (11:00 local): Finally get into rental car
10:40 arrive at hotel near location
11:00 (1:00 local) set alarm for 7 am local (5:00 am Seattle time) head hits pillow
5:00 am wake up sore, tired, and feeling oppressed.

Total Travel Time 12 hours one way and 24 hours RT door to door.

One complete day of productivity wasted. One day of life squandered. Zero time spent with my family or friends. Zero personal time to enjoy or reflect. Zero moments feeling secure, healthy, or self-worthy. 24 hours of confrontation with my surroundings. Zero moments of inspiration. Zero opportunities to be exposed to new ideas. Zero interesting people to learn from. Zero trees, flowers, sunshine, or fresh air. Zero fresh food; no fruit, vegetables, or raw nuts. Zero memories – except bad. No laughter, no friendship, no community. No exercise except running in fear.

The opportunity of the next economic paradigm is the ability to articulate the social value on all of these things – the ability to predict into the future the True Value of all the things that are squandered by an anti-social experience.  That is the essence of The Ingenesist Project.

Who Needs Anti-Social Travel?

With a private airplane, I could leave my home at 11:00 for a 11:30 departure at a small local airfield 6 miles from my house. The flight would have been about 4 hours long and I would arrive at my destination for dinner reservations with my colleagues. The flight would cost less than 1400 dollars round trip and I could return a full day earlier (eliminating 2 nights) than the the commercial flight for the same set of meeting objectives.

If a person’s time is worth 50 dollars per hour, the difference between 10 hours of flight time is 500 dollars off of a 1000 dollar ticket. The commercial flight costs ($300), including parking ($100), airport taxes($50), extra airline fees (50 dollars), car rental ($300), 2 extra hotel night ($400) for a total of 1200 dollars (I have the receipts to prove it).

So if 10 hours of your life is less than 200 dollars, then fly commercial. If your time, family, community – your life – is worth more than 20 dollars per hour, then you should consider taking America’s newest airline.

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Social Currency Derivatives Trading

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On December 13, 2010

In General Information

The New York Times published an article yesterday about derivative traders being controlled by 6 powerful banks whose influence serves to keep out competitors and decrease the transparency of transactions. What struck me was the graphics that the article used to demonstrate both the problem and the solution for derivative trading:

The Problem:  Murky Market – no transparency

The Solution: Introducing a clearinghouse for transparency and correct pricing

The second diagram demonstrates how the introduction of a vetting mechanism inserted directly at the spot of least transparency greatly increases socially valuable attributes such as transparency, true pricing, reduced risk, open sourcing, elimination of conflicts of interest, and increased sustainability, etc – many of the attributes demanded by the new generation of activists seeking their place in the discussion that they struggle to understand. Hedge funds are indeed important tools for reducing volatility if, and only if, they don’t themselves introduce new risks.

The Value Game:

The second diagram looks a great deal like The Value Game developed by The Ingenesist Project for the monetizing social currency. By introducing a leveraged asset in the middle of a series of transactions, true value of the whole transaction system can be established eliminating volatility and reducing systemic risks.  The Value Game works in a manner quite similar to a hedge instrument.

The Airplane Game:

The Airplane Game deployed by the new start-up called Social Flights, for example, introduces a jet airplane transaction as a clearinghouse for the balance of the transactions in the game of door-to-door travel.  When all the players put their money down on a jet flight, they convert the financial currency to social currency, the true value of the transaction can be established when compared to an alternate market such as commercial airline, driving, train, etc. – not necessarily to dollars in the bank.

Financial Currency is a derivative of social currency

It is not surprising that social currency will become a hedge instrument for financial currency in markets.  After all, nothing economic can happen until people get together to build something.  Nothing of any significance can be built unless people exchange social currency. Only after all of that, can it be converted into money.

Intrinsic Banking

As such, every broker in every market can be replaced by a Social Value Game providing intrinsic banking services.  Can you see it?


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Social Stock Exchange

By

On November 19, 2010

In General Information

The over-reaching objective of the alternate/social currencies movement is to create an alternate storage and exchange device to contain “Value”.

Bizarro Capitalism

Coupons regularly portray value in Bizarro World where “Save” really means “Spend Faster”.  The vendor outlet artificially prints the Bizarro Currency which can only be redeemed in Bizarro World.  No social value is created, rather, it is destroyed.

But, if my friends sell me the product, why should I pay a salesman?

Quit complaining, the new business plan is very simple:

Step 1: Convert financial currency into a social currency,

Step 2: Create Value in the social environment (denominated in the social currency).

Step 3: Convert surplus Value back into financial currency.

Example: Suppose Alphonso publishes his knowledge inventory to a social network as follows

Career mechanical engineer, aspiring photographer, outdoors lover, economics blogger, social media index top 20%, etc.

Based on this profile, Nikon USA gives Alphonso a coupon for $500 off of any purchase of $1000 dollars.  In other words, this coupon has a tangible face value of 500 dollars. Obviously Nikon can’t discount all of their products by 50%, so they announce that only 10,000 of these coupons will be placed in circulation with some fairly distant expiration date.

The Value Game:

Suppose that Alphonso already owns a Canon so he lists the 500 dollar coupon on Craigslist for 250 dollars.  From there, he meets another photography enthusiast in his local community and keeps the difference to buy some new camping gear.

Now, we are in familiar Groupon territory; a 500 dollar deal for 250 dollars.

The value of the coupon decreases as the expiration date nears but the value of the coupon increases as the scarcity increases.  Nikon can regulate values and incentives by changing the rates at which they issue coupons. The Par value of the coupon reflects these external market forces.

People will reach into their social networks to play the value game

People will get their friends together to go on a Nikon spending spree, groups of people can buy and share community camera gear, they can donate the coupon to their kid’s high school photography class – all in exchange for Social Value.

Creating Social Value

This process of people working together around a leveraged asset (such as a 1000 dollar camera) creates social value.  It quickly becomes in the best interest for Alphonso to strengthen the photography community because his increased status will enhance his knowledge inventory and increase the likelihood of receiving additional discounts from Nikon and many other brands.

Converting Back to Currency

Every time Nikon is mentioned in conversation, this is an advertising impression – it is done in a positive light of social value creation.  This is exactly the task that an expensive ad agency would be hired to play Bizarro World.  Nikon would be largely agnostic over where the ad budget is allocated as long as measurable sales result.  Likewise, Alphonso and his friends strengthen their financial position in a market

The Future of Money

Eventually, an environment would emerge where coupons never actually need to be converted to cash. All coupons from all vendors can go into an exchange pool much like a Bond Market rated on a “social value score” and trading at a par value dependent on market forces. The difference is that Value would now be allocated according to social priority rather than Wall Street priority.

The total value of the exchange pool can become the basis of a new currency standard to fund new production of new social products and innovations.

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Symbionomics And The Space Between Things

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On November 18, 2010

In General Information

Each stage of economic development in human history was derived from the prior stage by integrating the tools developed in that prior stage; The agrarian era, the scientific revolution, the industrial revolution, the information era, the knowledge economy all followed this pattern.

Whatever happens next will be extremely interesting.

Today we are rapidly emerging era of human history where there is great cause for optimism. The tools developed from the Knowledge economy are truly remarkable.  For the first time in modern history, Value is not represented by things, it is represented by the space between things.

Symbionomics

The Symbionomics project is produced by world class film maker Alan Rosenblith and visionary Sustainable Community Developer, Jay Standish.  Their objective is to reveal the next great truism in the context of human economic systems. Please watch the following trailer and please support this essential project.  The hardest secret to keep is the truth.

LandingPage from alan rosenblith on Vimeo.

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Social Value is Social Enterprise

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On November 15, 2010

In General Information

The fastest way to unleash the extraordinary value that is contained in communities of experienced, talented, and motivated people is to provide a substrate for them to trade their knowledge assets among each other.  When people get together around a purpose, they build things that create incredible social value. The Social Value Platform provides an electronic accounting system for social value.  In The Social Value Game, vendors deposit inventory into a strategic community of people and the community creates social value.  This new social value is then converted into monetary revenue in the next economic paradigm called Social Capitalism.


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A New Generation of Social Business Methods

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On November 13, 2010

In General Information

Now on Kindle and IPad!!

The next Generation of electronic accounts:

There are approximately 5.5 Trillion dollars worth of retail transactions made face-to-face in the U.S. driven by a 400 Billion dollar advertising industry. Many analysts believe that the next platform for money transfer will use mobile devices (as clients for web transactions) in lieu of debit cards or cash.  Companies such as PayPal expect to be the greatest beneficiaries of this trend and are predictably promoting and developing the transaction modes.

The big hurdles will be security, friction, and privacy

Mobile to web transactions introduce any number of hacking opportunities.  Furthermore, PayPal, The Wireless Carrier, Marketers, The Bank, The Federal and State governments, and a host of other intermediaries are taking a piece of your paycheck and your data profile along with that Slurpee you just texted.

A huge amount of anti-social friction is imposed on the consumer in the name of convenience

Most people are unaware of the latest technology in debit cards that will allow them to transact in social currencies.  Vendors can issue electronic coupons directly to a customer’s debit card.  New social media applications allow people to exchange coupons from different companies among each other without necessarily converting them to dollars.  This scrambles the data, preserves anonymity, and escapes taxation.  Yet they can be just as easily redeemed for dollar denominated discounts at the point of sale.

The Social Value Game

Most people are also unaware of a new class of business methods being deployed in social media based on The Social Value Game developed by The Ingenesist Project.  The Social Value Game allows people to leverage their social influence around a product or service to attract coupons from companies willing to sponsor the customer’s social activity in their marketing strategy.  As such, social priorities will drive Wall Street priorities

A New Generation of Social Business Methods

When combined, these two technologies can vastly reduce the frictions of electronic commerce, reduce advertising, improve anonymity, scramble personal data and increase the security of transactions while introducing a strong bias toward social value in commerce.  Instead of encrypting the device, these technologies encrypt the currency. At the point of sale, coupons will enter an exchange pool and the customer will receive their discount.  In effect, they are selling their access and their data instead of having a gatekeeper sell it for them.

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Reverse Economics And True Value Social Games

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On November 11, 2010

In General Information

Illustration from Wired (reversed) - Aegir Hallmundur; Benjamin Franklin: Corbis

Debit Cards and Credit cards routinely handle conversions from Dollars to Pesos to Euros and Yen.  The calculation is simple because there are known conversion rates between them.  In Fact, the credit card or debit card is buying the other currency much in the same way that they buy the pair of Levies, IPad, or bag of Tulip Bulbs being purchased.

Trading coupons for coupons

In other words, a debit card or credit card should also be able to use IPads, Levies, or Tulip Bulbs to buy money.  Of course, they would not use an actual IPad any more than a bank uses an actual Dollar – they trade a 100% coupon of a dollar for a 100% coupon of an IPad.  By adjusting the exchange rate between IPads and Dollars,  a 50% coupon for an IPad equals 300 Dollars and it is easy to see we are in very familiar Groupon territory.

The Dollar as a black market Currency

The debit card (or any form of mobile payment system) can, in fact, be used to trade what in earlier technological eras would be called a Black Market currency.  For example, After the Mexican currency crash of 1994-1995, I personally witnessed people empty WalMart to the bare shelves literally overnight, only to find those items circulating as currency the next day – in exchange for Dollars; the black market currency of the less developed World.

Drive the economy in reverse in order to drive the economy forward

With a high velocity and frictionless payment processing system, the economy should be able to operate in “reverse” just as easily – if not better than – it operates in so-called “forward”.  Here is why:

Suppose that Big Box retailer issues a coupon for 50% off all of it’s products for one Christmas Season because they want to beat out every merchant in the country.  The contingency coupon gets applied to all the credit/debit cards of all people that have ever shopped at the Big Box.  Since the local merchants are driven to failure and they’ll need to liquidate anyway, their response is to also honor the Big Box coupons.  This will initiate a spiral and all retailers will begin to accept each other’s coupons.  Soon, the brands such as Nike, Coca-cola, and Canon will be pulled into honoring retailer discounts.   The “coupon” will become the currency instead of the dollars.  The exchange rate between products will be determined by local arbitrage.

Lose the friction, improve efficiency

First, it would become very difficult to tax these transactions.  It would also be very difficult to inflate or deflate a dollar currency against these transactions. Arbitrage opportunities will be based on the true social value of a product in a community.  The dollar denominated conversion factor will become increasingly arbitrary.  The the new currency will be a social currency because people will now favor whatever products have the highest Social Value in their community relative to the knowledge assets of the community.  Advertising friction will disappear.  Assume Market Friction was 50%…..what changes?

In the end game, social priorities will drive Wall Street priorities

Social Currency is real currency.  The technology exists today to make it a frictionless exchange.  The economy may actually run better in so-called “reverse”.  The only thing missing is a True Value Social Game

References:

Sepp Hasslberger The Future of Money

The March issue of Wired Magazine carries an article titled: The Future of Money: It’s Flexible, Frictionless and (Almost) Free.,

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The Social Value Index

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On November 2, 2010

In General Information

The Big Mac Index is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test of the extent to which market exchange rates result in goods costing the same in different countries.  UBS Wealth Management Research has expanded the idea of the Big Mac index to include the amount of time that an average worker in a given country must work to earn enough to buy a Big Mac.

Time is the true scarcity

Everyone is allotted a certain amount of time before they must leave the game and how they choose to allocate their time defines how they stand in the economy playing out before us.   People may store, exchange, borrow and give their time to others.  People can also steal, exploit, and waste the time of others.  Likewise, the greatest innovations are those that create time and the greatest scourges of our civilization are those that kill time.

Social Value Index

There are many indices that help us to track comparative values. These include the Dow Jones Industrial Average and the S&P 500, etc. People track them over time to help define productivity. Productivity (you and I going to work everyday) is what gives the dollar it’s value, not the other way around. Likewise, the Social Value Index will compare the financial profit (or loss) of a product or service with the social profit (or loss) of that product with respect to time.

Future of Money

The future of money will most likely arise from entrepreneurs influencing the social value index with thousands of new business models rather than the creation of some new independent currency.  The ratio between financial currency and social currency may in fact become that “new currency” standard.  As the dollar loses it’s steam, the social currency will gain steam and the Social Value Index will rise (not unlike like the S&P 500 index since 1945) to reflect a measure of social economic growth; i.e., abundant social factors of production will define productivity instead of scarcity of land, Labor, and Capital.

The trick is to cure the cancer without killing the patient

A new social currency will be born from the slow and steady evaporation of the old debt as the dollar atrophies, rather than the wholesale demise of Capitalism. As such, the Social Currency will become increasingly biased toward social priorities instead of Wall Street priorities and the pesky little flaw in Market Capitalism will correct itself.  This is the primordial soup from which ideals such as the environment, renewable energy, wealth disparity, education, etc., will become highly profitable social enterprise.  This can be achieved quickly and cheaply with existing technology if we index the data correctly; that is, with respect to time.

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