The Ingenesist Project

The Next Economic Paradigm

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Introduction To Curiosumé

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On September 13, 2014

In General Information

(Editors note:  We are publishing the documentation and tutorial for the Curiosumé application for review and comment)

Introduction To Curiosumé

Curiosumé is an open source specification for the analog-to-digital conversion of knowledge asset objects.  Designed as a system to replace the résumé as a means for describing the interests, skills, and abilities of people, things, and ideas —  it functions as a personal digital API for the trade and exchange of actionable knowledge.

Since semantic knowledge assets are machine-readable, they generate matches, proximity measurements, relevance and importance rankings, and predicted probabilities of various outcomes.  As such, the economics of “intangibles” becomes computable and meaningful.

By activating knowledge assets within an economic system, social entrepreneurs may readily trade and exchange intangible assets much as they do with tangible assets.   Curiosumé facilitates trade of intangibles through a unique distributed network of objects and assigned attributes.

  • Ownership of one’s Personal API
  • Anonymity until point of transaction
  • Deploying multiple personas
  • Combining multiple personae
  • Imaginary personae
  • Measuring proxies for economic output, matching, assessing, scenario testing
  • Anonymity and privacy

Use Cases:

The use cases for Curiosumé will be a numerous as the number of entrepreneurs who can articulate the protocol in a market.  Since Curiosumé eliminates “Competition” from the onset,  there is little or no economic incentive to lie, deceive, or cheat.  This allows the market an opportunity to defer vetting mechanisms to downstream applications that can compare (for example) a submitted persona against a control personal as a cryptographic key to unlock a transaction or block chain, etc.  In essence, making cheating too expensive to sustain.

  • Individuals may overlay their own persona on any dataset to visualize and discover adjacencies, paths, and connections.
  • Individuals may interact with the web using a Personal API
  • Protegé and Mentors may find each other in close proximity in community or within an organization.
  • People with special skills can find worthy and productive collaborations in communities or within the organization.
  • Trade in knowledge assets is facilitated through “anonymous until point of transaction” protocol.  People will provide better data knowing that they have complete control over their personal identities.
  • Build Social Currency; multiple personas may combine Curiosumés to establish the knowledge inventory for a team or to discover the probability that a group of friends may produce any mutual affinity efficiently together.
  • Any product or service may be described in Curiosumé format and compared to a community listing to discover customers, partners, and employees.
  • Curiosume data is pre-normalized allowing any user to make predictive assessments about any collection of personas relative to a project, product, event, itinerary,  or interaction with any physical asset.
  • Cryptographic; a personal API may be used as a private key in unlocking smart contracts on the block chain protocol
  • Toll Booth on Big Data; marketers, employers, or data aggregators would pay individuals for access to their persona.
  • Instead of advertising to a demographic, marketers may identify specific knowledge assets and may offset prices based on the social values or proclivities of the persona.
  • Economic development agencies can take a knowledge asset survey of a region to identify what institutions or industries they have a strategic advantage.  Or, they may retrain or import specific knowledge assets in order to grow into new industries – with great precision.
  • Philanthropic  institutions can assess need and impact prior to committing to directed giving by assembling strategic knowledge assets around a specific philanthropic goal.
  • Corporations may assess their ability to enter a develop a new products or enter a new market based on a Curiosumé survey
  • Competitors may assess the ability, and cost to defend against their competition disrupting a new product initiative.
  • Corporations can better tailor their products to what customers actually want to buy rather than trying to “market” what the company already knows how to produce.
  • Corporations can make hiring vs training decisions with better clarity based on a Curiosumé survey.
  • The college “degree” system may evolve in favor of boutique personas designed for innovation in an industry.
  • The financial industry (from the NYSE, Banks to VC) can determine the probability that a company may be able to execute a business plan given their Curiosumé survey
  • The Insurance industry can mitigate risk exposures by assuring that the right collection of knowledge assets are deployed to, say, a construction project.
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The Wall Street Hack

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On August 25, 2012

In General Information

In the first post of this series, we identified the 5 components of a financial system and suggested that Zertify, Gamidox, and Exoquant would serve to simulate their functions in a parallel economy before ultimately being adopted completely.

In this post we will identify the hack on the Wall Street Financial instrument regime.  Although exoquant is a bit technical, the basic hack is quite simple:

  • Everyone knows that money is created through the creation of debt.
  • Everyone also knows that debt is a promise to produce something more in the future.
Likewise:
  • Everyone also knows that innovations increase human productivity.
  • Everyone also knows that innovation is a promise to produce something more in the future.

Here’s the hack:

Therefore, a currency backed by debt and a currency backed by innovation are both backed by future productivity.  As such, two currencies backed by the same underlying asset are fully convertible with each other.  Water dissolves water and innovation dissolves debt.

Here is how the Wall Street algorithm works: 

  • People produce stuff in exchange for money
  • Bankers do not care about money, they care about the rate of change of money over time.  This is called the “interest” rate.
  • Stockholders do not care about interest rate, they care about the rate of change of interest rate over time, this is called growth rate.
  • Hedge fund managers do not care about growth rate, they care about the rate of change of growth rate over time, this is the margin on their bets; options, and derivatives, etc.
  • CDOs and other financial exotica become increasingly divorced from the fact that people produce stuff for money.

The Exoquant Analogy:

  • The value of information is derived from the rate of change of data over time
  • The value of knowledge is derived from the rate of change of information over time
  • The value of innovation is derived from the rate of change of knowledge over time
  • The value of wisdom is derived from the value of innovation over time.
In order to “see” innovation before it happens, all we need to do is identify and measure rates of change of information in communities…and so on. Technically, this is a derivative, i.e., something whose value is derived from the value of something else.   All of these metrics can be seen quite readily in the Zertify, Gamidox data sets.  Each is a “derivative” backed by the stuff that people produce rather than the fiction of debt.  The ability to predict future productivity is superior with an innovation backed currency and therefore superior to debt forced productivity – often compared to slavery.

The Silver Bullet

Innovation is a magic word.  The hack is true to the Wall Street math as well as American culture.  Anyone running for public office would not attack the proposition of an innovation backed currency.  Therefore, the hack will not trigger an antigen.
 The next and final post, The Currency Hack, will formulate this innovation currency in more detail.

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Elevator Pitch – The Ingenesist Project

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On April 20, 2012

In General Information

>door closes<

The Ingenesist Project designs and deploys a new class of business methods that will facilitate the production and trade of goods and services against the inevitable devaluation of the dollar.

The systems and methods developed by the Ingenesist Project can create new and tradable value from existing social infrastructure which would act as a hedge against inflation, austerity programs, and lost productive capacity due to high corporate unemployment.

Anyone looking for a hedge on the dollar is looking for The Ingenesist Project.

< door opens >

In case you are still interested

Ingenesist designs and executes a new class of business methods that creates new value by deploying a social game to real asset markets.

A Value Game begins and ends with money because that is the world we currently live in. However, new value is created within the game through the managed interaction of 3 or more communities that share an asset.

Current Milestones  

The Value Game was developed from a large-scale international comparative education research project from the NAFTA implementation era. Currently, Ingenesist deploys a Value Game to the aviation industry with a funded start-up called Social Flights.  In this platform; private aircraft are the shared asset and the operators, travelers, and economic development concerns represent the integral communities.

Ingenesist is currently designing a value game for the construction industry on a large remediation project for a high-rise condominium.  In this case, the condominium is the shared asset while the residents, the contractors, and the real estate market represent the integral communities.

Future Milestones

Ingenesist is currently looking to fund a web application with a working title of Zertify.  Zertify is a proprietary knowledge asset inventory method that will allow The Value Game to scale indefinitely and internationally.  As such, the requirement to convert back into money will no longer be necessary as the value created in one  game can be exchanged with value created in another game.

Expected Outcomes

If we are successful, a new currency will form; one that is backed by real assets and the real interaction of real communities whose best interest is to preserve real assets rather than consume them.   Zertify.com will be followed by Exoquant.com, and Gamidox.com – which will securitize the new currency to achieve  capitalization.

Why is this important?

This will be very important because the inevitable global currency adjustments would not have a direct impact on a non-debt backed currency.  In fact, Ingenesist will hedge the dollar – as the dollar loses value, the new currency will increase in value.  It is likely that everyone reading this post has a vested interest in the outcome; literally and figuratively.

Why are we different?

Many start-ups just scale Facebook networks and call it a “social currency” for the purposes of  consumption marketing. Other application have formed the asset incorrectly in our opinion. Ingenesist actually produces real things that reflect the real priorities of real social interactions…and this is real serious business.

Contact:

Daniel R. Robles PE, MBA
The Ingenesist Project, Founder/Director
Social Flights, Chief Innovation Officer

Skype: Ingenesist
Linkedin Profile
Twitter: @ingenesist

YouTube Channel: Ingenesist
Video: Sibos 2011
Video: The Value Game
Zertify.com specs; Contact Directly (for actual)
Gamidox.com specs Contact Directly
Exoquant.com specs: Contact Directly

Speaking: The Future Of Money and Technology Summit 2012 April 23rd San Francisco
Attending: The Unmoney un-conference 2012; April 24th San Francisco

Ingenesist Blog
Social Flights Blog

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The Paragon of Capitalism

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On December 13, 2011

In General Information

Capitalism is characterized by the condition where individuals acting in their own best interest consequently act in the best interest of society.  By contrast, Socialism is characterized by the condition where individuals acting in the best interest of society consequently act in their own best interest.

Who are the Socialist?

While America espouses a capitalist system of social organization, the jobs that Capitalists create are contained in corporations that operate much closer to the socialist model of community organization.

In a corporation, employees are motivated to act in the best interest of the corporation as a means to assure their own best interest.  Resources allocation is channeled through ministers who are led by a benevolent dictator responding to the priorities of a family of stockholders.  Tasks are segmented into units of equal pay for equal work. There are limited avenues to advancement. People cannot talk freely against their employer. It is acceptable practice to banish some people for the best interest of the collective.

First Amendment To The U.S. Counterintuition

The opposite holds for the OWS movement – some say the occupiers are socialist, however, the jobs that they create are Capitalist.  There is no benevolent dictator or appointed ministers or hierarchy to allocate resources.  Anyone can join and nobody gets sent to the gulag.  Yet, everyone knows what to do like some kind of invisible hand that elevates an ideal.  Most importantly, there are unlimited avenues for advancement.

The movement was peaceful.

Buildings did not fall.  Mothers did not mourn the death of children. There was no volatility induced on the stock markets, the lawyers stayed in their offices, politicians were relatively unscathed. Those protestors who did suffer are now celebrated in the media, culture, art, music, Facebook, etc.  In short, People acting in their own best interest were in fact acting in the best interest of society.

Reoccupy Wall Street

Now that the movement has been dispersed, and the 89% who still have jobs return to occupy their respective corners of Wall Street.  The global narrative has changed for everything from warfare to environmental protection to income equality.

The products that emerge

Already, mobile apps now exceed CD/DVD sales.  Mobile computing devices will replace PCs. Television sales are going down. Many of us now own our last internal combustion automobile. Social Media Applications are mimicking financial instruments with new systems for trade, exchanges, trust, influence, and value creation.  Allocating social capital, creative capital, and intellectual capital rather than the now quaint but hopelessly static notions of land, labor, and fiat capital is producing real value.

Capitalism and socialism are simply two of many different forms of social organization.  People are reorganizing.

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89% Are Already OWS

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On November 23, 2011

In General Information

99% of Americans don’t have a game that they can win playing by the rules imposed on them by the other 1%.  But in order to keep this game in play, that 1% utterly depends on the remaining 89% who still have jobs to show up for work and do as they are told. The spectre of the 9% fallen is an incentive, of sorts, to those still walking.

These are the 89 percenters…

…who already occupy Wall Street with their knowledge of systems and processes to implement procedures and methods that support the connections and networks of the remaining 1%.  Without these people in place, the system will fail faster than S&P can calculate a credit score, literally.

The 89% know what each other know

The logistics manager knows whom to call when the packages are late.  The account manager knows all of the customers by name.  The service team knows exactly how to get the computer systems back online.  The loan officer knows where the money is.  But only the 1% know where the knowledge is…and where it isn’t…

Knowledge is money

As RIM recently learned, if the computers go down, all the money in the world will not bring them back.  Most companies have an off-line life span of only a few days or hours before irreparable damage occurs.  Only the right knowledge in the right place at the right time can save the firm.   This is a huge monetary vulnerability.

The Public Knowledge Inventory

I found a great picture of the Occupy Wall Street Library from here.  The great irony is that OWS felt the need to build a Library that represents the ideas that they have between their ears.  What they really need is a “Library” for the knowledge that actually lives, breaths, and acts in the minds of the 99%.  Only then can they deploy the force that they need to move enterprises.

Divide and conquer

As long as Americans are fighting with each other, there is little chance that they will organize their knowledge assets and deploy their knowledge assets in a manner that serves social priorities instead of Wall Street priorities.  This is the big shift that the World is waiting for.  As long as people fear losing their jobs, they will comply with the 1%

What scares them the most?

The greatest fear of any company is to have their key employees poached by a competitor.  Companies have gone out of their way to implement non-poaching agreements between known competitors and NDAs against unknown competitors.  Companies hide key players behind a mountain of bureaucracy, misinformation, and obscure titles and job descriptions in order to hide them from the open market; yet they willingly poach other firms when they can.

The cry of the 99% is income equality.

Let me suggest that OWS consider knowledge equality as a superior alternative.  So instead of the OWS book library, they should form a public knowledge Library.  A public knowledge inventory would make knowledge transparent to all people and all companies equally.

Then Let the Poaching begin

If the 89% were not scared heartless about getting another job, then they would be far more willing to join the movement.  In fact, the MVPs would be the most powerful voice of the movement – the top innovators and visionaries toiling their life away for a company willing to raid their pension fund or drop insurance coverage at the drop of a hat.  Nobody is going to tell them to take a bath – they are the water.

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The Science of Change

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On October 17, 2011

In General Information

Calculus has been called the greatest achievement of the human mind.  Yes, it is a little difficult to understand … until one day it becomes the simplest, most obvious, and glorious form of expression ever imagined.  Like a musical instrument, there is a point where all the symbols and lines can disappear and the artist can express himself or herself in the medium of the art – leading to many more great achievements of human mind.

The Science of Change

Calculus is amazing because it can make the invisible visible.  From sub-atomic particles, gravity, silicon circuits, diffusion of medicine through cell walls, to the discovery of new planets in distant solar systems – none of which are directly visible to the observer, yet their existence enables human imagination, innovation, cooperation, and social development at the most fundamental form.

Changing Wall Street

Wall Street lives quite comfortably in our homes, political system, our food , and our occupations – without being seen directly. Wall Street is utterly invisible.  Most of their work doesn’t even happen on Wall Street.  How did they accomplish this?  How were they so successful in occupying Main Street without being seen?

The Trojan Proxy

Wall Street is a mathematical construct – it exists in the form of symbols and numbers, or, “proxies” for making stuff – but not the actual stuff itself.   That is the vulnerability that we can easily exploit.  If we are smart, we can dismantle Wall Street brick by brick and they will happily walk right through the door because “our door” – the knowledge asset inventory – can be made indistinguishable from any other “proxy” for making stuff.  (I write extensively on this strategy in the prior posts).

There is a bigger message here that I hope does not get lost in the clamor.  There is likewise a very easy way to occupy Wall Street, however, it’s going to take a little mathematical cleverness. How do we make them visible to us and ourselves invisible to them.

The key is that we need to change ourselves. We need to transform, not them.  We don’t need to occupy Wall Street, we simply need to occupy Main Street because that is where they occupy us.  It is not enough to marvel at our numbers, civil disobedience, and cardboard signs.  We need a Science of change so that we can do so.

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Supply and Demand for Knowledge Assets

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On October 12, 2011

In General Information

If we follow the Wall Street accounting model, the supply and demand for knowledge assets are cast against the factors of production; land, labor, and capital.  The typical corporate human resource department looks to the community for labor units within commuting distance to a factory, and who are willing to rent their time in exchange a minimum amount of money.

But Land is Obsolete

Technology has made the idea of “land” as a factor of production almost obsolete.  Knowledge assets travel over the Internet and can be deployed and organized in many ways across long distances without a factory.  Indeed there are server farms and automation houses where things are made if needed – but these are hardly factors of production as they once were.

What exactly is a Labor unit again?

Machines have replaced much of what we once called “labor”.  I am sitting at Starbucks where a smiling robot is the only thing missing from the age of automated lattes.  The social, creative, and intellectual capital required to create, design, maintain, and serve the technology is what ushers us into the knowledge economy and the associated innovation economy.

Capital is arbitrary

Everyone knows that money is created out of thin air when someone allocates their future productivity to the bankers balance sheet in exchange for a place to sleep.  When this game loses its entertainment value, “capital” as a factor of production will also become obsolete.

The Supply and Demand for Knowledge Assets:

Knowledge assets are deployed by teachers and replicated by student.  Teachers represent the supply of knowledge and students represent the demand for knowledge.  In between these two extremes are collaborations – that is, varying combinations of teaching and learning that ultimately results in a productive outcome such as a latte, automobile, or computer program.

If we sample a population of knowledge assets across some geographic area (Land) we would expect to find something that looks like a bell curve.

If the bell curve has a different shape, this tells us what things can be made and what things cannot (Labor).

So when people allocate their own productivity, they are in effect assigning their productivity to a community balance sheet (Capital).  They are saying “this is what we are willing to make because we have the freedom, liberty, and we intion to pursue our happiness”.

Hardly a Wall Street model.

The result is that the social, creative, and intellectual assets of people must now replace Land, Labor, and Capital as factors of production in the new value economy.  Trying to produce anything less would be inefficient in a Capitalist system – perhaps some may have noticed as much lately.

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A Better Way To Occupy Wall Street

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On October 10, 2011

In General Information

What if I told you that we could occupy Wall Street without actually camping out there?  In case you have not noticed, Wall Street occupies your house without you ever seeing any suits milling around your driveway.  So what’s the plan?

In the Age of The Internet, redistribution of wealth should not be a very difficult thing to do, yet the approach is surprisingly low-tech.  Just look at the pictures; if this is going to be our approach, then we’re in deep trouble.

Here’s the trick. Wall Street is built on a foundation where the factors of production are land, labor, and capital.  All we need to do is shift the factors of production to something else. We don’t actually need to shift Wall Street, we need to shift ourselves.

The reality is that the today’s economy is built on social, creative, and intellectual factors of production – these are the factors of production of that so-called 99% of the value of our economy.  It’s a knowledge economy, remember?

Now, notice how land and labor are constrained by geography, property laws, political districts, and “national borders”. Also notice that the accounting system (capital) is as anonymous as possible, if not shrouded in secrecy.  Do you remember how Steve Jobs told us that it’s OK to copy good ideas?

First, we need to build a knowledge inventory of all the useful stuff in our brains and integrated by geographic proximity so we all can find each other.  This is how we’ll mimic land and labor.  Next, the knowledge inventory must be anonymous until the point of transaction – this is not for privacy concerns, rather, we need to do this to create scarcity (nothing personal, Zuck).  This is how we mimic “capital”.

At the end of the day, your knowledge inventory is your personal API – you create your own value and integrate with others or withhold it as you wish…just like Wall Street. Of course, everyone would then need to become a corporation so that we can pay our fair share of taxes (but not a penny more). That’s code for “too big to fail”.

Have you forgotten about Wall Street yet?  If so, it’s not too early to coin the term APIcracy.

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New Economies; May The Best Street Win

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On September 7, 2011

In General Information

The great dream for new economies movement is that Wall Street has finally met its match from the vast interconnected social systems that now dominate communication, organization, and commerce.

The problem is that no matter what the New Economies Movement comes up with, Wall Street will capitalize it, commoditize it, securitize it, and sell it back to us for the price of our communities.  Then they’ll build derivatives and options around it and wrap it all up in a nice hedge fund that transfers all risk back to us.   The Street always wins.

So why can’t we do what Wall Street does?

At Social Flights we believe that we can provide 10,000 jobs across the United States by letting people sell options on aircraft seats.

How would this work?

The Hub and Spoke system consists of about 30 major airports in the US that act as hubs.  The rest are spokes and many smaller cities are barely served at all.  So unless you are flying between two hubs, you will always have to catch a connection, waste time, and incur social expenses.

For the price of a typical airport lounge bar tab, a traveler can buy an option to fly a private jet non-stop between their destinations.  An option is the right without the obligation to take a position in the future.  The option would be convertible, transferrable, and may even be exercised on a wide variety of schedules.

Calling all unemployed entrepreneurs 

Suppose that I saw a listing on Social Flights for a private jet flight from Boise Idaho to Colorado Springs taking place in three weeks and costing 300 dollars.  Since I know a lot of people in both cities, I can either use the ticket myself, or I have 3 weeks to sell it for, say, 500 dollars.

This is a bargain because there are no non-stop flights between these two cities and airline prices tend to increase as the departure date approaches.  The private jet can do the trip in two hours whereas the commercial airline would take 8 or more hours. I could buy an option on that flight for, say 30 dollars and resell the ticket for a $170.00 profit.   If I cannot sell the ticket, then I can use the ticket, convert it to another option, or lose my 30 dollars (just like the bar tab).

I am a Capitalist

In effect, I am rewarded for my size and quality of my social network.  I am rewarded for my ability to research in the Internet to find likely prospects who would seek to travel at a time savings.  I am rewarded for my knowledge, associations, professional skills, and ability to analyze data and organize people.   I am rewarded for finding arbitrage opportunities in an inefficient industry.  I buy low and sell high – I am a Capitalist

While this may not seem like a large impact, if 5000 – 10,000 people make their living trading Social Options, the market will shift.  If Social Options can be created for aviation inventory, they can be created for all inventory.  For the exact same effect as a Groupon, people can trade options on goods and services while hedging against Wall Street and restoring community Values.

Don’t just change the game, change the street that it is played on….

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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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80/20 Rule: The Value of Human Interaction

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On October 25, 2010

In General Information

If an IPod is shuffling in the forest, and nobody is around to hear it, does it make a sound?

This is a standard philosophical riddle that raises questions regarding observation and knowledge of reality. Alexander T. Jackson, one of the great minds of the 20th century, may have said that, “View points of this riddle differ based on the perceived definition of the word ‘sound’, often confused with the definition of the word ‘hearing’.”

A $300 Ipod is shuffling in the forest and nobody is around to interact with it, does it have value?

This philosophical riddle also raises questions regarding observations and knowledge of reality.  Viewpoints in this riddle differ based on the perceived definition of the word ‘money’, often confused with the definition of the word ‘value’.

To this question, Wall Street would say “Yes”, but Main Street would say “No”. In fact this brings into question the order of how we assign value in our world.

Suppose we constructed the same riddle for any physical asset such as a bridge, house, airplane, computer, car, university education, insurance policy, Marketing Department, tennis shoe, police officer, trumpet, leaf blower, FaceBook, Twitter, Linked In, fungus cream, guacamole, anything at WalMart, etc…..

Value of human interaction

Before long, we notice that the value of nearly all products and services is wholly derived from the value of human interaction with the object.  So where exactly is the true value of our economy, in the object or in the human interaction?   Wall Street would say “object”, but Main Street would say “human interaction”.

Credit Score

In finance, the credit score was established to assess the human interaction with a financial instrument called debt.  Yet, in the above example it is relatively clear that the vast majority of value created is dependent on human interaction with products and services that may or may not be financed with debt, not the debt itself.  It would seem that a social credit score and a knowledge inventory would be more appropriate way to assess the true value of economic activity. But where do we start establishing such an index?

The Social Value Index

We’ll start with a baseline 80/20 rule first identified by an Italian Economist named Vilfredo Pareto.  In our rendition, 80% of the true economy is created in the form of social value and 20% is created in the form of financial value.  Keep in mind that Dr. Pareto also defined a concept called the “Pareto Efficiency” for social resource allocation. This refers to the end-state of an economic game where no player can become better off without also making at least one other player worse off.

The objective then, is to design Social Value Games that are 80/20 (social vs. financial leverage) compliant and Pareto Efficient then, test the hypothesis and improve it toward optimality.

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The Social Value Game

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On October 19, 2010

In General Information

The Social Value Game

The value game is a social media business method developed by the folks at The Ingenesist Project in a dynamic application of social technology.

Most applications of game theory are controlled from in-house or deployed against a competitive landscape.  The Value Game is deployed external to the corporation and in a cooperative landscape where rewards are given to those who organize people around a “highly leveraged product” in valuable ways.

There are 5 elements to The Value Game

The first is what we call a highly leveraged product such as a conference, experience, convenience, ZipCars, or reunion – we’ll see that almost any product can be leveraged.

The next element is a secondary product vendor such as a hotel, restaurant, transportation, clothing, or equipment supplier – we’ll also see how almost any product can be deployed in the secondary role.

The third element is a consumer who seeks to minimize financial cost and maximize social value.

The fourth element is a 3rd party entrepreneur who is able to organized people in social networks and leverage primary and secondary assets in unique combinations.

The fifth Element is a true value calculator called the Social Value Index (SVI).   The SVI is the scorekeeper that calculates the actual value of the leveraged product after all of the discounts and social value factors are counted.

The game starts when everyone joins the same social network underwritten by a mobile electronic debit card platform and sets their filters for what information can enter (and to block out spam).  The highly leveraged product in the middle acts like a ball in play whose value is dependent on the interaction of the other elements.  Secondary vendors will deploy incentives into the field.  Third party entrepreneurs will organize people around the incentives and take social profits.  The Social Value Index will keep score.

Example 1: A ZipCar costs about 8 dollars per hour; this business model does not encourage social activity; it encourages fast shopping. Suppose that a person pays for the ZipCar on their debit card.  Local restaurants will be made aware of the purchase and then deploy coupons against the ZipCar to the buyer’s debit card. Next, a 3rd party entrepreneurs may improve the SVI by organizing a ZipCar swap so that the person does not have to leave in the same ZipCar that they arrived in and can spend more time shopping.  Another entrepreneur may organize events for families and friends that increase the passengers in each ZipCar, or by capturing any inventory from the community such as movie tickets or family experiences to deploy against the ZipCar.  After the event, the SVI updates the net cost of the ZipCar from 8 dollars per hour to, say, 1.42 per hour.  This is 80% savings on the ZipCar and 33% savings on a day out with the family over using their own car.

In effect, the leveraged product buys itself in a convertible social currency

Example 2: Suppose that a popular aerobics instructor has 40 students.  The local health food store may authorize her to give away 1000 coupons for 5% discount on store products.  In return, the aerobics instructor gets 5% of total purchased.  The health food store already spends 10% of revenue on advertising. It is in the instructor’s best interest to give the coupons to people who are likely to spend the most at the store.  After all, if 1000 people spend 100 dollars each, she stands to gain 5000 dollars.  The health food store stands to gain loyal customers without advertising. The aerobics instructor may maximize her profits by joining with a health food chef to teach classes in healthy cooking.  Or, she may join with a caterer, wedding planner, or hotel to supply an entire event for which she will receive social and financial value.  She may give them to colleagues who also become authorized to give away coupons – and she negotiates for a percentage of their output as well. She will become knowledgeable about the products at the store and talk about them with her friends.  She may even sell the face value of the coupons for cash since it is likely that a high bidder would also be a large customer for the health food store.  The Social Value Index favors this store, this aerobics instructor, and this social network – higher than competitors.  SVI registers with Search Engines and bargain hunters seek the Aerobics Instructor for deeper information and services.

Millions of applications will arise limited only by the imagination of communities not Wall Street

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Calculus for Dummies and Capitalists

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On September 20, 2010

In General Information

Mathematics Dysfunction Disorder

I am continuously astonished at the reactions I get from people every time I make a reference to mathematics, especially Calculus. Most people politely glaze their eyes over and stare at an inanimate object somewhere behind my head. Others launch into a diatribe of how the linear thinkers destroyed the world in the first place. Others will simply say, “I have [insert Deficit Dysfunction Disorder here]”

Puzzled by Limits?  Perplexed by derivatives?

The truth of the matter is that everyone already knows Calculus, they solve differential equations all day long – they just don’t know that they already know what I’m talking about.  If you take away all the strange terms, squiggly lines, and alphabet soup notation,….

Calculus is astonishingly simple


  • The Banker does not care about money, he cares about the rate of change of money.
  • The Stock Market does not care about risk, it cares about the rate of change of risk
  • The Politician does not care about votes, they care about the rate of change in votes
  • The Meteorologist does not care about weather, she cares about the rate of change in weather
  • The Pilot does not care about lift, they care about the rate of change of lift
  • The Gymnast does not care about motion, she cares about the rate of change of motion
  • The Artist does not care about color, he cares about the rate of change of color
  • The Doctor does not care about your health, she cares about the rate of change in your health
  • The Baker does not care about dough, they care about the rate of change of dough
  • The Farmer does not care about crops, he cares about the rate of change of crops
  • The Scientists does not care about data, they care about the rate of change of data
  • Google does not care about information, it cares about the rate of change of information
  • Entrepreneurs do not care about knowledge, they care about the rate of change of knowledge
  • Markets do not care about innovation, they care about the rate of change of innovation
  • Our children do not care about our wisdom, they care about our rate of change of wisdom

When people can learn how to understand what they are really doing in instead of what they think they are doing, then and only then, will we be able to see, and subsequently, build the next economic paradigm.  That is why I use mathematics and that is when Social Media Becomes a Science

The Capitalist does not care about value, they care about the rate of change of value

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Intellectual Property In the Cloud

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On August 31, 2010

In General Information

The Patent system is slow, static, and expensive. Sure it’s great for corporations and wealthy institutions, but what about the rest of us? How do we get paid for our intellectual property? We make rapid fire decisions every day that can make or break markets – who’s got time to patent?

Intellectual Property In the Cloud

Or maybe the last thing that Wall Street wants is for Engineers, Architects, designers, and creative people to get “royalties” on their work. Wall Street is quite happy collecting the royalties of the creative people in America – those people who actually produce something real and tangible.  Social media is a social contract and Intellectual Property is our tangible currency. Hello.

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Social Capitalism and The Innovation Bond

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On August 18, 2010

In General Information

We know the Venture Capitalists look for returns of 1000% on their investments. We also know that Corporate innovation (as reflected by the S&P 500) enjoys a long term median return rate of about 9-10%

It follows to reason that all of the innovation that could return somewhere between 10% and 1000% goes largely un-capitalized. This does not mean that the innovation does not exist – it only means that it is invisible to any existing financial system, it is accounted as “intangible” – or worse, it shows up as a liability.

Parents caring for children, Children caring for elderly parents, Mentors educating proteges, groups of people organizing, sharing knowledge, and growing families – all increase the net productivity of society. Legions of people creating options and opportunities for themselves and each other in communities, social media, and extended networks – all increase the value stored in communities.   Billions of people-hours inventing better ways to do the things that they do, compensating for the shortcomings of governments and corporations – all of this innovation falls into the range between 10% and 1000% ROI, yet, remains invisible and un-capitalized.

Social media as a whole is growing at well over 200% per year where every single interaction creates incremental multiples of social value – otherwise people would not do it (to say that people are irrational is to say that markets are irrational).  Where is all that value going?  Meanwhile, in the current Global financial debt crisis, institutions that hold huge amounts of cash are scouring the globe for pockets of low-risk productivity as sanctuary from volatile financial markets.

Now, suppose that an innovation bond were to come along which produces a risk adjusted return of, say, 15%. This means that human productivity is being reliably increased somewhere in a community by only 15% per year. If this were the case across a broad sector of inter-related communities where productivity were denominated in a fungible currency, investors would seek refuge in the Innovation Bond.  If the Innovation Bond returned say, 20% or more – all the money in the world may drop the debt based currency in favor of the innovation based currency by seeking refuge in innovation bonds.  Yes, I said it – “all the money in the world”.  Now, get over it.

Proceeds would be distributed to organized communities whose knowledge inventory is formatted like a financial instrument in the form of entrepreneurship. Proceeds would go to communities where the probability of success is known long before the bets are made in the form of Cheap Venture Capital. Proceeds would go to communities where productivity is defined by an un-corruptible algorithm through decreased volatility coefficients. Proceeds would go to communities where assets are valued accurately by true supply and true demand.  Proceeds would go to less developed communities with the highest social arbitrage potential rather than those with the most powerful marketers and lobbyists.  Most importantly, money would go to corporations that adopt the innovation economy. The stronger the institutions of Social Capital become, the greater the value of an innovation bond.  New production of goods and services would reflect these social priorities in the True Value Game.

In effect, Social Priorities will drive Wall Street priorities instead of Wall Street priorities driving Social Priorities – that is Social Capitalism

In the future, there will be only one sustainable investment left – people, communities, and their natural willingness and ability to be productive with their time. The rest is history.

***

Material based on video series here

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What is Social Capitalism?

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On July 19, 2010

In General Information

July 8, 2014 Update:

Wikipedia defines Capitalism as an “economic and social system in which the means of production are privately controlled”. 

 Factors of Production (from classical economics) are presumed to be some proxy for land, labor, and capital.  Suppose, however, the factors of production for modern society were something like “Social Capital, Intellectual Capital, and Creative Capital” of people and their relationships?  After all, these are the assets that are deployed in order to produce the proverbial basket of goods upon which most currencies are compared. 

Since these factors of production exist between the ears of each individual person, they are, by definition “privately controlled” and readily exchanged among other people in social networks.   If the US Supreme Court can rule that Corporations are people, then it is equally valid that people are corporations. Therefore, Social Capitalism refers to the economic and social system in which the means of production are social, creative, and intellectual assets.  

In order for Social Capitalism to become the dominant form of social organization, quite literally, society must reorganize itself to trade “abundant intangibles instead of scarce tangibles”. Then, all the decentralized innovations can integrate. The following video describes a system for reorganizing society so that the new economic paradigm; called Social Capitalism, may emerge.

Reorganizing For The Era Of Social Capitalism

Social Capitalism is similar to Material Capitalism with the exception that society would trade in abundant intangibles instead of scarce tangibles….and, everything changes.

***

The Article below is from 2010 – more than 4 years ago – when Social Capitalism was just beginning to enter the lexicon of the social media practitioners.  This article below quotes the Wikipedia Article on “Social Capitalism”.  That article has since been removed by Wikipedia for failure to be a real -ism; I suppose.  That is, Wikipedia does not yet recognize the movement as a real form of Social Organization.  It is interesting, if not historic, to watch the progress of a social movement from its tenuous inception:

The Adaptive Cycle: Holling, C. S. 1986. Resilience of ecosystems;

Social capitalism is an old idea taking on an new form in the age of social media where social capital, creative capital, and intellectual capital are deployed outside the construct of the prevailing corporations or governments.

Throughout human history, societies have reorganized themselves in response to tyranny, innovation, environment, new wisdom, etc.   I believe this to be the root of what Social Capitalism is, and therefore, how it should be defined.

In The Shadows:

The dominant definition of  “Social Capitalism” from Wikipedia reflects a social cause cast against the backdrop of market capitalism.  This definition acknowledges that economies work better when everyone participates; specifically, the so-called tier 1 and tier 2 people.  Tier 1 individuals have steady financial incomes that allow them to function without private or government support. Tier 2 individuals cannot meet the prevailing standard of living and rely on private or government support. Therefore the prevailing definition of Social Capitalism often refers to efforts to bolster tier 2 persons as a means of reinforcing the economy for everyone.

Conflict:

There is an inherent conflict where tier 1 is held responsible to support tier 2 as a means of protecting their tier 1 status. Traditionally tier 2 included poor families dependent on food stamps; children who depend on public education; elderly people who are no longer able to work, and low-income criminals who require police intervention, etc.

Ideally, getting more people from tier 2 into tier 1 is the desirable objective.  Indeed political division is marked by the theories and practices on how exactly that objective would best be accomplished.

A worst case:

What happens when tier 2 is simply forgotten; they are simply allowed to fail in the mainstream economy?  What if the government becomes too weak to bolster their economic prospects?  What happens when a critical mass of tier 1 people involuntarily enter the tier 2 environment bringing along their substantial knowledge inventory.  They are otherwise very productive people that had been laid-off, outsourced, underemployed, or otherwise marginalized.

The Special Case:

What happens when Tier 2 deploy new technologies that responding to their priorities, not necessarily Wall Street priorities.  What happens when tier 2 people trade a social “currency” among themselves? What happens when tier 2 swells to a size and scope that they are able to bear broad political and economic influence.  Many great human struggles emerged from under the hand of a Tier 1 constraint using their own manner to store and exchange value  (currency) represented by their own knowledge inventory and productivity.  Why would that not happen internally in American Society?

Structural Capitalism:

Social Capitalism is where factors of production in an economy are purely human and technological and less structural:. Specifically, social capital, creative capital, and intellectual capital deployed outside the construct of the prevailing corporations or governments.  Maybe it should be called “structural capitalism” because that is what is actually changing. We are at an extraordinary time in history where an extraordinary structural reorganization is taking place.

That’s Social Capitalism as it’s always been.

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Stock Harmony; Exchange of Social Value

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On July 14, 2010

In General Information

I came across an interesting business model for the deployment of a social currency. Stock Harmony, quite simply, sells itself to interesting people. Those people then interact with each other adding social value to Stock Harmony. The more social value is created, the more the original shares are worth. The more the shares are worth, the more interesting people will join further increasing the value of the shares. From that position to deploy social value, Stock Harmony can amplify the voice for social priorities over Wall Street priorities, effectively re-allocating factors of production.

Actually, the same thing happens all the time in typical social circles, networks, affinity groups, and political action committees. However, I am not certain that anyone has yet been successful (ethically) in using social circles as a way to store and exchange value. That is why Stock Harmony is interesting.

It sounds so simple, right? Well, … not really….

It’s all about structure. The way that a process or system is structured determines how people interact with it. Structure also determines how governments, markets, laws, politics, and even public opinion interact with the process or system as well. Interestingly, the structure of facts often keeps secrets tight. In short, structure shapes human behavior and human behavior shapes structure.

Companies sell shares to raise money. Per SEC regulations, the “sale of shares” must comply with certain disclosure and accounting standards. The SEC regulates companies in the sale of shares as a means to safeguard investors.  In other words, it is illegal to sell shares without government oversight.

Raising Money

The possibility that anyone can sell shares in themselves or their private enterprise as a means of raising money is, by default, relegated to the banking system. A person essentially sells shares on their productive time on Earth to buy a house, a car, or a business, etc. The structure begins to crumble when the employment contracts begin to crumble. As people leave the old system, they take their value with them and tend to create new ones. This is where Stock Harmony treads.

What if the shares are issued in non-dollar denominations?

Today we see many non-dollar denominated structures arising apparently at the same rate that the financial system is failing. Google secretly invests 100M in Zynga – a gaming company with a common gaming currency. Facebook established a system of currency-like Credits. Groupons deploy social currency to incite monetary discounts, etc, and PayPal stands ready for the next killer currency app. Any of these transaction systems are poised to hold a black market currency if fiat currencies fail. If the fiat currencies fail to recover, the black market becomes a gray market and ultimately a legitimate market. So, there is a lot at stake.

Currency must act as a proxy for human productivity;

So this is what makes Stock Harmony interesting. The successful “next currency” will be the one which best represents human productivity. Only then will someone be willing to trade their productivity for that of another person using a currency note as an exchange mechanism. This is where other alternate currencies fall apart and where Stock Harmony shows greater strength. After all – what would you rather accept in exchange for your services – Farmville gaming currency or a currency backed by the harmony and productivity of real people in real community?

It will all come down to structure.

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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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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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Two Sides Of The Social Value Equation

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On May 7, 2010

In General Information

There are two sides to the Social Value Equation – the creation of social value and the destruction of social value. There are countless examples where innovation destroys the value of prior technologies. There are also many instances where “progress”, perhaps in the form of a freeway or public structure, divides a community where strong social bonds once acted.

In the presentations that I give, I often cite the value of a bridge over a waterway. The bridge may cost 50 million dollars to build and maintain, but it increases human productivity by 50 billion in the life span of the bridge. We often cite a factor of 1:1000 for the valuation of the dollar to social currency.

Contrary to that, Jane Jacobs (renowned urban theorist and community activist) may argue, the bridge (and roadway) may divide a community or neighborhood. Where the community may once have been scaled for foot traffic, the new boundary may require a car to circumvent. The new road may divert old commercial traffic in many ways that are bad for a community. In such a case, the social capital destroyed by the bridge is in fact the dominant financial outcome.

So here I am, I just destroyed my own best analogy to demonstrate a point. Without vetting the complete transaction in the form of social currency, net “progress” of any kind is as easy to leverage backwards as well as forward at a rate of 1000:1.

Communities that seek to stop a disruptive development program will often organize to protest urban development decisions. Unfortunately, they are usually up against a calculation of economic impact that is dominated by dollar denominated currency. Without a “Social Currency” of their own, quantified and convertible to dollars, communities are doomed. Law suits will play out in the same manner where damages are non-quantifiable, and therefore non-existent.

Jane Jacobs also writes that a community that can place a value on their social currency – although I do not think she explicitly called it that – and can act to preserve value or increase value by their actions. Many communities from Greenwich Village to Boston have thrived under a social currency diverting projects away from sensitive communities. The Big Dig went underground in Boston much like the The viaduct replacement project will do the same Seattle. Granted, the Seattle project mainly preserves water and mountain views for million dollar condos, this concept, in fact, would be more critical to poorer communities than wealthy ones.

Obviously there is no way to impede progress. All innovations destroy prior value in the creation of greater value. The danger is when Wall Street priorities can dominate Social Priorities. Capitalism, for all the greatness it creates, is amoral. Capitalism is committed to dollar currency, and devoid of social obligation except to the degree that obligation is profitable – that is where social currency converts to capital currency.

Through the magic of the fractional reserve system, Banks create money backed by debt vs. deposits at a factor of 1:1000. Therefore, the convertibility of social currency with a capital currency at a similar factor of 1000:1 is essentially the only effective way to convert Social Priorities into Wall Street Priorities.

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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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The 1:1000 Rule; A Social Currency Imperative

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On April 22, 2010

In General Information

What’s the difference between money and value?

Today, I saw yet another doom gloom economic forecast with the proverbial exponential graph of interest-on-debt climbing out to the stratosphere. The prognosis is the same; all bad, very ‘all bad’ things will happen.

So I wonder, to whom is all this interest being paid? Where is all that money stored? It has to belong to someone or be represented by something on the planet Earth, after all, money makes the world go around.

The 1000:1 rule

If I were to take, for example, NOA, the National Oceanographic Agency, and ask someone a Goldman Sachs to place a value on it, they would add up the replacement value of all the ships and weather satellites and come up with a number like, say, 4 Billion Dollars.

Now, if I were to calculate the increase in human productivity that result directly from the ability to forecast the weather – for the purposes of food production, managing all modes of transportation, Energy production, and tangential resource allocation – the value of NOA would be in well in excess of 4 Trillion dollars. This is a factor of over 1000 between the value of the same object in financial currency and social currency.

A bridge spans a waterway and carries 50,000 cars and trucks per day. An alternate route would take each vehicle at least 1 hour longer per day to cross the waterway. 50 billion dollars worth of social value is created over the life of the bridge that cost 50 million to construct; a 1000:1 leverage ratio.

A single Boeing 747 costs 100 million dollars but increases human productivity (including influence ripples) by 100 billion dollars over the service life of the aircraft compared to the nearest alternative mode of transportation. Again, 1000:1

That’s the difference between money and value.

The problem arises because our financial system is not able to articulate true value of social currency using a dollar denominated currency so social value remains invisible, not non-existant. Maybe the financial system does not want to articulate social value. After all, dollar denominated currency represents control of social value at a ratio of 1:1000. It’s about control

9.6 Trillion dollars was spent to educate every American. Just because a “corporation” does not exist to employ them and utilize their talents to the highest productivity level, does not mean that the talent and value does not exist. According to the 1:1000 rule, The GDP of the US in Social Currency is a minimum of 9,600 Trillion. What deficit?

It is about control. The dollar has a 1:1000 control leverage over social currency. It is not at all surprising to see social media expand at the rate proportional to that which the doom-gloom crowd predicts that the financial system will collapse. They are related, they hedge each other. Don’t let anyone convince you otherwise.

Again, the imminent collapse of the financial system – no matter what the ‘doom gloom’ crowd says – does not mean that value does not exist; it simply means that the dollar will no longer control the value; that is, the social value wedged between people’s ears is free to be capitalized and securitized directly. We need to capture social currency in a new financial paradigm.

Social currency is not a buzz word, it’s an imperative – it is the Ingenesist Project

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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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