The Ingenesist Project

The Next Economic Paradigm

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Making A Mess on Madison Ave

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On November 10, 2009

In General Information

Wall Street talks about a Basket of Goods. The UN talks about a basket of Currencies.  What would Madison Avenue say when Main Street coverts your baskets of goods with their basket of social currencies?

Here is a simple business plan that will screw everything up.

Suppose that a pool of advertisers in a single industry (yup, competitors) all throw 10% of their advertising budget into a basket.  Now, suppose that money is distributed among a basket of the top 10% most active social media mavens (bloggers) based on their rankings related to the affinity segment.

For example, all teen fashion designers and outlets would toss 10% of their ad budget into a basket.  The money would be distributed to the top 10% of teen fashion bloggers for doing exactly what they are going to do anyway – communicate their lifestyle experiences in their galaxy of communities.

What does this achieve?

1. If your product sucks, you’ll know why.

2. If your competitor rocks, you’ll know why.

3. Your brand is disseminated more efficiently than advertising

4. You are supporting the community that serves you.

5. People who are good at community organizing can earn a living doing it – that’s good for communities and your brand image.

6. Beats the Payola Laws because the payer can only pull their money from the basket – not any single payee.  Pulling out would not send a good message oh, no, no, no

7. Bogus Bloggers can’t beat the rankings

8. a 300 Billion dollar per year advertising industry with a 95% failure rate can be bypassed by GOOD products – profit center anyone?

9. Designers create products in response to Social Priorities not Wall Street priorities.

10. You’ll create a Millions of young, proactive, innovative entrepreneurs too busy to watch traditional media anyway.

Oh sure, you’ll hear a desperate whine from Madison Avenue – That’s all free advertising – as a bulldozer moves the wrong way down a ONE WAY street.

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Social Currency; History Matters

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On November 3, 2009

In General Information

History often provides clarity in the present. I was searching the term “Social Currency” and I found these two posts on a forum from all the way back in 2001.  The authors are quite explicit in their expectations of social currency in their present and deep into the future.

A framework for the future:

I find such framework to be useful in grounding my own opinions, expectations, and aspirations in the social media space.  The authors here are quite intimate in their views and we would all be remiss in not searching the hidden layers of our consciousness on the subject.  Enjoy.

(I left all the links in hoping that this would suffice for credits back to the source  http://everything2.com/title/social%2520currency)

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Banks In The Future

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On October 29, 2009

In General Information

 

Bankers don’t care about money, they care about the rate of change of money. At The Ingenesist Project we are not entirely interested in change – we are entirely interested in the rate at which things change. As you can imagine, we get all giddy when we see the rate at which the rate of things change…that’s all that banking is and all that banking ever will be.

Each of the Facebook Applications posted below are to Facebook what The NYSE is to Commercial Banking. Note that Facebook is growing at an astonishing rate. Now, these applications – on top of Facebook – will increase the rate of change of the rate of change in how people communicate, transact, organize, and deliver conversation.

You are hearing it here; these innovations are the most significant disruption that Wall Street can’t possibly imagine. Money is a social agreement and these are the banks of the future. Although many come from the gaming industry, many games are modeled after the real world, therefore, transition back to the real world is not as difficult as one may think. If people are willing to trade it, it becomes money. This is serious business. While many of these new innovations are on the right track – not all of them will survive.

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1,000,000 More Become Invisible, Powerless, and Marginalized

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On October 8, 2009

In General Information

The September Job Numbers are out and the trends are disturbing.  Millions upon millions of Americans are now wondering how they are going to safeguard the health and welfare of their families and property.  As these people lose their “money” they become increasingly invisible, powerless, and marginalized – except for one single, solitary, beacon of earthly influence.  Social Media.

Now, more than ever, we need to implement an alternate economy with an alternate currency.  I am not pitching some “anti-dollar-therefore-anti-American” platform, I am talking about what the hell will millions of unemployed people and their families do if they don’t have a functional currency they can trade for basic needs and services.

These same people have tons of practical experience, diverse knowledge, and worthy intellect – but no money?  It makes absolutely no sense that “productivity” should become so divorced from the value of a solitary currency.

We must come to the immediate conclusion that social media can be a fabric that binds the American economy.  If done correctly, Social Media can become the basis of an economy that rewards social priorities over Wall Street Priorities.  But ONLY if done correctly.

While the institutions around us falter, social media will increasingly duplicate – for all practical purposes – the functions of these institutions in our society.  As this transition takes place, we must lead social media in specific and intentional directions.  This cannot be a “traditional” market driven process – the market is what we’re trying to correct.  This cannot be a random process or else it will become reactionary and feed on itself.  Instead, Social Media needs to be organized in a manner that allows information, knowledge, and innovation – the basis of human productivity – to trade like a financial instrument.

What if I told you that it would be a lot easier than it sounds?  What if I told you that almost all of the components needed to build this new economy already existed in the social media landscape?  What if  I told you that Government, Corporations, and Wall Street will not do this for us.  What if I told you that the risk from not doing anything far outweighs the risk of trying to develop and implement an economy built on a social media platform.

Everyone must have a productive role in the next economic paradigm – employed, unemployed, communities, traditional media, even existing corporations and their advertising departments.  All of the existing infrastructure is in place – it only needs to be rearranged a little bit.  That is what The Ingenesist Project hopes to initiate.  We may not be 100% correct and the process that actually arises may be substantially different, but we need to start somewhere.

Meanwhile, here are the Jobs stats for September;

Headlines: 263,000 “jobs lost” and unemployment rate up to 9.8%.

That’s not good – there goes the “second derivative” argument. Weekly earnings are also down by $1.54, which is bad news too. But the Household Data is VASTLY worse than reported. Here are the month-over-month changes, and they’re in the realm of frightening.

Civilian Labor Force: 154,879,000 to 153,617,000 this month.

Employed: 140,074,000 down to 139,079,000 this month.

That’s a loss of 995,000 jobs, not 263,000, and the labor force contracted by 1,262,000 people!

THE INVISIBLE PEOPLE: The people “not in the labor force” rose by a staggering 1,516,000 in the last month (”unemployed” who have given up and exited the labor force).

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It’s Time for a Reputation Based Currency

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On October 6, 2009

In General Information

Many people know that the events that inspired what now has become The Ingenesist Project originated with my personal observation and experience of the Mexican Peso Crisis as a visiting professor.  Very few people in America realize the implications of a real financial crisis and associated currency collapse. Unfortunately, many people in the World have – perhaps we should listen to their ideas.

The Good, the Bad, and the Ugly

As recently as 1999-2002, Argentina experienced the type of worst-case financial collapse that America narrowly avoided only a few months ago – but that may eventually happen. The simplest reality is that when things go really really bad, people need to continue trading among each other for basic needs using a functional and relevant currency.  When things are really good, people need a currency that reflects productivity, not debt – i.e., social capitalism priorities, not necessarily Wall Street capitalism priorities.

Ground Zero

It is not surprising to me that great applied currency applications would be  coming out of Argentina today.  The Whuffie Bank is an exciting new project that introduces a reputation based currency inspired by several science fiction authors of the past, specifically Cory Doctorow.   Likewise, the founders of the Whuffie Bank demonstrate the perfect combination of humility, openness, and inquisitiveness that is required in the emerging social media space.  Everyone realizes that the Whuffie is not a perfect currency, but the story has to start somewhere and TWB has something important to say.

It’s Time for a Reputation Based Currency

I’ll talk more about the Whuffie Bank as I learn more.  First, it would be best to describe the origin of the term.  I lifted the following description from Wikipedia:

Whuffie is the ephemeral, reputation-based currency of Cory Doctorow’s science fiction novel, Down and Out in the Magic Kingdom. This book describes a post-scarcity economy: All the necessities (and most of the luxuries) of life are free for the taking. A person’s current Whuffie is instantly viewable to anyone, as everybody has a brain-implant giving them an interface with the Net. (Cory’s Blog)

The term has since seen some adoption as a synonym for Social capital, including its use in the title of the Tara Hunt book The Whuffie Factor.

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When The Kids Arrive – from MySpace

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On August 29, 2009

In General Information

Several articles have come out refuting the death of MySpace as researchers try to make sense of the continued persistence of what many people consider last-year’s news. Here is an interesting article by Misiek Piskorski from Harvard Business Review answering the question “Where are all those My Space Users”?

“Both traditional and social media have declared MySpace dead. Even a brief scan of articles reveals that media mavens “don’t know anybody who uses MySpace anymore,” which reportedly is not a huge loss as the site “is ridden by spammers” and “its atrocious HTML, bLiNgY graphics, and horrific backgrounds” are offensive. Many of you reading this post probably do not know anyone who uses the site either.

Yet MySpace is the 11th most visited site in the world, with unique 60 to 70 million U.S. visitors every month. Even though the site is not growing, it is a far cry from “dead” if you ask me.”

But wait!

Notice how the “Media Centers” Los Angeles, Chicago, New York are in Facebook territory.  Also note how the technology power centers; Silicon Valley, Seattle, and Boston are also in the Facebook territory.  Academics from Harvard, Yale, Stanford are taken by surprise in Facebookville.  The great financial centers; Wall Street, LA, SF and Chicago are all Facebook.  Maybe the prognosis for the future of social media is skewed by the proximity to major media, academic, and financial centers. Centralized power is the antithesis of social media, Right?

Looking for Disassociation.

Here at The Ingenesist Project we have long been looking for a disassociation between main stream media and social media.  MySpace may be the social experiment that indicates a deeper and most promising trend.  Is it a requirement that a social media analyst be located in Silicon Valley? Do celebrity endorsements really mean anything tangible?  Does editorialized news always provide what people need?

MySpace Demographics:

The resulting sample is representative of the MySpace population. 53% of users identify themselves as women. Of all users below the age of 50, half are 21 years old or younger, and 30% are between the ages of 22 and 30.  Everyone knows that Kids don’t Tweet and late adopters to Social Media are also later-in-lifers.   The population of the world is finite, so when will Facebook level off as Twitter has?

Looking for reversal:

Next, we are looking for a reversal where Social Media drives s0-called traditional media – not the other way around. Can a blogger in Arizona drive the great branding strategies of the future?  Can a Webinar from Montana introduce the next age of enlightenment?  Can Nashville become the next great Venture Capital hub? Can a community of children in Florida band together to sustain the next great social movement.  Will democracy, voting, and public opinion be driven by youth culture? Will corporate innovation respond to social priorities rather than Wall Street Priorities?

Ideas whose times are coming:

There are many examples of the above miracles of social media, however, a disassociation and reversal with traditional media will be an event of flip-floponomics of great significance – a watershed moment in the history of the next economic paradigm.  Traditional media, understandably, may inadvertently be assigning a premature death to many great ideas yet to come.

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Is a social contract legally binding…and who cares?

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On July 13, 2009

In General Information

Trillions of dollars in play:

Trillions upon trillions of dollars worth of value that once coursed through the veins of Market Capitalism is being transferred to social media from the legacy economy now stifled by insurmountable debt.  These numbers are indeed spectacular because they account for the invisible value “lost”, and most importantly, the calculations provides clues on how to “find” it again.

What is a Social Contract worth?

According to Legacy Economics, the term “social contract” describes a broad class of theories that try to explain the ways in which people maintain social order. The notion of the social contract implies that people give up some rights to a government or other authority in order to receive or maintain social order. Otherwise, we would each have unlimited natural freedoms, including the “right to all things” and thus the freedom to harm all who threaten our own self-preservation; there would be an endless “war of all against all”.

Take me to your leader

By contrast, Social Media begs the questions: who or what exactly is that authority?  Isn’t the greatness of the Internet the lack of an all powerful authority? So why aren’t we at a war of all against all?  What keeps social media at peace instead of an endless flame war?  Whatever this alien is, it is capturing and storing trillions upon trillions of dollars of value away from the legacy economy, but where?

Separating facts from fiction

According to the old economy, it is a “fact” that human knowledge is an “intangible asset” of which there are only two types defined:

1. Legal intangibles such as trade secrets, copyrights, patents, and goodwill (brands).

2. Competitive intangibles such as knowledge activities, collaboration activities, leverage activities, and structural activities.

However, when we consider social media;

1.    There is no law governing the phenomenon – so there are no legal intangibles.

2.    Collaboration, leveraging and structural activities are not being conducted in a competitive environment (the context of one “Company” against another).

So, the definition fails to account for knowledge assets in social media. The Ingenesist Project discovers the lost trillions simply by treating the social contract like a legal contract.

Tangible assets are managed by contracts

Technically, any oral agreement between two parties can constitute a binding legal contract. The legacy economy limitation, however, is that only parties to a written agreement have material evidence (the written contract itself) to prove the actual terms uttered at the time the agreement was struck.

But social media, email, and blog posts, etc., all constitute vast “written” agreements and material evidence as far as most people are concerned.   So what is missing?  Are we waiting for permission from government, Wall Street, corporations, attorneys, or the Federal Reserve to say it is OK for people to stop competing with each other or to renegotiate the terms of the social contract (and currency of exchange)?

The mystery is no mystery

Guess what, there is nothing there. Absolutely nothing except philosophical barriers carried over from legacy economics built upon political division. The mystery is that there is no mystery except using social media to unite people.  After all, the biggest Brand in the world is a Community Organizer.  Such calculation provides clues on how to “find” value again.

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The Vicarious Search Engine

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On July 7, 2009

In General Information

The search engine wars continue as both Google and Bing develop more exotic ways of arriving at the wrong answer.  Both commit the same error as all declining industries in social media space; assuming that they can predict what people want without engaging them in a conversation.

The first development is the predictive search notably pioneered by Amazon.com for predicting future purchases based on past purchases.  While predictive search is an improvement, the next step is the “vicarious” search, that is, when the search engine sees the world through your eyes – or someone Else’s – for your benefit.

The Web is Flat

The Ingenesist Project specifies a standard knowledge inventory that may be represented as a packet of code.  If someone wanted to see the web through the eyes of another person, they could buy a packet of their knowledge inventory.  Likewise, a web article would be tagged with the representative knowledge inventory code of the author.  Each comment or re post to a blog article would contain the knowledge inventory of its aggregated vetters.

The search can be done in reverse as well.  If I find an idea on the web and want to know who can execute it locally, I can simulate the knowledge inventory in one or more local people.  This is not trivial.  It literally allows an entrepreneur to manage knowledge assets that they did not know exists and predict content that does not yet exist.

Been there, done that?

Obviously there are privacy, security, and ethics issues related to others seeing the world through your eyes.  But what if every American was told 20 years ago that their identifier number for an insolvent social security program would be attached to their personal, medical, financial, and civil records then spun through Wall Street algorithms, sold worldwide to advertisers, politicians, banks, insurance companies, demographers, and ultimately hacked?  The cities would have burned.

So why can’t social mediators monetize?

The difference today is that if packaged correctly, we can own and control our knowledge inventory.  We can allow or decline access and we can revoke access – it happens all day long on Face Book, Linkedin, Twitter, and My Space.   On-line communities represent collections of knowledge assets.  The 400 Billion dollar per year advertising budget is on the table – up for grabs.  The 100 Billion dollar “head hunting” budget is up for grabs. The multi-billion dollar election budgets are all up for grabs. What are we thinking?

The likelihood of Innovation

The innovation economy will depend on business intelligence related to society’s knowledge inventory to match most worthy knowledge surplus to the most worthy knowledge deficit.   Entrepreneurs must know supply and demand for knowledge assets as well as where to find them at what cost.  Entrepreneurs need to predict competition, disruption, risks, and volatility in knowledge assets.  They need to conduct scenario tests before expending money.  They need to predict the likelihood of innovation and all of the options that they have in the future related to those innovations.

The Securitization of Knowledge Assets

Entrepreneurs need to securitize knowledge assets in order to finance innovation on the scale that will be required to offset our massive debt. This is how the innovation economy must play out.  We cannot depend on corporations or governments to do this for us.  People must control, regulate, anonymize, and manage  their own knowledge inventory.   If only they could see their world through the entrepreneur’s eyes – perhaps they need a vicarious search engine more than anyone.

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Social Media Strikes Back

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On June 26, 2009

In General Information

Money represents human productivity.

Recent headlines declare that 78 billion dollars worth of fuel and productivity are wasted each year by congestion on highways. 1.2 Trillion dollars per year in productivity is lost due to past failures in education. The US spends 7% more of our GDP on health care than the average of other developed nations leaving nearly 1 trillion dollars of unknown ‘productivity value’ in vapor per year. 200 Billion dollars per year is spent on war, whether necessary or not, that has not increased American productivity in an economic sense.

2.5 Trillion Units of Human Productivity

Without even trying hard, 2.5 Trillion Dollars per year in stuff not produced is wasted on activity that does not increase human productivity (stuff produced). Obviously debt is a promise to produce stuff in the future. But we’re wasting stuff now? At some point the logic falls apart but no matter how you look at it, money represents productivity and the only way out of this mess is to innovate at an astonishing rate.

Conversational Capital

In an earlier article, we conjured up a rough tabulation of productivity gains due to social media:

One billion messages are sent on Facebook every day. Suppose that each Facebook conversation has a net value of $1.00 per person. That comes out to 730 Billion dollars per year of human productivity saved.

Twitter is worth a cool 100 Million tweets per day. Let’s assign a net productivity gain of $1.00 per tweet delivered. That is $36 Billion per year in increased human productivity.

Suppose each blog article published increases human productivity by $0.50 each. With over 100M blogs, that is 10 billion dollars per day – or1.8 trillion dollars per year.

The grand total is 2.5 Trillion Dollars worth of conversational currency.

In Search of Waste Economics:

Now, return to the waste side of the balance sheet let’s reflect on the areas of impact that social media has on: transportation, energy, education, health care, and world Peace:

Social media reviews automobile quality and drives social priorities toward green industry. Social media allows people to find work close to home, social media vets energy systems such as wind, solar, nuclear. Social media is driving journalism to value added roles and away from corporate collusion. Social media provides richer and more current content than textbooks. Social media is driving social priorities over Wall Street priorities in health care, energy, politics, industry, and science. You Tube is seeing a 1700% increase in downloads as people set up video cameras all over the world searching and reporting injustice.  Little Brother is watching.

Social media strikes back

In order to predict where social media will strike next all we need to do is look for the waste economy; areas where world governments, institutions, and corporations are inefficient, wasteful, co opted, or corrupt.

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Is the Corporate Structure Obsolete?

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On June 24, 2009

In General Information

The Social Media Production System

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

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

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

General Accounting Practices:

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

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

Standard Balance Sheet for Social Media

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

Business Plans of the Future:

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

Threats:

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

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How Does Social Media Affect GDP?

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On June 19, 2009

In General Information

Gross domestic product (GDP) is a basic measure of an economy’s economic performance.  GDP is the market value of all final goods and services made within the borders of a nation in a year measured in Dollars.  Globally, GDP is equal to the total monetary income generated by production of goods and services in a country.

Gross Domestic Product does not take into account many important variables accelerated by Social Media and growing exponentially in economic influence.

GDP counts only industrial output, but…

Industrial output is becoming increasingly dependent on social networks and social innovation.  GDP does not take into account such non-market transactions such as open source development, crowd sourced innovation, conversational currency, social capital, creative capital, or intellectual capital exchanged between people in diverse social networks

GDP reflects Wall Street Priorities, but…

Wall Street Priorities are increasingly challenged by social priorities. GDP does not account for sustainable business practices, heroism, mentorship, activism, volunteerism, social networking, uncompensated innovation, and community involvement.  GDP does not account for quality improvements and social multipliers such as aggregation of social media, increasingly powerful computers, acceleration of conversations, online etiquette, multi-media, and social editorial services.

All of the above exclusions are valuable, because…

These exclusions add value, they store value, they create value, they distribute value, and they exchange value.  If we called it a financial instrument that is highly convertible, extremely liquid, and easily transported it would describe a currency by any definition of the word.  For the purpose of this discussion, call this currency the “Rallod” – or Dollar spelled backwards.  The Rallod is the currency of the new American economic and production paradigm.

The Invisible Currency

For Example; Twitter is doing in Iran what America has been trying to do in Iraq for 8 years.  Face book, LinkedIn, and the entirety of social media space is producing many times the effectiveness of the $200 Billion U.S. advertising industry in terms of driving people to specific action. Social vetting platforms such as blogs, commentaries, groups, and content aggregation have increased the efficiency of markets by vastly reducing arbitrage opportunities while also identifying scams and corruption.  Human productivity is being converted to Rallods and there is no politician, executive, or white collar criminal anywhere in the world who is not deeply concerned about this invisible currency.

The Best is Yet to Come:

The “Last Mile of Social Media” is analogous to the last mile of broadband Internet – the marginal cost of reaching every person in every household and tightening social networks to extremely high resolution, is diminishing rapidly.   The Last Mile will bring communities together to vet local politicians, corporations, products, and policies.  The Last Mile will formulate a knowledge inventory combines with close proximity of knowledge assets and a percentile search engine to predict outcomes.  The Last Mile of Social Media will duplicate every function that exists in a corporation except it will be built upon the social media operating system; aggregated, amalgamated, sustainable, and reflecting social priorities.

So what happens to GDP?

GDP by current measure will reflect only the value of the “dollar”, not necessarily the value of the human productivity.  Perhaps it already does.

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The Invisible Currency Among Us

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On June 17, 2009

In General Information

Liquid Swords - by Megan Olson

Invisible Currency

On my birthday, I received many greetings on Facebook from friends and family.  So, let’s say for example that Hallmark sold 10 less cards (@$3.95 ea), the telephone company sold 10 less long distance phone calls phone calls (@$.60 minute),  FedEx delivered no additional packages, oil companies sold no gas, and my friends did not deploy, say, 20 hours (@$25/hr) of human productivity buying stuff, licking stamps, or delivering mail in my honor.  Total productivity savings can be valued over $500.00; or roughly $50.00 per message.

Conversational Capital

One billion messages are sent on Facebook every day.  Each message sent and received constitutes a conversation.  Each of these conversations has a value that can be expressed in terms of productivity saved and assigned a dollar value. Suppose that each Facebook message has a value of only $1.00 per person engaged in a conversation.  That comes out to 730 Billion dollars per year of human productivity saved – enough to fund TARP.

Twitter is worth a cool 100 Million tweets per day.  Let’s assign a net productivity gain of $1.00 per tweet sent (not received).  If you think that tweets are not productive, follow the Iran Crisis; a revolution fought with liquid swords.  So let’s assign Twitter $36 Billion per year in increased human productivity.

Next, according to Google analytics, about 100 real people spend enough time on my little blog every day to read at least one article.  Suppose each blog article increases human productivity by $1.00 each. Technorati tracks well over 100M blogs.  That is 10 billion dollars per day – or a whopping 3.6 Trillion dollars per year.  Let’s discount that by 50% to only $1.8T in fairness to the skeptics.

The grand total is 2.5 Trillion Dollars worth of conversational currency – 2 times the 2009 national deficit and 5% of America’s entire debt obligation – and growing.   Where is all this productivity going?

What’s happening is what’s not happening.

People are NOT sitting through hours of TV commercials anymore.  People editorialize their own news and do NOT watch what is designed to corrupt them.  People are NOT letting their ideas die unheard.  People are NOT letting politics run them down and have now elected health care, the environment, and the end of warfare to the Presidency of this and other nations.  People have become far more focused and more productive through the rediscovery of family, friends, Art, Music and social priorities over debt enslavement.  Next, social media is coming to the neighborhoods.

Millions of people practice “social media” in their spare time.  This is invisible productivity that effectively magnifies the productivity of others with an astonishing multiplier effect.  Craigslist, CarFax, Zillow, Epinion, Amazon, and Expedia are all eliminating arbitrage opportunity and sending brokers scurrying for a real education. Product reviews are killing the scams and delivering the right product to the right market.

The Anti-buck

Maybe the Dollar is not so overvalued after all. Maybe the dollar deficit is counter balanced by this new invisible currency.  Suppose the more inflation that occurs, the more this invisible currency will affect the overall economy.  Suppose people are hedging dollar currency with conversational currency.  Suppose social priorities are replacing Wall Street Priorities.  Suppose we are approaching a new equilibrium rather than an impending free fall – except for those who try to control it.

Special Thanks to Megan Olson

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The Competition is Competition Itself

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On June 7, 2009

In General Information

In quantum physics, the Heisenberg uncertainty principle states that certain pairs of physical properties, like position and momentum, cannot both be known. That is, the more precisely one property is known, the less precisely the other can be known.

A practical analogy is the modern corporation.  It is difficult for a corporation to truly innovate because people behave as a function of the corporation’s interaction with them.  Heisenberg’s uncertainty principle suggests that the more we know about competition, the less we may know about cooperation.

Is competition is good for innovation?

A corporation is a closed loop that feeds on internalization.  External influence is traditionally shunned because of the great promise of the competitive economic system.  We compete with other companies, with our own legal system, with Unions, and with each other.  We hold and protect trade secrets; spend millions on patents that never get used.  We make our “intangible Human Assets” sign “tangible” contracts of secrecy and non-competition.

How do we define cooperation?

We often think of cooperation as teamwork. However, we define cooperation as the alternative to working separately in competition.  The definition of cooperation is derived from competition; the assumption that there is an opponent.  There needs to be a war against something in order to accomplish something together.  If you are not with us, you are against us.

Who exactly is the opponent?

Competition is a deeply ingrained part of our culture.  The business world is filled with sports analogies like; “knock them dead”, “carry the ball”, “we need a home run”, “great save!”  We see that national sports franchises command the highest pay and best ratings.  Reality TV is all about kicking people off islands, backstabbing one’s fellow apprentice.  We have even turned the pursuit of love and happiness into a competition.  The object is to decimate the competition. We define ourselves with slogans like: “may the best man win”; “the survival of the fittest”; “winner takes all”.  Destruction sells.

Beating a dead horse:

So what happens when we compete with each other?  What are the consequences when we decimate each other?  What happens when one departments competes with another department in the same company?  What happens when one person competes with another for a salary and bonuses?  What happens when society competes with Wall Street for their 401K?  What happens when the competition is already lost – do we continue competing or do we then cooperate?

The unwinnable war

After a while, societies and communities becomes a closed loop much like the corporations that they interface with.  They have no idea who the friend is or who the enemy is.  When people are in a game that they cannot win, they feel alone. Loneliness is the war that cannot be fought.

Social Media Cooperation; A closed loop system:

Social Media is emerging as an astonishing force in cooperation by uniting communities and people of diverse and complementary interests, affinities, and actions.  Social media works in a new dimension:  It is a “cultural dimensions” where the opponent is opposition itself.

Social media teaches cooperation. The more we know about cooperation, the less we know about competition.

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Follow The Leader

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On May 12, 2009

In General Information

Two Types of Leaders

There are two types of Leaders in the World.  The first type elevates themselves by standing on the shoulders of others.  The second type elevates themselves by elevating the people around them.

The first type of leader gets ahead much faster but often produces unsustainable conditions.  The second type takes much longer to get ahead, but creates a solid foundation for much greater growth and benefit to the community.

Follow the speculator

This is often the difference between the entrepreneur and the speculator.  The entrepreneur will scour the earth looking for resources to elevate from a low level of productivity to a higher level of productivity.  The speculator simply looks for volatility and instability so that they can place bets for or against the success of the entrepreneurs.

Social media aggregation services and search engines are very good at analyzing followers and using the quantity of followers as a proxy for leadership.  They are not, however, very good at identifying leaders any more than they can identify empathy, kindness, and courage.

Leaders follow leaders….

The next paradigm of economic development will be an innovation economy characterized by social aggregation and search devices that identify both types of leaders in a community. Once visible, an entrepreneurial community, by definition, will reject the first type of leader and elevate the second type to a level of higher productivity.

…not followers

The Ingenesist Project specifies the structure of an innovation economy where human knowledge is tangible outside the construct of the Wall Street.  All of the functions of a corporation can soon be duplicated in social networks enabled by social media.  We are very close to this day.  One of the critical evolutionary steps will be to identify and segregate the leaders from the speculators. This simply cannot be accomplished if preoccupied with watching followers.

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The Fertilizer Economy

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On March 15, 2009

In General Information

The bad, the good, and the ugly

The bad news is that United States has a global comparative advantage in producing bullshit. The good news is that we may actually be able to till it into fertilizer for the Innovation economy.

America’s financial crisis was caused by money created from money which was in turn a derivative of wild-eyed speculation in assorted proxies for real productivity, including real estate.  Stock prices were supported by imperfect information in a Tickle-Me-Elmo culture while broker fees are embedded in every conceivable transaction.

America has become a world leader in hype, marketing, lawsuits, and fantasy. None of these industries actually produce anything yet nobody can say they are not immensely creative, induce sweeping social movements, and their propagation demands extraordinary intellectual resources, flexibility, and adaptability.

The Theory of Comparative Advantage

It is not efficient for, say, Ghana to produce rice and Vietnam to produce cocoa. If they each produce their natural endowments and then trade the differences, fewer resources are expended to produce more goods.  This theory is the basis of global free trade and the efficiencies are irrefutable so globalization is here to stay.

Meanwhile, the literature on the subject of innovation agrees that innovation is maximized as a function of endowments in social capital, creative capital and intellectual capital.  Silicon Valley is widely held as the poster child for emerging from the deep social movements of the 1960’s attracting an inflow of diverse people where high tolerance, creative art and music were abundant in close proximity to intellectual centers of Stanford and Berkeley.

Comparative Advantage for Innovation:

By the theory of comparative advantage, if a country does not possess a comparative advantage in intellectual capital, creative capital, and social capital, they would not hold a comparative advantage in an innovation economy.

For example; China has a huge endowment of intellectual capital and throughout history they have been an inspired creative force.  However, the current government thwarts social capital.  Therefore, whereas China has a comparative advantage in a manufacturing economy, they would not necessarily have a comparative advantage in an innovation economy.

Many other countries have endowments of intellectual capital as well as democratic governments, but cultural norms may still constrain diversity related to gender roles, social classes, lifestyle tolerance, or the acceptance of “outsiders”.  As such, they may have comparative advantage in a knowledge economy, but the relative deficiency in creative capital would inhibit a comparative advantage in an innovation economy just as quickly.

The Fertilizer Economy:

That said, the United States has a vast abundance and tremendous economies of scale in social capital, intellectual capital, and creative capital in comparison to any other country in the world.  The problem is that these assets are sequestered behind the corporate veil, suppressed from true wealth creation by the priorities of a financial system built to produce nothing except analyst expectations.  Like sugar calories, lots of energy is delivered, but sustainable health is not.

The harvest in the wind

The brokers, speculators, and marketers are not bad people – in fact, they are brilliant.  They are simply stuck with the wrong set of incentives.  The Ingenesist Project dramatically changes the incentives and promises a far better allocation of intellectual capital, social capital, and creative capital.  By making such assets tangible outside the construct of the Wall Street, the comparative advantage of the United States in an innovation economy will be astonishing.

Where there is fertilizer in the wind, Wall Street will lead. Where there is a harvest in the wind, Wall Street will follow.

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Social Media; The Engine of New Economic Growth

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On February 19, 2009

In General Information

Click image to activate

Business Models of the Future:

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

The Last Mile:

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

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

Feel the Burn:

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

Social Vetting:

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

Begging for Mercy:

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

Role play

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

The Engine of Economic Growth:

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

Master of Puppets:

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

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The US Financial System – Tail Wagging Dog

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On February 10, 2009

In General Information

The financial system is not the problem.  The Innovation System is the problem – or did you notice that we do not have an “innovation system”?  Finance and Innovation in the US has engaged in the dangerous dance of tail wagging dog.  Innovation is as Wall Street does; not the other way around.  This is wrong, this is very wrong.

Doers, not shakers

[Our economic strength is derived from the doers, the makers of things, the innovators who create and expand enterprises, the workers who provide life to companies and, with their earnings, support families and invest in their future… This is what drives economic growth.] – Barack Obama

These are sobering words.  It make one wonder how everyone else makes a living; the brokers, the agents, the middlemen, the gatekeepers, the spinners, the flippers, the money managers, and everyone else in the game with their hands “in the flow of money” dragging the system into a tailspin.  Many of these people publicly criticize the working class, who have finally run out of steam, for gumming up their game.

It is also amazing that the engineers, educators, technologists, medical professionals, and public servants could produce so much for so long; enough to feed everyone else – except, as of recently, themselves.

[The financial system is central to this process, transforming the earnings and savings of American workers into the loans that finance a first home, a new car or a college education, the credit necessary to build a company around a new idea.] – Tim Geithner

Meet the Master:

The financial system is supposed to be the servant, not the master.  Innovation takes time, effort and resources before the payback can be realized.  For this reason only, the financial system bridges that time gap to allow for increased future productivity to generate new wealth for use by all.  That is the only reason why the financial system should exists.  But somehow we have gotten it backwards.

We got it backwards:

Technological change must precede economic growth.  We are going about the process of globalization as if economic growth can precede technological change.  The invention of the wheel, wedge and the pulley came before the invention of the Collateralized Debt Obligation (CDO) – there is no excuse for this oversight. This is clearly unsustainable and the process must be reversed.

An easy fix, almost:

The Ingenesist project specifies 3 web applications that will allow social capital, creative capital, and intellectual capital to become tangible outside of the bloated and failing financial system.  These applications will make innovation success predictable.  If success is predictable, then cash flows are predictable.  Using the same calculus as Wall Street, the cash flows can be combined, diversified, and split up into innovation bonds with superior returns that can be issued to fund new and sustainable innovation enterprise. Problem solved.

3 steps away from a quantum leap:

This can be done today playing by the rules and using existing technology – 3 simple applications.  That is how close we are to achieving the most important evolutionary step in human history.  The Government needs to empower the people to release themselves from the shackles of debt created by those who create little else.  For this reason, Obama is on the only correct path – buying time so that this important social media technology can mature.

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Necessity Is The The Mother of All Stimuli

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On February 10, 2009

In General Information

So who exactly is paying for this? The next economic stimulus package will not come from the halls of Washington or the boardrooms of Wall Street, but from the streets of America.  The objective of The Ingenesist Project is to induce a crowd sourced innovation economy by integrating Social Media with three web applications. It’s all about to become extremely exciting.

Social Media Grows Legs

There only remains three tiny applications yet to be developed and deployed to social media that will allow human knowledge to become tangible outside the construct of a corporation, and therefore, independent of Wall Street.  Social media technology is very close to duplicating nearly every function of the corporation outside of the traditional corporate structure.  America’s most valuable asset is not money, it is social capital, creative capital, and intellectual capital, and it’s about to stand up, brush itself off, and walk away from the mess left by the excesses of greed and power.

The Evolution of a Species:

1. Social Media will be used to develop a knowledge inventory in a computer code based on, say, the Dewey Decimal System.  Suddenly, human knowledge will become organized like a library and searchable by computer in very high resolution.

2. Boolean logic will be applied to the knowledge inventory and the resume will be replaced by a high resolution computer readable descriptive code.

3. Communities of practice will normalize (bell curve) their knowledge domain. At this point, knowledge will appear in the same form as a financial instrument and can then be treated as a tangible asset.

4. A percentile search engine will calculate the probability that a various collections of knowledge assets can execute collections of innovation business plan scenarios.

5. An Innovation Bank will match most worthy knowledge deficit to most worthy knowledge surplus and keep a record of the “secret sauce” of success feeding back to the search engine.

Wall Street Calculus:

Using the same equations as Wall Street, the Innovation Bank will predict the probability that a venture will be successful given a set of knowledge assets.  The Innovation Bank can then predict the future cash flows associated with the venture. Now, thousands of ventures and their predicted cash flows can be combined, diversified, and diced up into innovation bonds having superior returns over any other investment.  Investors will flood the Innovation System with cash.  This cash will be used to fund more innovation investment and the cycle will continue.  Everyone takes an equity position and innovation reflects social priorities rather than Wall Street priorities.  This changes everything.

This can happen today with existing infrastructure.  The only thing needed is a social movement; that’s what Americans are best at.  Where does this leave Wall Street, failing businesses, and all their debt?  The funny thing about knowledge assets is that they can walk if necessary.

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Oh, What a Semantic Web We Weave

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On February 5, 2009

In General Information

Innovation Economics:

is the conscious practice of investing in innovation as a method for driving economic prosperity.  Innovation is the science of change and economics is the science of incentives.

Money is fictitious:

Money does not represent gold or silver, it represents your productivity.  The value is held in the productivity, not coins or bank notes.  Debt represents future productivity and savings represents past productivity. It’s very simple.

So if the word “money” and the word “productivity” mean the same thing, they should be interchangeable. Right?

As a test, try the following:

Every time you hear someone use the word “money”, simply insert the word “productivity”.  Try it with the kids, your boss, the news broadcast, or your favorite politicians.  If their statement still makes sense, then it is likely a logical statement.  If the statement is confused, reversed, or makes no sense whatsoever, then this is where we need Innovation Economics.

The Reversal:

  • “Mom, can I have some [productivity] to buy an ice cream cone?”
  • “We don’t have enough [productivity] to invest in R&D”
  • “There isn’t enough [productivity] in the budget so we must cut education programs”.

The Confusion:

  • “It concerns me that Facebook has yet to find a [productivity] model that seems likely to secure its future.”
  • “Icelandic [productivity] collapse is heard around the world”
  • “Global Warming costs too much [productivity] to solve”

The Ridiculous:

  • “Wall Street Executives earned excessive [productivity] in 2008”
  • “State of Washington opens more liquor stores to raise much needed [productivity]
  • “Lawmakers from both political parties have criticized banks for failing to use the taxpayer [productivity] for lending to help stabilize the hard-hit U.S. economy”.

It’s really fun to play this game when you start getting bored with the endless dribble of spin.  You can even go backwards; hear “productivity” and insert “money”. Pour yourself a glass of wine, sit back to the nightly news and you may start noticing some interesting trends.

Discussions related to engineers, infrastructure, airplanes, teachers, doctors, police and firefighters, etc., tend to get The Reversal. Discussions related to innovation industries such as social media, environment, and social causes tend to get The Confusion.  Discussions related to gambling, marketing and advertising, money shuffling, law suits, Wall Street, and various forms of speculation, are simply The Ridiculous.

It will make you wonder why we would need a Web 3.0 Semantic Web.  We really need a Web 3.0 de-Semantic Web.

(Picture from Charlotte’s Web; a story about a dinner pig who makes friends with a spider who comes up with a plan to save the pig by writing words in her web.  All the town’s people thought that the pig was special and his life was spared. The farm animals knew that it was really the spider who was special – she was an innovation economist)
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Social Media; The Opportunity of a Century

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On December 1, 2008

In General Information

The Perfect Storm:

We are at an historic time in human history; one that may never repeat itself again. The current financial crisis may provide just enough disruption for a completely new economic paradigm to emerge; the Innovation Economy.  We cannot squander this moment arguing over common logon for our Twitter and Facebook profiles; a far greater integration is required from Social Media.

Advertising is not the correct revenue model.

It is astonishing that Social Media, in general, has not figured out how to make money.  Social Media IS money.  All wealth on Earth was created from the social capital, creative capital, and intellectual capital of people – wealth creation is already crowd sourced.  Now, there is an opportunity for Social Media to harness this engine of economic growth and wealth creation – if they could only see it.

The problem is simple: Globalization is proceeding as if economic growth can occur before technological change. Some time in the past, we got these two things up mixed. It does not take money to make money; it takes innovation to make money.  Technological change MUST ALWAYS happen before real economic growth can occur.  Anything else is a transfer of wealth, not the creation of wealth. All that is unsustainable today – the economy, the environment, natural resources, energy – is due to this itsy bitsy anomaly of current market economics.   Today, we can easily correct this little flaw with almost a flip of a switch – but the window of opportunity will be short – and we need to be clever.

The idea that human knowledge is tangible and behaves individually and collectively like a financial instrument is still considered impossible.  The ability to place a market value on the social capital, creative capital, and intellectual capital of a team, community, or geographic population of people – let alone a social network – has never been accomplished.  This idea remains the Holy Grail of finance and one that Social Media is uniquely positioned to capture.  If the finance industry can invent “tangible derivatives” out of thin air paper, then we ought to be able to do the same with knowledge assets that live and breathe tangibly all around us.

If it looks like money, it will behave like money, guaranteed:

First, we need to build a knowledge inventory system that includes everyone; and which can be anonymously codified and amalgamated with logic in machine readable format (the Universal Decimal Classification System is a good candidate). Second, we need to sample our inventory in a community using the proverbial “Bell Curve”. Third, we need to develop a search engine that returns the probability that a strategic combination of knowledge assets can execute a given objective. Fourth, we need an innovation Bank that will “pull” knowledge surplus and “pull” knowledge deficits together from diverse communities.   (Please see the IEc101 at https://ingenesist.com)

This should not sound too weird; it is the same game that Wall Street plays.  The switch is flipped when we engage our innovation system with the financial system.

Go where the money is:

Social Media is perfectly positioned to develop these features in their products and in our communities. We first must understand that innovation is predictable.  We may not be able to say exactly where the innovation will lead, but we can be sure that if we place a group of strategically diversified persons in a room, innovation will happen.  If the fact of innovation is predictable, risks related to the invented can be pooled, morphed, or diversified.  If risk can be diversified, it can be hedged to zero.  If innovation has zero risk, Wall Street will salivate to issue “innovation bonds” to finance diverse communities of practice.  If innovation capital is inexpensive and accessible, a great amount of innovation will occur.  The anomaly of capital markets can be reversed, and the result will be sustainable economic growth.

Naturally, the compensation structure will be in the form of dividends, both financial and in social welfare.  New corporations will emerge and the old corporations will become more efficient. What is invented will tend to reflect social priorities rather than today’s short term Wall Street priorities.   America must innovate at an intense and sustained rate in order to compensate for the imbalance of debt economics that has been created in its absence.  Social Media can be, and must be, the infrastructure upon which an Innovation Economy is built.  Again, this opportunity is staring us straight in the eye.  This is the conversation that must be having today if we will meet the challenges of tomorrow.

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2008 Financial Crisis – The End Game

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On November 11, 2008

In General Information

The year is 2020, no burning cities, no mass hysteria, no bread lines; the economy is on an exponential growth curve.  The financial crisis of 2008 ended in an anticlimactic sort of way.  Sure, lots of hedge fund bankers were unemployed for a while and many companies once deemed titans of industry have disappeared, but nobody seemed to notice much.

Government debt has been eliminated and Wall Street has become the steward of what has become an Innovation Economy rising from the ashes of debt economics.  The transition, in fact, was surprisingly smooth.  Social Networks figured out a way to make knowledge tangible outside the construct of Wall Street, the central banks, and the traditional corporations.

When the dollar started to fall, people began trading a different currency called the rallod.  The rallod was backed by future productivity resulting from innovation rather than future productivity supporting debt.  The vicious cycle of debt economics was reversed just in time.  When the dollar finally crashed, it pegged to the rallod and the economy began to grow again with an astonishing, yet peaceful, transfer of wealth and power to self-regulating communities, society is general.  It’s still hard to believe what happened.

Today the engines of economic growth are millions of hot new start-ups that exist in the form of “Communities of Practice” related to specific technology areas rather than the old corporation model.  They automatically cluster around a technology and spin off other start-ups at an incredible rate in a strange nesting arrangement called the “tangential innovation” market.  Most innovation is open sourced because the “Patent” (and protectionism in general) is no longer the center of the innovation finance universe, rather, the “secret sauce” of social, creative, and intellectual capital is the most valuable player today.

About 10 years ago, something resembling the human genome project mapped all knowledge in the form of social, creative, and intellectual capital that exists in society to a very high granularity.  A programming language was invented to represent knowledge assets like packets of code that are processed by a community algorithm (The CV/resume is a bar joke now). Thanks to a visionary government, 1st amendment protections were built into this inventory with anonymity laws.

Part of Google was democratized in a public takeover and spun off to design an open source percentile search engine to help entrepreneurs build unique collections of knowledge assets and predict the probability that various combinations of these assets could successfully execute a business plan.  These unique combinations then induce hyper-innovation around a technology and the resulting innovations get spun off to be reabsorbed by different and diverse communities of practice in continuous iterations forming a virtuous vortex of new systems, methods, and solutions.  Sketched out, these arrangements looked like electrical circuits.  Wealth creation is intense.

Instead of having jobs, many people in a geographic area are pinged by a Percentile search engine which calculates the likelihood that their interaction together will increase the probability of successful execution of a business plan when combined with other knowledge assets.  Instead of earning wages, people are paid with micro-royalties specified by contracts on capital asset sub-sections. These micro-royalties add up to substantial residual income enjoying a multiplier effect as their work continues downstream. The government funds social security through it’s own innovation ventures. Service workers such as police, teachers, fire fighters, nurses, local merchants, etc., are key beneficiaries because of their impact on the community is directly associated with productivity.

Many of the senior knowledge workers have determined that they can earn more money by taking an equity position in their students, and the students of their student – such pyramids are in fact sustainable and generate astonishing returns.  Mentors have entered the landscape in vast numbers and apprenticeships have become abundant.  The income potential for the “creating creators” boggles the imagination.   Again, a virtuous circle has formed between the mentor and the student. In aggregate, wisdom is being retained, refined, and transferred efficiently throughout social networks.  Universities have begun doing the same forgoing tuition in exchange for an equity position in students.

University “degrees” have disappeared in favor of unique combinations of knowledge assets that are continually SEO’d for best Percentile Search Engine Placement.  People do not compete directly, rather, they compete with the Percentile Search Engine in the local market place – although virtual work is becoming popular again.  As owners of their knowledge assets, the entrepreneurial spirit is ubiquitous.  No individual has either a monopoly or an identical knowledge set as anyone else.  Everyone has perfect information about the knowledge assets in a market.  People are pinged for different reasons at different times for different rates depending on supply and demand.  Continuous education is a social event in itself often mistaken for recreation!

Since the knowledge inventory has mapped all knowledge and the Percentile Search Engine calculated probabilities and scenarios, the Innovation bank formed to make most worthy and optimal matches between knowledge surplus and knowledge deficit in a community.  Since the probability of innovation success has become predictable, innovation risk is now diversified away.  Innovation insurance products abound. With near-zero innovation risk the cost of venture capital has approached 5-7 % instead of 500-2000% of less than a decade ago.  Banks now issue innovation bonds on the public market to finance innovation in society.  For an investment of such high return and such little risk, participation is near universal.  This created another virtuous circle; the more innovation that occurs, the more money is created.  The more money that is created, the more innovation occurs.

Even the poorest areas of the planet are getting into the action because, by definition, parts of an economy with the highest potential for technological change are the same places that return the highest dividends in an innovation economy.  Arbitrage opportunities between master and oppressor have disappeared worldwide.

Like a neural network, the economic system of tangible knowledge is self-correcting, fault tolerant, and self-regulating.  Governments across the globe tried to stop the social network driven innovation economy – but they eventually gave up.  It was like water; it flowed between the cracks and simply eroded the barriers. China learned to show it’s sense of humor exporting some of the funniest jokes ever conceived.

Oil production has been replaced by superconducting wind turbines, global temperatures have stabilized, all cars are electric or “water leakers” (as the hydro’s are affectionately known), many diseases have been cured, and the list goes on.  It is hard to believe this happened in only 12 years.  Then again, the Internet had only been widely used 12 years prior to 2008.  Did I mention, we’re finally sending a multinational expedition to Mars…

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The Tangibility of Knowledge

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On November 9, 2008

In General Information

Knowledge Tangibility should be the most important conversation in Social Media circles given the current financial situation in America.

I lived through financial devaluation in another country and the effects were crushing: after the run on the banks, there will be a run on Walmart.  People will buy TVs, small appliances, shoes, and useful stuff that will hold more value tomorrow that they cost today.  These items may become a de facto currency of trade.  Americans will be astonished by how fast a devaluation event plays out; hours and days, not months or years.  When things settle down, the government will retire the old dollar and introduce a new currency at an exchange of, say, 1 megabuck equals 1000 old dollars.  Then the chips are cleared, assets are transferred, and the same game can start all over again.

The difference is that for the first time in history, there is a window of opportunity for social media technology to break this cycle. Please let me explain:

Suppose that a BMW costs $50,000 dollars and a KIA costs $10,000 dollars.  These prices reflect the quantity and quality of the car in terms of availability and popular amenities such as, handling, road noise, comfort, status, etc. Suppose the government introduces a new currency called the “megabuck”.  Suppose the government pegs the megabuck to cars saying that all cars will have a value of 30,000 megabucks. Since these cars are not equal, people will begin trading; the BMW will be bid up to 50,000 megabucks and the Kia will be bid down to 10,000 megabucks based on supply and demand – right back where they started.

Admittedly an oversimplification, but the point is does not matter what you call the currency – the most important thing is the quantity and quality of the asset.  This brings us back to the idea of knowledge tangibility.

Suppose that, on average, 1 hour of human labor is worth 20 megabucks.  As above, hard labor will be bid up while soft labor would be bid down.  The same is not really true with knowledge because knowledge is invisible and it can’t be counted with bricks or bushels.  There is no knowledge inventory in America’s communities.  Therefore, there is no way to establish supply and demand for knowledge assets.  People in a community do not know what other people in the community know. This is where social networks will make a huge difference.

Human knowledge, if formatted correctly, would make an excellent asset upon which to peg a currency. Today, accountants say that human knowledge is “intangible” but social media demonstrates otherwise; human knowledge is simply invisible – hidden inside corporations under the thumb of Wall Street. Social media demonstrates that knowledge assets are itching to be release to the public domain in a highly tangible manner.  Believe it or not, we are now 95% of the way toward real knowledge tangibility today.   We should be very excited about this because everything changes.

Like the example with the cars, we need to have a comprehensive inventory of the knowledge assets in our communities so that they can be strategically combined into productive organizations.  This inventory must be formatted in terms of quantity and quality and include all knowledge living including social, creative, and intellectual capital.  If done correctly, it will not matter what happens to the dollar or what currency is used as a scorecard, the value of human knowledge assets will remain intact.

Again, the value is in the asset, not the currency – it is in you, me, and our diverse communities who will favor community priorities rather than Wall Street priorities. This is how where we will find equity, sustainability, and fairness in a capitalist system.

The Ingenesist Project has specified exactly how to create knowledge tangibility in a capitalist model using 3 simple web applications for Social Networks; a Knowledge Inventory, a Percentile Search Engine, and an Innovation Bank. Please read the intro and the articles on page IEc101.  If you agree, please pass it on.  If you do not agree, please help us make it better.  If you don’t understand, email me. This needs to happen fast and unfortunately nobody will do it for us – we must do it ourselves.

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The Balance Sheet for Knowledge Assets

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On November 6, 2008

In General Information

Innovation economics has a way of forcing us to look at the mirror image of conventional wisdom.  This article will look at knowledge assets as they might appear on an accounting balance sheet.  You may be surprised at what happens at the bottom line.

Wall Street will often reward a company that has a large backlog of orders. This can appear in the eyes of most observers as an asset. After all, who would not want a backlog of orders?  However, in the world of social media, a huge backlog causes a serious problem – it represents commitments made that have not yet been delivered. An unfulfilled promise in a social network is a liability and not an asset.  By extension, a backlog in an innovation economy is a liability and not an asset (note: climate change).

Applying conventional wisdom to an innovation economy, we find that most companies have an excellent inventory of the “liability” but a poor inventory of the “asset” that will execute those promises. All of their plans, specifications, blueprints, job descriptions, policies and procedures, etc., are liabilities in an innovation economy because these define the promise that is unfulfilled, not the asset that will fulfill them.

Until recently, companies assumed that the right knowledge assets will always be available – an assumption that for a long time has limited the level of productivity that humans can achieve, specifically, the sustainability of natural resources. The absence of a knowledge inventory limits the complexity of problems that humans can solve much like industry was limited to custom machinery before Eli Whitney demonstrated the concept of interchangeable parts less than 200 years ago.

Further, if the product line is expected to have a life cycle of more than a few years, the knowledge inventory must extend beyond the doors of the company and into the surrounding community.  Therefore, the knowledge inventory must take on the taxonomy of the community, not the taxonomy of the corporation such as skill codes, levels, titles, etc. The requirement is now clearly in the domain of social networks.  Yet, I still hear grumblings in the blog sphere that social networks cannot be monetized – nothing should be further from the truth.

So, let’s talk about the bottom line.  For example, Boeing announced today that their greatest future challenge would be the availability of engineers. Boeing has a market capitalization of $34B and a $300B backlog.  Money has a 10:1 multiplier as it travels through and economy.  For a balanced accounting statement, what would be the real value of a social network that can capture the correct knowledge inventory to support Boeing; 34B, 300B, or 3T?

In general, valid estimates of the bottom line can vary by 2 orders of magnitude depending on the point of view of Wall Street, corporate management, or the social network community.  Who would be the better steward?

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Social Enterprise; Rating Systems

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On October 31, 2008

In General Information

There is an ongoing discussion about the rating system for articles posted to a business oriented social network site that I belong to.  While am not part of the discussion, my one and only post to that site had been rated very low despite the fact that I am recognized internationally in the subject matter of that particular article.  I stopped posting articles to rated sites because the rating systems are flawed at the core of logic – Frankly, it’s too risky.  As the creativity, originality, or controversy of the post increases, the disincentives to sharing it also increases.  I don’t want my customers googling me to see this rating without also being able to google my reviewer.  No sour grapes – I’d wear a D+ from Stephen Hawking as a badge of honor.

The objective of any business/social network in today’s world should be to make human knowledge more tangible outside the construct of the corporation, such that it emulates a financial instrument – at the end of the day, it’s about the money.  Otherwise Social Networking amounts to active recreation – like guitar hero, or tubing; fun but somewhat trivial.

ALL financial instruments, without exception, are described in terms of a quantity and a quality.  ALL quantity and quality measures for financial instruments are statistical in nature – that is, they fall on some kind of “bell curve”.  This is true for EVERYTHING from a stock valuation to credit score to marketing demographics to health/home/life/car/business insurance, baseball players, GPA,  etc. – the bell curve is ubiquitous.  Whoever is not minimally familiar with the simplest basic concepts of a Normal  Distribution, et al, is at a severe and unfortunate disadvantage in the innovation economy. This is how the world of money is organized, this is what money is, this is what Wall Street does – for better or worse, like it or not….it is what is.

One obvious failure of most Social network rating systems is the linear 1-5 “stars”.  If there were 6 stars then at least we could have a leg up on applying the most valuable mathematical tools available from the world of wealth and value creation (hence, Six Sigma).  Second – the bell curve is not linear and the reviewer needs to be aware of this. 6 stars would mean that a post falls (in some measure) between 97%-100% of all similar level posts ever read by the reviewer. 5 stars falls in the 85%-97% range; 4 stars, 50%-85%; 3 stars, 35%-50%; 2 stars, 3%-15%; 1 star 0-3%.

If Calculus isn’t your thing, consider this – the bell curve rating system makes the reviewer really think about who they are in the process, the responsibility they hold in the rating of others, and the implications of their ratings – too high, or too low.  It would be good to know how many articles the reviewer has read and rated, the average of their ratings, as well as their own rating on articles published (is this staring to sound like EBay? – it should, at 25B market cap, they’re not silly people).  Social accountability does wonders for market efficiency and wealth creation.

Social Networks are ideally suited for correctly rating their own knowledge inventories so that when their members go out in the new world trying to make a living, it is known to all that they have been vetted by a respected community.  This increases the value of the member and it increases the value of the community in the market. Communities that empower and release great talent to a market actually empower themselves; Harvard, GE, Frank Zappa.  This has happened at the local level since the stone ages.

What about our competitive instincts? There can only be one winner and the rest are losers, aren’t all good Capitalists supposed to decimate thy neighbor? Always remember, it is all about the perfect combination of average assets, not necessarily the single excessive asset that makes product most valuable in a market.  The market for Toyotas is far greater than the market for Ferraris, yet each are competitive in their respective market.  The studies of ‘beauty’ discovered a collection of perfectly average features – in the eye of the beholder, consistent with balance and harmony.  So we’ll need to drop the win-lose culture on this one and worry about competing with the real threats that lie before us.

Sure, most people will complain about such a system because it is too complicated, too math-ish, not the easy tweet (OMG CUL8R!). But this is the reality of how money is organized – and disorganized (did I mention Wall Street yet?). There is no exception, there is no rational alternative – the world does not care if people agree with the way things are or if they understand the math.

Fortunately, once people learn to roll over this metaphysical speed bump, the rest is real easy as a vast world of possibility for generating extreme wealth in social networks will unfold before our eyes!!  Knowledge tangibility is the Holy Grail of modern finance but Social Networks are at risk of squandering this unique and historical opportunity to paint this empty canvas in their own image.  Act now, please – this chance may never happen again.

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The Ingenesist Project – press release

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On October 21, 2008

In General Information

We have launched The Ingenesist Project. The Innovation Economy is an absolutely huge and necessary step forward for all of us. The current financial system is unstable and it will fail. At best, the innovation economy can increase human productivity sufficiently to support the debt load. At worst, there needs to be a system of trade in place for society in the event of a crash or devaluation so that people can purchase the necessities until the recovery can take hold. So yes, this is serious business.

Anyone following this blog please spread the word. I need to get people to the point where they will read the 18 articles – after which, hopefully, their outlook on the tangibility of knowledge in social networks will be permanently altered.

My challenge, of course, is to make a very difficult subject matter easy to explain and compelling enough to call people to action. Those 18 articles condense 400 years of financial industry development and history into a few pages. Yes, the analogy between social networks and finance holds well. This is not easy to explain, but the solution to the financial mess is right under our noses. It’s almost too simple to see.

The forum has been added to solicit threaded comments to the 18 articles. This is the backbone to the open source development. I hope to build future posts on the comments that arise – a feedback loop. We will identify the sub components, partners, strategies, and action items together. Participants will pay each other in a new currency.

I will soon simplify and interpret the preferred embodiments from the patent which will illuminate the countless new-to-this-world business opportunities that will become available to entrepreneurs in this environment.

As a demonstration; vetting mechanisms make markets more efficient. Ebay has the feedback score, Craigslist has the flagging feature – this is fact. Social networks are perfectly suited to act in this manner across the entire spectrum of commerce. This is a multi-billion dollar industry that can be very easily monetized in the innovation economy. I hope that others can see this too. There is a great deal of wealth to be generated for each other.

I would like to thank all of the people who advise this program. I soon hope to invite a Board of Directors and formalize the growing concern that is The Ingenesist Project. Anyone reding this, I am an open networker on Linked in – sent me a invite and I’ll respond.

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

For immediate release:

The Ingenesist Project; Putting an End to Debt Economics

(Seattle) The Ingenesist Project is an open source economic development program that will challenge America’s financial meltdown head-on by creating an innovation economy trading rallods (dollar spelled backwards) backed by innovation instead of dollars that are backed by debt.

“Deficit spending is unsustainable. When the dollar crashes, People will need an alternate economy to trade in – one whose currency is backed by something tangible; and there is there is nothing more tangible than the human imagination, including gold”, says originator, Dan Robles. “Capitalism likes competition; well today, Social Networks are the ultimate competitor”

The Ingenesist Project has identified three relatively simple web applications which, when applied to Social Networks, will allow human intellect, social capital, and creativity to become tangible outside the construct of Wall Street and Corporations.

By definition, the rallod is pegged to the national debt, as such, The Ingenesist Project has 10 trillion rallods (and counting) to distribute. Participants in the Ingenesist Project Development Forum will award these rallods to each other on a reputation scale for their work in design, development, and improvement of the three web application that will release society from the shackles of debt economics.

The forum is open to anyone and participants can earn millions of rallods for their work in developing these applications.

The New ‘Stock’ Market

The Ingenesist Project has a patent pending for an Innovation Banking System to finance social innovation and will release all rights to the public domain.

“This is one of the most important patents applications published in our time. Countless ‘new-to-the-world’ business plans and patentable methods, systems, and devices will result from the The Ingenesist Project”, says Robles “Everything changes from the University System to the prioritization of global resources. Wall Street will be come the steward instead of the master”

Entrepreneurs are encouraged to patent, protect, or contain all intellectual property that they develop in the new economy and become as wealthy as they possibly can under the condition that they pay royalties, equity, or options to their knowledge inventory.

The entrepreneur’s “Secret-Sauce”, however, must be shared with The Ingenesist Project in order to improve the Percentile Search Engine Algorithm for the benefit of the public domain.

The Rallod

The U.S. National Debt is over 10 trillion dollars. Assuming deficit spending stops today, every man, woman, and child in the US is responsible for $33,500.00.

This means that $33,500.00 of every person’s productivity has already been spent. Obviously, the only way to pay the debt is to increase every person’s productivity by exactly $33,500.00.

The only sustainably way to increase human productivity is innovation. If the dollars crashes and pegs to the Rallod – the innovation economy will replace the debt economy and those who build it will become the bankers of tomorrow.

More Information:

Please review www.Ingenesist.com

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