The Ingenesist Project

The Next Economic Paradigm

Tag: zillow

Zertify Zillow Zestimates On Blockchain

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On December 9, 2015

In General Information

Big Problem with Zillow Zestimates:

Perhaps the best example of metadata being imposed upon an unwary public is the “Zillow Zestimate”.  Zillow.com is a real estate website that aggregates public information and boldly publishes the value of your personal property while quietly disclaiming that invalidity of their own valuation.  In all fairness, RedFin.com and Trulia.com also provide similarly structured valuations of your most valuable asset with no physical verification. The slightest misrepresentation could cost the homeowner tens of thousands of dollars for which there is absolutely no recourse.

According to Homevisor.com: if your house (or a house you are looking to buy) has a Zestimate of $300,000 – there is almost a 25% chance that the house will sell for less than $240,000 or more than $360,000. That is a pretty wide margin of error. 

There must be a way to Zertify Zilliow Zestimates on blockchain

Implications:

The result is that responsible homeowners who have conscientiously maintained and improved their property at great expense of time and money may be punished in a market while those who neglected their properties may be overly rewarded.  Neither the buyer nor the seller has any way of inspecting comparable homes used by Zillow.  This causes market distortion that affects the buyer, the seller, and the community at large.

Root Cause:

Zillow, Trulia, and RedFin all scan from public data sources.  The problem is that there is no trusted public ledger where owners can register valuable improvements and amenities that may dramatically impact the value – and which lower the risk of owning a particular property.  If such a trusted ledger did exist, it is certain that data scrapers such as Zillow, Trulia, and RedFin would be happy to scrape the data at no marginal cost.

Solution:

An organization such as the National Society of Professional Engineers has sufficient authority to provide a blockchain based ledger where a licensed professional engineer could physically review major components of a property including structural, plumbing, electrical, envelope, energy efficiency, HVAC, Solar Installations, mold, corrosion, critical slope, tree liabilities, view amenities, etc., and formulate an annual cost of ownership statement (ACOS) over a standard period of time.  The licensed engineer will register the ACOS, along with recent remodeling permits filed with the city, on the NSPE blockchain where it may be accessed by Zillow, Redfin, Trulia, MLS, banks, insurance, and the public, etc.

Value Proposition:

The ACOS and the Professional Engineering condition assessment could be provided to owners for a flat fee or subscription fee with a ROI greater than 10:1. This means that viability threshold for engineering assessment is defined as adding more than 10,000 dollars to the average sales price of the property for every 1000 dollars that the homeowner spends on the engineering report.  Owners that don’t meet this minimum threshold would not benefit from an ACOS and could not be listed on the NSPE Registry.

Size of market:

Assuming that there are about 100 million private homes in the US.  The percentage of under-valued homes that would benefit from a 10:1 PE registry are characterized at over +1 standard deviation on a bell curve distribution and higher.  This is roughly equivalent to 14% of 100 million, or approximately 14 million properties.  If each of those spends a minimum of  $1000 dollars for assessments, the value of the market would exceed $1.4B dollars. According to Homevisor.com estimates, the market would bear an engineering cost of $6000 yielding a $60,000 ROI, or roughly a $10B dollar market.

Conclusion:

Such a blockchain would safeguard the health and welfare of people and property while increasing  the visibility of professional engineers as a public financial institution with real financial impact.  The NSPE data would reduce volatility in banking and insurance ledgers so that pricing becomes more efficient. Real Estate professionals, renovation contractors, and real estate appraisers would also benefit from the registry by delivering the right product to the right client at the right time. It will increase the demand for a retail professional engineering sector to defend the technical best interest of society.  It will signal high integrity rather than low integrity to the preventive maintenance market.  Most importantly, the homeowners who maintain their property and those who will buy those properties benefit from fair market assessment of property values at a far greater utility than the typical point-of-sale home inspection.

Notes:

  • The ideas presented here are the sole creation of the author and not meant to reflect the intentions or interests of the National Society of Professional Engineers, Zillow, or any other referenced entity. 
  • Zertify takes its name from a portmanteau between the word certify and the statistical z-test https://en.wikipedia.org/wiki/Z-test
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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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Innovation Bonds: 3 Million Jobs

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On February 26, 2009

In General Information

Another approach for spending a Trillion dollars (backed by debt) would be for the government to issue innovation bonds (backed by innovation) to fund new enterprise.  Surely the World still greatly admires and respects American Ingenuity (social capital, intellectual capital, and creative capital) and would likely buy such a financial instrument instead of more of our debt.

The final frontier; your backyard

The Last Mile of social media is a vastly unexploited resource with an astonishing wealth creation potential.  The Ingenesist Project (TIP) specifies a structure for an innovation economy through the application of 3 simple web applications deployed to social media that will ignite “The Last Mile”.

Already, people use social media to harvest great ideas from around the world.  The Ingenesist Project will enable global ideas to be applied in local economies throughout our communities.

Running Numbers:

The sweet spot for Last Mile social media is (2-6) people living within a (1-6) square mile area. Assume an average innovator density is about (1) person per square mile.  The United States is a little more than (3) million square miles.  If only (1) of the thousands upon thousands of potential applications of Last Mile social media were implemented across the country, then (3) million jobs would be created.

Dan’s List; Leave a Tip

Here is a list of (10) hypothetical business ideas that a buddy and I dreamed up over lunch using TIP methodology for inducing an Innovation Economy.  Each of these ideas has a working revenue model.

1.    Zertify: This company is a last mile/vetting social media application where neighbors “Zertify their Zillow Zestimates”.
2.    Start Up Neighborhood (SUN): is a last mile social media application where neighbors get together to innovate and create new businesses.
3.    ScatterWatt: is a last mile social media application for decentralizing power generation aggregating local clean power generation systems (rooftop wind, solar, greenery).
4.    ComPrac: is a last mile/vetting application of social media that forms and organizes communities of practice for the purpose of mentorship and cooperation in innovation.
5.    CombinePac: is a last mile/vetting application of social media that combines communities of practice strategically for the purpose of tangential innovation
6.    TopUse: is a last mile social media/vetting application that makes best use of already disturbed lands saving undisturbed lands from exploitation.
7.    CodeVitae: is last mile/vetting service that translates CVs and job descriptions into universal decimal classification system for computerized analysis, normalization, and improved allocation.
8.    Proximizer: A last mile social media application that reallocates knowledge assets for best proximity to home space for carbon credits.
9.    CarbonCops: is last mile social media application to register, certify, and implement carbon savings ideas.
10.    VetBucks: is a last mile/vetting site for the verifying expenditure of public funds.

Improving Information for Fun and Profit:

The degree to which information is improved in a market is the degree to which the innovation adds value.  As such, monetization becomes a relatively simple matter.  Furthermore, the options that are created will have a multiplier effect in the communities as neighbors learn what knowledge assets are available with which to cooperate in their communities and where their knowledge assets can be deployed productively. New ideas generate more new ideas as the markets will seek to fill in the blank spots and support more structure for innovation economy.

An Endowment for their Grandchildren:

While the leadership elders are to be respected for their wisdom and accomplishments, they have very little comprehension of the economic growth potential of social media. It is understandable that they may overlook this opportunity.  The capitalization of social media lays in the hands of the young people who know exactly what to do if given the opportunity.  Why not give them a shot at getting the books in order?  Call it their inheritance.

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Social Enterprise; Show Me The Money

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On October 27, 2008

In General Information

The term social capital is thrown around with great ease without really understanding what the word “capital” implies.   Capital is money used to earn more money; that means that social capital must somehow be related to, or derived from money.  There is no shortage of blog posts asking the timeless question “Where’s the money in all this social stuff?”

If social capital is money, it needs to behave like money.  So for our litmus test today, let’s talk about financial derivatives – the same ones that got us into the mortgage crisis mess.  A derivative is something whose value is derived from something else.  The price of an SUV is often derived from the current price of fuel.  Not so obvious are collateralized debt obligations – but they are kind of similar.

So where is the money in all this social network stuff, what on Earth is a social capital derivative, and how can it be “capitalized”?

Suppose I start a social network for my neighborhood. The objective of this social network is to make certain all of the data collected by, and posted on Zillow.com (a real estate valuation site) is accurate.  After all, it is not in anyone’s best interest for an overpriced house to stay on the market too long because it raises questions about the value of the other houses.  Nor it is in the best interest for a house to be undervalued – that too brings down the value of the other houses.  It is in everyone’s best interest that all the houses are correctly priced.  If this could be accomplished, then a discount real estate broker can be used saving 2-6 percent on the transaction.  That sounds like real money to me.

Meanwhile, it is in the best interest of all of the neighbors to help all of the other neighbors to improve those things on everyone’s homes that increase correct market value by the most; kitchen, bath remodels and a little landscaping, etc.  Again, this supports the value of everyone’s house and improves people’s decisions on how to invest their home improvement money.  Wow, that sounds like real money too.

A sample of persons living in a community would surely reveal a whole range of specialized knowledge useful to others in the neighborhood. Neighborhood watch organizations are better crime deterrents than police patrols.  Further, local contractors, banks, stores, and businesses would love to target such an organized and focused group of people. They may even pay the community for advertising on the site… cha ching!  Nobody would dare provide poor service since reputations would be quickly damaged on the community forum; likewise, disputes are handled quickly and equitably since it is everyone’s best interest to do so…

Now for the derivative:

The number one attribute for increasing the value of a home is a good neighborhood.

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