- Posts tagged Social Currency
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The 3 Steps To Social Profits
I have been approached by many brilliant social entrepreneurs in recent weeks. They each have several things in common. Each has an incredibly creative idea and a strong passion linked to a deep seated observation that social currency has value. As nebulous as that may sound, it is very real, specific, and clear in the minds of those who I’ll call, The New Entrepreneur.
Nothing Economic can happen until two or more people get together to build something. Likewise, when two or more people get together to build something, economic things happen. The objective of this post is to demonstrate the 3 underlying actions of a new class of business plans that will become dominant in the next economic paradigm.
Our recipe is simple:
Step one: convert financial currency into social currency
Step two: Create value denominated in social currency
Step three: Convert new social currency back into financial currency – if needed
This simple recipe forms the basis of the business plans for several start-ups including Social Flights and The Social Value Network as well as numerous other projects that we consult to in the US, Greece, Brazil, Australia, China, and Mexico.
So here is how it works
The Old Business Model: Suppose you buy a truck and you use it to haul stuff for your own personal and business interests. After 5 years, you can sell the truck for about 1/2 what you paid for it.
The New Business Model: Suppose that you buy a truck to hauls stuff for your own personal or business interests. Suppose that you also let The Boy Scout troop leader borrow it to pick up christmas trees for sale. Suppose you let the Kiwanis use it to pick up supplies for their annual salmon bake. Suppose you let the YWCA haul donated furniture to their satellite facility. Suppose you help your neighbor use it for a home improvement project. After 5 years, you sell the truck for about 1/2 of what you paid for it.
The difference is that now your community is engaged with your personal interests. You have converted financial capital into social capital and created new value denominated in social currency. One notable example includes Neighborgoods, but there will undoubtedly be thousands of variations of this leveraging every conceivable physical asset.
Now, how do you transform this back social capital into financial capital? Well, that’s what the emerging science of Social Capitalism is all about. Social Profit is like a fungible option with a face value. If structured correctly, an option can have a face value equal to the difference between discount and full price. That face value can be traded like money. When you are engaged in a community, people know who you are, they trust you and they share with you. People are trading options – the right without the obligation to exercise a financial position in the future.
Options have real value as an asset if you have them or as a liability if you don’t
The Invisible Hand of Social Capitalism to define the future of Money
Living to work, or working to live?
Everyone knows what money is supposed to be – it is supposed to be a representation of human productivity, otherwise nobody would “work” for it, right?
It is also fairly obvious that money is not the only thing that represents human productivity. People work for family, community, reputation, love, recreation, art, music, etc. These values are denominated in social currencies.
Working for Social Currency
Market Capitalism has deftly turned social currencies into consumption verticals. People consume recreation products, family products, community products, reputation products, etc. The irony is that people are foregoing all those things to drive off to work in order to earn the money so that they can buy back their family, recreation, and community. People are “working” for social currencies denominated in dollars. The Mantra of Madison Avenue is to “Steal the thing that people love about themselves and sell it back for the price of the product”
Influence Peddling
Well known internet celebrities are getting sponsorships from some well known corporations – but not all. The reason is clear – these people have the ability to influence the opinions and interactions of their community. However, if the sponsor has a terrible product, that same influence can turn against the brand and the influencer in an amplified manner. It is clearly in the brand’s best interest to match the product with the message of the influencer and vice versa.
Everyone is an influencer within their own knowledge inventory
A mechanical engineer can influence the professional community of engineers. A math teacher can influence students. A police officer can influence citizens. A patriarch can influence an extended family. A big brother can influence a little sister. Taken together and segmented across a hugely diverse knowledge inventory of human civilization, everyone is an influencer of everyone else.
Printing Social Currency
So instead of going to work to to earn money, people could just as easily go into their community to earn influence. Brands can sponsor people based on their knowledge inventory to use, share, organize, and improve communities and products. The most successful product will be those that help people to improve their communities. As such, brands and products will likewise benefit from stronger and unified communities. Products that weaken, marginalize, oppress, or isolate people from their communities will fail.
The Invisible Hands of Social Capitalism
Nothing economic can happen until people get together to build something. Strong linked communities will get together to build “economic” things. What they choose to build will become the value generation mechanisms of the future economy that will transform social value back into financial value. Like Adam Smith’s invisible hand of Market Capitalism, the Invisible Hands of Social Capitalism will reward people for organizing themselves to make what they enjoy most and are naturally talented in producing. We’ll call them “Recorporations“.
Creating value in the age of distributed capitalism - McKinsey Quarterly
One way for executives to shake up their strategic thinking is to start with the radical question of how a mutation could destroy the boundaries of their industries. In my mind, that danger increases under the following circumstances:
- The products or services you offer are affordable to few but desired by many.
- Trust between you and your customer has fractured. The average person’s trust in business has been in steep decline for the past 30 years, and the distance between what today’s businesses can deliver and what individuals want is only growing. This problem makes all consumer-facing industries—especially financial services, health care, insurance, autos, airlines, utilities, media, education, and pharmaceuticals—particularly vulnerable.
- Your business model is concentrated, with a high level of fixed costs, a large percentage of which could be distributed, delegated to collaborators, or shifted to the virtual world. Here, too, most existing industries are deeply vulnerable.
- Your organizational structures, systems, and activities can be replaced by flexible, responsive, low-cost networks. A neighborhood watch, citizen journalists, online peer support, and peer-to-peer reviews and information sharing are all examples.
- There are hidden assets, outside institutional boundaries, that are underutilized but could replace your fixed costs, add capacity, or add new capabilities.
- You don’t have all the tangible or intangible assets required to meet your customers’ needs.
- Your end users have needs and desires that you haven’t imagined and have no way to learn about. Unless you make a strategic commitment to explore I-space, you’ll learn about this vulnerability only when your end users migrate elsewhere. This has already been the experience of executives in industries such as recorded music, newspapers, broadcast news, and travel.
State of The Blogosphere — Infographiclabs
First published on The Blog Herald.
Best Buy Prediction Market Videos
“Big companies are like communist countries – we all know how well communist countries worked. At some point they fell apart, not because the leaders were dumb, but because nobody would tell the leaders at the top, who had to make decisions, what decisions to make.”
Jeff Severts, EVP, Best Buy
Think of the possibilities! Tapping into the wisdom of the crowd is the new way of predicting future outcomes.
Doc Searls Weblog · Beyond caveat emptor
Talk about asymmetry. You are no longer just a client to a server. You are a target with crosshairs on your wallet.
Trying to make advertising more helpful is a good thing. Within a trusted relationship, it can be a better thing. The problem with all this tracking is that it does not involve trusted relationships. Advertisers and site owners may assume or infer some degree of conscious assent by users. But, as the Journal series makes clear, most of us have no idea how much unwelcome tracking is really going on. (Hell, they didn’t know until they started digging.)
So let’s say we can construct trusted relationships with sellers. By we I mean you and me, as individuals. How about if we have our own terms of engagement with sellers—ones that express our intentions, and not just theirs? What might we say? How about,
- You will put nothing on my computer or browser other than what we need for our relationship.
- Any data you collect in the course of our relationship can be shared with me.
- You can combine my data with other data and share it outside our relatinship, provided it is not PII (Personally Identifiable Information).
- If we cease our relationship, you can keep my data but not associate any PII with that data.
- You will also not follow my behavior or accumulate data about me for the purposes of promotion or advertising unless I opt into that. Nor will your affiliates or partners.
I’m not a lawyer, and I’m not saying any of the points above are either legal or in legal language. But they are the kinds of things we might like to say within a relationship that is symmetrical in nature yet includes the kind of asymmetry-by-choice that Joe talks about: the kind based on real trust and real agreement and not just passive assent.
Use Value Network maps to understand how your organization works | Conversational Currency
We usually look at organizational networks at three levels. The first (described as a knowledge factory) is at a strategic level, built on the high-level inventory of an organization’s intangible capital. Today, I’ll talk about the next takes the perspective of the knowledge factory down one more level of detail (third perspective, personal networks comes tomorrow).
This perspective looks at the roles people play in your organization. This is the Value Network methodology described by Verna Allee in
The Future of Knowledge (still one of my favorite books on the knowledge economy and why I pursued certification in this methodology*).
This approach involves mapping a network where a specific task or process occurs. The nodes in this network are “roles.” A role speaks to the specific function that a person is playing. This is not their title on an org chart—it is usually more descriptive—such as advisor, buyer, designer, marketer, mentor, partner, problem solver. It is common for a person to serve in more than one role.
Once you identify the roles, then all the different “exchanges” between roles are catalogued and mapped. An effort is made to identify both tangible and intangible exchanges. Delivery of a product, document or money is a tangible exchange. An intangible exchange is something like the sharing of knowledge, an introduction to someone else or personal support. Generally, the tangible exchanges are more formal. The intangible, while less structured, can be critical in creating trust and facilitating better communication in an organization.
Please Vote for The Ingenesist Project; SXSW
The Ingenesist Project has submitted the following presentation to the South By Southwest Conference in Austin Texas on March 2011. We sincerely encourage our readers to vote for this presentation. It promises to be hugely compelling, deeply controversial, and boldly disruptive. This is for a 60 minute solo presentation to the Advanced Technical Track – the competition is impressive. Voting ends Friday August 27, 2010
Please select the following link to vote
Thank you very much for your support
The Ingenesist Project
Description:
Today, we have one of the most extraordinary opportunities in human history playing out before our eyes. Social Capitalism is no longer merely a band-aid for an amoral Market Capitalism, it is a new form of Capitalism in it’s own right.
In the age of social media, many entrepreneurs no longer allocate land, labor, and financial capital as a primary means of production. Rather, they deploy social capital, creative capital, and intellectual capital to the production of a vast amount of “value” that is stored and exchanged in communities. The objective of The Ingenesist Project is to make this value tangible outside the constructs of government and corporate interaction.
This presentation identifies the five essential components of Market Capitalism and demonstrates similar elements emerging in social media. It then specifies how these elements can be integrated to perform the essential analogous functions of financial institutions. Next, we specify three relatively simple social media applications that may create a new class of business plans enabling millions of social entrepreneurs worldwide. Finally, a new financial instrument is described which can be capitalized and securitized to form the basis of a fungible social currency to hedge the dollar.
The net result could create a condition where Wall Street priorities are subservient to social priorities rather than social priorities being subservient to Wall Street priorities.
Questions Answered
What can replace market capitalism when it finally runs out of steam?
What exactly are people producing when they engage in Social Media and why does it create value?
What characteristics must a social currency have in order to be fully convertible or even a replacement for the dollar?
What is a knowledge inventory, how should it be formed, and why should every community have one?
What would be a powerful strategic plan for the Internet in the absence of one today?
[Level Advanced Category Entrepreneurism / Monetization Tags monetization, Social Capitalism, Social Currency Type Solo Event Interactive 2011]The presentation will mirror some content found in the following video series
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The End of Management - WSJ.com
The weakness of managed corporations in dealing with accelerating change is only half the double-flanked attack on traditional notions of corporate management. The other half comes from the erosion of the fundamental justification for corporations in the first place.
British economist Ronald Coase laid out the basic logic of the managed corporation in his 1937 work, "The Nature of the Firm." He argued corporations were necessary because of what he called "transaction costs." It was simply too complicated and too costly to search for and find the right worker at the right moment for any given task, or to search for supplies, or to renegotiate prices, police performance and protect trade secrets in an open marketplace. The corporation might not be as good at allocating labor and capital as the marketplace; it made up for those weaknesses by reducing transaction costs.
Mr. Coase received his Nobel Prize in 1991—the very dawn of the Internet age. Since then, the ability of human beings on different continents and with vastly different skills and interests to work together and coordinate complex tasks has taken quantum leaps. Complicated enterprises, like maintaining Wikipedia or building a Linux operating system, now can be accomplished with little or no corporate management structure at all.
That's led some utopians, like Don Tapscott and Anthony Williams, authors of the book "Wikinomics," to predict the rise of "mass collaboration" as the new form of economic organization. They believe corporate hierarchies will disappear, as individuals are empowered to work together in creating "a new era, perhaps even a golden one, on par with the Italian renaissance or the rise of Athenian democracy."
