The democratisation of financial capital

April 22nd, 2011


Which business, which industry, which NGO or political organization, democratic or otherwise has not been touched by the impact of our most recent communications revolution? In a breath it seems, businesses defined by their socialness, community, and peer to peer interactivity have erupted in complete violation of the orthodoxy of traditional business, and how that business is made: controlled access to stuff, to information. This is the Gestalt Switch –  today people are using communication technologies to get what they want and need from each other rather than through existing organisations and institutions. Why? Because those institutions have been recognised as being unable to deliver on their promise to society. Because they abuse their position of power, because they lose sight of why they were there in the first place.

So why is access to financial capital any different? In No Straight Lines: making sense of a non-linear world, I make the case and argument that as our world has become increasingly unfair, to the point whereby that unfairness is highly corrosive, people will take action, political action, dramatic action, action with consequences. It is no accident that today, communications tools are being wielded as powerful agents of political change. As much as everything ‘digital’ has affected our world, the point is we are in a social revolution not a technological one. And, as much as we have seen profound change in certain areas of society, the owners of monetary power (banks, venture capital, financing) have seemingly been unaffected by the disruptive energy of a non-linear world until now, other than by their own doing. But what the banking crisis demonstrated is how dysfunctional finance and money markets have become, not only in venture funding and lending but in pensions, the managers of which know they will never be able to properly pay back to society.

So at either end of people’ lives; the creation of jobs and then a happy retirement, the system which should support that has failed. Its not failing, its failed. So where do the new entrepreneurial companies that create the new jobs come from? How will we finance our retirement? We need novel ways to make this all happen.

In the same way that Martin Luther used Gutenberg’s printing press to reform the church, organisations such as GrowVC, or Profounder or Kiva or Zopa, or Kickstarter, to name but a few, are also part of this challenge to financial hierarchies and their positions of power that now serve themselves rather than society at large. And this process is starting to accelerate, (see the Startup Exemption Petition)

Disruption does not ask permission

So disruption does not ask permission, and it never comes from the centre, the future of investing and the kickstarting of innovation requires radical new ways of funding and this will have a significant impact on society. This innovation will flatten  powerhouses of financial capital and if the idea proves as exciting as the ideas explored and brought to life in the writings and pamphlets that led to the French Revolution, then that idea will spread. As Tony Judt wrote in, Ill Fares the Land, (review)

By the time the revolution broke out, this new language of politics was in place, and in so doing discredited everything that had gone before it.

And once you have stormed the Bastille, you don’t go back to your day job. Who is an entrepreneur? Who is an investor? Who has the right to be either? Such perspectives are as skewed as the myopia of those that whinge about professionals and amateurs, and how the internet has destroyed culture. The question to that is who owns culture and who makes it? What we are seeing is a decoupling from the belief systems that have defined our world for generations.

In this process of the democratisation of venture funding, and the creation of a new innovation eco-system (to accelerate deal flow, that creates more companies and that creates more jobs), it has been reported back to me that some American’s believe this could be the re-invention of the American Dream. And Ross Dawson suggests, that a significant shift in capitalism could be coming. As head of vision at Grow Venture Community (GrowVC), I have watched these developments with great interest. I think, in the same way that micro loans work in many countries, rather than pointing to such financing models as ‘only for the really poor’, there is a more fundamental dynamic at work here, that participatory human systems when connected by the connective tissue of communications media can do some extraordinary things. It also I think breaks down the false barriers between who can and who cannot engage in wealth and value creation. This false distinction has corrupted many in their greed, consequently hurting society per se. As John Kay wrote, “Capitalists, are capitalism’s worst enemy – and particularly the market fundamentalist tendency which has been in the ascendant for the last 20 years”. And yet many in the finance and banking world cannot accept even though they were bailed out by states around the world paying millions in bonus’s is fair. In the same way Ann-Marie suggested the starving in the streets of Paris ‘eat cake’, the financial institutions has become detached from understanding their role in the wider society (read here for a selection of posts that explores these issues). So change is gonna come,

Ross believes,

While we supposedly live in a capitalist society, the potential is for new and more open structures to create far better use of capital than we have today. A more fluid form capitalism could transform business and how individuals create value.

The Wall Street Journal,

Federal securities regulators are weighing demands to make it easier for fast-growing companies to use social networks such as Facebook and Twitter to raise money by tapping thousands of investors for very small amounts of shares. The Securities and Exchange Commission is looking at adapting its rules to encourage Internet-age techniques for small companies raising capital. The issue is part of a wider review by the agency into whether to ease decades-old constraints on share issues by closely held companies.

The use of “crowd-funding” techniques has spread in recent years from artists looking to fund creative works to entrepreneurs trying to expand their firms. In a typical example, a company looking to raise $100,000 would use an Internet site to invite investors to buy as much as $100 of shares each.

If all goes well, small companies can raise cash relatively cheaply, while investors get a stake in an innovative business with limited downside risk. The SEC is now considering calls to relax its rules to make it easier for companies to use crowd-funding without having to undergo the full panoply of disclosure and other legal requirements required by the securities laws for share issues.

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Entrepreneurship, innovation and the future of the European economy

April 18th, 2011

The presentation that I gave in Athens last week.

Creating a culture of innovation in Europe

April 13th, 2011

This week is an event hosted in Athens (YES Execom) which brings entrepreneurs together from around Europe to discuss how innovation and entrepreneurship is going to play a key role in how Europe progress’s from our current crisis, exacerbated by the collapse of the banking industry to becoming globally competitive once again.

My presentation will focus on: Entrepreneurship, innovation and the future of the European economy. And I will be making two central points [1] we need to think differently about innovation and the businesses we are trying to create, this requires what I call a non-linear approach, which requires us to creatively design innovative businesses in very different ways. Being literate in tools, software, eco-systems, platforms, processes, legal frameworks, understanding human motivation at a deep social level, for example, are all part of this way of thinking and designing. Here are a couple of presentations that explore this theme (mobile and institutions), (designing for innovation in a non-linear world: presentation 1presentation 2).

[2] Creating innovation eco-systems at a national and European wide level is also central to deciding whether we will compete successfully or not. Something which I argue we currently do not do well. This is not something that we can afford to pay lip service to, creating such an eco-system requires serious effort and cooperation.

The event has been convened, by the Hellenic Ministry of Foreign Affairs, and the Ministry of Regional Development and Competitiveness.

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Juliana Rotich of Ushahidi in conversation

April 12th, 2011

Ushahidi (Testimony) inspires me, because it was created from nothing, with no money, it demonstrates what true entrepreneurship can do. It also inspires me because like any good piece of work that is true to the age we live in it brings with it the hand of humanity. From Kenya, to Chile, Haiti, Queensland in Australia Ushahidi as a crisis management tool was of course deployed in Japan. Juliana Rotich discusses the platform with and how it can help people in a crisis.

In Lewis Hyde’s book The Gift he writes, the hegemony of the market can undermine the possibility of gift-exchange, the esemplastic powers can be destroyed by an overvaluation of analytic cognition. Ushahidi is a gift to the world and asks nothing in return.

Juliana Rotich about Ushahidi’s Crisis Mapping in 280 seconds from 99FACES on Vimeo.

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Alan Moore Intersections video

April 8th, 2011

The video of the presentation that I gave at the Intersections conference in Cornwall. In which I argue that we are not in a technological revolution but a social one, and in the face of faultlines appearing in our economies, and throughout society and indeed the institutions meant to be helping us; government, healthcare, education. We face a design problem. The question is then how do we know how to design and bring into the world sustainable answers to intractable problems? My slides are available here at slideshare. Pre-register for No Straight Lines: making sense of our non-linear world

Intersections Day Two: Alan Moore from Dott Cornwall on Vimeo.

The rise and fall of information empires

April 6th, 2011

In his review of Tim Wu‘s recent book, The Master Switch John Naughton asks at the outset, “At the heart of this fascinating book is one of the central questions of our age – rendered more urgent by recent events in the Arab world. The question is this: is the internet a revolutionary innovation, something that will overthrow the established order? Or will it turn out to have been just an unruly technology that the ancien regime will eventually capture and subdue? Faced with the upheavals triggered by the network so far in economics, social life and politics, most people would probably say that the internet is indeed sui generis. But Professor Wu is not so sure, and therein lies the importance of his book. If the internet does indeed succeed in escaping the controlling embrace of corporations or governments, he argues, then it will be a historic first. For every other modern communications technology – telephone, radio, cinema and TV – has eventually succumbed to these forces.”

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Qustodian the complete marketing channel

March 28th, 2011

Brian Jacobs, is a partner with me involved with the innovative revenue-sharing Qustodian mobile commerce platform. Brian has written something that all media, agency, telco, brands should read and reflect upon.

Brian writes,

For several years now, it has been ‘the year of mobile’. And yet despite everyone’s best efforts, it hasn’t really happened yet, has it? Why might that be? There were several opinions expressed at MediaTel’s recent ‘Come on Mobile..Stand Up and Deliver’ event.

Potentially mobile offers commercial users a truly unique integrated channel.

First, mobile is personal; much more personal than any other channel. This is a benefit and a problem. A benefit in that if consumers are prepared to accept messages, and if they’re prepared to participate in a dialogue with a brand then the result is a truly engaged consumer. On the other hand if consumers just tolerate irrelevant messages from advertisers they care little about, then the result is…well, at best an irritated customer, and at worst a customer for whom hell will freeze over before he or she ever buys anything from your client ever again.

An illustration – a while ago I received a text from an insurance company asking me if I would be interested in a quote for business insurance. I don’t remember giving this company permission to contact me; and I don’t know who to be most irritated with – the company or Vodafone. Yes I run a small business, and yes I have business insurance. Does that make me a likely member of the target market? I would say no – because at no point did I knowingly give permission for anyone to contact me. I suspect my operator would say yes – I’m in the target market, as I opted in (or failed to opt out), even if unknowingly.
It seems to me that simply assuming that consumers are prepared to be contacted if they’ve opted in, or not opted out is incorrect. Certainly they may have consciously agreed to receive messages, but we all know that the opt-in process generally works passively, rather than actively. This is not right – and furthermore raises a huge question: who controls what is done with data about me? I think that when it comes to the most personal channel – my mobile phone – then I should. I want to be in control; I want to decide who I hear from.

Our mobile marketing channel Qustodian ( launching in the UK later this year following a successful launch in Spain puts consumers in control. They decide who they hear from; they control their data; they benefit (in cash) from the use to which their data is put; and they decide whether to stay with us, or cancel their involvement with us – something they can do at any time.

But Qustodian is a very small player compared to the major operators. For this medium to really take off it needs the big guys to start applying certain principles around active opt-in and active consumer participation, as opposed to believing that passively collected eyeballs, maybe modified by a broad discriminator such as a location in any way equals engaged consumers.

I believe that mobile can deliver engaged consumers. It can be used for messages in virtually any format – including film, text, static images. It can be used to guide consumers through multiple materials on multiple screens within one campaign. It can offer promotions. It can transact. It can measure effect. Every click is collected and can be used to measure the effect of any activity.

So why aren’t advertisers queuing up to use this new medium? Why aren’t the agencies recommending it? Is it, as one speaker at the MediaTel event suggested because everyone is still obsessed with TV (an odd remark coming from an organisation that itself spends tens of millions on television, presumably because it works for them)? Of course not.

Is it (as was also suggested) because the measurement is imperfect? But as we’ve seen, it’s potentially superior to anything from a 5,000 homes panel, or from an online system that doesn’t identify individuals. Can’t be.

Or is it because agencies can’t make money from mobile? But what about agencies’ vaunted ability to offer media neutral thinking? Surely not.

I think the real reason is that mobile isn’t really an advertising medium at all; it’s a complete marketing channel with everything that that implies. I’m not sure that we are yet able to think of mobile as anything other than an advertising vehicle. And, until we are, until we learn to think in a different way about communicating with customers, until we turn all the talk about integrated thinking into integrated action, mobile won’t fulfill its huge potential.

SMLXL posts on mobile commerce

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A sociedade a economia no straight lines

March 23rd, 2011

Article published in HSM Brazil on the forthcoming book No Straight Lines

(Download 40-47_Alan Moore)

The society and the economy of No Straight Lines

The society and the economy of No Straight Lines

Bill Drummond and the 17

March 17th, 2011

I really enjoyed this video – question is this a story about performance art, or is it a story that requires us to suspend disbelief and see the world and our relationship to each other in different ways? A great Do Lecture.

Mobile culture and commerce for cultural institutions

March 9th, 2011

Today I spoke at a conference on how mobile communications can be transformative for cultural institutions – my keynote was called Assets and Access in the Cultural Sector. The overview of the event organised by Camerjam, and Spark are was that exploring the use of mobile technology by cultural organisations they could; generate new content and revenue streams, discover innovative ways to communicate with audiences, exploit content and exhibition archives, and develop new partnerships, and I did my best to explore what that meant. So here are my thoughts, I hope it proves useful food for thought. The quality of the speakers I saw was very high.

#camerjam #mobileculture

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