Information, knowledge and innovation are distinct phases of human intellect which are profoundly related. The vehicle for transformation across these phases is the “conversation”. As the medium of exchange, the conversation acts as a currency. The speed at which these exchanges take place defines the value of a market – a good party is where everyone is engaged. A good time is of the essence.
Changes in the value of the market defines the potential for value creation through conversation – a great party pulls more people into engagement and becomes a social movement; i.e., a marketing success.
Currency (money) and Current (time) and Current (force) are similar too!
Conversations exist as a state of shared information tied to a common and progressing theme. The internet enables the propagation of conversations from two persons to millions of people. The propagation of conversations is dependent on interest rates of the audience. The rate of propagation accelerates with the transformation of information into knowledge by others in it’s path. People are driven to entrepreneurial action when the alignment of information matches the environment that they observe.
Conversation is Currency
Currencies come in many different forms and the best ones are convertible – or can be transformed – into other currencies. Our objective is to convert social currency, creative currency, and intellectual currency into a universal currency such as, but not necessarily, money.
Anything of value such as an option to exercise an action at a later date, or an equity position in the actions of others, or a mentorship opportunity with a great teacher are all convertible currencies. Of course, this is nothing new; we pay money to buy a book, take a class, invest in start-ups, and teach our children.
An End to a Means:
What is new is that social media allows us to convert the other currencies before, after, and in between the conversion to money. The option to convert to money is simply an option like any other option, not necessarily a means to an end.
Obviously we could pay money to buy a book, use that book to teach our children and hope our children can start up a new company, etc. However, suppose we could pay money to buy a book, improve the book by adding information shared by others, teach hundreds of other people how to apply the ideas to their start-up, take an “knowledge equity” position in those hundreds of start ups, have access to the data that they produce, and write a book that improves the likelihood of successful start-ups.
The Interesting Thing About Interest Rates
The next economic paradigm will introduce thousands of convertible currencies in the form of infinite conversations. Those currencies will be converted in infinite combinations for infinite applications each adding value to the conversation. Relational data aggregation will match most worthy currencies and social vetting will manage the production process. The corporate silo can never form; therefore the exploitation of creativity. Interest is not measured in terms of risk, but rather in terms of productivity and deficit spending is impossible.