Money as trust
Money as trust
I heard an interesting comment made during Davos (I wasn’t there, but was listening to Bloomberg Surveillance) about the economic situation. One Davos participant said that it’s all a matter of trust. He hit the nail right on the head. Everything that you see happening right now is about trust, because trust is the foundation of money.
Remember the lesson we discussed recently: money is essentially a medium of exchange and a store of value. I trust you to represent yourself and your value accurately, and you trust me to do the same. Money flows between us, and business is done.
This is why, by the way, trust cannot be a commodity or a currency, as Julien Smith once posited – trust is a meta-quality of currency but cannot be currency itself. Let me put it another way. (Julien and Chris Brogan will be publishing a book about the topic of trust as currency, which I look forward to debating)
Money is a tangible form of trust.
If I write on a sheet of paper that this paper note is redeemable for one iPod, is that paper worth one iPod?
It depends. If you trust me and believe that I’m acting in good faith, and that I have that iPod, then yes, that paper is worth one iPod.
If you don’t trust me, then that note is just a sheet of paper with words on it.
Trust powers currency. The only difference between my sheet of paper worth an iPod and a sheet of paper from the government of the United States (besides obvious physical differences) is that relatively few people trust me, and a whole bunch of people trust Uncle Sam. If I do business with my close friends, that sheet of paper has as much purchasing power as Uncle Sam’s sheets of paper.
Our current financial crisis ultimately comes down to a lack of trust. We don’t trust realtors to accurately represent the price of a home, so we don’t buy. We as buyers and taxpayers don’t trust appraisers to accurately assess the value of a home. The real estate market tanks. As values go down, investments based on that real estate collapse.
Banks don’t trust each other’s investments because of poor practices, and so interbank lending and lending to consumers dries up. Banks conserve cash because they don’t trust.
And here we are. No trust anywhere in our institutional financial system is what’s ultimately causing it to malfunction. This, of course, has real consequences as investments decay, the job market deteriorates, and the overall economy grinds to a halt.
What ends this crisis is whether our trust can be regained by corporate America and the government. What ends this crisis is a re-establishment of trust – and as anyone knows who has violated or had their trust violated, that takes a long time, a lot of forgiveness, and a clear record of performance, of living up to promises in an unbroken record.
This is where social media is a start – authenticity, transparency, and humanity in our communications with others. Not PR. Not corporate-speak. Relationships we can begin to trust. When you talk to Pamela O’Hara or Greg Cangialosi, you’re talking to human beings who represent their companies, but the trust you have in them is at the human level.
If companies want to restore profitability and growth, they have to fulfill that trust. There’s a reason we say that brand is a promise. Fulfill that promise, earn back trust, and you will prosper. Violate that trust and in this fragile economic environment, your company disappears.
What should YOU be doing right now, in this economy? Building trust. Building relationships. Strengthening your network. Growing your network. Why? Relationships can exist without money – barter, trade, collaboration. Money can’t exist without relationships, because without trust, money itself fails.
Who do you trust?
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Fun With Journchat
Fun With Journchat
Last night I decided to give Journchat a spin, which is a Twitter-hosted discussion of journalism topics between PR folks and journalists.
Question: As a journ, who should I follow on Twitter to ensure my newsroom is on top of breaking news? (quick one) #journchat
Not a person, but topics. Try jargon for your news vertical in search.twitter.com like FAFSA or JPM or IMDB.
If you think news is happening somewhere, do location in search.twitter.com to see if there’s a mention.
if you want breaking news, tie a search from search.twitter.com RSS to an RSS->SMS service. Text to your phone of breaking tweets.
Connect Twitter RSS to Yahoo Pipes, filter, then send to Google Reader. See www.FinancialAidPodcast.com/twitterbook
You should also be using marketing tools like Google Trends, Insight for Search, etc. to find trending topics.
Plug in every kind of RSS search – Twitter, Google News, etc. – into Google Reader to find stories, esp. overnight.
Question: What do u think of The Big Video Debate: Rough or Slick?
Slick or rough matters less than relevant.
Crappy video in HD is still crappy video. Instead of spending money on HD, spend less money on a stabilizer!
If you want to try slick video on a Mac, look into the free software CamTwist. Text, crawls, logos, etc.
@howardkang and every reporter regardless of medium should carry a Flipcam or other pocket camera.
I carry a Nikon D90, Flipcam, and Samson Zoom H2 all the time, just in case. Have gotten decent local stuff.
Question: Journs and bloggers: how do you use twitter/online to source stories?
I use every channel available. Bloomberg, Twitter, Facebook, CNN, whatever has the info I want for my blog/podcast.
I do a lot of financial services writing, so Google Finance, Econoday, and friends on Twitter all are sources.
Twitter is great for reality-checking a piece and getting immediate feedback, esp. fact check. 4,800+ friends = fast checks.
Question: What do journs need and/or look for in a web 2.0 press room? (source’s site)
I need to see obvious contact information, multiple channels. Don’t make me hunt you down or I won’t bother.
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Pixelated Business Marketing Conference
Pixelated Business Marketing Conference
A while back, Mitch Joel posted his Pixelated conference series, a collection of seminars and sessions from conferences that contain the “best of the best” for any set of topics. I’ve been so busy doing stuff that I never got around to putting mine together until now. This version of Pixelated is focused on Business Marketing – ideas from sales, marketing, branding, and new media that should help any business do things a little better.
If this were a conference, a real life conference, I have no doubt that attending it would cost you thousands of dollars, at least for the first sessions. Thanks to the exceptional generosity of conferences and events who post their sessions, you can enjoy some of the best content on earth without leaving your chair.
Treat this as an actual conference. Take a day or half a day to watch the videos and give them your undivided attention. Have a bottle of water, a notepad, and an open mind as you watch the sessions, as if you were actually there.
Rather than just a pile of videos, I’ve also added brief annotations about why I think each session is important.
Updated: refreshed for July 2010, with some new sessions from TED and other shows.
Pixelated Business Marketing starts… now.
Seth Godin @ TED: This is Seth’s newest set of perspectives, based on his book Tribes. The evolution of marketing from mass media to hero culture of sorts.
Rory Sutherland @ TED: An amazingly funny and insightful talk about the creation of non-tangible value.
Malcolm Gladwell @ TED: This session ranks super high on my list because Malcolm gets you to think outside the box. What product or service do your customers deeply want but don’t know it?
Joseph Pine @ TED: If nothing else, this talk should make you think about what experiences are and how to give them to customers, rather than products or services.
Dan Ariely @ TED: Dan’s book, Predictably Irrational, is the basis for this talk about how our decision processes are flawed, including why consumers buy things they really shouldn’t.
Garr Reynolds at Google Talks: Garr is the author of Presentation Zen, a phenomenal book that asks you to look at how you present information and how you can make your presentations better, more impactful, and less boring.
Avinash Kaushik at Google Talks: Avinash is pretty much THE bottom line when it comes to web analytics. In this talk he goes over a good chunk of his book and also talks about data-drive corporate culture and its importance.
Seth Godin @ Inbound Marketing Summit: Seth is a master marketer. His talk goes over how you can make your products or services more remarkable.
David Meerman Scott from Inbound Marketing Summit: David’s book, the New Rules of Marketing and PR, power part of this talk as he goes over how the ground is changing underneath traditional business outreach.
NEDMA: I talk about email marketing and social media integration.
Optimization Summit: I talk about the best practices of email marketing.
Inbound Marketing Summit: I talk about whether or not your business should be podcasting.
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Monetization and social media
Monetization and social media
Get rich quick! Quit your day job! Money while you sleep! All claims made of social media and virtually every other new technology, idea, or movement since mankind first created money itself. Can you make money in social media? Should you make it an aim?
To answer this question, we have to dig into the history and concept of money itself.
What is money?
Ask any child and most adults, and no one will have a coherent answer to this question. People know money by what it can do, but not what it is. The classical definition of money is a medium of exchange, a measure of account, and store of value. For the purposes of this discussion, we’re going to focus on a medium of exchange and a store of value.
A Medium of Exchange
Before money, we had barter. Let’s say I raised chickens and you raised cows. If I wanted some beef and you wanted some chicken, we’d get together and trade. We’d negotiate how many chickens equaled a cow, and vice versa. If all went well, I went home with some beef for my family and you went home with some chicken.
But… what if you didn’t want chicken? You had beef, and I wanted beef, but you didn’t want chicken? Suddenly, I have a problem. We couldn’t trade. No amount of chicken I had would be helpful to me if you didn’t want chicken. I’d have to find someone who wanted chicken and see what they had to trade. Maybe they had seashells, and you wanted seashells, so I’d have to trade chicken for seashells first, then find you and trade seashells for beef.
This got really inefficient around Greek and Roman times, which is when currency got invented. Suddenly, we have a neutral intermediary. I think chicken is worth 5 copper coins, and you think cow is worth 250 copper coins. Now, if I have chicken and you have beef, but you still don’t want chicken, that’s fine. I’ll find someone who wants chicken and trade with them for copper coins. Then I’ll come back to you and buy as much cow as I can with the same copper coins.
This is one of the core roles of money – instead of having to barter everything, you can trade in a generally accepted medium of exchange.
A Store of Value
Here’s another problem with barter. Let’s say instead of chicken, I have wheat. You have cows. During harvest season, we can trade. I’ll trade you a few bales of wheat in exchange for a cow. Everyone’s happy.
What about in the winter, though? I have no wheat. All my wheat either got milled into flour, sold, consumed, or… spoiled. Wheat is transitory. Wheat spoils, rots, molds, etc. if you don’t use it within a certain period of time. In fact, most consumables eventually spoil.
Here’s where money comes in again. I go to the market and trade my wheat to someone who wants it. I get copper coins. Unlike wheat, these don’t spoil, decay, or rot. (yes, they do oxidize, but that’s a different conversation) If I sell enough wheat, I amass a large pile of coins and throughout the non-harvest season, I have copper coins to buy things with.
This is money’s role as a store of value. It takes the fruits of my labors – wheat – and stores it in a form that’s less subject to spoilage. Also, it’s a lot easier to carry around a pile of coins than a bale of wheat.
What does any of this have to do with new media and social media?
If you are a social media practitioner interested in earning money for your skills, you have to deeply understand money first.
First, money is a medium of exchange for other goods and services. Money doesn’t solve the value equation – that is, what you do must have value to someone. Money only makes trading value easier. If what you do is of no value to anyone, then like the farmer facing no demand for chicken, no matter how skilled you are, no one will trade with you. As a social media practitioner, your work has to have value.
The most successful social media practitioners recognize that social media in and of itself is of relatively little value. It’s a communications channel. What is of value is what you deliver to your audience. I deliver, for example, financial aid information on my Financial Aid Podcast. The fact that it’s a podcast has no inherent value; what has value is the quality of the information.
If you’re considering offering up your services to someone else as a social media practitioner, make sure that they have something of value to offer their customers, or both you and your client will fail to generate any business. Your own track record must demonstrate that you understand underlying value and how to present it in a social media context.
If you’re considering engaging the services of a social media practitioner inside your company, look to see how adept they are at understanding value. Forget how many friends they have or how often they blog – look to see if they can communicate their own value and the value of their clients’ goods and services to others. Examine their other work and see if it conveys well the value of the client’s goods and services. Most important, recognize that a truly skilled social media practitioner will decline to do business with you if your offering has no value.
Second, money as a store of value is vitally important to social media practitioners. Like all industries, social media, new media, online media, etc. all have trends. There’s a new shiny object every day, and that presents new opportunities for you to demonstrate your skills and earn some money in doing so. You have to not only capitalize on trends, but sock those earnings away. You have to be able to store the value of a trend so that when it cools – and it always does – you have a strong base of capital to operate with.
Equally important is your ability to recognize value and trends ahead of time so that as a platform matures – as blogging has – you’re ahead of the curve and in new spaces. This is the often referenced blue ocean strategy, where there’s virtually no competition in any vertical in a new area. Blue ocean was podcasting in 2005, blogging in 1997, Twitter in 2006, Facebook in 2004 and so forth. As a social media practitioner looking to earn a living at your craft, you need to be able to spot new blue oceans and move in long before others do, while recognizing that it will be some time before that space is highly desired by a large population.
For companies looking at social media, recognize that the store of value means you need operating capital and strong revenue streams today from your social media efforts, but you need to be investing for the future as well. Your internal financial health will dictate how you prioritize investing for the future vs. banking on what’s hot today.
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Make your social media experiment useful
In reading the latest “controversy” in social media about Burger King’s ad agency tweeting on behalf of the client and the furor over authenticity and transparency, I came to this conclusion:
Burger King needs a new agency.
If you haven’t been following along, here’s the very short summary. CP+B is the agency in question tweeting as the fictional King character for Burger King on Twitter. Some social media folks object to a lack of disclosure by the agency, a lack of authenticity.
Here’s a different perspective on the issue: ROI. What in the world was CP+B thinking? I’d love to see even a back of the envelope ROI argument for creating a Twitter account for a fictional character to sell sandwiches, which is the whole point of Burger King.
Forget about transparency, authenticity, and whether or not an agency should tweet as a client. What in the world is the ROI or even apparent value of this initiative?
Here’s how I would have handled a client’s request to be engaged on Twitter: create a Twitter bot that you can message with your current location. It returns the three nearest Burger Kings so that you can get something to EAT, since the whole point of Burger King is to provide something for me to eat. I’d use it in a heartbeat when I travel. If Burger King and CP+B approached Twitter or social media in general from the perspective of being USEFUL, they’d get more sales and a measurable ROI.
It’s absolutely true that you can’t get precise ROI on social media. My work for the Student Loan Network means that ROI gets fuzzy, but the business connections, enhanced distribution of things like eBooks, inbound links, and other measurable activities are all improved by Twitter and social media. Can I put an exact dollar amount on it? No. Can I say that Twitter has improved the bottom line? Yes. Have I helped folks on Twitter get financial aid questions answered? Yes.
Be useful in your social media experiments. Don’t just do something in social media because it’s what the cool kids are doing. Do something that is useful, that serves a need, and your social media experiment will be a success.
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