A Literacy of the Imagination

a deeper look at innovation through the lenses of media, technology, venture investment and hyperculture

Designing (For) Trust


A few years ago, I discovered a conversational framework in pre-marital counseling that opened my eyes to how trust might actually operate in relationships (you can already guess what happened to my marriage... ;). One of the revelations I had was that you don't just build trust in relationships, you go into relationships having trust in yourself.

I sometimes cringe when people talk about trust as though it is a given, as they tend to gloss over the realities of physical and mental interaction. This is especially the case when people wax on about social business or social technology innovations. But that is all well and good, because it is all part of the process of awareness, and I think the concepts tied to trust are important for people to build upon in their own ways and at their own paces.

We all know that relationship dynamics can be very complex, but I do believe that trust itself is quite simple in its faculty. I've also witnessed some very interesting transformations, both in the startup work I've been doing, as well as in some of the innovation work I've been privileged to be a part of. This is one of several scientific studies I've researched that seem to corroborate what I've experienced in different entrepreneurial and corporate settings. And there is always the inimitable Csikszentmihalyi (tongue-twister!) from which to draw inspiration.

If I were to reduce the essence of trust down to single equivalent, it would be this: love of self. A natural extension of that would be confidence in self. This confidence is expressed quite clearly at the personal and collective levels, and takes on various forms of creative and cognitive energy. Some questions to ask ourselves (per the graphic) might be:

- How do I feel about myself when I enter group environments?

- How do I choose to communicate those feelings?

- How do I express my values in such a way that they can be understood?

- What are my true intentions?

- What are my perceptions of self as I interact with others?

- What are other people's perceptions of me (how do I 'occur' to them?)

- What am I willing to do or contribute to change those perceptions?

- Can I empathize with others and align my values to theirs?

Self-love, of course, doesn't refer to a reliance on Ego (the self-consumed part of it), but rather a completeness or a mindfulness that one can share love and be loved. Confidence, therefore, can manifest as an organic expression of that self-love, and can literally permeate a room or physical space with an incredible aura. In online spaces, it can certainly catalyze the visions or perceptions of what a relationship might become.

Lest we forget that we can design platforms, experiences and/or ideas for trust-building, and we can engage in trust-building exercises, but there is a significant awareness factor that cannot be ignored.

Admittedly, I've made a lot of mistakes in this respect; it's one thing to want to trust someone, but it's another thing to hold trust, earn trust and share trust with other people. I've had a few situations over the last several months in which trust was broken, in part because I failed to see what the the potential for trust could even be. That is something I've had to own as a part of my self-responsibility, my own learning experience. I also have to reconcile with the possibility that perhaps, to those people, I just wasn't trustworthy, for whatever reasons there may be (some of those reasons I'm still trying to figure out and incorporate into my own realm of understanding). On a more positive note, I've also repaired a couple of broken relationships because I was able to communicate my ownership of the issues, and was able to align a set of values with those people.

So, it seems we can design for trust, but we don't actually design trust itself, nor do we really engineer its mechanisms. Then again, who knows what today will reveal. In the meantime, perhaps the graphic at top will help you in your own design work.

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Sorry Jason Calacanis, Google Isn't the Only Game in Town (The Amazon Principle)

Next month, I'll be delivering a keynote at TruEffect's Brand Partner Summit in Boulder, Colorado, on the topic of storytelling and advertising. I've talked a bit about the future of ads in general, in particular as a service industry.

The real context I'd like to address right here -- and what will serve as the backdrop for my talk in Boulder -- is what is actually driving the media ecosystem and respective information systems as a whole.

Right now, Google seems to have the upper hand. But this won't be the case for much longer.

As you may recall, late last year Jason Calacanis wrote a really interesting piece entitled "#googlewinseverything".  The post generated quite a lot of buzz in technology and venture circles for obvious reasons. In the piece, Calacanis provides a list of truisms about Google, saying rather emphatically:

"In truth, the 10 ‘facts’ I’ve outlined above are not mine; these are the opinions I’ve collected over the past year asking intelligent folks, ‘So what do you think about Google?’ These are the 'facts' as the people see them. Although, I haven’t found anyone who disagrees with these 10 facts – do you?"

Well, I'm not going to disagree with Calacanis per se (he has access to a lot more inside info than I do and I have lots of respect for him as an entrepreneur and investor), but I am going to challenge the list of assertions he provides within context.

Here they are, point and counterpoint.

1. No company has as many smart people as Google. -> Define 'smart'. In a 'wicked' complex world, creative intelligence (or 'EQ', emotional quotient) is just as important as quantitative or purely scientific chops.

2. No company is as ambitious as Google. -> Define 'ambitious'. Do you mean to say that a host of companies without Google's market cap or footprint aren't taking on significant cultural mores, or attempting to create massive social change (for the better) -- like Amazon?

3. No company is working on as many hard problems as Google. -> Define 'hard problems'. Defer to counterpoint #2.

4. No company makes as many big bets as Google. -> What kind of bets? With what intentions? Defer to counterpoint #2.

5. No company is willing to make as many crazy acquisitions as Google. -> Maybe so. But there are lots of companies that don't have to acquire as much in order to 'push the envelope' as it were (i.e. market ownership is not the same as market creation...). Defer to counterpoint #2, with the caveat that Amazon is buying a lot in order to strengthen its infrastructure and market positioning.

6. No company has more data than Google. -> Perhaps. But is it all the right/best kind of data? (i.e. Is it clean? Can it be parallel processed? Is it behavioral? Does it seamlessly connect to the knowledge/social graphs? Is it scalable through reference/inferential databases? etc.). Defer to counterpoint #2.

7. Few companies understand how to play the government better than Google. -> Probably the case. But in Google's position, and given backdoor surveillance (as just one example), is that a good thing? More importantly, is Google really influencing policy in the best interests of us (its users)?

8. No company has more global influence than Google. -> Right now, probably true. But that won't remain to be the case. Defer to counterpoint #2.

9. No company is as ruthlessly efficient as Google. -> From my own experience working with Google (Google 'proper' and YouTube), that's simply not true. Great company and great people, yes, but 'ruthlessly efficient', no.

10. Only one CEO is more ambitious than Google’s Larry Page.* -> Jeff Bezos?

As you might've gathered, I have a thing for Amazon. Don't get me wrong, I think the world of Google, but Amazon is a special kind of dark horse (if you can even call a company that big a 'dark horse'). This Atlantic piece, which came out right around the time Calacanis wrote his post, was a really good, balanced take on how Amazon is making seismic moves.

The basic premise -- and my firm belief -- is that any company which thinks the way Amazon does long-term, to include massive financial risks, will 'win' long-term.

Now of course, pundits will say that Google has always thought long-term. That's debatable. Per the (counter)points above, Google has thought long-term about experimental domains like artificial intelligence, quantum computing, sustainable cities and transit, but I would assert that it actually hasn't thought that way about its own $28bb+ core search/ad business.

Here's why/how.

Amazon has just about every asset in the new commerce toolkit, and it's only a matter of time before its search product catches up with its capabilities in content, storytelling (journalism especially), publishing, purchasing, production, cloud/quantum computing and network distribution (private, social and virtual).

Bottom line: with its advanced ecosystem, Amazon doesn't need ads or impressions to rule the web like Google does currently.

If you'd like more validation on this position, check out a wonderfully curated thread my friend Alex Schleber put together in early February -- he poses a great list of questions (probably better than those I did here), and there's lots of contextual grist to explore, replete with great data-points.

The 'battle' between Google and Amazon, as it were, will likely produce cultural tensions that will push all of us to think differently, consume differently, produce more thoughtfully and tell stories with more of a bent towards real social utility. As a result, I think we will see the emergence of a truly co-opetitive economic landscape, in which ecosystems amplify these tensions and create amazing new ways to improve our world.

It will be exciting to watch and participate.

Story Evolutions

Try this mental exercise for a moment: Remove an ad unit or an advertorial or a listicle or an aggregated news feed from your line of sight.

What do you see?

You might find a contextual truth about a person, a company, a place, a region, a mission and/or an idea. Call it 'data'. The substance presented to a 'consumer' (let's call him or her an 'observer' to be a bit more respectful here), and represented through individual and collective narratives, is one that really stretches across time and the imagination itself. Call the substance itself a 'story'.

Any person who connects with a story will retell it and own it as their own -- this has been the case for centuries. Whether that person advocates a product or a service is another matter, but suffice to say, stories told well and curated meaningfully build relationships between people. The participatory nature of storytelling itself is actually what makes media social to begin with. And networks have existed long before the wonders of modern technology such as the telegraph, the phone or the web ever came to be. (Have we already forgotten this?)

As I've espoused for years, the duty of any company is not to manipulate consumer segments or audiences into believing that they need products and services via their 'brand', but to give them questions and/or ideas that empower them to think about why things matter... Whether products and services are sold or not. In turn, a real relationship can be had and maintained, and the opportunities to explore various fictional and non-fictional modalities are abundant (hence the multi-dimensional power of evolving and hotly debated disciplines like 'transmedia storytelling'). Not only that, the functions of a participatory relationship denote untold prospects for co-creating value -- the kind of value that builds better products, empowers employees, creates new markets, and makes honest men and women out of organizational leaders. Believe it or not, that leads to more profit and sustainable revenue streams.

If you want examples (or more of them), feel free to sift through myriad posts on this blog, or gander a presentation or two, and certainly check out some of the folks I mention who are doing great work across domains.

But for now, I'd like to challenge you to expand your thinking: Perhaps it's time we looked past what 'content' can do inside of a search field or a communications plan or on an affiliate link, and think more about what stories can do to transform the way we think about ourselves and our ecologies.

How does this actually translate to better marketing and digital media practices?

How can we monetize products and services without having to sacrifice the integrity of the information we put forth, or more importantly, the people with whom we share our information?

What are we doing to enhance our roles and respective disciplines inside and outside of organizations? (Are we not just relying on automation, compartmentalization and optimization to prove our value?)

Addressing these questions head on is the mark of future success for any company and news organization. You can count on it. In fact, it's already happening.

We are moving from broken economics in media, to a 'new' economic system of story. And story evolutions have always been here for us to use responsibly!

A New Venture Model: '5 and 15'

A couple of buddies of mine (Mike McCracken and Miles Gerson) and I are exploring a new kind of funding model that disrupts the traditional '2 and 20' model. Here are a few main reasons why we've been compelled to do this:

- VCs tend to invest way later stage and are good at sourcing and structuring, but tend to struggle with (or ignore) operational efficiencies. We've known this for a while, but things have come to a head given that a lot of early stage companies that are in revenue are also lacking support in their critical growth stages. Many of these same companies are coming to us for that support, along with help in raising strategic capital.

- Incubators and accelerators have done a great job of helping get startups off the ground, but have significant challenges of scale. At K5, we've been exploring ways to partner better and network the investments for startups we take to the seed through A series raises.

- Corporate venture arms are exploding; I've mentioned P&G-backed Cintrifuse in other posts (a fund of funds model that Mike helped develop through Ernst & Young), but there are many others coming onto the scene, such as this new $100mm fund from Siemens. That said, many of the corporate venture groups we've talked to still lack visibility to new startups 'on the ground' and also have challenges with vetting them. As important, we've seen and heard about lots of acquisitions and early exits go south because of poor integration with corporate business units or as units managing their own operations and P&Ls.

- Family funds are also changing face; some of the family offices we've spoken with are pivoting towards more operational roles inside of their portfolios; much of this has to do with a need for investment transparency and stronger vetting processes.

- On the capital front, crowdfunding is and will continue to transform the business landscape, and the equity crowdfunding space, specifically, is very interesting in terms of accredited investment. We'd like to develop ways to hybridize capital and equity requirements so as to make funding scenarios more flexible and extensible.

So the central idea here is that we can provide operational value to early stage companies. Mike has deep experience running companies and financing them (with UGO entertainment, for example, he raised 13 rounds of funding before they exited), while I have a lot of experience building platforms, developing products and taking them to market, and I've done this both on the corporate side and at the startup level. Miles has solid experience managing a fund, vetting and structuring deals, and has been building up his network on the corporate venture side.

The funding structure itself is still nascent and frankly a little messy, but the notion of '5 and 15' (5% management fees and 15% carry) rests on the premise that we can generate fees from active management of the companies in which we invest. Some VCs we've spoken to have actually said that the trend is dipping below a 2% management fee, but with the caveat that the LP (limited partnership) model is still in place.

I'll share more as we progress with this...

Socially Conscious Investing, Work & World-Building

Happy New Year! 2014 has already proven to be quite fruitful and full of new roads for discovery.

As a follow-up piece to previous posts on conscious capital, co-op investments and discovering value in the age of bitcoin, I thought I would share a video of my talk in Grasse from October. Some of the corporate examples of sustainable innovation you're probably familiar with, but it goes a bit more into how these kinds of efforts can scale in a global marketplace. Many companies are still hesitant to invest in sustainability efforts, and I believe that's because disciplines like CSR are more about good branding than good business models. But that's all changing.

The real emphasis is on how people can transcend their roles and responsibilities at work and in everyday life to become progenitors of change. This has been the core philosophy behind the innovation experiments we've been running around the globe, and it involves much more than good technology and fancy methodologies (although those elements are, of course, important).

In this case -- enabling executive stakeholders in the cosmetics industry to imagine a different world through their products -- we were able to spend four days developing creative muscles, nurturing personal and group awareness, as well as running through role-playing scenarios. The participants literally built worlds or ecosystems that reflected ecological and emotional connections to their companies, and the economy itself. One CEO even remarked that in doing so, she envisioned a new world without economic bubbles.

(*sidenote* we're editing a documentary film of the whole experience which we plan to distribute in Q3...)

Related to 'anti-bubble' economics and scale, Marc Andreessen was featured in an insightful piece in the Wall Street Journal a few days ago. That said, I thought the interview with him below is a terrific view into the immediate future (what I call the 'Future Now'). In particular, it's interesting to hear his thoughts on globalization and how value is created in competitive markets through an entrepreneurial mindset. I wish that he and other innovative investors would address more of the 'human problems' we face (Mr. Andreessen does touch upon on it in spots), but their intentions seem to be headed towards more of a socially conscious approach to investing, alongside of building sustainable companies and economies.

As I've mentioned in other posts, the concept of work is completely transforming, and not just as a by-product of repatriation, disintermediation and other production or transactional efficiencies (which are becoming more and more obvious). Passion and empathy are co-opting 'work' as a cultural edict and a form of social responsibility that embrace the complexities of human discourse. People want to change the world -- they need to, and they're figuring out how to make it happen for themselves and their communities.

And what a wonderful thing that is to see.

 

The Power of the Co-Op Investment Model

Following up on earlier posts regarding brand economics and ecosystemic investment, it's been interesting to witness (and advise on) some shifts in the startup investment landscape.

One such shift involves what can be coined as 'co-op investment'.

The basic premise of a co-op is to provide a structure that aligns various resources, operators and assets such that the investment itself has shared value. So, in the case of a corporation subsidizing a co-op investment, you would have entrepreneurs, marketers, researchers, lawyers and supply chain folks inhabiting the same space, sharing resources and making sure that their collective efforts produced demonstrable results.

Co-Op Investment.png

This has been the case with P&G's Cintrifuse project in Cincinnati. What started more or less as a $60mm write-down a little over a year ago, has blossomed into an ecosystem of 23 upstart companies and a funding mechanism that pairs up strategic partners with smart money, smart resources and tons of possibility for scale (a new form of a fund-of-funds).

A friend who is close to the project and I are developing ways to expand on the model, to see how this might scale in other markets around the country -- the idea being that we can develop new civic infrastructures, create new jobs and right some of our inherent social ills such as income inequality, poor education and skills development, as well as urban decay.

More to come as this model evolves...

Conscious Capital & Collective Intelligence

I just returned from Grasse in the south of France, where I took part in curating an experience to reinvent the perfume industry with executive leaders and stakeholders in the supply chain. I really didn't know what to expect (a common feeling when doing 'innovation' work), and I can honestly say that I was blown away by what transpired.

Human-centered design processes are obviously important in the work we do, but what's often neglected or left out is some sort of a human evolution in connecting to the intentions of what is desired as an outcome or set of outcomes. One of the themes we explored in this discovery process -- a new economic construct, really -- was conscious capital.

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The magic of this event was the people and the interactions; in short, we were able to co-create a system that defined what capital is and can be in terms of value through the collective. Here's what was reinforced as we did the work:

Collective intelligence is an actual science that bridges conscious thought with conscious action.

There are a number of collective intelligence camps around the world that are advancing the notions of how we cultivate and manage information, and this was the first time I had experienced 'CI' as a real science. Part of it was the methodology applied in bringing conversational data from the web into the physical space, and coordinating a relationship between the 'outside' and the 'inside' information (in essence, making the 'big data' accessible, relevant and collaborative). Another very important aspect was making participants aware of what is happening 'out there' and what is happening 'in here' -- here being their own consciousness and a relatedness to others, especially those in the room (or in the field).

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Storytelling is at the fore of product and system design -- it feeds off of heightened awareness through concise mental and physical play.

As various groups got deeper and deeper into developing a new perfume ecosystem, their interactions -- emotions, touch, communications, understandings -- went directly into their thought processes. It was as if they didn't have to think about what they were doing... they were just doing it, creating it, manifesting it. As such, their storytelling capabilities were amplified and they were literally able to express their insights in incredibly inventive ways. And when I talk of story, I really do mean the telling of it through agents, actors and archetypes... Which was omnipresent throughout this experience.

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Creativity, and thus innovation, is truly collective.

This might seem obvious to some, but in an executional realm it isn't, nor should it be. Truth is, we still ascribe much of our creative powers to some form of ownership ("I came up with this idea, not you..."), and innovation tends to be thought of as some 'special practice' that happens 'somewhere else'. For all the participants it became abundantly clear that they could remain in their specialty areas (executive management, R&D, production, sales, etc.) while wearing multiple hats. As one participant shared with me: "I always knew I was an interdisciplinarian!" Another participant astutely pointed out that owning the process of creation is counterproductive and counterintuitive to building a market: the more you give away the more you get back. This led to some fantastic explorations of commons practices and shared IP. 

There will be lots more to share on this (we're making a documentary film of the experience because it was that transformational), but it seems that we have a whole new territory to explore in how we reimagine corporate and social ecosystems... and how we can peacefully bring them together.

Until next time... 

Some Truth About 'Big Data', Agnostic Storytelling & Journalism

A couple weeks back I gave a talk at the USC Annenberg Innovation Lab on how to use data and the stories behind the data to build intelligence and sustain markets.

It's an hour-long, so I thought I'd summarize some key points for you:

 - Immediacy and importance with information leave us, as readers and media participants, grappling over the choice of information we want to consume or with which we want to interact;

- Data isn't 'big' so much as it is curatorial and relevant given a particular context or set of contexts;

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- Normative methods for measurement (clicks, views, page rank etc.) don't represent true or scalable value, and actually commodify the media market, to include 'content' and the creators of it; 

- Discovery and serendipity (not filtering) are vital for critical thought processes;

- Stories are in actuality the predicates for markets and their growth; the question becomes how we look beyond the need to push content out into media environments and instead look at how storytelling is used to leverage cultural and business behaviors;

- We need to relearn how to think, and ask better questions, knowing that the 'answers' may not come to us right away or ever;

- Central or 'meta' narratives have been constructed over time to influence our perspectives of the world that often run in conflict with what we know to be true in our hearts; the choices we make (our freewill) can shift these perspectives and create new realities through personal and collective stories;

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- Cognitive bias can be reframed to look at 'truth' and 'circumstance' as inferential; the idea is that information streams have phases or stages that provide pivots through which we can understand operating context -- the thing that enables us to understand information and make better decisions;

- The future of the media business as a whole hinges on three things: 1. emergence (allowing stories and ideas to flourish without media or advertising bias), 2. socialization (syndicating information streams as part of the storytelling process), 3. learning (adapting to what we discover, when we discover it). 

Be vigilant in your pursuit of context. Think and act critically. Always consider your fellow (wo)man. Be kind, be generous, be unreasonable in protecting your civil rights, and those of others. Make great, inspiring media. Most of all, always be informed, and if you’re not afforded the opportunity, then trust your intuition... All fundamental truth resides in your heart. And with that, the stories you tell, the information you share, can only be, and will only be, magnificent.

 

New World 'Consumerism'

The crises of our time, it becomes increasingly clear, are the necessary impetus for the revolution now under way. And once we understand nature’s transformative powers, we see that it is our powerful ally, not a force to be feared or subdued.
— Thomas Kuhn

Around this time three years ago, I wrote a piece called The Socialization of Products and Services that garnered about 17k views and a nice little comment thread. At that time, companies were starting to ride the new wave of the ‘connected world’, which involved everything from AR apps, to QR codes, to new content systems, to new forms of