This is why I wrote my book - You Don't Need a Job - there is no point is just hoping for the best or complaining. We have to rethink our world.
More here on employment around the world.
Pew just show that youth unemployment is 37% in the US. "37% of 18- to 29-year-olds are unemployed or out of the workforce, the highest share among this age group in more than three decades. Research shows that young people who graduate from college in a bad economy typically suffer long-term consequences — with effects on their careers and earnings that linger as long as 15 years.1(See chapter 5 in the full report)"
The old have always complained about the young. But today there is a new aspect of being young that worries an old man like me. Many cannot leave home and grow up. This is new. Student loans are at the top of the list. Low earnings are the other side of the equation.
The reason for this permanent state of child living is debt. The reason for this is the end of the job world but not the end of the expectations that came with the job world. Here is the data for the UK.
"Research by the Co-operative Group has identified a 'lost generation' of 18 to 30-year-olds in the UK for whom debt is normality – a so-called debt-eration – and who are finding it hard to become independent in the UK's challenging economy.
More than eight out of 10 (84%) young adults in the UK admit to having received financial support from their parents since "coming of age".
Young adults in the 18-30 age range have asked their parents for financial help for a range of things from food shopping costs (43%) to holidays (36%) to debt payments (16%) and house purchases (8%).
Even beyond financial support from the 'Bank of Mum and Dad', a high proportion of young adults (80%) still rely heavily on their parents for help with basic tasks and decision-making. The most common areas for support including transport (40%), chores such as cleaning and ironing (34%) and help with finding a job (27%). The traditional pattern of youngsters leaving home when they go to university has made way for a new generation of those staying near or at home for their higher education and then staying put.
The research highlights that money is an issue for young adults, with nearly a third (31%) not feeling financially independent. The report has identified a "debt-eration", with nearly two thirds (60%) of 18 to 30-year-olds admitting to having debt. The findings reveal that for this generation debt is normal, with 77% not alarmed or worried by it.
Yet, despite parents and guardians helping their offspring repay debt, nearly a third of young adults are hiding their debt from their parents, amounting to an average burden of £3,579 of secret debt.
The main sources of debt for this age group are: student loans (63%), credit cards (31%), personal loans (23%), overdrafts (19%) and money borrowed from parents (18%).
In addition, the group's earning expectations do not live up to reality. Over two-fifths (41%) earn less than they thought they would in relation to their age and education level and, on average, people aged 18-30 take home £7,187 less than they thought they would. Also, according to the findings, more than a tenth (16%) of 18 to 30-year-olds do not feel they have a job that matches their qualifications."
And this group will soon be parents!
For me the starting point is to stop trying to make the old system work. Thousands of pounds/dollars of student debt is not a good start. Thinking that this will lead to a well paying job or a career is mistaken. The jobs are not there for the young and cannot be anymore. The world has changed. The yoing are going to have to think about how "To Make a Living".
The why's and hows are in my first book, "You Don't Need a Job".
I worry about money today? I never used to but I do now. I am not alone. More and more people look into the future and worry that money might not buy anything or that they might now have any or both. There are all sorts of signs.
A stockmarket that is not based on the real economy. The 1% who have most of the wealth? Workers who are not rewarded for their work? Cyprus and "austerity"? Bank Bailouts that supersede everyone and everything? The rape of our environment in the search for "growth"? Bitcoin? There is lots of evidence that something wrong with money today.
Money seems to have become an end in itself and it has become too distanced from the needs of people and the planet. What is wrong and what will come? I have a few ideas that I would like to test with you.
I think that institutions have captured humanity. We think they serve us but they don't and money is central to this capture.
We go to school to learn. But in reality 60% leave school knowing almost nothing and the rest know a lot of abstract things that give them a credential. Schools teach to the test and the credential. In reality most of us leave school knowing little about what is really important. We have few practical skills. Our education system is an end in itself.
In theory our health system should keep us well. If we have a car accident it does a very good job of fixing us. But for our general health, look at the outcomes. We are all getting more and more sick and this is all costing us more and more money. Health care has become an end in itself.
What has banking become? It used to help people and business finance real things, like build a factory, a canal, a house. It used to help people trade with each other. But now most of the money in banking is made by financial manipulation. Banking has become divorced from the real economy. It is an end in itself.
And the job? If we are honest, most jobs today are also abstractions from the core of making and serving in a real way. You are a part of a machine. You are not the personification of the thing or the service. Your pay in a job is not based on the value that you create, look at how wages have lagged productivity, they are based on leverage. How low can you be paid and still turn up for work is the equation. The job is an end in itself.
But there was another way that did root everything in the real.
They also had a problem with money at the time. Then money was made from gold or silver and was made only by kings. There was not enough money around to conduct trade. So the merchants of the Hanse came up with a system that solved their problem and that kept their trade OUTSIDE THE CONTROL OF GOVERNMENT.
Groups of merchants would do business with each other and use a ledger instead. I buy fish from you, we record the sale in the ledger. You buy iron from me, we enter the sale in the ledger. We supply wood and building materials to another partner, it goes into the ledger. Periodically we net the whole thing out. Very little real cash was needed. But the transactions were real. This was not barter. There was a cash value attached. So we all knew where we stood. And best of all, when we sell to outsiders, like the English, they pay cash which flushes the whole system.
This is the scale of the Hanse:
This system can and did scale. It made the Hanse the wealthiest region in the world for several hundred years.
The ledger was a public document shared within the group. It was the partnership platform. Big deals could be done like this too such as building a fleet or improving the harbor. Bigger deals could be done when Lubeck and Danzig and other cities funded anti pirate patrols.
The entire Hanseatic League used this approach of public business to give them the edge over all who had to finance themselves using cash alone or who had to borrow conventionally. The ledger was in effect their credit system: for it enabled them to escape the bonds of a monetary system that, then, was based on physical gold and silver.
Are you starting to see how we might do this today?
The General Store and Barn Building
This is a tested idea. This is how credit also worked in rural Canada and America for hundreds of years. In rural communities there was no cash for most of the year. So how did business get done? With a ledger!
In that case the ledger was held by the General Store. Again in rural America, cash was rare and only was abundant after harvest. You bought from the store using the ledger and the store ledger was used to record you buying and selling other things with your neighbours. Harvest would flush the system when we sold to outsiders.
Without the social trust platform of the General Store, economic life in rural areas would not be possible. But here, the the power of Trust and Community built on the ledger added another layer of value. This I call Barn Building.
In rural America and Canada, social trust extended beyond good to include services.
In these kinds of communities there was also a social labour exchange. If you needed a new barn for your son, the community would give its labour in return for an expectation that you would do the same to others. Here the ledger was kept in the minds of the community. The more you were seen as being generous, you lent me your cart, you gave me a cow when my milker died, the more the entire community would be ready to aid you. In this kind of system, the more you give, the more social credit you have.
Today, this is how Open Source software works. The core deal being that I can use the elements in the system but I have to give back my improvements. The reality being that the more you give to the system, the more you can expect to get back. At first in status, or trust, and then in material help. The Open Source community lives their lives in public. Inside their world, all the key players are well known. Newbies have to prove their worth. This is normal and human.
The real world
In a value system based on real good and services, money and credit can be attached to reality. There will be enough money al the time because it is based on real trade in real things. So such a system avoids two big problems of all other money systems.
If money is rooted in a scarce commodity, like Gold or Cowrie shells, there is never enough. Kings debase the currency or others do. If the money is based on paper and the trust in a government, in the end governments debase the trust. This is what we see today. Money is worth a fraction of what it was 100 years ago. It has been no store of value.
The future of money
In parts of Europe, such as on Greek Islands, where no on has any cash, markets are emerging where all involved trade with each other based on selling real goods and real services for a money amount, like the Hanse, but based on the ledger.
My bet is that online markets will arise that are much bigger than a town on a Greek Island. Those of us who have little access to cash will be able to use the online ledger to buy and sell real goods and services.
I already consult locally for food. It's a good deal for both sides. We work out my hourly rate. This gives me a credit in the store and I buy food at her market rates. We both win.
We are learning how to insert trust into this. Look at eBay, at Airbnb. Look at sharing sites. We are so close.
For personal trust and reputation are central. This is less about contract than shame and reputation. The letter of the law will not save you if you behave badly in such a system.
At the same time, new clearing systems are emerging outside the banking system I am looking at Ripple.com.
I see a system emerging that will be outside the control of the current system. That like MOOCS and Universities will make the current offer look like a bad deal. Like Craigslist, make the classified in newspapers look like a bad deal. Like downloads and sharing make albums look like a bad deal.
THEY will fight this. But will lose. They will lose because this kind of money works for 99% of us.
If we go down this route we will humanize money. Money will represent real value that each of us create. Money will be limited to the real value that the planet offers too. Money will be balanced with reality. Money will be a store of real value. Each of us will be able to get what we earn.
More later on this but you can see more right away in my book You Don't Need a Banker to get Credit. You can get this here
What is the economy that will give us all hope - real hope that we can have a good life? I think that it is what I call the Networked Artisan. This is a person who makes things by their own hands but uses often the new tools to do this and the network to connect and sell to a community that can be next door or across the way.
It can be a micro farmer like Amy and Verena at Heart Beet Organics on PEI who operate a 2 acre farm using large greenhouses to produce veggies 10 months of the year.
As part of the pattern for all Networked Artisans, they sell direct to customers and create close personal relationships with them. Farmers markets grew by 17% last year. Food will be at the core of this new personal movement. Trust is at the heart of it.
In the UK there are web hubs springing up that make it easier and easier for customers to become part of this.
This is Big Barn. Check it out and see how amazing it is.
Are you a knitter? There are 3 million knitters in an online community called Ravelry. Here they compare projects, help each other and sell things to each other. It is a vast tribe of knitters.
Underneath all of this is a new market. This is the market of the people who no longer trust the corporate offering. They know that they lose control and that they are often lied to. This is why food is a wedge. For as people learn how the processed diet is so bad for them AND how they have been misled as to its safety, they seek food that they can trust.
How big is this market?
2.5% of a population are the Innovators who jump in early. In America that is about 8 million people.
13.5% are the Early Adopters - that is about another 40 million.
So nearly 50 million people are ready for this kind of offering. That is a huge market for a small artisan. A market that the Big Corporates cannot reach and compete in any more. They will be excluded over time.
Meanwhile, all the technology that is taking away the jobs in that sector, is helping the New Artisan. You have rock bottom communication costs. You have top flight tools. Want an ecommerce tool - Woo Commerce. Want CRM - Paupress. Want to publish a book - pressbooks. Want make a prototype - 3D printers. Each year, the tools get better and cheaper.
The next wave are going to be local aggregators like this new one for Portland.
Soon every commnity will have such a site. It will get easier and easier to become part of this.
The future is here now. The empowered person in the empowering network of people who want trust and meaning back in their lives.
So what do you do?
My first book - You Don't Need a Job - explores this shift in detail. If you want to know more abouyt what is going on and how to become part of this, then please give it a whirl.
Posted at 10:25 AM in 3D Printing, Books, Capitalism 2.0, Community, Corporatism, Food, Food and Drink, Food Systems, Freelancing, Great Disruption, Health, Human Workplace, Local Resiliency, Making a Living, Mindset, Natural Organization, Open Source, Open Space, Organizations and Culture, Paleo, Paradigms, Peak Oil, PEI, Resilient Communities, Social Economy, Workplace, You Don't Need a Job | Permalink | Comments (2)
| | | | | | |
Traditional organizations are Reductionist by culture. They need to have cause and effect lined up. They need to feel that effort on its own will deliver a result. They are obsessed with focus and efficiency.
So how then can they use Big Data and Social Media effectively to discover things that are real but are not obvious? How can tech firms sell Big Data Solutions and Enterprise Social Media and expect a reductive culture to use this technology well?
The Cynefin framework has five domains. The first four domains are:
Traditional organizations, by their culture, can only work in the Simple and the Complicated quadrants of life.
The value of Big Data is to discover "Emergent" and to test Novel properties. To see things that cannot be seen as an act of deliberate study. The Value of Enterprise Social Media is also to reveal Emergence and to test Novel properties from the crowd of employees and all those that touch the enterprise.
People embedded in the reductionist mindset cannot do this. And if they could, the culture of the organization will force them to be more deliberate and so miss the emergent. They are not allowed to play either and so cannot test the novel.
Image Source Peter Fryer
How do you get around this culrtural blindness? I think that a good start is to have a Hacker Department. Euan Semple was at one time, Hacker in Chief for the BBC. Peter Rukavina has just been appointed Hacker in Residence for UPEI.
What happens is that this can start a viral infection in the culture. So long as Euan was at the BBC, with no real power, he could and did make a massive impact. Since he has left, the BBC is reverting. Look at Andy Carvin at NPR! Andy's influence has been huge and mainly because his bosses let him get on with stuff. Who would know what his work on Twitter in the Arab Spring would lead to?
A tiny Trojan Mouse, such as Andy Carvin at NPR, Euan Semple or Peter Rukavina, can make a huge difference and move the entire organization. Tiny new things that contain the seeds of change.
If I was a CEO and wanted to create value from Big Data or from Social Media, I would set up a small office that reported to me and look for my own hacker in residence to be the agent and chief hacker. I would let them have a lot of space and time to discover things and I would give them access to everyone and to everything.
If I was the CEO of a big data firm or a firm that offered Enterprise Social Media, I would have a stable of such hackers and I would lend them out on yearly terms to my clients.
I would do this because I know that a reductionist eye cannot see emergence or play enough to see novelty. I would do this because the new competitive issue is not efficiency but in seeing the emergent and discovering the truly novel.
We see this in science. Most of science today is confined by a redutionist approach. All of this will be over turned in the next decade by other scientists who can cope with working in the Complex and the Chaotic sectors.
So even if you as the CEO may be stuck there too, you can at least use logic to know that having a Euan, and Andy or a Peter will be good for you.
Why is business so boring!
"..Why is the language of business so sterile, so uninspiring and so relentlessly banal? Is it because business is the province of engineers and economists rather than artists and theologians? Is it because the emphasis on rationality and pragmatism squashes idealism? I’m not sure. But I know this—customers, investors, taxpayers and policymakers believe there’s a hole in the soul of business. The only way for managers to change this fact, and regain the moral high ground, is to embrace what Socrates called the good, the just and the beautiful.
So, dear reader, a couple of questions for you: Why do you believe the language of beauty, love, justice and service is so notably absent in the corporate realm? And what would you do to remedy that fact?"
My answer is that when a business is only about the numbers it is by definition banal, base and so boring. Without a higher purpose there is no purpose that others can become attached too.
Small is beautiful but rarely offers much of a living. The new secret sauce of the Artisanal Industrial Revolution is Network Aggregation. This can happen online such as when Artisans aggregate in sites like Etsy or Knitters in Ravelry. But what is really new, and what I think will make a huge impact of Foodies, are face to face aggregators.
Here is what is happening in New York. This example tells me that entrepreneurs can do this anywhere - Put some business oomph behind local food.
Source: New York Times
"Perhaps more than any other entrepreneurs in a borough chock-full of kale and crafts, Mr. Butler and Mr. Demby have helped create, curate and nurture the booming Brooklyn artisanal complex. In just five years, the 40-something fathers have turned the Flea and Smorgasburg into a small-batch empire. They operate four markets in Brooklyn each weekend from early April to late November. Smorgasburg also runs concessions at Central Park’s Summerstage concerts. After Thanksgiving, the Flea moves indoors to the former Williamsburgh Savings Bank building.
On a sunny weekend when the stalls are filled to capacity and thousands of tourists, hipsters and chowhounds come to graze, the business can gross as much as $60,000, based on the fees the vendors pay.
Mr. Butler and Mr. Demby — whose friends jokingly call him Artisanal Eric — maintain a modest profile when observing their weekend markets with their children in tow. But during the week, the two are doggedly focused on moving beyond their borough’s over-the-top identity as the home of white truffle mayonnaise.
Now they are wading into Manhattan and into the corporate world, at a time when small-scale food makers belong to one of the fastest-growing industries in New York.
Last week, coolness made the reverse commute. The two men began a partnership with the upscale food retailer Whole Foods Market that will bring one vendor a month to the second floor of Whole Foods’ Bowery store in Manhattan. In February, a retail stand, also on the floor, will begin selling packaged items from other Smorgasburg vendors. The plan is for the relationship to continue in Brooklyn when Whole Foods opens in Gowanus and Williamsburg in the next two years."
This approach is I think the keystone of the new artisanal world. 100 years ago artisans made most things we need but were restricted to their local market. Henry Ford replaced them with a process that took the skill out of the work and offered the product to the world. Don't believe me? Here is the story. Now we can take back the skill but also offer scale - by using aggregation and trust.
Few artisan enjoy or have time for the larger business issues. On their own, it is too hard for customers to find them. Trusted Network Aggregators offer a win win solution for us all.
More about this idea in my new book You Don't Need a Job
Last week, prompted by pressure from my son to be more clear about networks in my upcoming book - You Don't need a Job - You need a Need a Network - some new thoughts pushed their way to the front and I wanted to share them with you in sketch book form.
Please help me get them more clear.
The Network Effect and the Trust Network Effect - There is a difference that is important. In the standard network effect, the value of the network to each member is linked to the growth of the connections. It is transactional. So the more phones that are connected to the network, the more valuable the network is in utility to each member. This is the mechanical approach to networks.
For many people that I see using social media, this is their only goal. Many try and get as many "friends" as possible. If you are a real A lister - this works - you have influence. But for most people, having 7,000 friends on Facebook or Twitter doesn't mean a thing - IF YOU NEED SOMETHING.
I have been working a lot recently using Indiegogo and observing people who seek to raise money using crowd sourcing.
In every case that I have seen so far, the campaigns that worked had activated their core circle of trusted people who themselves had such a circle - who had such a circle and so on. It was this inner circle that did the work. The campaigns that just threw the ask out to the general network, tended to fail. There was no power to the general ask for help.
Why is this? If I have 3,000 friends on facebook - why don't they help me - they say they are committed but they don't act?
I think of my own behaviour. I will only act if a few people that I know well and trust ask me. For the rest, the answer is always no. How small is this group? Maybe 8 and no more that 30+ depending on the context.
This is my real network. I only act on strong ties not weak.
It may extend further on occasion to people who used to be in the inner circle but for whom time has passed and they have moved further out. So an ex close colleague or friend can call out of the blue and I will be ready to act. They remain people who have been trusted, Any of you who have served in the military will know this. When a ex shipmate or buddy calls, you go back immediately to where you used to be in trust.
I am seeing that this inner circle of trust is the "leverage". You have to pay attention to your reputation and to your inner network. To get you have to give. It's all barn building.
A high quality inner network is the goal.
This quality is all based on trust. So if I am right, then the drive for many friends is a waste of time and is based on the simple view of the network. We are not simple, we are complex humans! No Trust - No Commitment or Action.
The New Super Trust Leverage - Trust Platforms - What is new then and what I think is the Highland Park Game Changer - are platforms that create this level of trust among people who have never met!
Airbnb is a good example. Here is a platform that enables you to offer your place for rent to strangers. Etsy is another. Here is a platform that enables you to sell your crafts to strangers. Amazon is enabling a new publishing system for the "small" author. Visa is another. Visa is a platform that enables a retailer to take your money safely.
They key to all of these platforms is that they mediate and maintain high levels of trust. Thus enabling us to DO THINGS with small vendors and to be small vendors on a global scale.
They also do this at a very low cost. No Budget hotel chain can compete with Airbnb in price and value. No storefront with Etsy. No publisher can do what Amazon is doing for the small author. This trust mediation gives both sides of the transaction a deal that is impossible for the Factory model to replicate.
There is also a huge secondary impact. That is, as each of us buys from another in trust platforms, the trust that was at first mediated, becomes real. We tend to go back to the same places on Airbnb because we get to know and like each other. We get in touch with authors who use Kindle and start to have a real relationship with them.
So what I see is that the product of each successful transaction in trust platforms is the exponential increase in trust. This in turn increases the utility for all. The line between provider and consumer becomes blurred. This then is when an author can get crowd funding to help him write the new book! This is when the farmer can pre-sell his crop or meat in the spring for delivery in the fall.
The value is not confined to the connections alone but to the overall trust in the system.
This is the game changer. This is a much much better deal for all than the Highland Park system. It was Highland Park that overthrew the old local and artisan system because it was then a better deal for all. So I think Trust Platforms will overthrow the Highland Park world.
Highland Park was the new factory that Henry Ford opened in 1910 that had all the new features of the Production Line installed. It was the DNA of the process that would be at the heart of all modern institutions. Mass Production killed the small and the local because it could offer a car for much less money than one made by hand by artisans. It also gave a large unskilled work force much more money than a day labourer job could. Both sides of the mass market were created.
This better deal meant that The small and the local got pushed to the fringe. The family farm nearly died. The local paper died. The bakery, dairy, butcher, general store, iron foundry all died. The local banker who knew everyone was no longer needed. The local doctor who had a stake in the health of his community was no longer needed. The local diner that held the community together was no longer needed. All were replaced by Highland Park. And so we ended up Bowling Alone - for as community died, so did Trust.
All became simple transactions.
We all came to depend on a few vast organizations for all that is important for us. Vast organizations that not only do not care for us but work only for their own needs now. For the Highland Park Contract has been broken. Now most of us have the wages of day labourers, if we are lucky! Now most of the products and services are of low quality or worse, hurt us.
We are ready for something better and something better is here.
It's early days. It is maybe the equivalent of 1920. But I see Trust Platforms taking over the role of Highland Parks. They will do this because they are a better system. They offer more value to all. The evolutionary Tipping Point is 20%. Each time the trust platform takes 20% of the gross out of the sector, the Highland Park alternative will fall. 20 employees at Craigslist did this and look what happened to the mass production newspapers.
When 20% of kids choose the Platform rather than school, most of the universities will fold. When 20% of us stop going to the doctor for our chronic illness, how will they and big pharma cope? Coming will be a local food system that is based on trust and real food. When 20% of us buy all our food locally, how will Big Food cope?
Highland Park is trapped by their fixed process costs. With a 20% loss of gross and a trend of lower gross as the network grows, they cannot stand.
Evolution will work quite well and has a good chance of solving what seems to be the impossible world situation in front of us.
Posted at 07:26 AM in Capitalism 2.0, Community, Complexity, Design, Education, Emergence, Facebook, Food, Great Disruption, Health, Hope, Human Workplace, Local Resiliency, Making a Living, Messy World, Mindset, Musings, Natural Organization, Organizations and Culture, Paradigms, PEI, Resilient Communities, Social Banking, Social Economy, Social Media, Social Object, Social Software and Blogging, Trust, Trusted Space | Permalink | Comments (11)
| | | | | | |
We got notice that Indiegogo has disbursed the funds today and Raymond Loo's campaign is now really over with the goal of $12,000 fully realized.
This work is not easy. It is not as simple as filling in the blanks on the sites and launching.
In my old life I was an investment banker. I used to syndicate bond deals out of London. I never thought I would need these skills again but as I work on a number of Crowd Sourcing deals all the old lessons come to the front.
So here are a few lessons from an old pro. Take them as you choose. But remember, there are thousands of years of lessons behind the lessons I offer.
Make it Personal - No matter how noble the cause, we are most attracted to a person. If you have a cause, then put a person in the centre.
The Person Must Have Social Weight - The more the person is widely recognized as being a good person, being trustworthy and a person who helps others, the stronger the appeal.
We can all say no to an idea. Harder to say no to someone we know.
Make the campaign about something aspirational - Design it so that our hopes and dreams are attracted. It can be the rebel game designer who gets shafted by the publishers and then appeals to the gamers to give the corporate funders the finger. It can be like Raymond, to back a food system that gives the finger to factory farming. It is not enough to just ask for help - get explicit about what this really means to others.
We care about saving the world but we care about people who are saving the world more.
It's ALL about the inner network - People like Raymond have a small group of people who are close to him who love him and in turn have their own network. Think of petals on a flower. Their networks branch out - they touch each other but are largely different. The key is to know these people and to work with them well before you launch. Bring them into the planning. THEY do most of the lifting. And it they who you have to pay a lot of attention.
This is the deep structure of a deal done in the correct way. Think of who is at the root of each petal. Think of whom they represent. In London Underwriting, we use nationality as a key determinant. So there are Swiss, German, Japanese, American, Benelux, Canadian "Petals" and there are those that have a connection to the sector and those that have a connection to particular types of investors.
Fill in this Permaflower with your equivalent. Ask who and what is missing. Go and fill in the gaps - BEFORE you launch. As in the Art of War, the campaign is largely won or lost before you launch by the way that you have involved this core.
You don't need more than 8 people in your core. With 8 people each with 4 close friends with 4 close friends, you are connected closely to 4,000 people.
This inner 8 are the entire deal. You have to work a lot with them BEFORE the launch.
You have to have a Road Show - You have to meet face to face with your inner core. This is the norm of underwriting in London and on Wall St. It's all very personal. So when you are invited or not or you turn down or not, there is a social impact. This is not a mechanical business. It is about as personal as it gets.
Most of the work has to be done BEFORE you launch.
The better the core the better the deal. And a way of getting other influencers in on the deal is to start with 3 of your own. Then you can say "X" is in. If "X" is a hitter, the "Y" will come in and so then will"Z". Sounds crass, but that is how people are. We want to be with people we admire. We want to be part of a success.
Face to Face trumps online. Real Syndicators spend face time with each other. It's so we can ask for help from each other. We have to care about each other.
Reciprocity - To get you have to give - In this world you don't get far by being a "taker". Help as many other deals in your network as possible. Help can be to contribute or if you cannot do that then help by spreading the word.
Again most of the work happens BEFORE the launch.
For there is more than your deal in your community. The more the community gets used to "Barn Building" like this - then the more capacity you build. The more you give, the more your social bank account builds and then so does your capacity.
Think about the size - Size is everything. The Underwriters took too much for Facebook and now everyone feels screwed. The only way to get large size is to have something to sell. In Raymond's case it was meat. Others have sold CD's, books, Games and watches. If the reward is only honor, you cannot ask for much.
The key perk size is between $30 - $50. 100 people coming in at $50 gives you a chunk. 100 coming in at $20 is not much.
You have to design the perks so that most will pay in this range. It has to be worth their while.
If you do not have a perk that is a valuable thing, then you have to plan on small size.
Bingo Perks - If you have a big "Bingo" Perk - then set it up so that it does not take Bill Gates to do it. Design it with how it will be taken into account. In Raymond's case the Bingo was a dinner for 10 cooked by a well known chef. We designed this so that 10 friends could get together - not impossible and fun. In Patrick Ledwell's case, he aimed at businesses that would have a Christmas party - his Bingo was to be their entertainer.
A success in the "Bingo" is what makes the difference often. So design it with great care so that you have a chance to get it.
Luck is important in any deal but don't plan for luck, plan for a realistic chance that someone will take the Bingo and get something from it.
Financing is all about momentum - You are going out for dinner, you pass 3 restaurants. One is empty, one is a bit busy and the third is packed with a line up. Which one do you choose? The packed one. It's the same with syndications. Your deal must open with a bang and keep this going for the first 4 days. You must plan to raise at least 30% in the first week. You do this by getting your core to get in early. You must open on the first day with 5- 10%.
Don't beg!!!! - Each Day Tell a new Positve Story - The moment you start to beg - "Please help us" with less than 10% by week 1, you are doomed.
If you are struggling you have to get more influencers to go public about their support and why they support this. Your job is to build confidence.
Every day in the first week - tell a new story and better have another person tell the story of why this is good. When you have momentum, tell people about the success. Success breeds success.
Timing - Financings go in waves. You want to be early in the cycle. What happens is this. There is a lull in the market. A new deal comes out that gets everyone's attention. We all pile in. Then another that will be bigger. We all pile in. At some point though, we all get tired and we all get tapped out. But many, seeing how well the early birds did, go to market. They don't do well. Some bomb. Then we get a lull. And the cycle continues.
You have to be plugged into your local network to know the cycle. To reopen the cycle, you need a special deal.
Again this is not a simple, let's use Kickstarter and get money like Patrick did. For when you fail, you close a door for a long time. If you fail more than 3 times in a row, the door will shut permanently.
This is not a game - This is not Farmville. Once you have your money, the next round of hard work begins. As with a farmer with a CSA, now is the time that you truly create the confidence that will enable you to ask again at some time. You have to work hard to make sure that all you have promised happens well. You have to deliver and in a strong way.
You now have a community that has supported you. Look after them. Cultivate them. Honor them.
If you do this right, they will advocate for your enterprise all the time and when the time if right, you can go them again and get more financing.
It's all about Trust - The Motto of the City of London is "My word is my bond". This is the eternal motto of anyone who seeks to ask others for money. It has been lost today in the big markets. But Crowd Sourcing is a return to how banking always was - a personal business based on trust.
Every thing you do either adds to trust or takes it away. Assess everything you do in this framework.
Trust is the real currency here.