Tuesday, December 16, 2014

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Is all "real" money just funny money? The Case for Barter Currency

I believe that a significant part of the problem with instability in the global economy is the very nature of currency valuation/devaluation. It seems that the central nature of currency is based on a fixed scarcity of either what the currency is backed by, or the fixed scarcity of a finite amount of printed money. The more money a government prints, the less value it has -- but I question the very nature of current currencies.

For example, during the recent recession, a significant driver of economic damage was caused by highly leveraged investment bankers investing in securitized credit derivatives, which basically make debt more opaque and unstable. The net effect of the house of cards caused suffering in the developing world, as commodity prices spiraled downwards. And already, heavy lobbyist pressure is seeking to remove the safeguards put in place against these derivatives, after so much suffering.

But every one of the individuals in the developing world who suffered from this house of cards, has continued value beyond currency. I believe it is time to seriously consider a barter currency that is based on the immutable value of the individual's skills. This kind of alternative currency could help local economies survive, regardless of the fixed scarcity, and inherent instability, of so called "stable" international monetary systems.

I invite anyone to prove how conventional currency is any better than Monopoly money when you look closely. All money is funny money.

Here's a quiz for you. Which of these is more "real"?

What do you think? Please comment below.

Saturday, August 9, 2014

About this Blog

This blog is about the idea of a non-profit stock exchange; there's more information at www.npoex.com. It originally came from a TEDx talk, which can be seen below.

Monday, July 14, 2014

Non-Profit Stock Exchange: User Experience - 1

First of several "User Experience" (UX) brainstorms.

Today I'm going to try dipping my toes lightly but concretely into what it might be like to try a stock exchange for non-profits. A technical term for this is called the "user experience", sometimes abbreviated by "UX".

User experience design can be very formal, with professionals spending their full-time thinking about it, designing things visually, testing it out, and getting people to test it out.

To help get some forward momentum, I'm going to pretend I'm in a sleeping bag, looking up at the stars, and brainstorming with some friends about user experience -- verbally. Try to imagine it. I guess if you're reading then you're at the campfire too. There are no mosquitoes, but there are crickets chirping nearby, and the temperature is just right.

It would be nice to have an experience that was familiar to people who have invested in the stock market, or who have a retirement account of some kind. But it would also be nice to be simpler, maybe a bit more friendly, less intimidating. Informational, but not too "cutesy".

I think walking in the door, it might be nice to have some simple options at the top, such as: 

How It Works

There would likely be more categories, but that is a start I suppose.

I think it might also be nice to have some kind of 1-2-3 "Wizard" on the front page, so that when you visit, without even having to click on anything, it gives you a simple overview of how things work.

At the time of writing, there seem to be a lot of sites out there that are putting just about everything on a single page, that you can just scroll through, without having to click on anything. That might be something to consider too; I think it's partly because of many people are visiting websites on mobile devices, where it might just be simpler to "scroll down" if you want to read more.

I want to keep this post short - so I'll get right into a potential "1-2-3"

Welcome to NPOEx, a stock exchange for non-profit organizations. Here's how to get started. (with a nice spiffy graphic of some kind, based on other similer 1-2-3 approaches)

1. Claim your free currency.
2. Choose an organization to invest it in.
3. Sign-up to complete the process.

How does that sound? You can comment at the bottom of this post, or at www.facebook.com/npoex - you don't need to have any technical expertise -- just imagine whether that would be friendly, if it would make sense.

Part of the reason step 1 might be free currency is to encourage people to try it. Then perhaps once you try, you might invest money of your own in a non-profit organization. And there probably would be some kind of simple paragraph explanation at the top of the screen, as well as "take a tour" links, and "learn more about NPOEx" for people who wanted to learn more.

But as a starting point, as the "front lobby" of a user experience, that's what I'm thinking.

How's that?

Thursday, July 10, 2014

Dream: Color-coded Portfolios

In this post I wanted to daydream a bit, about what it would be like to have a color-coded portfolio of investments. In this case, it would be investing to have impact, to change the world, with an expectation of ongoing feedback, knowing what happens, how things unfold.

One of the influences on starting to think about color-coding investments was volunteering for One Laptop Per Child during my PhD research, a project that developed laptops for children around the world, to help with education. And though there was a great deal of support for the project, I was struck by the question that was sometimes raised, about going into an area of the developing world, and helping with education, when there wasn't necessarily even all the other "basics", such as drinking water, sanitation, etc.

And it felt to me at the time that the answer was "Yes". Not only to education, but also to health, also the environment. Not one exclusively - but seeking a balanced approach. And when I started thinking more in terms of color, particularly the "green" of environment, it felt like there could be more colors, and that colors could be a way to simplify things, a way to suggest to people that they could support the world holistically, in a balanced way, by thinking about having a set of causes to support.

This grew into thinking about how people will invest in a portfolio of companies, when they are investing in the stock market. Most people spread their investments out over a number of different companies, or invest in a mutual fund, which spreads the investment out for you.

So that's the for-profit stock market, in a nutshell. Invest, hope for the best, celebrate success.

So why not invite people to have a portfolio of non-profit investments?

Some people already do this - they respond to individual appeals on television, or email, or the Internet. Maybe they regularly send a check or digital donation to more than one organization. But chances are that in the modern world of being buried in a flood of information, the messages from non-profits can get buried too. Or there might be a good feeling of knowing you're supporting an organization, in spirit or financially, when you see the magnet on the refrigerator - but the relationship is about as far as that goes. There might be positive intent, but not a very deep relationship.

It would be fair to say that one thing that drives people to be actively engaged in their stock portfolios, or retirement portfolios, is the natural, avid interest in how much it is worth, especially the more you rely on the portfolio for future income or survival. And there's nothing wrong with that.

With donating in a cause, it does seem like there's enough people out there who already are open to supporting causes, but who might find it satisfying to have a simpler way of supporting those causes, and an integrated way of keeping track of the ongoing impact. And the hope, the daydream, the prayer, the aspiration is, that the same dynamics that fuel the stock market could help fuel a non-profit one. That people would gain a clear, focused sense of the impact their donation is having, through the paradigm of a portfolio.

Even the for-profit stock market can be overwhelming to many - witness the success and assistance that financial providers provide. There's so many options out there, it can be overwhelming. And seasoned veterans will tell you that it's hard to "beat the market" -- meaning you can be more successful than others some of the time, but there's always surprises. So a lot of effort can come to naught, you can lose your wealth, significant amounts of it.

And that might be one bright distinction of a  non-profit stock exchange - there may be risk, but there's much less risk of total loss. That is, if you invest wisely, most likely there will be a cumulative impact, and cumulative gain over time. And when you invest in an organization, that sends a signal to other investors -- and that could end up drawing more resources confidently into areas where they're needed, where they are being effectively used.

And maybe, just maybe, the same dynamic of the portfolio could help simplify things, and make them less overwhelming. And maybe, just maybe, color coding could help simplify the issue.

Imagine having a set of cards that represented the causes you're supporting, color-coded for organizations that impact health, the environment, community.

It could be a means of self-expression, and it could be beautiful.

"I'm going to go for a mix of green, red and blue".

"I'm going to go for a mix of red and pink".

The beauty comes from responding to that question about supporting one cause while neglecting others. A color coded portfolio could help people develop a balanced approach towards changing the world, to help holistically - in health, in education, in the environment, not just for the present world, but for future generations. And that's what the idea is really about - investing for the future.

Thanks for reading through this blog post. 

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Tuesday, June 10, 2014

NPOEx Description

NPOEx is an idea for developing a stock exchange for non-profit organizations. I gave a TEDx talk on the topic, which can be seen at http://tinyurl.com/npoexvid, and I am re-visiting the site to start developing regular posts, to build up content, and to work on developing requirements for an active prototype. This blog will probably end up being a source of content that will be refined and posted on www.npoex.com.

Basic Description

NPOEx is a proposed platform for developing a simulated stock exchange, for non-profit organizations. The idea is that a user can invest virtual or real currency in a non-profit, obtain virtual shares in the organization, and receive "social return on investment". The shares have the potential to become an ongoing connection between the investor and their chosen organizations.

Overall Concept

Leverage market dynamics to provide users with a stock exchange experience, and tools for managing a "portfolio" of giving. The user experience could include profiles on non-profits, and various data and information, as well as "impact ratings", to help a potential donor understand the impact a non-profit is having. Aside from providing information to potential investors, impact ratings are also intended to have an influence on the value of "shares", to help provide a feedback loop that can give users a sense of the amount of impact that the specific amount of their investment is having.

Business Model

The structure could be non-profit, for-profit, or a hybrid of both, and could end up being an ecosystem, where the main platform has an API, an Application Programming Interface that would allow other companies and organizations to write "apps" to interact with the basic platform, which like the current for-profit stock exchange connects with things like eTrade, or other Web-based stock trading software. (simplify) So the initial goal is to start simple, and grow organically.

The revenue model could be to charge a transaction fee to process donations, much like other "donation platforms".  Or the platform could provide a free exchange, if it was sponsored by a company, foundation, or consortium of some kind.

Corporate Social Responsibility: Another aspect of NPOEx could certainly be to provide opportunities for corporations to either donate directly, help promote, or provide their customers with points to invest in a charity of choice, using the underlying platform.

Instead of a company telling a customer how the company donated money to a charity, the power of choice could be given to the customer. And some members of traditional loyalty programs would prefer to have the opportunity to donate those points to charity.

These approaches could be a meaningful way to deepen the relationship between corporations, non-profits and customers.

Why is a non-profit stock exchange Needed?

Significant progress been made towards improving the world, by non-profit organizations and foundations, especially with the increasing sophistication of measuring outcomes. Yet philanthropists who are committing billions, such as Bill Gates and Warren Buffett, freely admit that a lot more effort and resources are needed.

From an ethical standpoint, exploration of using market dynamics to help meet the scale of global needs seems absolutely necessary, if there's any chance whatsoever it can work -- and precedents support the real possibility that it can work. Already, non-profits and crowdfunding sites are starting to harvest "the wisdom of the crowds". But the ecosystem at present could be compared to the state of global business 100 years ago -- a patchwork of entities stretching across the globe, with a variety of methods of raising capital, yet without a seamless system that could support *all* efforts at raising capital for non-profits.

The Black Hole of Donations

Often, an individual donor has little idea of the impact their donation is having, aside from monthly email newsletters -- if they even read them. They take a step of faith, and hope for the best. But charitable investment through a non-profit stock exchange has the potential to demonstrate to a donor that they have a clear ongoing stake in the organizations they support, when they are awarded shares in those organizations.

Currently, individual donors may choose to make a donation based on a well-crafted appeal, based on their own moral and ethical viewpoints. But investment-based giving not only has the potential to increase engagement; it can also serve as an stepping stone towards incremental, increased giving. 

A market-based system can take even a small spontaneous intention of kindness or mercy, and award a share in a non-profit organization, and thereby establish a unique link. This can serve as a basis to develop a relationship -- without overwhelming the donor.

One premise of the intended approach of NPOEx is to strive for a comfortable, non-overwhelming environment, to help motivate further participation in philanthropy; to present challenges, invitations - but through the paradigm of investment. And the proposed user experience of gaming could help to draw in people who otherwise might not be interested.

The Motivation Gap: Making it Fun

While some people might be motivated to use such a platform purely on the merits of wanting to support non-profits, others may be motivated by a "gamified" experience. Research has shown that people will spend significant amounts of time and money to play a compelling, enjoyable social game, situated on a social network such as Facebook, purely for enjoyment. Similarly, there has been a proven pattern where people will spend time playing a virtual game to win virtual currency based on the psychological value of the currency, even when there is no monetary value.

This evidence supports the potential for a "game layer" for NPOEx, where the traditional non-profit "appeal" is transformed into an appealing experience, where the initial motivation is to have fun. The user experience could range from adding light gamification to a traditional investment experience, with ranking, connection to social networks, and awards -- or it could be a game experience that is like Monopoly, but instead is Philanthropy.

Starting with a social game or at least a virtual simulation also has the advantage of being able to test/improve the user experience, features and expectations, prior to integrating the additional complication of facilitating donations.


Thank you for reading this description. If you have any feedback, questions, suggestions on how it could be improved, or if you're scratching your head about something, I'd love to hear from you! tekelsey@gmail.com

If you want to hear more, please enter your email address at the top right of this blog, and you'll be notified when there are new updates.