In 1932, a small town in Bavaria called Worgl created an economic experiment to counter the devastating effects of the Great Depression. The Mayor issued a new currency and encouraged citizens to spend it quickly to put money back in the system. People were motivated to participate in an economy based on action.
Within months, the town’s unemployment rate had dropped by over 30%. Dubbed “The Miracle of Worgl,” the experiment was eventually terminated by Austria’s Central Bank in 1933 for fear the nation’s existing currency would lose relevance. Unemployment immediately returned, and Austria’s economy collapsed further in the wake of Hitler’s rise to power.
Where’s the Whuffie?
Like the town of Worgl, we’re facing a deficit in the economy of online influence. Focus has been largely placed on volume and reach of an individual’s ideas versus the implications of their actions. We’re so focused on growing our own brands that the megaphone has become more important than the message.
The notion of the Whuffie, conceived by Cory Doctorow in his novel Down and Out in the Magic Kingdom, created the precedent for online social capital in the Web 2.0 world. The Whuffie Manifesto further states that “when reputation is wealth, only those who do good and well unto others are the richest.”
Accountability Based Influence
But how can you measure when people “do good?” Sites like DailyFeats have created models in which people self-badge positive actions that then aggregate their overall “Life Score,” which CEO and co-founder Veer Gidwaney says “is a reflection of the good that you do every day.”
But a core part of DailyFeats is the accountability factor. The notion of “good” is defined by an individual, and then supported via the closed-loop context of a person’s social graph. This “accountability based influence,” or ABI, is complementary to current measures, but evolves the idea of reputation based on action in communities where a closed-loop context makes sense. And it’s in these contexts that social capital is most easily converted into the virtual currencies moving to the forefront of the new digital economy.
Empire Avenue: Accountability via Investment
“We saw a future coming where the value of what an individual produces online, including the networks they create, will become part of the very economic fabric of our societies,” notes Duleepa Wijayawardhana, CEO of Empire Avenue, a “social stock market” that encourages users to buy and trade shares in each other to increase virtual currency.
The service is a perfect example of ABI as it applies to the notion of investment in users. By buying stock in someone online, you’re declaring them to be socially credit-worthy. Investment implies a literal endorsement of another member’s character and reputation.
The service has created a paradigm in which user’s scores could eventually be utilized for reputation scoring outside of the platform. Positive reputation within the community could translate to increased credit and benefits outside of Empire Avenue’s social stock market.
The Rypple Effect: Accountability via Work
“As we move toward a more social and transparent workplace environment, influence is becoming less dependent on your place in the org chart and more on the real, measurable impact you have on your colleagues,” says Nick Stein, director of content and media for Rypple, a social performance platform for goals, feedback and recognition. “The idea is that all ongoing feedback, both positive and constructive, helps build an employee’s real reputation at work.”
The service lets users create custom badges, but the focus on feedback goes deeper than simple game mechanics. Features like “Loops” let users provide ongoing and actionable critiques of colleagues so feedback can be assessed at any time. As Stein points out, “this enables individuals to develop influence based on their real impact rather than a perception of where they sit in the company hierarchy.”
The influence created by individuals is also portable, at least within the closed loops of a specific organization. So while there’s no immediate plan for a “Rypple Score,” the company utilizes an ABI ranking that reflects a person’s long-term career reputation. But while the enterprise becomes social, work reputation based on action will certainly become more relevant as employees move forward.
CrowdTwist: Accountability via Specificity
There’s a lack of accountability with most measures of influence because they aren’t able to delineate vertical-specific interest among community members.
“We’re looking more deeply into a brand’s landscape to understand how and where their audience is engaging with the brand itself,” says Irving Fain, CEO of CrowdTwist. “Because our platform extends across many platforms (social, purchase, site, etc.), there are a number of ways in which we can better define these metrics.”
The service also pushes brands to be more accountable to fans. While the platform utilizes gamification methods to reward points for engagement, the incentives are focused on products or prizes rather than badges. A recent campaign with LiveNation encouraged fans to engage with content on a concert site (view a blog post, “like” a Facebook status update) to get points that could be traded for things like dinner with your favorite band. Pageviews per visitor ascended from three per week before the campaign to 26, and people spent over six more minutes per visit perusing the site.
By identifying and delighting the various segments of their advocates, brands will gain ABI with relevant incentives and targeted engagement.
Lenddo: Accountability via Potential
Models of ABI based on offline actions have existed for decades via community-based lending. Future potential and reputation are the means for currency exchange where an entire neighborhood is responsible for loans. It’s a model being replicated in the online world by Lenddo.
“You can think of a Lenddo score as a page rank for people’s financial reputation,” says Lenddo CEO Jeff Stewart. “The best way to improve your Lenddo score and better access to loans is to have many friends from multiple circles who are willing to put their reputation at risk to vouch for your good character.” Helping people with these loans at scale means Lenddo can create relationships that move beyond financial transactions to build a global community that encourages good will.
Ven: Accountability via Values
“Facebook will become the biggest bank in the world,” says Stan Stalnaker, the founding director of Hub Culture, a social network that revolves around a virtual currency called Ven. “This will happen the moment they allow for P2P exchange of Facebook credit between users. If they can link that to Likes, and map the value of Likes and other activity on their imprint of the social graph, these values will begin to function like money.”
But Stalnaker has already created this P2P exchange via Hub Culture where, like citizens of Worgl, members are expected to put Ven into virtual circulation as much as possible. Based on a portfolio of units that includes leading currencies, commodities and carbon futures, the Ven is less volatile than other global currencies and is traded for everything from knowledge, to travel discounts and even to a Nissan Leaf.
Stalnaker recognizes that the notion of virtual currency is in its infancy. When the disparity of definitions surrounding currency and influence someday merge, a “singular value” will reflect a common exchange of goods. Until then, he notes that “what currency really is … is language. We all speak in English dollars and some people speak in Rubles. What the Internet needs is its own language for currency.”
From Words to Wealth
Douglas Rushkoff, author and coiner of the term “social currency” notes in his book Program of Be Programmed that “only by understanding the biases of the media through which we engage with the world can we differentiate between what we intend, and what the machines we’re using intend for us — whether they or their programmers even know it.”
We’re in an era in which the bias of social media, value-added content broadcast via the Internet, has created a glut of data attached to identity largely through the medium of words versus action. So like the citizens of Worgl, we need to ask ourselves — how can we evolve the notion of online economy based on influence? How can we find a language of currency for the Internet?