Thinks 590

WSJ: “Why not abandon elections and replace them with surveys? Surveys turn citizens into “respondents” answering from home by phone or computer. Respondents are scientifically selected to represent a slice of the population. Answering is easy, to please Democrats, and since your qualities and attributes are selected without regard to your name, there’s no risk of fraud, which should please Republicans. Now that we have surveys made reliable by the science of polling, why do we need elections with their hoopla, ceremony, and expense—not to mention their chanciness, rowdiness and unreason?”

Subscribed on how the amazing digital transformation of New York Times: “Seen over the arc of the last decade, it’s clear that The New York Times has been slowly transforming from a newspaper, to an online publication, to a media conglomerate complete with technology-focused employees, apps, and new offerings every few financial quarters. Now The New York Times is effectively a tech company, with data scientists working just as fervently as its journalists. And they’ve done an impeccable job orchestrating several services and offerings into one platform, The Times. So, what can an aspiring subscription business learn from the last 12 years of the New York Times’s amazing transformation? Simply put, if you want to keep up with the times (no pun intended), you need to be flexible and use technology, data, subscriptions, and ultimately, make what the subscribers want your main focus. The New York Times thinks of its customers as subscribers, who have subscriptions, and ultimately, assets to the brand.”

Joel Mokyr reviews “How the World Became Rich: The Historical Origins of Economic Growth” by Mark Koyama and Jared Rubin”: “Where the book truly shines is pointing out why the Great Enrichment was relatively late in coming and why the pre-1750 world — with a few exceptions — remained poor. The authors admirably survey the consensus that has emerged on the subject. Three major factors held the economies back. First, as neo-Malthusians such as Galor and Clark have maintained, before 1750 population growth in many cases wiped out the fruits of productivity growth, such as they were. Second, predators of various kinds and extractive institutions (North-Wallis-Weingast’s “natural state”) not only pillaged and plundered the riches of the few places that had been economically successful, they extinguished incentives to invest and innovate. Finally, until institutions had been established to govern and control the accumulation and dissemination of useful knowledge, the opportunities for sustained technological progress remained too limited. As the authors point out in admirable detail, the Industrial Revolution meant that these three brakes on economic progress slowly dissolved to create the Great Enrichment, first in a few economies in the West, then in more and more places around the world.”

The MuCo Future (Part 7)

Workings – 2

Making MuCo as a Web3 entity is important for multiple reasons: governance is not in the control of a single ‘centralised’ entity but is decentralised, which in turn should lead to an increase in trust in Mu; Mu creation is decided by rules and is either capped or the increase is pre-planned, which should then lead to appreciating in the value of Mu over time creating an alternative to simply spending it; and the creation of a Mu Exchange, which allows trading of Mu without a central intermediary determining the price. This is how most cryptocurrencies work. The creation of new Mu can still continue with the proceeds being used for Mu operations. Mu transactions and the ledger can be onchain thus enabling Mu to be traded on other exchanges also.

The one assumption made above is that Mu cannot be converted back into fiat currency. This may be necessary to ensure it is not considered a ‘currency’ or a ‘virtual digital asset’ and taxed. One side of a Mu trade is of course Mu, while the other side of Mu is a product, service or an experience.

Let’s run through an example to see how this works in practice. Let’s say I have earned 1,000 Mu from various brands for my non-transaction actions – attention, data, voice and network. Now, I have two options. I can either hold on to the Mu with the hope that it will ‘buy’ more in the future than today, or I can spend (redeem) it on the Marketplace for experiences. Let’s say I decide to spend 300 Mu to get an advance copy of the new Daniel Silva book from HarperCollins. I then pay 400 Mu to attend an interaction with The Economist editors.

Brands will need a constant supply of new Mu. They can get some Mu from selling ‘experiences’ on the marketplace. They can also buy Mu from the daily auctions conducted by MuCo on the exchange. This is where price discovery happens. It is probably what happens on commodities markets with daily trades determining the price. At some future point of time, once enough Mu have been ‘mined’, MuCo ceases to offer Mu and lets Mu holders trade among themselves – this is what will perhaps lead to an appreciation in the value of Mu.

While MuCo is selling Mu, it has a clear source of revenue. What happens once all Mu are minted? How does MuCo then generate revenue? The answer could be two-fold. MuCo could then introduce a small fee for running the exchange, or it could simply remain a ‘protocol’ and end its existence as an independent entity. Mu exchanges (and there could be multiple of them) would create the liquidity, with the wallets on the public blockchain. (Note: This is perhaps a bit speculative and needs more thought.)

Whatever be the long future, as long as MuCo has created a lubricant to remove the friction between non-financial interaction between brands and consumers, it would have served its purpose. Investors in MuCo would benefit from the revenues from Mu sales and perhaps an initial pre-mine of the Mu tokens that they could later sell on the exchange(s).

Thinks 589

Thomas Sowell in 2002: “Turning out generation after generation of people who do not know what it is to weigh opposing arguments is producing intellectual couch potatoes who know only how to repeat whatever they have been indoctrinated with. They are precisely the kind of gullible people that the Nazis targeted in their years of struggle for power. I think it was Jefferson who said that freedom and ignorance cannot co-exist indefinitely.” [via CafeHayek]

FT: “Paying in cash, for those living in metropolises, is often treated as an anachronism, akin to filing a story with a typewriter or using a payphone. Notes or coins are treated as an inconvenient and dirty product of the past, fit only for tooth fairies and low-level tax avoidance (or in some cases, rather unsophisticated money laundering)…Journalist and author Brett Scott, who previously wrote The Heretic’s Guide to Global Finance (2013), takes a rather different line: “We must vigorously assert our right to use cash, and to see that as a political act,” he writes. Cash is not stopping human progress. Rather, it is a roadblock against a greater concentration of data collection and power within Big Tech and Big Finance companies — a combination of players that is pushing us to adopt its own “cloudmoney”.”

WSJ: “The concept of commutativity explains whether sequences make a difference, from slinging bags over your shoulder to adding ingredients in a recipe…Things are said to commute if it doesn’t matter in what order you do them. For example, 2+3 = 3+2, and the order doesn’t matter. Addition of ordinary numbers is commutative, as is multiplication, and this is very helpful for simplifying computations. When we study more complex concepts, however, things might not commute. Take cooking: It doesn’t usually matter in what order you add things such as salt and pepper, but it matters a lot if you’re making something delicate like mayonnaise.”

The MuCo Future (Part 6)

Workings – 1

Let’s dig deeper into the inner workings of MuCo. To make it simpler, we will first assume MuCo is operating in the Web 2.0 world – the current Internet as we know it. We will then later morph MuCo into a Web3 entity. The best way to look at MuCo is to follow the money and tokens (or points).

Think of MuCo as a Mu factory. It takes fiat currency as input and produces Mu. The Mu can then be distributed by the buyers (brands) to their customers – MuCo has no control over that process. MuCo maintains a centralised database which tracks the flow of Mu (from source to destination). End consumers have to come to MuCo to use the Mu – they begin by activating it by identifying themselves (email address, mobile number) to claim the Mu that has been given to them by brands. Thus, brands and consumers have “wallets” and transactions are stored in a database. This is almost identical to how current loyalty programs work.

Consumers will then want to redeem Mu. For this, MuCo will need to run a market of offerings from brands. This can work in two ways: either MuCo ‘buys’ the products from brands and ‘sells’ it to customers (like a Mu Shop) or brands can themselves sell directly to customers (in a Mu Marketplace). In the latter scenario, brands get Mu in return for their ‘experience’ offerings.

This is quite straightforward. MuCo derives its revenues selling Mu. With enough Mu out there, brands will find it to their benefit to create offerings for consumers. Mu works across brands – that is its true utility.

The limitations of the above approach are that there is dependency on MuCo for maintaining the integrity of Mu. Brands and consumers have to implicitly trust MuCo that it will not in any way debase the value of Mu or charge a ‘tax’ on transactions.

One point not discussed above is the price at which Mu gets sold by MuCo. Ideally, this should be via an auctions process so there is price discovery. But that will probably take time because it will need enough demand generation and therefore interest from multiple bidders. Until then, MuCo may need to set an arbitrary price and sell as brands ask for Mu.

MuCo is thus running a 2-sided marketplace between brands and consumers. The challenge such marketplaces face is the ‘cold start’ problem – creating enough demand on both sides to get activity going. To overcome this problem, MuCo may need partners who can help accelerate the process of getting Mu in the hands of consumers. It will also need to create an attractive shop to get consumers to see the value and utility of Mu before brands start coming in with their own offerings. This is where MuCo will need initial capital to bootstrap itself.

Thinks 588

Vinod Khosla: “Every major area has been innovated by high-risk experiments, whose chances of getting off the ground were very low. Take Airbnb. In 2007-08, if you’d said people would just let a stranger into their house, into their spare bedroom . . . give me a break! Luckily for them, what happened was we had the financial crisis in 2008, just when they were getting going. Suddenly, the proposition wasn’t: will somebody let a stranger into their house in their spare bedroom? The choice, for about 10 per cent of the people in the US at least, was: my mortgage is under stress; do I lose my house or let a stranger in? Given that choice, they didn’t want to lose their house. I recently asked [Airbnb co-founder] Joe Gebbia this question and he said: “Absolutely right, people who would never consider letting a stranger into their house did, because the alternative was losing their house and not being able to pay their mortgage right after the crisis.” So luck plays a role, but also innovation plays a role. Almost all societal large progress happens because of some improbable.”

Arthur Laffer and Stephen Moore: “Catalysts for inflation vary—excessive government spending, printing too much money, currency devaluations, specific and general shortages of goods and services. Once embedded in an economy they can create long-lasting inflation. The secret to curing inflation isn’t economic collapse and high unemployment but the opposite: pro-growth policies that create incentives for more goods, more employment, less government spending and sound money. As the economy produces more, prices go down. Conversely, austerity means less goods produced and less employment. How does putting people out of work and reducing the supply of goods cause the prices of goods to fall?”

Rui Ma: “In fast fashion, there’s something known as the “impossible triangle.” It’s the perfect production scenario, where a company can 1) quickly onboard lots of new styles at 2) low prices, while 3) being hyper-efficient in managing massive volumes of inventory. Unlike Shein, those other upstarts didn’t quite crack the third edge of that triangle. And that’s what left them trailing — according to Crunchbase — the fourth most-valuable tech startup in the world, with an estimated $100 billion valuation.”

The MuCo Future (Part 5)

LETS

My friend, Atanu Dey, had once told me about LETS (Local Exchange Trading System). It traces its origins to Michael Linton in 1983 in British Columbia. According to Investopedia: “Local Exchange Trading Systems (LETS) are locally organized, economic organizations that allow the exchange of goods and services among group members. The groups use a locally created units of value as currency which can be traded or bartered in exchange for goods or services. Members of LETS typically view the systems as organized and cooperative schemes that maximize purchasing power while benefiting members and the community.” From Slow Movement: “Instead of money LETS use ‘community credits’. People earn LETS credits by providing a service and they spend their credits on whatever is offered by other people in the scheme e.g. childcare, transport, food, trade services or home repairs. Where there has been a financial outlay to provide the service eg purchase of wood to make a box, the recipient pays for the wood, but not the service of making the box.”

Wikipedia adds:

A list of services offered by network members is put together to create a LETS scheme, and trading takes place between members using a local currency. The LETS foundation is a virtual currency, a check book, a directory as well as a transparent accounting system built on trust and community regulation. The first LETS required nothing more than a telephone, an answering machine and a notebook. Since then, there have been several attempts to improve the process with software, printed notes, and other familiar aspects of traditional currencies.

  1. Local people set up an organization to trade between themselves, often paying a small membership fee to cover administration costs
  2. Members maintain a directory of offers and wants to help facilitate trades
  3. Upon trading, members may ‘pay’ each other with printed notes, log the transaction in log books or online, or write cheques which are later cleared by the system accountant.
  4. Members whose balances exceed specified limits (positive or negative) are obliged to move their balance back towards zero by spending or earning.

LETS is a full-fledged monetary or exchange system, unlike direct barter. LETS members are able to earn credits from any member and spend them with anyone else on the scheme. Since the details are worked out by the users, there is much variation between schemes.

MuCo can be thought of as creating a LETS-like trading system. Think of it as a two-sided system. Consumers have time, personal information, their social networks, and their recommendations to offer – attention, data, network and voice. Brands can benefit from all of these. But they have no easy way to compensate customers for these. They could use points as part of their existing loyalty programs, but there are two constraints: rewards for these non-monetary actions need to be much smaller than what is possible via the loyalty programs, and not all businesses have loyalty programs. The way to solve this problem is to create a pan-brand solution delinked from money – that is where Mu as points or tokens comes in. Micro-incentives for small, in-the-flow actions all add up to enable a meaningful aggregate for consumers who can now be offered an array of ‘priceless’ experiences by the brands at close to zero cost. MuCo thus creates a LETS-like market where there is none today, a win-win for both brands and customers.

Thinks 587

NYTimes on 10 years of CRISPR: “The gene-editing technology has led to innovations in medicine, evolution and agriculture — and raised profound ethical questions about altering human DNA.”

WSJ on hypercasual games: “Mobile games that require little brainpower to play are becoming more sophisticated as their publishers try to cling on to fickle—and monetizable—players…“Hypercasual is still in its genesis phase with so much runway to be innovated on around this wonderfully pure notion of essentially a single gameplay loop,” said Clive Downie, senior vice president and general manager at Unity Technologies Inc., a 3-D content development platform that is used by hypercasual game designers. “Developers are looking for additional ways to add complexity and challenge to games.” Hypercasual’s popularity has boomed in the past two years. The number of hypercasual game downloads in 2021 increased to 15.6 billion from 12.6 billion in 2020 and 7.51 billion in 2019, according to Data.AI.”

Adrian Wooldridge: “It’s time to recognize that a new world is here to stay: We are at an early stage of a revolution in the distribution of work, driven by the miniaturization of smart machines and the ubiquity of the internet, that is as fundamental as the one that occurred with the industrial revolution in the 19th century and the office revolution of the early 20th century…It’s also time to recognize that both sides in the debate have a claim to be heard. Workers are right to want to work wherever they can be most productive. Forcing someone to endure a morale-sapping (and sometimes dangerous) commute just to keep a row of office desks filled is counterproductive. But employers are also right to worry that flexible work brings new problems. We need to shift the focus of the debate from the ideological to the practical — from the desirability of a change that is probably inevitable to the question of how to manage a distributed organization.”

The MuCo Future (Part 4)

Clash of Clans

Well-designed games grab our attention for long periods of time. One such game is “Clash of Clans” (CoC). Thanks to my son, Abhishek, I have been playing it for a few minutes daily for the past many years. It is the only game I play. (I tell everyone who is willing to listen that they should pick a game and stick with it for many years; there are a lot of marketers and product managers who can learn from games on how to ‘hook’ customers.)

Recently, CoC introduced a whole new section, “Clan Capital”. After the Home Village and Builder Base, it is the third expansion.

Every weekend, there are “raids” (attacks) that need to be done on other Clan Capitals. In return, one earns “raid medals” which can then be redeemed for various goodies.

Through the years, I have not spent a rupee on buying the in-game digital/virtual goods. But the time adds up. It’s fun and one also learns about gamification through the various tricks and tweaks CoC does to keep the interest going. (For example, they recently removed all training costs on troops encouraging gamers to attack much more.)

Mu can be thought of as doing something similar. It removes the financial element from the brand-customer equation – that has its own Loyalty 1.0 equation. What Mu does is bring in the non-monetary aspects into the equation. Give time (like in CoC), get rewards (like gems and medals in CoC) and then use those to ‘buy’ experiences (gold, elixir, dark elixir and various “Magic Items” in CoC). If all of this had cost money, I would have probably stopped playing it a long time ago.

What Mu therefore enables is for customers to ‘earn’ rewards in the form of Mu which can then give them exciting experiences that money cannot buy. In that sense, it “gamifies” our real world. And as far as I can tell, no one has done that before. This is what is unique about MuCo and Loyalty 2.0.

Thinks 586

NYTimes on 10 years of CRISPR: “The gene-editing technology has led to innovations in medicine, evolution and agriculture — and raised profound ethical questions about altering human DNA.”

WSJ on hypercasual games: “Mobile games that require little brainpower to play are becoming more sophisticated as their publishers try to cling on to fickle—and monetizable—players…“Hypercasual is still in its genesis phase with so much runway to be innovated on around this wonderfully pure notion of essentially a single gameplay loop,” said Clive Downie, senior vice president and general manager at Unity Technologies Inc., a 3-D content development platform that is used by hypercasual game designers. “Developers are looking for additional ways to add complexity and challenge to games.” Hypercasual’s popularity has boomed in the past two years. The number of hypercasual game downloads in 2021 increased to 15.6 billion from 12.6 billion in 2020 and 7.51 billion in 2019, according to Data.AI.”

Adrian Wooldridge: “It’s time to recognize that a new world is here to stay: We are at an early stage of a revolution in the distribution of work, driven by the miniaturization of smart machines and the ubiquity of the internet, that is as fundamental as the one that occurred with the industrial revolution in the 19th century and the office revolution of the early 20th century…It’s also time to recognize that both sides in the debate have a claim to be heard. Workers are right to want to work wherever they can be most productive. Forcing someone to endure a morale-sapping (and sometimes dangerous) commute just to keep a row of office desks filled is counterproductive. But employers are also right to worry that flexible work brings new problems. We need to shift the focus of the debate from the ideological to the practical — from the desirability of a change that is probably inevitable to the question of how to manage a distributed organization.”

The MuCo Future (Part 3)

Examples

I asked myself: which experiences would be costless for the brands I engage and transact with, and at the same time be priceless for me as a customer? In loyalty parlance, these are 1:100 rewards – cost is 1 for the brand and value is 100 for the customer. Airline miles are the best and most successful example. The incremental cost for an airline is just providing free meals (assuming the seat was anyway going empty), while the perceived value for the flyer is that of the actual cost of the ticket.

  • Daniel Silva is one of my favourite thriller authors. His new Gabriel Allon book, “Portrait of an Unknown Woman”, was published on July 19. I would have loved to get early access to the book by paying Mu (tokens).
  • A similar approach can be taken for releases on Netflix or other OTT platforms. I could have paid in Mu to get early access to the recent “Lincoln Lawyer” series on Amazon’s Prime Video.
  • We participate in many online webinars. Most of them have a chat box to type in the question; the moderator then picks a few for the presenter(s) to answer. I could use Mu to ensure my question is prioritised and answered.
  • Publishers could connect readers with authors. For example, I read Richard Rumelt’s book, “The Crux.” I would be keen to ask a few questions to the author – and Mu could be the passport for that conversation.
  • Influencers could do the same – offer their followers exclusive content in exchange for Mu.
  • Media companies could offer interactions with editors and journalists with payment by Mu as the entry (access) fee. Imagine being able to discuss the Ukraine crisis or the inflation scenario with the team at The Economist.
  • Content companies with paywalls could offer a Mu-based payment system for single articles (as an alternative to a full subscription package).
  • Samsung could offer early access to their new mobiles for Mu to long-standing Samsung mobile customers (like me).
  • Fashion companies could allow me to use Mu to unlock special features on their website (an Augmented Reality option, for example).
  • In a long queue at a shopping outlet, I could use Mu to get to the front of the line and checkout faster. A similar approach could be used at airports – not just for check-in but perhaps even at the security and immigration counters.

Most of these experiences do not happen today. It is because customers are reluctant to part with their money to pay for these and brands do not have an alternative ‘currency’ that they can accept. This is the friction that Mu can eliminate. Mu becomes the alternative – which customers earn with their actions delinked from spending. Because Mu is, in a sense, ‘free’, we would be more amenable to using it for optional and yet exclusive experiences. As customers start seeing value and utility for Mu, they will be keen to earn it – and that is where brands will benefit in the form of attention, data, referrals and reviews. Think of things that Mu can ‘buy’ as “digital goods” – akin to what happens in games.