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Four Trends with Great Potential


Ken H.

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I’m excited about several evolving trends using technology in new ways that show the creative side of humanity and offer (at least some) promise to address some of the issues of our day:

 

Cash Mobs – Groups of people getting together, usually casually and quickly connecting via a social-media tool, who descend upon a merchant in distress with the sole purpose of spending money there.

 

Kickstarter.com (and other similar) group financing sites - Enabling ordinary people to help not so ordinary ideas get off the ground. (Not yet legal in Canada but coming (I hope).)

 

Intra-country micro loans - Some into 3rd-World countries (e.g. I’ve made Kiva.org loans for years) have been around a long time, but the growth in them within 1st-World countries is exciting. Again many people coming together to help others in distress.

 

Social Impact Bonds – Government bonds issued indexed to successfully addressing social issues. Win/Win/Win – Investors get a return for governments being successful in reducing social cost, peoples' lives are improved. (E.g. homelessness.)

 

 

What other new and creative ways using tools (e.g. cell phones, Twitter, Facebook) that didn’t even exist a few short years ago illustrate that we’re not quite ‘down for the count’?

 

 

 

 

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Joe Frickin' Friday
Cash Mobs - Groups of people getting together, usually casually and quickly connecting via a social-media tool, who descend upon a merchant in distress with the sole purpose of spending money there.

 

I would guess that in the vast majority of cases, this amounts to polishing the brass on the Titanic. I suspect most distressed small businesses are that way because of long-term issues - a poor choice of location, business strategy, or something else - and that a ahort-term injection of cash just delays the inevitable closing of doors.

 

Kickstarter.com (and other similar) group financing sites - Enabling ordinary people to help not so ordinary ideas get off the ground. (Not yet legal in Canada but coming (I hope).)

 

A little like crowdsourced VC funding - except that the donors receive no financial equity in the outcome, which means this is pure charity. Curious, why is this not yet legal in Canada?

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Ken, another one to look at is Kiva.org. It is small loans paid to people in developing countries where $25.00 is real seed money for a dream.

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Cash Mobs - Groups of people getting together, usually casually and quickly connecting via a social-media tool, who descend upon a merchant in distress with the sole purpose of spending money there.
I would guess that in the vast majority of cases, this amounts to polishing the brass on the Titanic. I suspect most distressed small businesses are that way because of long-term issues - a poor choice of location, business strategy, or something else - and that a ahort-term injection of cash just delays the inevitable closing of doors.

Yeah could be. Although there may be some domino effect that has longer term implications. People becoming familiar with a SMB they were not before for example. Or helping a SMB owner get past a short term hump.

 

Kickstarter.com (and other similar) group financing sites - Enabling ordinary people to help not so ordinary ideas get off the ground. (Not yet legal in Canada but coming (I hope).)
A little like crowdsourced VC funding - except that the donors receive no financial equity in the outcome, which means this is pure charity.

That’s not always the case. Some have a speculative return built into the prospectus. Besides, where they don't, what's wrong with pure charity if it helps something new and potentially great get started?

 

Curious, why is this not yet legal in Canada?

The laws are quite strict about when a solicitation for investments has to come under Security Rules Regulations. I’m not sure of the exact specifics off the top of my head, but I think it’s something like if there are to be over 20 investors you have to do a full blow federal Securities Filing. It’s a consumer protection thing. Cavite emptor is not the automatic law of the land here. However there is a movement afoot to loosen the restrictions a bit to allow more things like kickstarter.

 

 

I’m not saying all of these or other ‘new-think’ ideas will be successful, undoubtedly some will not. Rather I think it’s worth celebrating that the (mostly from the younger generations) out of the box thinking of how to tackle problems in new unique ways is happening.

 

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May make a capitalist out of you yet! ;)

LOL. I’ve never been ‘anti-capitalism. ’ I’m just not a proponent of unfettered pure play capitalism where quest for the almighty dollar trumps all else. Pure capitalism doesn’t work any better than pure socialism, or pure dictatorships, or a pure play of any other social/economic model one could name. Success of societies is all about attaining balances.

 

However debating the pros & cons of various social/economic models is probably a different thread, and ground for the most part we’ve covered here in one way or another before.

 

My interest in this particular thread is in the innovation of new ways of thinking on how to address social/economic problems. I.e. when the tried and true doesn’t work – try something new! And I like (and would like to learn more about) that.

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Joe Frickin' Friday
Besides, where they don't, what's wrong with pure charity if it helps something new and potentially great get started?

 

No complaints, just comparing/contrasting with conventional VC.

 

 

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Dave McReynolds

I don't think this is a new concept. Anytime anyone applies for a grant from the government or a private foundation to fund research, an artistic endeavor, or takes advantage of various programs available to assist new businesses, the same principle is being applied.

 

The difference here is that these are ways that ordinary people can participate in these efforts. We all have an instinct to help our fellow men, with the hope that a better society will result, and if these avenues appeal to some more than donations to a church or the Boy Scouts, then why not?

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these are ways that ordinary people can participate in these efforts.

Yes and that's what I like about some of the newer concepts, even if just new ways to enable old ideas. To me they all forms of positive energy. New ways to get ordinary people involved in improving society.

 

In particular I’m excited the advent of Social Impact Bonds. What could be more positive than paying people for investing in efforts to reduce the aspects of society that have real cost? Even the issuers of the bonds are double-incentivised to perform. Both by needing to provide a return to the investor (and thus encourage more future investments in same) and by the real cost savings they realize in improving the effectiveness of thier social programs. And not to slight in the least the real impact on improving lives. The Canadian federal gov’t has recently come out endorsing the concept and a plan to encourage the use of them more. What a great innovation.

 

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Kickstarter isn't typically a charity - the benefit to donors is often an opportunity to buy some pre-release gadget (or other thing) before anyone else, and often at a steep discount. The best kickstarters have tiered buy-ins, and the earlier you get in, the better the discount.

 

The other thing about kickstarter is that unless the funding goal is met, they don't get the money. (And the donors aren't charged.)

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May make a capitalist out of you yet! ;)

LOL. I’ve never been ‘anti-capitalism. ’ I’m just not a proponent of unfettered pure play capitalism where quest for the almighty dollar trumps all else. Pure capitalism doesn’t work any better than pure socialism, or pure dictatorships, or a pure play of any other social/economic model one could name. Success of societies is all about attaining balances.

 

However debating the pros & cons of various social/economic models is probably a different thread, and ground for the most part we’ve covered here in one way or another before.

 

My interest in this particular thread is in the innovation of new ways of thinking on how to address social/economic problems. I.e. when the tried and true doesn’t work – try something new! And I like (and would like to learn more about) that.

I know ... I was just having you on! ;) To be honest ... I'm all for people helping each other out without either depending on the government or wallowing in self-pity to the pont that the media steps in to make a meal (or 12) of the "tragedy ... the tragedy ... the tragedy." We have become far too codependant on these two institutions, if you ask me!

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