The passionate nerds in Revision Labs’ Learning 2.0 Lab have been brewing a new, more effectively customized yet community-inclusive model for organizational learning.  I tweet.  But given how much of their fancy philosophizing flies around the office, I thought a tangential blog about how people make decisions around education could be appropriate.

I’ve been working with Professor David Harrison and  SkillUp Washington on an upfront financing mechanism to help King County’s working poor onto a path of sustainability through education and training.  While that sounds boring and tedious (to me initially, at least), the essence for this need stems from the oft-overlooked heterogeneity of decision making models across socio-economic classes.

What?  I know, right?  Different people make decisions differently, and they all (to some extent) deviate from those archaic models of “rational decision-making” that we swallow and regurgitate in every Economics 101 class.

While we all respond to signals slightly differently, there’s a dramatic difference between how the low-income make decisions and weigh trade-offs and their middle and upper-class counterparts.  Cognizance of this alone can help us better customize public policy toward funding around training and education for the working poor.

Arlene’s Decision Making Model

“Arlene” is our avatar.  She is the traditional socio-economic underdog; over 25, under-skilled, working but earning annually less than 200 percent of the federal poverty line.  Arlene struggles to satisfy her basic needs, and the opportunity cost of enrolling in school and remaining actively enrolled is high.  The conventional incentives traditional students are motivated by (well paying job, financial security, social status) to persist through each semester are not the same for Arlene, who can’t consistently afford the time it takes to obtain a degree.  More importantly, her expected value of a degree as far lower, given a lifetime of internalizing social stigmas and/or low-paying, crummy past employment.

The oft-cited “rational” decision-making model is not ubiquitous.  Divergences from the standard model are most obvious among the low-income, who must choose daily between basic necessities like food and rent.  Their immediate future is mired in uncertainty, let alone long-term future, much unlike their middle and upper-class counterparts.

Low-income, often ethnic minorities and/or women, in King County (and everywhere) possess so few tools and resources that the constraints and preferences they juggle in making the most “rational” decision are frequently misaligned with a sustainable future.

Greater income volatility for low-income individuals increases their need for short-term credit.  Arlene’s time preferences and discount rate on future earnings is higher than middle and high-income earners; she can’t afford to prioritize education, given the many imminent constraints working poor face.  Arlene’s expected value of future full-time employment is diminished by daily uncertainties, and consequently far lower than what we may “rationally” predict.  Education has been shown to lower one’s discount rate in decision-making and permit the self-discipline that financial sustainability demands[1].

The inability to “afford” to wait to consume A (food, rent, childcare) over B (books and transportation to school) by Arlene and her counterparts reinforce barriers to graduation and full-time employment.  Arlene’s continued enrollment and active participation in community college and training programs is one of the most crucial building blocks of self-sufficiency, yet it is highly fragile and easily disturbed.  And the reason it is so fragile is because of the above: she can’t afford time and the expected value of that time spent on education is low, shrouded by uncertainty and past experiences.  Promises just aren’t as incentivizing for Arlene as they are for you and me.

An upfront financing mechanism that lowers the discount rate of re-enrolling next semester and raises the expected value of earning a degree would help clear Arlene’s path to self-sufficiency by making it more obvious and more certain.  A pay-as-you-go system that financially supports Arlene’s ambitions to become, for example, a registered nurse by providing partial upfront wages (that she would earn as an RN) would give her both the financial stability and confidence in the future necessary to complete the steps needed to do so.  It is precisely this lack of ready resources that reinforces the traditional barriers to entry to sustained training and employment.  This financing is an investment in human capital.  The outlay cost is the price of Arlene’s increased certainty in earning a degree that secures a good job.  The reward is the development of human capital, satisfying demand for high-demand industries, and the social and economic spillover effects of having the working poor move out of poverty.

We propose helping Arlene along the way to employment and bringing future financial rewards closer to home, before securing a job, and allowing her to repay the investment over time and below market-rate interest, post-employment.

[1] Bauer and Chytilover: The Impact of Education on Subjective Discount Rates in Ugandan Villages. March 2009.  http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1369803

Community, Consumer Loyalty, and Word-of-Mouth Marketing

When a company creates community around its products, it ensures customer loyalty. When engaged in a community, consumers no longer feel like they’re consumers. Rather, they see themselves as guests, members, and participants congregating around a common goal or belief. That change in mindset plays an integral role in up-keeping consumer commitment and in encouraging word-of-mouth marketing.

But why stop there? If community cultivating can serve as a marketing strategy and as the best possible customer care model available, shouldn’t it be able to do more?

Well, it can. A business’s community of fans, clients, followers, subscribers, guests…whatever you want to call them… can also take care of product design.

Peering and Linux

The idea of outsourcing product design to the public has become much more popular with the invention of the internet. It is the internet that has allowed businesses to source the intellect of people all over the world. What we’re seeing, as the Wikinomics authors Don Tapscott and Anthony D. Williams describe it, is a “new form of horizontal organization [that] is emerging [to rival] the hierarchical firm in its capacity to create information-based products and services, and in some cases, physical things” (22).

Tapscott and Williams call this new form of organization ‘peering,’ but the act of increasing corporate transparency and bringing in the public to help design and create a product is also becoming known under different vocabulary such as ‘open sourcing,’ ‘crowd sourcing,’ ‘peer-to-peer production,’ and ‘community-based design.’

One of the most familiar cases of outsourcing product design to the public is the example of the Linux computer operating system. Linux was started by a man named Linus Torvalds in 1991. Torvalds took the existing Unix operating system, created a simpler version of it, and then posted that version online for other programmers to view and modify. Some of the programmers made changes, for free, Torvalds ended up licensing the program under a general public license, and Linux as an open source operating system was born (Tapscott and Williams, 24).

Today, thousands of volunteer programmers make modifications to Linux on a daily basis, and because it’s reliable and more importantly, free, Linux is considered an important “enterprise software keystone” for many companies (Tapscott and Williams, 24).

Linux represents the perfect example of an organization or a business sourcing the public to help design a product. With the internet, especially the onset of Web 2.0, with our still sour economy, more and more companies are adopting the open source model. It’s cheaper than supporting a bulky design team; it can be quicker than using traditional design methods; and perhaps most importantly, the transparency and trust inherent in peering and open source strategies are incredibly effective at cultivating that longed-for sense of community and customer loyalty around a product.

Of course, with that sense of community and loyalty centering around a product, businesses are rewarded with increased word-of-mouth marketing and increased participation in product design. It’s a virtuous circle. Open up to the public, allow them an opinion on the product design, secure their loyalties and their powers of advocacy, garner more interest in the product, and ultimately receive more input in product design!

I want to go into more detail on different businesses and companies that operate on the open source model, but I think a separate blog post should be dedicated to exploring those distinct examples. Look for it next week!

Collaboration = Wealth

For now, I would like to close out with a Ted Talk by Howard Rheingold on the history of human collaboration, current economic thought on human collaboration, and the future of human collaboration. In particular, I want to draw attention to the last six minutes of Rheingold’s talk where Rheingold starts to talk about how open sourcing, peer-production, and cooperation, can transform into wealth.

*Tapscott, Don and Anthony D. Willilams. Wikinomics: How Mass Collaboration Changes Everything. USA: Portfolio, 2008.

Re-Vision Labs has partnered with the innovative interdisciplinary program Three Degrees for the Digital Media and Learning Competition supported by the MacArthur Foundation.  If the joint proposal is successful in securing a grant, Re-Vision Labs will create a participatory online platform to connect Three Degree’s interdisciplinary Climate Justice Seminar with host community partners in the high-Andes and other climate vulnerable communities around the globe.  Please check out the entire proposal here—we are looking to find additional innovative and established partners within the competition to see whether our collaboration can be strengthened further.

Three Degrees, which is comprised of 25 graduate students from 15 different departments at the University of Washington, is researching how communities in the high-Andean regions of Ecuador will adapt to glacier retreat.  At the completion of the 5-month seminar the graduate students will create climate adaptation assessments focusing upon 5-issue areas:  health, food & water, security, equity, and justice.  Currently, the seminar is in its first phase as pilot project.

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by Ashley Best
Re-Vision Labs Fellow Emeritus

Need the current scoop on education in the United States? Check out these links!

STATE OF THE UNION: President Obama gave the State of the Union last night and unveiled his plan to use healthy competition to bolster performance in schools across the nation and to work toward reducing the high cost of tuition through various avenues.  His “Race to the Top” program rewards schools that make strides in raising academic standards and teacher quality, and improving failing schools .  This plan would help schools that have weakened their standard under the No Child Left Behind act, as floundering schools currently lose federal funding and districts cling to what monies they have available.  It is estimated that these programs will cost in the ballpark of $4 billion. “In the 21st century, the best anti-poverty program around is a world-class education,” Obama said. “No one should go broke because they chose to go to college.” Tax breaks and student loan payback incentives are designed to ease the burden places on students and families under the high cost of college tuition.  The following links explore these plans and their implications of the future of United States education.

"We only reward success." - President Obama

1. The Official Plan – From the White House website

2. Prepared Text – The basics of Obama’s vision to improve the United States’ education system

3. The Nitty Gritty - A detailed account of the individual facets of the new education plan

4. Show Me the Money – How do we pay for “Race to the Top”?

5. United States Student Association – The country’s oldest and largest national student-led organization praises education ideas

Check back for next week’s hot topic!  Education is empowering. Enjoy the week!

A New Kind of Worker

Last spring, I came across a series of articles in Time Magazine called ‘The Future of Work.” The series stated that the coming decade will bring an end to the ‘climbing the corporate ladder’ trend that we’re all so familiar with.

The upcoming generation of workers, according to a consulting firm quoted in the Times series, will no longer be defining success by paycheck, rank, or seniority. Instead, people will begin to define success “‘by what matters to [them] on a personal level,’ whether that’s the chance to lead a new-product launch or being able to take winters off for snowboarding”(Fischer, “When Gen X Runs the Show”).

The series goes on to point out that workers are no longer as willing to commit themselves, body and soul, to their jobs and only their jobs. Balance in life is becoming a new and important priority.

A New Kind of Company?

My question is this: If money is no longer the primary determinant of success for individuals, how will this new trend affect the way our corporations and businesses measure success?

If this new generation of workers are defining success by how well they maintain a work/life balance and how often they’re able to achieve their personal goals, does that then mean that our companies will cease to operate only for money? Could there ever exist a future where entire businesses measure their success not by sales or clients but by their ability to attain certain goals while maintaining balance?

Being a bit of a realist and subscriber to free market philosophies, I’m not entirely convinced this could, indeed, be a feasible future.

However, it is interesting to note that there are already some companies who are seeking to define their success on these new, more balanced terms. The long-standing outdoor clothing company, Patagonia, Inc. is one of them.

Founded by climber and surfer, Yvon Chouinard, Patagonia has always been a little bit of an anomaly among businesses for a couple of reasons:

1. The goals of the management team and employees are closely related to the goals of the clients. Those goals are, predictably, enjoy the out-of-doors in comfortable out-of-door-wear. That’s how the company got started in the first place: Yvon Chouinard started making his own equipment for personal use.
2. The company’s long term success depends on the preservation of wild spaces.

So here we have a company run by people with personal goals of enjoying wild spaces with both a personal and corporate interest in the preservation of those wild spaces.

The end result? A company who, like the future generation of workers, measures it’s success in a new way.

As Yvon Chouinard writes in his book Let My People Go Surfing, Patagonia evaluates its success not on sales numbers but on the “number of [environmental] threats averted: old-growth forests that were not clear-cut, mines that were never dug in pristine areas, toxic pesticides that were not sprayed,” or conversely, on the positive results of dismantled dams, restored wild areas, and creation of parks and wildernesses (Chouinard, 78).

By those measures, Patagonia has been extremely successful. As of 2006, Patagonia’s 1% for the Planet program in which 1% of the company’s sales are donated to grassroots, environmental groups has caught on with over 400 other companies (Chouinard, XI). Since 1985, over $22 million has gone to environmental groups from Patagonia alone (Chouinard, 78).

A Hopeful Outlook

Every company has a mission statement. Patagonia’s is: “make the best product, cause no unnecessary harm, and use business to inspire and implement solutions to the environmental crisis” (Chouinard, 78). The company focuses not just on a profit or even solely on producing a product. It also brings into consideration somewhat loftier goals like avoiding inflicting unnecessary harm and seeking to sustain the environment.

Perhaps the corporations of the future will have mission statements of a similar nature that look at success from a broader, more open perspective and that make more of an effort to incorporate all three of the elements of the Triple Bottom Line (people, planet, profit) than they do today. Profit will always be an integral part of business, but perhaps, someday, people will view profit as something that ca be achieved not through the ‘rape and pillage of the earth’ but rather by doing the right thing (Chouinard).

Perhaps someday, corporate success will be defined not just by numbers in a bank but also by what good that company has done for humanity at large. Perhaps someday, the new business philosophy will be: Why stop with profit alone when your business can change the world?

I’ll close out with another quote from Let My People Go Surfing that really highlights the potential role that business can play in making our world a better place:

“A certain void exists now with the decline of so many good institutions that used to guide our lives, such as social clubs, religions, athletic teams, neighborhoods, and nuclear families, all of which had a unifying effect. They gave us a sense of belonging to a group, working toward a common goal. People still need an ethical center, a sense of their role in society. A company can help fill that void if it shows its employees and its customers that it understands its own ethical responsibilities and then can help them respond to their own.

Patagonia will never be completely socially responsible. it will never make a totally sustainable non-damaging product. But it is committed to trying” (Chouinard, 259).

*Chouinard, Yvon. Let My People Go Surfing. New York: Penguin Books, 2005.

How Do You Achieve Critical Mass in Social Media?

There is no question about it, when you first start a blog, a Facebook page, or a Twitter account, it is HARD to build up your account.  In no way does the 1980s “if you build it, they will come” philosophy work in social media.  You have to prove your worth on the social media site, and you have to put the work in to get out there and let people know you exist plus prove to them that you’re worth spending time with.

There isn’t just one thing that brings you to a critical mass.  It has to do with the quality of your posts, your ability to understand and cater to your target audience, the focus, authenticity, and consistency of your outreach efforts… and truth be told, a bit of luck.

Hitting critical mass is quick, unpredictable, and totally exciting!  And once critical mass happens, the momentum soars.  People will come to you.  It is a glorious time!

What Number Makes Critical Mass?

At LinkedIn, users get a special prize for having more than 500 connections.  Is 500 the magic critical mass number?  Do you only need 500 fans, 500 blog visitors per day, or 500 Twitter followers, before it takes on a life of its own?

I would say it depends on the quality of your posts as to whether your critical mass will be 500, 1,000 or 2,000.  High quality posts, such as those on our client TisBest’s Facebook page, quickly allowed the company to reach 500 loyal fans.  Once that happened, the Facebook fans took off on their own – telling their friends who in turn tell their friends – and quickly the TisBest fan base surpassed 1,000, and continues growing strong.  And they don’t have to try anymore – they can focus on continued quality and timely engagement.

However, we have other clients who take longer to learn how to effectively engage their audience and turn fans into advocates.  For them, it takes somewhere between 1,000 and 2,000 fans before their accounts really take off unattended.  It depends quite a bit on post quality and well-timed regularity, as well as developing the skills to truly engage.

Metcalfe’s Law, Zipf’s Law, and The Long Tail

These three principles are often spoken or written about in discussions of critical mass.  In the blogging spirit of brevity, rather than fully dissecting them I’ll just give a brief summary and hope that in doing so I don’t grossly oversimplify the ideas so much that they are unrecognizable.

They are all 3 related:

• In Metcalfe’s Law, the value of a network is proportional to the square of the number of users who are connected within that network.  Fair enough: your network is only as powerful as its number of users*.  (Bob Metcalfe is attributed to inventing the Ethernet, by the way.)

• Zipf’s Law is a law of scale, where the quantity of (whatever it is you’re studying) is inversely proportional to its rank within a group of (whatever it is you’re studying).  So essentially the popularity of a word, website, or fan page follows a predictable distribution that is proportional to the popularity of all the words, websites, or fan pages.

Not terribly profound, but it does put things in perspective:  if you are a microfinance site, you can only be as popular as microfinance sites are – a microfinance blog’s fan size and growth is proportional to other microfinance blogs, and will not be proportional to a social media blog, or example.  Unless an unpredictable and large variable comes to play, social media blogs are just going to be more popular than microfinance blogs, so there is no reason to strive that high!

• The Long Tail is essentially a niche marketing strategy, coined by Clay Shirky and popularized by Chris Anderson in a 2004 Wired article and later a book by the same name.  A free market generally follows a distribution that favors the most popular 20% of retail items.
  

So think of movies:  the top 20% of movies are all that Blockbuster or Wallmart would ever care about and stock, because that’s all that works with their market model.  They can’t have a bunch of slow-selling items on their shelves for months at a time.  But then along comes Netflix, who is making a killing on the other 80% of the titles!  It costs next to nothing for Netflix to stock a whole lot of different titles due to their new kind of model.  The same is true for blogs, Facebook pages, or Twitter accounts.  So what if you aren’t in Technorati’s top 100 – you can still make a big impact.  Thanks to Netflix, there are a whole lot of documentaries that are actually getting seen – and changing people’s minds – because someone believed in the long tail.

Personally, I don’t think any one of these principles stands on its own as a guide for how we should think about critical mass in social media.  But together they do begin to paint a picture of the types of things that play a part in success.  And the greatest factor of all is still the creation and maintenance of an infrastructure of true engagement.

All three principles fall flat if they aren’t effectively set up and maintained.

*Note:  there is some argument that users do not equal Metcalfe’s original description of “compatibly communicating devices”, but we’re interpreting loosely here anyway.

Speaking of the Long Tail….

Sometimes it Just Takes One Person

At One Green Generation, I have an advocate who has brought me far.  That advocate just happens to be one of the top respected people on reddit.com.  That means every time he or she posts a link from my site, it has the potential to go up the reddit ratings very quickly.  On January 4, 2009, when many people were just starting to enact their “go green”new year’s resolutions, qgyh2 posted a link of mine, and my blog stats rose from 500 a day to nearly 3,000 in one day.

While most of those 2,500 new people did not stay and become regular readers or subscribers, a few did.  And, because there were so many people coming to the site, one or two of those reddit users also had a StumbleUpon account, and happened to have a lot of clout there.  The next day, reddit and StumbleUpon users together brought almost 5,000 people to the site.  Then more people Stumbled the post over the coming weeks and months, and still today I have at least 150 readers each day coming to read that one post.  And over those two days, my site surpassed its critical mass.

Which brings me to….

Sometimes it Just Takes One Post

Now don’t get me wrong, you can’t have a site full of crappy posts with one good one.  Yes, people will come and read that good one, but they won’t stick around.  Overall quality needs to be paramount.  It is important to occasionally spend quite a bit longer to write a well-researched, well-laid out article that people will pass on to their friends.  These longer, deeper articles are ALWAYS the ones that end up Stumbled, reddited, and bringing in hits long after I’ve posted the article.

But note that these posts will generate high traffic only if they come at the right time, and when you’ve already hit critical mass.

Typical articles that work well in this category are How To or Top Ten articles.  They’re also articles that get to the heart of whatever field your blog plays within.  And finally, something I have never done, they are the posts that list a lot of other bloggers and essentially bolster their egos.  Magazine and newspaper blogs do this:  The Top 100 Bloggers of the Year, for example.

And one final note:  it’s rarely predictable when critical mass will happen, and when a post will go “viral.”  You can’t get disappointed if you spend 24 hours creating the best article you’ve ever written, and it doesn’t get any play at all.

Viral Happens More On Some Days Than Others

Watch your site stats.  Watch your comments.  When is there the most activity on your site?  What time of day do your readers most like to read your posts?  Answer these questions, and then make sure your most important articles are posted during the peak times.

If your site is virtually dead on a Sunday, don’t post the article on Sunday.  If it peaks on Wednesday afternoon (many sites do), post on Wednesday morning so it’s there and waiting.

Don’t Discount SEO

The intricacies of SEO are for another post, but I encourage you to not take SEO lightly.  Some of my most loyal readers came to my blog via a recipe they found on Google, or a solution for how to get rid of ants sustainably on Yahoo.  How do I know this?  They have told me so.

Follow Your Own Path

I want to conclude this article by recognizing the incredible human-ness of the internet and every social media site.  The internet is people, through and through.  People are not always predictable.  And people are not always good predictors.  So write good articles and posts that follow best practices, write them frequently, tell your friends and acquaintances about them, and have the infrastructure in place that allows for good strong engagement.  If you do all of those things well, and have a little patience, you’ll probably do just fine!

Have You Experienced Critical Mass?

Please share your tips with all of us, or ask questions if you have them!

In 2001, Washington experienced a 6.8 magnitude earthquake. Although some infrastructure and buildings required extensive repairs, not a single life was lost. When compared to the tens of thousands of lives lost in the 7.0 magnitude quake in Haiti, it is clear that poverty was a key factor.

Already one of the poorest countries in the world, our neighbors in Haiti need our help.  They have lost their government, their roads, their homes, and – I would imagine – their hope.  And we can do something for them.

Seattle Greendrinks, SeaMo, Re-Vision Labs, and Global Washington have joined together to co-host “Washington for Haiti” in recognition of the urgent need for support.

Some may ask why it is necessary to hold an event, rather than just encouraging direct donations. We agree that direct donations are critically important, but we feel compelled to provide an opportunity for the Seattle community to gather and learn from experts and witnesses, since the more we know about the tragedy, the more likely we are to commit to supporting the long term changes needed to ensure that a disaster of this magnitude never happens again.

Please Join Us

When: Thursday, 28 January 2010, 6pm-9pm

Where: Pike Brewery, 1415 First Ave Seattle WA

What: A Benefit to support the work of one of Haiti’s most well-established economic development organizations, as they play a key role in emergency relief and long term reconstruction efforts.

Who: Hear from speakers representing Fonkoze and other organizations working on the ground in Haiti, as well as live music from Sunday Evening Whiskey Club.

Cost: $20 suggested donation at the door, with all proceeds going directly to Fonkoze.

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