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I can’t hide that I was eager to review The Whuffie Factor by Tara ‘missrogue‘ Hunt since I learned that the book was coming out earlier last year. I found Tara by some links that lead me to her blog and I couldn’t agree more with the ideas she expressed there, they were the validating point for ideas I was beginning to have about  Marketing and Economy.

My Copy of The Whuffie Factor

My Copy of The Whuffie Factor

In a previous post I did a study of Whuffie in a more anthropological and historical way comparing it to the reciprocity used in the Inca Empire. But that post was made from the dots I connected from Tara’s posts and other sources including Cory Doctorow’s book.

Finally a week ago, the book arrived in a amazon.com box and I was very happy to finally read it and maybe even post my own review, which I’m doing right now.

The Whuffie Factor is an amazing book, ok not a very quantitive way to express it, but if you read it you’ll understand the importance of those kind of words in saying what you think about something. Tara proposes the Whuffie theory in the first chapters which is basically how to establish a strategy and a course of action in building relationships with your community (costumers and non-costumers).

In the 1980s Michael Porter wrote the importance of strategy in doing business  and he has been proven right every single day since he published that book, today Tara publishes the importance of Whuffie in building a business and a personal brand from now on, and as Porter’s book this one will also prove to be true in the next century if not longer.

The book is very rich in examples about how to win and make others earn a great deal of Whuffie and it’s also divided in to the 5 key points needed to build Whuffie giving a special highlight to the points where it’s needed. This 300ish page book will be sucked up by your brain in a very few hours of reading it and it will give you an insight in what are the key actions to take in order to build a close relationship with your community. If you already think costumer is the first thing, it will show you how to engage in the conversation and if you’ve been skeptical about embracing social networking tools to leverage communication with your costumers, this book will show why it’s important and also show you a myriad of real cases where applying the 5 Whuffie Principles has led to succesful outcomes.

I could talk more in depth of the book, but my best advice is to read it, because no one can explain Whuffie better than Tara.

This blog post was written about 6 months ago and never published, while searching through old word documents I found it and felt it was the right time to publish it considering that Tara’s book is coming out April 21st. I have not read the book yet but for what I’ve read and conversed (specially on twitter) with Tara i must recommend this book as a must read for anyone interested in communities and social capital (which should be all of us).


With Tara Hunt’s book coming out soon (update: The Book is Already Out) , the social networks gaining users by millions every month and with communities becoming more close than ever, I thought it was accurate to mention some of the ancient forms of Whuffie and how they worked compared to now. Whuffie worked in the past, in some cultures is working right now and will definitely keep working in the future. The intention of this post is to show that The Whuffie factor has been key in some ancient systems and that it will be key in the coming years of this evolving system. Many other authors including Francis Fukuyama, Thomas Friendman and swedish Funksters Jonas Ridderstrale and Kjell Nordstrom predicted a change was coming. Today, brains are more important than capital, because brains attract it and therefore relationships between brains will lead to the creation of new things. Whuffie will be the currency that tells us with who we can collaborate and who can collaborate with us.

Today Whuffie is being defined as: 

“The sum of the reputation, influence, bridging capital and bonding capital, access to ideas and talent, access to resources, potential access to further resources, saved up favors, accomplishments (resumes, awards, articles, etc.) and the Whuffie of those who you have relationships with.”(Tara Hunt)

 I think it’s time to welcome this new phase of the economy with a little bit of background history on how it was and how we are going back to a similar organization.The Reputation based economy has been the goal, but we don’t realize that many of the ancient cultures worked with similar systems. Today we have the Internet to help us accelerate the process, and maybe an iPhone app will count how many Whuffie you have.The Incas were one of those cultures. They lived in the Andes for about 200 years until they were conquered by Fransisco Pizarro around 1535. But, their culture comes from way before as the Inca Empire was formed by various smaller cultures that were conquered by a big culture based in the Cuzco area. Their economic system was based in reciprocity and redistribution of goods. 

How the Incas built Whuffie

Inca’s organized themselves in families or ayllus. These were considered the unit in which the reciprocity system was based. A family will perform some activity in benefit of another and then this beneficiary  family will owe them the same amount of time and effort. This system was based only in time and effort and not in products or “stuff”. With “stuff ” I mean corn, potatoes, pottery or artifacts. Today that will be iPhones, cars and computers. The exchange of products was part of the redistribution system and this was done with the emperor or Inca. Since the Inca didn’t work because of his Holy condition all the people will give some work to the Inca and the product of this work was the Inca’s contribution to the system. Once all the contributions were done they were redistributed according to the amounts given by each family. But, also the Inca didn’t worked because he was busy organizing and running the system, so politicians get this benefit as long as they make the system work. And I mean actually work! People will decide what is good or bad for them by giving good or bad reputation to the work of the other person. Politicians or lawmakers could be elected by the amount of Whuffie they had. In fact, this was not present in Inca society but it could be a great development.

So basically with the Inca economic system you had only as you worked for. There was no “riches” or capital as all of this was owned either by the state or the whole family. So if you worked better and faster and for longer you will have more people owe you some work. And when you needed something a person with the right skills from the beneficiary family will do it for you. (Isn’t that perfect I paint your wall and you help me plant my potatoes or give me some advice).

The Incas had no currency, they just had this very rudimentary instrument to record numbers which may have been hours worked by some family in favor of another or hours worked in favor of the Inca. So this was the currency.(There is still not certainty about this theory). This is where the Whuffie Counter iPhone app will kick in.

Now, we are in a economic system that is being ruled by whuffie. Whuffie is not the main currency yet, but it is taking an important place, specially in highly connected communities where people collaborate with each other every day. Your reputation is based on your accomplishments, so if you are a very good video editor or marketing specialist people will call you for you to use this skills on their favor (provided they did the same effort by putting their talents work for you). This will be reciprocity explained the Incas had. You  perform one hour in a Talk and then all the people benefiting with it will owe you an hour,or a fraction of an hour, of any other job you may need (like painting your house or taking the dog for a walk). Your Whuffie is based on how much you can contribute with other people and to the community in general. 

There is one more thing that Whuffie is and that was present in the Inca economy.Each family, according to the position of their land and the resources they had, produced a different product or had different tools to perform certain jobs. This will be the “access to resources, potential access to further resources”, you will be know as a rich family if you had many members. Since the unit was worked hours the more sons and daughters you had the most hours of work you could offer and the most work you could get done for you by others. Accumulated favors where the ones that permitted you to ask for help in building a house or a farm, so you accumulated them for when you needed them and you could achieve a bigger project. Today opposite to having lot’s of family members you will need to have lot’s of skills and many areas of expertise, or one good area where you can be excellent. For example, you need to be a marketing specialist, a good public speaker, a technology adviser, a good writer, etc. This many ways guarantee that you can build whuffie fast and at all times. 

The Next Economy or the Whuffie Based Economy

Cory Doctorow came with this idea of a “future” civilization working with Whuffie (again). Well, this was no future, in fact seems we are getting back to the basic form of economy the Incas used. Of course that there are lots of differences. The Incas were not exposed to 500 years of capitalist development as we have been and today, to get any kind of good you need to have money available either as cash or in your bank account. Unless you have some Whuffie (the reputation part) and companies will give you products to try so you can refer them to your numerous contacts. For services, sometimes you need the money and sometimes Whuffie will be more than enough. (Though i may be wrong here and you could use Whuffie to get some products too).

Reciprocity then it’s just like the Incas with only one difference. In the Inca’s time you could accumulate more “whuffie” or “inca whuffie” if you had a numerous family. But in today’s individualized society you rely on your talent, know-how and contacts (mainly in the form of having resources available). So today to have more Whuffie you need to perform a valuable service or job, know some scarce skill or be able to put together a non-easy to do combination of resources. Or as stated lines above have multiple skills.

So the conclusion is that we are going back to a old system that worked really well for the people in it. Since the Incas had many wars all the conquered cultures were forced to accept the system and, hence, lost some of their properties at first, but once integrated to the system the populations inside had peace between them and had plenty of resources to survive. Right now if you are talented, helpful, intelligent and have accomplished lots you are one of the Rich persons (talking in Inca terms). And right now we don’t need wars to get more people in the system, the idea that whuffie is necessary will make people look for way to integrate and collaborate.

Punishment.

Nowadays in this Whuffie system if you don’t give back a favor or if you lose your reputation because of receiving money to promote something that you don’t believe in. The punishment is that no one will listen to you or make you any kind of favor so you can “cash out” your Whuffie.  In the Inca’s time you were expelled from the  family and this meant that you where automatically poor because you only had your work to give and that was returned to you, if anybody needed that. Usually people wouldn’t take work from a single person because the things he was able to perform were limited.

Motivation

In Doctorow’s definition of Whuffie he says that it is the source of motivation to do work for others so you can receive back the same amount of effort. This motivation is for making only work that helps the community and that is really useful, since the community is the one that rates it as good or bad. This is a high improvement to the capitalism ubber älles system that was reining mainly in the 20th century. The reason is that for example we feel that transgenic foods or abusive use of petrol are bad we will rate the makers of this products as bad, and they will have no Whuffie so they will not be motivated to create this harmful products. In the Inca economy you needed to do what others asked for, so if there was a consensus on the harmfulness of certain activity it would be not performed in the community. This characteristic of the Whuffie and Inca systems is very important because if we were going to live in a Whuffie system any form of illegal activity will be avoided because it will reduce your reputation and you will not have access to any other service or product you may need.

However nowadays in this money based economy we still have people producing this harmful products and services because there is no community to stop them and because people accept what is imposed by big corporations because they still have the image of “power” or the need for their products. Gladly communities are beginning to understand that corporations and governments have Whuffie too and they are making protests or stop consuming products they believe are harmful for their healths (mental and physical) or the planet. There are lot’s of sustainable organic food associations making increasing sales with socially responsible products that assure the well being of the producers in developing countries.

Doctorow’s idea of a future civilization are not that crazy, we are heading there and in some cultures we come from them. Now we need to adapt them to a global status and that may take time. But, Whuffie will be king, maybe not immediately, but remember Tara Hunt’s words “it is getting harder to eat without it”.

This means that maybe the Whuffie economy is the real deal. Maybe humans were made to work in a Whuffie economy and if we seek in pure capitalist theory a perfect market should be working on Whuffie because money is no longer a motivation since all companies make no profit at all. Authors such as Kjell Nordstrom and Jonas Ridderstrale said Karl Marx was right, that finally the power was going to the people, but in other form and with other process. I think Whuffie supports this theory since we’ve seen the Incas working in a culture where there was trade without people being richer or poorer than others. They had larger families so they could offer and get more work done, but they also had to feed more people. Talking about nowadays we see that suddenly people are becoming the main key in competition as resources are becoming “plain vanilla” the only thing left is Know-How, creativity and contacts and finally companies lose power to the people forming them. So that is the revolution of the working class. But if we are going to live in a Whuffie economy we should start teaming up in communities (like the ayllu of the Incas) in order to get the best experience out of it.

And then this communities will get richer in comparison with the ones that are not collaborating. The new Whuffie system will be based on the impact you make in the world.

So what does this means: Whether you are a business or a person you need to start serving the community and caring about them, because that is the only way you will succeed and built the components that will raise your Whuffie and if you do good to people, they will do good to you.

The Whuffie definition was extracted from a post by Tara Hunt and some of the concepts from Cory Doctorow’s book.

Starting Up

For the next year I’ll be involved in launching two projects for startup businesses one in the web market and other one in the Education market with a huge potential of evolving into a webapp.

I think it’s a good idea to blog all my startup advances to share it with  people that have ideas and want to turn them into reality. 

The first step I’m taking is implementing a business plan model so we can have a guide of where we are going. Many people say business plans suck, and sometimes you don’t need them. That’s true, but it gives you a guide of where to go and focuses your resources and capabilities on the market you want and helps you be aware of the potential threats that may come in the near future.

Today we started by establishing our values and what we wante from the business, we came up with a mission statement and values that will lead the effort we are making. Then we proceeded to establish the resources we have, the ones we lack and did the same thing with the capabilities.

We endend the meeting as all this took us almost 4 hours, we will meet again next week and hopefully finish a SWOT analysis that will lead to determine a possible competitive advantage.

Next week I will post the second part of this planning meetings.

In the mean time I have a few questions.

What was your start up process?

Do you like to  use business plans or what do you use?

The Industry

Internet or Web apps are becoming a huge industry making so much stuff so easy, like for example blogging. Now everybody has a blog, of course if it’s well designed and marketed it will be better. I realized my blog posts don’t get many reads and I know why this happens. It’s all basically my fault. I created a Tumblr account and made it my bio link in my twitter page and then failed to update it, It should have been my blog, and secondly I’m always lazy to post or write long articles.

Well after that random blurb i was thinking on launching 2 podcasts, a nice blog and finally a web app. This are projects I have had for at least 6 months now.  Some may be launching soon and probably the web app will take sometime, specially because I’m not in a country with much confidence in web startups, but that will not stop me. 

I will have to work hard on that using platform as a service offers out there and contacting some coder around the world, which i hope to find and finally launch the startup and get some funding, even if we have to move it to the US or another country.

So software as a service, platforms as a service and the latest community as a service are all making it possible for people around the world to build lot’s of web products easily and I love how this services democratize the world in a real way. Thomas Friedman said it in his book “The earth is flat” and it is becoming more real for everyone now.

 

Right now I’m looking for a coder, a web designer and some co-hosts for a podcast and nice blog. I’m sure all this will start and hopefully be sustainable in the future.

So what are your projects now? Continue Reading »

So right now there is a economic downturn in some parts of the world. Many will say it’s global, but the turth is that it isn’t because there are countries growing out there (China, India and Peru). This downturn or crisis causes people to lose confidence and to stop investing and stay safe at home.

 

But that’s wrong.

 

This is the time to start winning in your business. For sure your market has slowed it’s growth or even started decreasing. So what? Well, right now i see that as a great opportunity to become more efficient in what you do. Maybe you don’t need those extra servers consuming energy or that extra I.T guy. Ok you’ll contribute to job losses, but you can also ask that guy to find a way to make himself add value to the business and become more efficient in what his collaboration is. The point is that when cash is short you find incredible ways of saving money without losing the quality of service. 

 

You can also move to a bigger office for the same price (that’s if you’re still with high sales and profits). For example, TechCrunch found a nice office and the chance to move thanks to the downturn. This new place will be cheaper and you can make your office a good place to attract talent when the growth period begins again. 

Also, many more stuff will be cheap. Let’s say for instance a company goes out of business (i.e Circuit City) you can buy all of their servers, machines, etc. for a cheap price and end up with good equipment to start making your business more efficient. You could add part time workes or even open a co working space with those extra pc’s , servers or furniture. 

Finally in times of crisis is when the team can grow together stronger. You’ll have to make some tough calls as the leader and you can make them point to a goal of integration. For example, instead of downsizing your company you can tell your employees you’ll cut their salaries in a porcentage and increase them when the sales and profits increase so that all of you can go through the crisis without losing your jobs. You can also try and make integration events so people can get to know each other in order to increase trust, reduce bureaucracy and increase efficiency.

Sometimes this things are easier said than done. But, in a business things are always tough to do than what they look on paper.

In this times, not only in the countries experiencing the economic crisis but also in the ones experiencing just a slow down in growth (which means are growing slower but still doing good) there are a few ways to make a new company (a startup, a family company or even a lemonade stand) look professionaly, operate as professional in a very cheap way.

The first thing i find useful is google docs. Commonly when you start a new business you currently have a job or have other projects. Let’s say you have a job and your partners also have multiple occupations (one is a caring mother, the other one has it’s own start up and finally the other one lives on the other side of the world). So you can use google docs to share the information that is not “classified”. Then you could build presentations, documents and spreadsheets so that everybody can see the information as it’s done without meeting each other on a daily basis. The alternative will be to pass office documents around by e-mail that will end up in partial documents multiplying around inboxes. 

The second thing google offers (yes, because google is that great and mainly because they make a huge effort in developing products others don’t) you can have a free e-mail service with your own domain making your business look serious. Let’s face it your company’s e-mail looks better as lemonade@lemonadestands.com than as lemonadestands@gmail.com. In my opinion with that more people will take you seriously and the cost is less than $10 a year.  Plus Gmail can be used in any pc or mac with free clients (like thunderbird) and in your iphone and maybe more phones will support it in the future (or maybe they already do).

Intuit offers a great platform to manage billing and accounting and many more things for cheap prices. So if your business develops a bit to the next level you can still manage growth with relative ease and for low prices. All this cut costs to say it someway can be translated in higher profits without downgrading quality of service or increasing costs for costumers. 

For sure there are more tools i don’t  know about. What do you use?

Back to Blogging

After a short break without blogging, mainly due to the academic load at university. I’m back.

This past weeks i have left my job at a good company and decided to look for something that i love to do. It’s sometimes hard to find something that you love to do and that at the same time pays your bills, but it’s possible.

With some freetime now I’ve been thinking about people like Bill Gates, Steve Jobs, Carlos Slim and many other millionaires who decided to do what they loved and got money to pay the bills, not only of them but of a whole bunch of people working directly or indirectly for them.

They didn’t do this alone, but they were keen enough to motivate a group to follow their ideas. If you would like to start doing something you love the best way is finding some people who love the same thing and motivate them to work with you in order to achieve your goal.

Many people don’t get to that point mainly because they never try to find people that share the same passions as them. Now with the internet you can find good people all around the world. So the process should be easier, but it seems the evolution is slow.

Of course you’ll need to get to know this people first, but i can assure that cultivating long term relationships with people you meet al around is an amazing opportunity to find people that can be your partners in the future. It’s a good way to find the next Woz or Paul Allen.

So just go out and search for someone that shares your passion. Then You’ll be ready to kick it!

iPhone

After some months i finally decided to get an iPhone 3G switching from my old loyal Nextel Motorola i560. The main reason i changed it’s because my nextel was old and thint kept up to date with all the things i was doing on the internet. I just needed to be interconected. 

It will be easier if you looked at it in pictures

Before                                                                                   After

 

Nextel i560

Nextel i560

iPhone

iPhone

 

 

 

 

 

 

 

 

 

 

 

Basically the only thing this phones have in common are the i at the beggining, though one is for the iDEN technology and the other one is because it’s apple. 

 

I’m really excited to have had the choice to choose which carrier to use. I wonder why apple didn’t do this in all the world. Here our 2 main GSM carriers got the iPhone so you can choose the one who offers the best plan and costumer services and it was a good deal. I even got the phone for less than 199 with a plan that has features that are not far from the ones offered in the US. 

Features i like. If you are reading this and you are not a tech geek, hence you don’t have and advanced phone then let me tell you that you’re missing one heck of an experience.

Objetive Review

My objective review is that this phone is better than a blackberry since it has a faster internet and lot’s of options with the APPs. I speacially like the Digg app and twitterlator which is much more organized than twitterrific (the free one). I still have failed to pay for apps because I’m on savings mode so I’m thinking i could pwn my iphone to get qik on it. 

Ok so I’m still in the feeling part of my purchase I guess i’ll wait until next week to review it objectively.

This week I was watching EPIC FU on a thursday (thanks work + college +  lot’s of occupations) and i actually noticed that i was there. I made a comment on a discussion on MIX the Epic Fu community and i was featured there. That’s so cool. Here is the video. (My comment appears at 8:12 approximately.

DROPP REPORT

Our latest project is a show called Dropp Report. We are working on it and still solving our hardware set up for it. But in the eagerness of doing it we started doing live shows and taped a Beta on Viddler using a webcam.

Here it is hope you enjoy and we promise to deliver better quality soon:

Follow us on twitter for updates on when we go live

http://twitter.com/jjaime

http://twitter.com/samueldlt