Archive for the ‘Web 2.0’ Category

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 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.


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.


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.

President Roosevelt said that phrase back in the 1930’s when the a big recession was happening. I just read this article on Mashable where Mark Hopkins quotes Steven Hodson saying that we still can get up, even if we don’t learn from our past mistakes in past recessions.

The truth is that economy isn’t perfect and capitalism isn’t perfect either. Capitalism is the best system we know and for sure the one we must use, but we need to tweak it on the go for it to achieve it’s main goal: Bring wellbeing to all the human beings living under that system. But there is one thing we haven’t tweaked since the first recession occured some centuries ago: To take control of our emotions.

At this times when i see Wallstreet indexes fell down every day, when i think the Dow Jones should be renamed Down Jones, when all the main markets in the world plunge i ask myself how many of those points that the Dow Jones went down are of true value and how many are generated by massive fear. Many financial advisors (and i must confess that i’ve read the books, but not payed attention to the authors names) have always recommended to control fear when things like this happen, but we fail to do it.

Daniel Goleman and the numerous books about emotional intelligence try to teach us how our emotions work and how we can control them. Right this is a skill we all need to develop before getting into feeling fear that will only make things seem worse than they truly are. The first thing we need to do is sit and relax, then put some music that makes us happy and start analyzing the situation thinking that every business that is in the stock market has people inside, and this persons are capable of generating revenues that is what ultimately affects share prices. For example, Yahoo Inc. is a great company, they managed to build a wide user base around the world and add some amazing services to their portfolio (Flickr to name one of those).

Yahoo stock went down quite a lot this week and i wonder how many people have sitted down and analyzed the capabailities of Yahoo before actually starting to sell and push the prices down. Yahoo in my POV is a very capable company, they can in fact build a big social network based on the wide range of users they have using individual services like Yahoo! Sports, Yahoo Mail, Flickr, etc. They can also stop focusing on Ad generated revenue and start to offer services that people can use and leave the ads to the ad expert Google. I don’t think Yahoo is worth the price that it has right now (Disclaimer: This is not a recommendation or expert advice it’s just my opinion and though i know about finances I’m nowhere near an expert).

On the other hand we have many start ups that are being affected by this plunge as they see capital flyaway from them and sales projections being lower than they expected. The main problem i see here is that many Web Startups are not focusing to the global markets. While the US could be on a recession countries like China, India and Peru are growing at rates of over 7% anually. These markets are also potential costumers and everybody knows that a diversified userbase will always be a coverage to the risk of a recession in one country. I liked the message posted by Jay Adelson saying they got money to expand their operations abroad and to more markets, that’s a good way to go for Digg. I think that their international expansion will make them bigger and i hope they get a version in Spanish and German wich may blow it up both in Latin America (Including all the Latin People in the US) and in the European Silicon Valley (Germany).

So, as you see by this few examples things aren’t lost yet. Comapnies have capabilities inside that will make them work and get out of the recession just fine. The people that let themselves be controlled by fear will leave a opportunity for those who think more calmly, buy stocks or purchase full businesses to make lot’s of profits in the future and to rebuild the american economy. Warren Buffet buys every time something like this happens and he has became one of the richest guys in the world just with stock trading (which mainly is taking advantage of others people fear).

So the recession is here and companies will be affected, yes. But we need to start getting out or creativity and look at ways to overcome it. See my post Start me up where i explain how Calley Nye is looking for funds for her startup in a new way. The world is filled with creative and capable minds so we should not worry about it. Just remember: DON’T LET COLLECTIVE FEAR CONTROL YOU.

Mainstream Apps

I was just watching lot’s of videos by many interesting people that rule new media and web 2.0. Specially Gary Vaynerchuk, Zadi Diaz, Jason Calacanis and Kevin Rose. They all agree on one point, the potential of the web is still enourmous, because not even 1% of the population are using the killer apps. 

Ok maybe more than 1% of the poulation are using it, but the truth is that it’s a minority using Twitter, FriendFeed, and watching On-line shows. Many average people use You Tube to watch short videos, funny videos or just trailers, they use e-mail to communicate and some of them have blogs.  But, the truth is that many of the really useful and collabortive apps that are out there on the market are still not used in a “Myspace” style. 

Myspace and Facebook are probably the most succesful social networks because they managed to get in the mainstream. Garay Vaynerchuk said: “Imagine when Oprah starts using twitter”. That shows the huge potential twitter and other sites have if they manage to get in to the majority of the population. I am pretty sure that Paris Hilton and Megan Fox will have close to 1 million followers if they were on twitter and with that many people will find other people and get the benefits of being part of the that community of users.

But all these cool apps aren’t mainstream yet and some seem to have trouble to get many users even inside the early adopters market. I think the main problem is that people still don’t see the benefits of using this sites. It’s crazy to say that because the benefits of these sites are in front of our faces. My personal experience is that I got a job via Twitter from a person I wouldn’t have known if i wasn’t using twitter at all. And at first it seemed normal but now I’m thrilled at the idea that I got a job using a site like Twitter. Twitter rocks, but i also got to learn lot’s of things and meet cool people that i can help and people that help me with my projects. Continue Reading »

So i was watching Gary Vaynerchuk’s keynote on New Media Expo and he talked about making shows about your DNA! I think it’s true you need to putt your DNA in everything you do and do what you like in order to be happy and excellent at those things.

The keynote got me thinking in what my DNA tells me i like. The answers was pretty simple : Computers, Girls (Over 50% of thinking done by men is about girls), Entertainment, News, Jokes, Marketing, Internet, Girls, Gadgets, How awesome is to be able to be online all day, More gadgets and girls. That was about it. The epic thing about this is that the list is pretty wide so i can do a whole bunch of things. My DNA also tells me to finish college (though i sense some pointless classes and information given to me there), but well i think some ideas are valuable. They tell me what techniques are not good anymore. So i prefer to learn from MIT Open Course ware ( SiliconCalley Style), and learn from people who have bright ideas and make them happen like Tara Hunt (FTW!!! I’m his number 1 fan! she rocks! I love the way she thinks and her ideas). Continue Reading »