Birthing a Gift Economy

Tonic, May 2009

No restaurant experience, no startup capital, no marketing.

After 2 years, still breaks even. Half hour wait to get a table, 4 week wait to volunteer!

Chapters in DC, Chicago, Boston. Three more in India.

Harvard Business Press: we don’t understand it!

Increasingly connected landscape.

Ideas spread rapidly, and virally.

Trillion web pages online. (Google, July ‘08)

5 billion mobiles by 2011. (Economist, ‘09)

More paid bloggers than programmers, firefighters or bartenders. (WSJ, ‘09)

Organizing without organizations.

Platforms simply hold space for emergence.

Massive disintermediation.

Philanthropy goes peer-to-peer.

Power of Many

Power of Abundance

Power of Small

Four volunteers at a homeless shelter, without a plan!

Websites to web solutions to cards to restaurant to magazine to films to health clinic.

Scaled exponentially, but we had three organizing principles that were never compromised.

Organizing Principles

1. Stay volunteer-run.

5 staff, 40 hrs/week

40 volunteers, 5 hrs/week!

Distribute and Decentralize Hierarchies simplify

coordination; org overhead is result of transaction costs.

Internet collapses transaction costs, aggregates small pieces.

Groups form without organizations, from Moldova protests to passing legislation to hobbyist meet-ups.

Crowd Sourcing

Crowd Sourcing Rules

The crowd is dispersed.

The crowd has limited attention span.

The crowd is full of specialists.

The crowd produces lot of junk.

The crowd finds the best stuff.

Organizing Principles

1. Stay volunteer-run. Power of many.

2. Don’t fundraise.

Zero Staff,

Tons of Help

Zero Marketing,

Tons of Media

Zero Plans,

Tons of Projects

Will Zero Fundraising

Lead To

Enough Money?

Scarcity

Abundance

Scarcity

Abundance

Scarcity

Abundance

Scarcity

Abundance

“Over 2791.297920 megabytes (and counting) of free storage so you'll never need to delete another message.”

Scarcity

Abundance

Production Long Tail

Fall of the Hit

Source: Wired Magazine

Fall of the Hit

Source: Wired Magazine

Vs.

Many-to-Many Distribution

Push Comes To Pull …

Go-steady-ready: “Forbidden unless permitted” is now “permitted unless forbidden”

Many to many: broadcast shifts to simulcast, mass market shifts to million minimarkets.

Co-create: lectures become conversations, advertising becomes word-of-mouth.

Organizing Principles

1. Stay volunteer-run. Power of many.

2. Don’t fundraise. Power of abundance.

3. Think small.

Story of Smile Cards

Coffee table experiment.

No plan, no marketing, no sustenance plan.

All gifted. 950,000 cards in circulation. Warren Buffett, Dalai Lama tagged personally!

Small is Free

Internet: Land of the Free

Free bandwidth.

Free storage.

Free processing.

“Freemium” Advertising Cross Subsidy LaborExchange No Marginal Cost

Gift: Don’t Monetize Attention

Radiohead Experiment

Organizing Principles Staying volunteer-run means that

we leverage “crowd sourcing”.

Not fundraising means that we leverage “many-to-many” networks.

Thinking small means that we leverage the power of gift.

Karma Clinic!

Volunteering: 85M people, 20B hours

Blood and organ donation programs

Burning Man, Churches, NPR

Scientific research

Small scale gift-economies in families

Wikipedia: 100M hours donated each year

Give without any strings attached, and trust reciprocity.

Redefine wealth as contributions, not possessions.

Find reward in density of interconnections via circulation of gifts.

Tragedy of the commons. Typical solutions: eliminate commons, or add governance.

Can’t scale. Need reputation, trust, and mutual information.

No incentive to produce or innovate.

Million Smile Cards printed, shipped 15,085 orders to 101 countries in 2008 -- by distributed shippers.

Dozens of new stories posted everyday! Dozens more comments. 66,401 subscribers to weekly newsletter.

Chicken Soup to magazines copy-left: republish with no strings attached.

Zero overhead, auto-catalytic cycle since 2003.

Smile Groups

HelpOthers.org

FeaturedAnyone can

post anything;10-200 views;members can

comment,add smiles.

Edited stories;anyone can read,

and comment;usually, 200-500

reads.

On Homepage,potentially

HO newsletter, & other CF sites!

500-3K reads.Some hit 70K!

Small acts of kindness.

Stories celebrate everyday heroes.

Social networks propagate those values and start to shift our cultural ethos.

Mini gift-economies enable trustosity: trust-driven philanthropy.

Generosity Entrepreneurs!

Service: deliver value that is relevant to the current context.

Social capital: a community waters the tree that serves them.

Surrender: trust self organization to manifest impact.