In February 2011, I have the privilege to speak at the lift conference in Geneva. But this isn’t about the conference as much as it is about an important subject that I’ve been asked to address. While this idea is nothing new to economists, theorists, futurists and other intellectuals around the world, my focus is on those who are unfamiliar with the role they play in an underground, but vital economy.
I’m going to explore the undercurrent of social economics, namely social currency and social capital. And, I promise you won’t find it boring…
As we’re seeing with services such as Klout and PeerIndex, our stature in the social web is based on our actions and words. Essentially, your “balance sheet” is available for anyone with a web browser to review, assess, and analyze. While this may seem trivial, progressive businesses are already factoring your stature into their customer index and your experiences may vary based on your social credit score. In addition, some credit agencies in the U.S. are also reportedly reviewing social graphs to explore associated credit risks based on who we know.
You are a bank. What works against us also works for us. Choose your investments wisely…but it starts with thinking about your interaction as investments.
I recently discussed the topic with Laurent Haug, the organizer of lift, and I’d like to share the conversation with you…
Laurent Haug: In what context is social currency emerging?
Brian Solis: We, from the mainstream to the earliest of adopters and greatest of innovators, may have missed an early opportunity to steer things in a more proactive direction. Instead, we are now playing catchup to what’s playing out as we speak… what we do and say in social networks equates to “social capital” and that one day it would be used for and against us.
The time has come to be mindful of the value we create in networks such as Facebook and Twitter, for ourselves. What we share, what we say, the smallest of actions from “likes” to Retweets to the simplest of updates form a digital representation of what we are. This persona can be leveraged when used effectively.
Is that the main reason behind users involvement in social networks?
No, of course not. Right now, the social web is a vibrant “egosystem“. When we were introduced to blogs, Facebook or Twitter, as human beings, we were simply excited at having an audience for our words and our experiences. With every reaction and friend request, we were rewarded to share more of ourselves. Now we realize something new: that what someone says can represent varying levels of value, whether it is an opinion or expertise. Who you are connected to is also important. We are judged by the company we keep. When combined, actions and relationships create a foundation for social capital.
With the emerging array of search and analysis tools, simple processes of data mining encourages advanced profiling that we, as users, are not, but should be, aware of.
For example, banks are looking at an individual’s social graph to determine their credit risk. In the blink of an eye, what could be considered trivial information becomes an influential element that will contribute to changing the direction your life will take. I believe we should make users more aware of this unfolding reality. This is about consciousness. How they engage online and who they connect with serves as social currency in every transaction.
Can you define social currency?
Social currency is represented in the resulting value and sentiment that stems from the exchange of social objects: words, videos, reactions, links. What I publish is social currency. We can measure the value of this currency in each exchange by its reach, resonance, and ultimately influence. However, it’s sum is greater than its parts. If I’m looking to weigh “who you are,” what appears in search as well as the presentation of your profiles, tells me more than you know. It defines who I am and how much I am “worth”. So social currency is a combination of actions and words.
Do you have a concrete example in mind?
While it’s difficult to call out individuals, we can take a look at how brands are establishing goodwill and investing in social capital through online engagement. I do appreciate what American Express is doing around Open Forum. For a brand, it is earning social capital through the investment of meaningful and valuable social currency. Its intention is to build a social community through value-added content, insight, advice, and community. The team is building a network and ecosystem, a complete engagement strategy built on social currency. They enlisted the brightest minds in the field of small business and placed them in a community where these people share content, expertise, and experience with everyone – without cost. It is a form of information commerce, with creation and curation of content. They also launched a mobile app to bring that experience to anyone anywhere. Their idea is to earn social capital by making a contribution to the wider community of small business owners.
What they want is not only immediate returns, but indirect and long term returns. American Express invests in priceless commodities: information and insights. They create a unique bond with the people they want to reach, and build social capital, something even stronger than goodwill. While intent counts, we are measured by what we do, not what we want to do.
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