The third update will be posted on Medium too, but it will be shared via the Ecosquared platform.
The ecosquared.info site is an archive of the early explorations of the Ecosquared system, and might host Help videos for the web-app. Please use the contact form if you’d like to take part in the alpha release.
Essentially, business is a trust game, and for this we propose a trust-metric, a social accounting system simpler to use than money.
In Ecosquared, money is only ever held by individuals; there is no ‘pot’ of money to argue over. And there is no set hierarchical structure of positions to justify or protect. As a result, you have the power to contribute as you see fit, with money and effort.
Start off as a test-user, and there’s nothing stopping you leading a soft-launch partnership with Ecosquared by summer 2017.
You are first and foremost open-minded;
you align word & deed in your daily activity;
you are not afraid of taking steps in a new direction;
you see a need for deep change globally and locally;
you can feedback on UX until it works.
Of the 16% of our revenue earmarked for our usership, we are cordoning off 1% for our active test-users. When we hit $-billions, our first 1000 active test-users will get from $1,000 to $1,000,000.
Apply to test-case the world’s first trust-metric, and make history.
Since the last public post we’ve managed to scrape together investment, £10k then £15k then £20k and £35k, together with grants from Scottish Enterprise, £14k and £8k; so around £100k in total. Nearly all has gone on development, the alpha completion and the majority on the beta which has taken 4 months to date.
I embarked on the last four months with a spring in my step. A specification for the beta laid down, and a team of coders raring to go. After my first month’s intensive definition of the specification, it has been a long and painful 3 months. Painful because I have not been allowed to give feedback! To give them their due, the coding team needed a block of time without interference.
state of the beta
There are numerous details to correct, and some issues which interfere with user’s UX, but it looks pretty much what was specified. Testing was meant to be included within development cost, but I suspect stress-testing with millions of users is yet to be done.
The plan was for the beta to run on its own, so that we could go live ourselves without any additional VC money. I will be finding out later this week what the estimate is for reaching completion.
Not being able to give feedback runs against my methodology: continuous improvement, to pivot during an ongoing project. This new team is not flexible, so they plough on despite encountering major difficulty. They never provide alternative workarounds, and I have not been invited to simplify the system. A tough experience to be sure.
status of business
The company has entered into overdraft, and extendable to its limit over the next two months. I am personally liable, which I guess is fair; the responsibility for bringing Ecosquared to the world is set squarely on my shoulders. We should be able to claim back 30% based on a government IT grant, returning us to a status of zero balance. On the knife-edge.
The plan we pursued from the outset 4 months ago was to approach a VC for £300k. £100k to complete beta to global standard, and £200k to secure business partners.
If we get £150k matched funding from SIB, and investors claim SEIS, they will end up paying £75k. £75k for a shot of becoming a global player, changing the future course of world history, and giving humanity a chance of dealing with the massive disorders that result from our current economic. And making £-billions in the process as we conduct this transition.
We need to tidy up landing page with its basic intro video, gather a pitch deck, a two-pager intro, and then it is about approaching potential investors and partners.
I have also approached a few small video production outfits. I want to record people’s response to the app, whether investor, partner or punter. The plan is to create a teaser, which may replace or supplement the intro video. With investment, we create a pilot and submit it to TV channels for commissioning — imagine a series where we demonstrate how the app is used on the ground, each episode following a group of people attempting to use it to help achieve their objective. A cross between Dragon’s Den and Gordon Ramsay’s Kitchen Nightmares.
Meanwhile, I am going to work on the Ecosquared book. I have written something over the summer, but I am fairly sure the style of it is not good enough. Would be nice to get a proper writer involved — the world is not ready for my unconventional style and approach. I must be content with presenting the math and the Ecosquared tool.
So, app to tidy up, £300k+ investment drive, documentary video and book. We are approaching zero-time!
After a long rather slow slog, Martin has secured investment. Hurrah. Not for the full amount, so Kevin has applied for government matched funding which will take a further two months. Baseline fact — we have enough to produce a beta version while upgrading the UX so that prototype is smoother. Whatever happens, we will have a better app at the end of this.
We have tentative relationships with paying use-cases at Find-a-Player, allthing.io, and Perth & Kinross Council. Only a few, since we are still spending most of our time on development; I’ve got a few months to attract a few other players, eg a charity, and a working prototype will greatly help with that. So, we need to drag the current prototype into shape. We’re working on implementing the Projects function to enable team formation for gratitude tracking, while making rudimentary wallet structure and security features to enable use in the public wild-lands. ETA within a month.
Though the web-app is by invitation only, do join in.
For the beta, we are hiring a talented UI Designer, Martina. We have one team who will be taking prototype to beta, using MEAN development stack, Artem and Tim, and another who are working on a .NET version from scratch, Sonya and Nicola; we will decide which fork makes sense a month in to development. Jorge will be managing migration from prototype to beta, while concentrating on creating the bitcoin wallet system, coding the SQ algorithm, and working with system admin and security expert Maxi to create world-class security.
We’ve also attracted Marc, an incredible pluralist artist, to conceive and ground a minimal project design for a mobile display — a task I have found to be beyond me — and with Martina I am sure we can come up with a UX which demonstrates the future development path of the web-app beyond the basic Ecosquared beta. We’ve got a pair of eyes on the potential native mobile app development path, Dave, and another on the whole tech development side. Of course we have Martin ensuring dots and crosses are consummately executed on the finance side, and I, David, get to fret endlessly as project manager, designer, founder.
Doesn’t feel like play yet. Once we get the prototype to minimal standard, with a full complement of functions, I think I may start being able to play. For example, I gifted the web-app to a teenager, Anna, yesterday. Not only did I experiment with gifting a thing via SMS — it works, Jorge, thanks! — she was able to accept and complete registration on the iphone — wow, Artem, good work whatever you did! Ok, Anna was not particularly phased by the notion of receiving money with her gift, more a teenage shrug versus the up-in-arms shock induced in most adults, but she was soon directing her mother on how to use the app correctly.
Play will occur when the interface becomes so natural, that the potential playing field beyond the tool attracts curiosity. At some point in history, the notion of using a racket to hit a ball around was totally alien. Of course we’ve thrown stuff around since year dot, cavemen probably played catch with bones. But a racket? Animal gut stretched across a space? I mean… totally alien. But, once the alienness of it was overcome, the effect on hitting a ball is quite natural. Completely useless in its own right, really. We need a frame, a court, rules, a game.
Sure, we can outline a few rules for Ecosquared, but without actually playing with the web-app the lines drawn out are almost arbitrary. We need to play around with the prototype. Early adopters — scratch that — early pioneers, designers, social creatives, the first people and groups to use the prototype will begin getting a measure of what it can do. Then, we will be able to evolve some social rules or conventions, and thus define web-app configurations for a real game. Then, and only then, will we have the kind of play that brings our humanity to excellence. Socially. Played meaningfully in teams of ten or less, and yet interscalable to millions or billions of us, just like our current, traditional, 3,000 year-old economic game.
A tool that enables us to excel at collaboration. Ecosquared, inviting our future genius.
First bona fide pitch to investors. New for them, and new for me too. I have plenty of experience with world premiere’s, at least in educational terms. I present ways of thinking, concepts, and so on, to kids in mathematics classes. Yes, most of the concepts are known, most from the last few hundred years, nevertheless they are new and fresh to the listeners. An Ecosquared pitch is a world premiere for first time listeners.
From an introduction by Michelle at Business Gateway, Finlay listened to Ecosquared and invited me to Perth & Kinross’ Angel’s Share event. There were five companies pitching, ranging from a website that enables group booking (nice solution), a lighting company producing back-lit tiles and a zero-volt supply system (cool tech), a craft distillery (very professional set up), and an electronic tagging system using NFC (a clear future market for this). And Ecosquared, the value-tracking app.
how d’it go?
I gave myself a 4 out of 10. My lawyer said it was excellent, and the LINC representative thought so too, and the gateway investor who gave us a Pitch Perfect training day last week also thought it was great. I gave myself a 4 because although it went well enough, it didn’t bring the audience close enough to the actual WOW of what Ecosquared is. I believe that if I can do that, a quality of response will be evoked. Literally, an inspiration. If we get that, we get investors signing up.
Let’s be clear about this. It is not putting down my skills. Not at all. It’s about the challenge of heightening listening such that people can perceive A) what ecosquared is and B) the potential within our reach. I don’t provide a vision. Or at least, I point out enough that the vision occurs to the listener. The connection is made in the listener’s mind, not mine. And I am not ‘making’ this connection in their head either.
I gave myself a 4 because I crossed the boundary, and mixed my vision with their perception. Does this make sense? Actually, it doesn’t need to — what matters is that people see its potential, and when they do, they can’t help but be amazed by what they see. The true inspiration is in their mind. This is not an esoteric point — it goes to the heart of Ecosquared: can Ecosquared deliver a non-intrusive rating system? It’s not about pushing, and advertising, and shouting; it’s about listening, valuing, and acting on one’s values, whether lolcat amusement last week or political votes once every 4 years.
I had a few conversations with investors afterwards. Some were impressed enough to suggest they would like to share Ecosquared with a few associates. Others were still struggling with the premise of Ecosquared, specifically the Gift-Mechanism. We talked a little, and I will follow it up with sharing the mathematical model of the GM. The math is solid; I’ve no problem with that. It’s the debate around the psychology which is the issue.
I’ll also be sharing the prototype with them. Very close to tying up the FE to the BE for today, but couldn’t quite. Looks like Friday. I am a great believer in experiential learning, whether it is learning to ride a bike, or algebra, or Ecosquared. My only worry about the prototype is that people won’t be able to see beyond the rather clunky interface. Like the first cars appeared noisy and smelly, so it took some enthusiasts to see beyond that and to exploit its actual function.
Best result of the day? Finlay at the end mentioned that the guy doing the photos — constantly crawling around throughout the whole 3 hour period — said it was ‘amazing’. For some reason, I find that has brought me the biggest sense of satisfaction. Of course I’d love for the investors to love my presentation and invest in Ecosquared — and I hope they will! Nevertheless, there is something very satisfying about hearing a positive response from an oblique angle, from someone who couldn’t help but be engaged. What do you think? Is my observation misplaced?
Get working prototype — if you want to test it, stick your email in the landing page — ecosquared.co.uk
Respond to any invitations to speak to investors, through LINC or otherwise.
I’d rather keep presentation to a minimum just now. Once we get £60k, have a working beta app by the end of summer, I will be happy about shouting it from the rooftops. For now, dealing with the shocked response in people is… not realised fully in a positive sense. Yes people are engaged and interested, but they are often overwhelmed as they try to simulate it in their own minds; the mental furniture of the current economic system gives little room for manouver. And I have noticed, beyond the genuinely open-minded, quite often the more intelligent the person is, the more contradictions it triggers, whether investors or intellectuals. Then again, flight is a rather tricky thing to get your head around, as is a bicycle if you think about it — certainly before a century ago, such things were simply flights of fancy.
Steve Jobs called a computer ‘a bicycle for the mind‘ — hear it in his own words. Ecosquared is a social bicycle. £60k gives the world an accountable, enumerated gift-economic a go.
It has taken a season to vet lawyers and accountants and assemble all the pieces for a business proposal. Could it be faster? Of course, but not given the current financial landscape and my lack of qualifications (being a math teacher doesn’t open up a world of connections in the adult world…). That’s three months of no income. I’ve read about other start-ups that haven’t had revenue for a couple of years, and they even have the audacity to promote a ‘lean’ business methodology. That’s not lean, that’s starvation-lean! And since they are heralded as successful on linkedin, it means they are being patronised by a parent company, and for me that’s cheating.
In business speak, I am now investor ready. Now it involves facing risk, or the perception of risk.
some basic math
The history of risk makes for fascinating reading, eg Against the Odds. I have always been drawn to the particular conceptual framework around probability. Three things stand out. First, teaching young minds probability is a real eye-opener. Any adult takes for granted that flipping a coin produces a 50/50 chance, getting an Ace of Spades 1/52. But this wasn’t God-given; this is mathematical application, and it doesn’t come naturally to young minds. Why not? Second, probability is contained within statistics, and I hate statistics since it is overly applied and misapplied. Third Bayes Theorem, something I have dived into over the years, and still have not been able to ‘tame’.
At the core of probability is time, at least for the applications that attract my attention. It is the perception of future events, a way to enumerate possible futures to help guide present decisions. This is fine for certain mechanical systems, eg cards shuffled in a deck. But not that useful for a system which involves consciousness. Just look at the Prisoner’s Dilemma, and thats a simple case. Its the capacity of participants to second-guess outcomes which elevates such systems beyond the complexity of purely mechanical systems. Whether it is a class of kids, or investors playing on the stock market, complex dynamics. Chaos Theory 101.
what is a business plan, after all?
It took me months before I realised what it is, or at least half of it is. Costs. A business plan is primarily a summary of future costing. It is the basic burn-rate of a company over the coming year, at least. That’s half of it. The other half is smoke-and-mirrors.
Whatever anyone says, a business plan attempt to forecast future adoptive behaviour — will people buy the thing or not? Sure, if your company is a new brand of ice-cream, there’s reasonable data out there to base your figures on; stock only one line on the shelf versus three wide, will influence whether the tub is picked up or not. But introducing the very notion of ice-cream is quite another — Steven Johnson’s mentions this in his excellent series which also makes for fascinating viewing.
When it comes to innovation, genuine market-creation, forecasting adoption figures is entirely speculative. Appreciation of risk is nowhere near a mechanical affair. And yet, it may have an equivalent level of simplicity to it, especially when faced with lack of evidence.
so how does an investor decide what to invest in?
I only know one bone fide entrepreneur who managed to win £110k from an investor match funded by Welsh government after months of stressing; within the year, the money was gone and he had established his original invention wasn’t viable — and he was going for a second round! A consequence of our current enterprise system is that once people invest, especially government bodies, it is hard to pull out until they get their return. Which results in investors and governments being reluctant to enter an investment relationship in the first place, introducing more checks and compliance tests at the outset, thus inflating initial costs. A nasty feedback loop.
This is biggest problem, as all entrepreneurs know, the stepped investment route. Originally, I asked for £30k, but this has grown to £60k, and it has been suggested I put together a £125k business proposal to reach the ‘lower boundary’ entry for VC’s. Again, what happens is that while the vast majority of entrepreneurs are ‘genuine’, wily ‘serial entrepreneurs’ know how to stay on the treadmill, just look at this outrageous trail of mayhem.
The consequence? The entrepreneurial scene, for investors, is like the stock-market. Few invest in the actual product or service of a company, it is merely a numbers game where stock goes up and down. The only difference being, perhaps, investors are betting on people, not companies. More like horse-racing gamblers than poker-players. And as a 45 year old ex-math teacher, I’m not the youngest horse in the paddock.
ok, what’s the simple answer?
It comes down to this: Has it been done before? If not, can it be tested, and how much will that cost?
Ecosquared is simple. Very very simple. And it is entirely natural. Given our current state of institutionalisation, however, it appears ‘counter-intuitive’ to the point that it is invisible. I watched Mel Gibson’s Apocalypto last weekend again, for all its flaws it is a truly remarkable blockbuster; have you come across the invisible ships proposition? A Gift-Economic evokes a similar response from members of a 3,000 year culture based on a transaction-economic.
First and foremost, it takes an acute mind to see Ecosquared. Certainly, I have found paper to be a terrible medium; however, I do find that everyone I engage ‘gets it’ in person. Still, this requires effort because it is mistakenly understood as ‘an idea’ rather than ‘a tool’. Once we get a prototype, and people experience it, even a child will get it — why? because we all grew up in a gift-economic, its entirely natural.
Second and more importantly, it takes courage to appreciate it. For an intellectual, this means admitting how new it is. Experts find this hard because they make their living based on what they do know. For an investor, this means acting on it, ie investing.
Most investors want to know how they are going to get their money back. Which is entirely reasonable for most kinds of investment — new brands of ice-cream say. However, with market-creation, as we have shown above, the rules are different.
We got first prototype running for under £1500, and I use it to track my engagement with people. Didn’t turn the light bulb on with investors. So, approaching the end of £3k and close to second version prototype. It will be clunky, chances of it going viral are slim, but it will reveal a glimmer of its potential. To the right people this will be enough. Enough for a £60k experiment which might show a greater acceleration than any bit of technology in history.
And besides, in a gift-economic, risk is a misplaced factor. I will leave that for another post to describe.
My intention has always been to phase revenue distribution to SQ ratio distributions. So, Ecosquared won’t take a cut from whatever is directed at the originator (musician, author, blog-post writer, giff-creator, etc), they are thanked by them using the app itself, and this means a natural distribution of money. It’s all about moneyflows. I’d hoped it will be anywhere between 2-10%, but it could be a hell of a lot lower or even higher. Very difficult to tell at this moment.
At this stage, investors want something more concrete, hence I established a clean % rate. Initially I thought 2%, but this is only operational if we get enough people using it. So, I could charge say 25% (still less than eg iTunes or Appstore). But what would be the incentive of attracting a company to soft-launch with us if later, this figure reduces down to 10% or even 2%? If I was a company, I’d wait until soft-launch was over, and the standard rate of 2% appeared. It’s a no-brainer. So, Ecosquared has to offer 2% right from the start, doesn’t it?
and thus, the inevitable complication around money arises…
Here’s a viable solution: charge people based on the number of people using our app.
32% for up to 10,000 users
16% for up to 100,000 users
8% for up to 1,000,000 users
4% for up to 10,000,000 users
2% for up to 100,000,000 users
Or some such scaling system. Now, is this too complicated?
I don’t mind how much we make, because the more we make, the more we will be able to give for the adoption of the next iteration — ‘marketing’. That is, if we clear £100,000 say, we can distribute this according to how ‘influential’ certain people are. For instance, we can gift a socially important player £10,000 when we give them an update to the app. They can keep the money (like a payment for their proven influence), or gift it forwards as usual. And the chances are — they will! Why? Because they are influential. It’s a virtuous cycle, all positive. The more influential they are, the more money they get. Obvious really.
no to tax — and yes to revenue distribution
It makes me think about how TV programmes were free for viewers because of advertisers. “Soap operas” because the highly dramatic shows (“operas”) were paid for by cleaning products (“soaps”). Facebook operates similarly. It offers a free channel of social content (people engaging each other rather than watching shows), and advertisers are willing to pay for eyeballs (companies, or any individual who wants to pay for promoting a post). Facebook is a “soap social-media”.
A cut of revenue is simply a tax. A forced costing. I have never liked this. It’s the wrong attitude. I shouldn’t be forced to pay for something which is obviously good, eg NHS. It’s because it is wrapped up with things like paying for defence, which is inherently morally arguable.
So, no tax, means voluntary gifting. Hence tracking gratitude, and SQ. That all makes sense.
I guess the thing that differentiates Ecosquared equity from standard equity, is that it determines the distribution of revenue. Profits are distributed to owners according to %-distribution of equity share of the company. The company has to be in profit for the owners to make money.
(A necessary aside. I was disgusted earlier this week because I saw the news — rare I know — about the power company Centrica which is closing down power-stations (and thus depriving people of jobs) because their profits have fallen. Their profits. So, it is a perfectly healthy company, everyone doing what they are meant to be doing, it’s going well — but because the owners are not getting as much as they did last year, they are going to cut the company. This… doesn’t… make… sense. I sat in front of the TV, irritated. The anchor was interviewing one of their specialist business journalist, and I just couldn’t believe no-one drew attention to this glaring injustice. They talked with moral weight about the potential loss of jobs, sympathetic for those who will lose their jobs, as well as the CEO who had to make such a weighty — but necessary — decision. I expect Russell Brand will be pointing this out in a more entertaining fashion, if he hasn’t already.)
Ecosquared equity (equity^2) distributes revenue. Front-wheel drive, as it were. And so, such owners can simply starve the company by keeping the money, or they can re-invest it in the company for it to continue working well. That is, they are responsible for the health of the company, rather than just feeding off its profits. Does this make sense?
ownership and usership
I suspect it does make sense, if we shift our thinking away from ownership, towards usership. That is, it is the users who determine the moneyflow through an organisation. Makes sense. But we don’t have the skills currently to make such decisions, other than those made people in positions, who are in a more or less static structure, whose salaries are generally hierarchical ordered. We need a more fluid dynamic system, with multiple moneyflow channels, which generate a more flexible decision-making consensus. But that is years ahead from our current social skills.
Right now, I am pulling together the business plan for Ecosquared which contains financial projections which are attractive to investors. Investors want ownership. Simple as that. I had hoped to introduce them to %-equity of the revenue. If the app goes viral, they could make 16% of £1,000,000+. No strings. Not a cut of the profits, but of revenue. But, at this stage, my very capable of experienced business advisor and no doubt the accountant will see this as a non-viable business proposal for investors. So, we must stick to ownership, and so they will be limited to profit. And the chase for profit means a squeezing of costs and that old game…
Honestly, if we are producing a value-tracking engine, we really do need an investor of quality. I have been saying that we are looking for high net-worth individuals. Perhaps I should rephrase it? We are looking for high net-value individuals.
It will be in all of our interests, as users of the app, to generate sufficient funds so that these investors will be more than happy to be bought out at say 10x their investment, ie £600,000. We can then phase to a gratitude distribution system — including the very same traditional “professional” investors!
Without investors, Ecosquared will struggle, so I shall no doubt be indebted to them — personally — for the rest of my life, just as I am indebted to Colin who coded the back-end SQ-calculator, and to Kevin who has taken me further business-wise than I could have gone alone. I am tracking their value with the app, of course, and they shall be receiving a percentage of everything I get until the day I die. And so does anyone else who helps.
there’s nothing to it
Just now, that’s zero. I guess that’s why people haven’t quite cottoned on to the power of this thing.
Well… if I get it all lined up, pertinent players have the heads up (like lawyers, accountants, app developers, marketing directors, musicians, authors, etc) — when we launch, we have a chance to take this globally. A parallel economic system, free from ownership and ‘negative’ money. And then it is for us, each one of us, to make our decision as to how we operate economically. With the app in our hands, and our personal network of relationships… it will take years…