NEW! Recessionhacking wiki

Recession Hacking is becoming quite the topic of conversation and people are taking up some of the topics discussed here - such as alternative currencies, jobs and entrepreneurship, entertainment etc. I was just invited to a WIKI that started last week on the topic www.recessionhacking.org. Nothing to do with this site but breaks the issues up into different topics. Rest assured I will be stealing liberally from these suggestions - or is that simply called 'open sourcing' these days?

Hack for Wall Street Bonuses

Give them what they deserve.
It still amazes me the millions in bonuses that were given out on Wall Street this year. Sure, a lot of people lost their jobs and those that stay need to be incentivised. What I don't understand is why they are given our money, rather than some of the bank's worthless assets that they helped create and sell to our pension funds.

Here's a hack that will fix the economic situation: The banks have billions of $ of assets that they cannot find buyers for - Sub prime mortgages, Asset Backed Securities and CDO's. Why can't these 'toxic assets' be off loaded to the Wall Street big wigs as bonuses at current market value? This gets the assets off the banks books, feeds the greed for bonuses within a broken industry and makes the fortunes of the 'over-paid' directly dependent on the financial future of the 'over-loaned'.

Towards a useful alternative currency?

The more our financial systems fail the more appealing alternative currencies become. It's only a matter of time before someone creates an alternative currency that uses social media platforms like twitter or Facebook. Twitter, for example, has all the requisite elements - an account, an accurate record of transactions, and a user specific ID. Twitter units could be traded at an agreed rate per hour for work done for each other. Every time you did work for someone else, they could be paid in Twitter units at an agreed rate per hour. Similarly, every time you wanted someone to do something for you, you could incentivize them withTwitter units (I'm sure someone can think of a better name). This could became a useful currency for anyone working in a creative collective or small business/start up community .

So, what do you need to create a social currency? (Significantly edited from www.newcurrencyfrontiers.blogspot.com).

1) An account is the place where information about ONE currency is aggregated and transformed for output - e.g. "account balance.”

2) A transaction is an interaction between two accounts. It is a record of what happened and describes a mathematical relationship between the two accounts.i.e. On February 10th 14:50 “account A” pays 50 to “account B”. This transaction describes the relationship between the two accounts, and records the time it occurred. Transactions could be transferable (debited to the payer, credited to the payee), or non-transferable (not debited to the payer, but still credited to payee) such as a reputation transaction or a thank you.

In order to have the maximum extensibility to this platform, receipts for all transactions within a currency could be aggregated on a server(s) (such as Twitter). These receipts would contain all the information about that transaction specified by the currency.

3) Currency – A currency is set of rules defining the types of accounts, how their balances are calculated, and how these accounts can transact with each other. A currency could have multiple different classes of accounts. For instance, a mutual credit currency might only allow businesses to be issuers of the currency (allow their balances to be negative).


4) Currency Complex defines the relationship between currencies. Many different currencies could be cross-referenced to produce a rich and resilient tapestry. Because currencies are modular within the currency complex, currencies can quickly evolve in an extensible way. Rules for currency could be contingent on metrics both inside and outside a given currency.


For instance, let’s say you wanted to have a credit limit in a mutual credit currency be dependent on the user's volume of transaction in the currency multiplied by the percent of "thumbs up" ratings. The user would need two accounts within the mutual credit currency, and an account in a second reputations currency. The user's buying power in the mutual credit currency would be a sum of all transactions. The user's transaction volume would be the sum of the absolute values of all their transactions (calculated in separate account). The user's history in the "thumbs up, thumbs down" currency would be calculated as an average. The credit limit for the first, could be linked to the second and the third (credit limit increases to 1000 when you have conducted 10,000 worth of business with 90% thumbs up).

5) ID – A person using this platform will need to have some sort of identity boundary on the currency platform. This is distinct from having an account, since an account, as I am defining it, is merely the place where one currency is aggregated. An ID will be able to have multiple different types of accounts within one currency, participate in multiple currencies within one currency complex, and participate in multiple currency complexes. The ID simply allows multiple different currencies to be grouped and displayed according to user.

Anyone really interested in this subject: CLICKHERE

Hacking marketing budgets

Could brand ideas be the answer to the marketing budget puzzle.
(Sorry, I promised myself this wouldn't be a marketing blog but it is my day job and this felt like an interesting recession hack for marketers).
Seems to me, in 2009 particularly, there are a lot of brands out there that are not getting the marketing funding they need to be successful. Many of these brands are already well known and already have a loyal customer base. For completely different reasons (namely the spontaneous combustion of the finance industry) it is much harder for companies to borrow money to make an investment in a brand that has growth potential. As a result, many good brands face an unsupported year just when there is a huge opportunity to out invest the competitors to gain significant market advantage.

On the other side of the fence a lot of private equity, angel and VC investors want to play conservatively with their money - staying away from new, unproven business models - yet their other investment choices offer poor and equally uncertain returns.

So, what if we brought these two parties together. Broker marketing investment $ from private equity in return for a cut of the incremental business revenue generated by the brand. Brands get the marketing budget they need (as long as the plan delivers ROI) and the investors get an investment that is grounded in a proven business model from a brand that is already a known entity.

So, how could it work?

1) Create and publish a list of all the brands that will not be funded this year. (The endangered brand list?). The brands with most potential could then be approached to see if they want to participate...Why wouldn't they?
2) Invite the creative communities - either discreetly within agency network or on an open co-creation platform - to submit brand ideas on the promise that any brand ideas that is used will be rewarded with a % of the revenue generated
3) Package the best of these ideas and pitch them to private equity investors and the brands. All the brands have to bring to the table is a willingness to cede marketing control to the investment partners.

As I think about it, these three stages could be executed in varying order depending on what you have easiest access to, ideas, funding, brands.

We should create an identifiable logo that features on all products supported by this process. Negotiate retail and consumer support in advance. There's entertainment content in here somewhere too - Dragons Den for brand ideas.

Anyone want to play?

The new economy's cubicle

Check out New Work City collective-working
(although originally because NWC don't use a hyphen I thought this had something to do with farming - coworking.)
It's essentially a new approach to office space and community center for all those start up organizations that will spring up everywhere as valuable, creative and productive people find alternative revenue streams. Some great companies will come out of this. They should offer membership for equity too and get a cut of the action.

Finnish spending

(via Daniel)
Finland is running an advertising campaign to get its 5 Million residents to stop saving and start spending. I like the the devil/vampire pig for a couple of reasons - It reminds me of HBO's True Blood and the FAT pig that I helped create for HSBC Direct. However, as we have discussed below, just spending will continue to support this broken economy. What we really need is guidance on how to fuel a better/different economy.

I still think that distinguishing between spending on people rather than things could be a good distinction. Giving money directly to people who do useful things for us ensures distribution of wealth to those who offer a valuable service - unlike giving money to corporations who disproportionately distribute it to management and other unnecessary spending (e.g. John Thain).

Money given to people is more likely to remain active in the economy - people will use it to do things they want to do/buy - while money that we spend on things, objects, possessions is likely to go nowhere. I recognise that ultimately paying for products goes to workers and producers but not before it sits on many different balance sheets and lots of people take a cut. If our new economy supports and incentivizes creativity and production we need to make sure the money we spend goes directly to the people who create and produce. The easiest way to do that is to buy as close to the source as possible so the people who actually create and produce get the money without it going to the 'middle men' who neither create nor produce anything.