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Saturday, May 7, 2011

The New Frontier of Capitalism

I keep getting asked, "what's the point of Empire Avenue?" Or told, "Empire Avenue is just a stupid game." My friend Robert Scoble thinks Empire Avenue makes a good News Reader, and that's about it. The thing is it is not just a game. It's definitely not a news reader (I'm sorry, but as forewarning, Robert will be sorely disappointed, just like he was with Quora, if that is his interpretation of the service). I already covered this a bit already calling it a "catalyst for a new economy". The thing is it's much more than that - it's a new era of social websites, one where capital can trump influence, and those with capital can become influential. It's a network of Capitalism vs. Socialism.

It's All a Game

A year or two ago, I participated in a panel at BlogWorld in Las Vegas where we talked about "the Twitter game." As founder of a site that helps people improve the relationships they build on social networks like Twitter (as, at least I hope, opposed to gaming them), I'm all too familiar with this game. You follow someone in hopes that they follow back. If they unfollow you, you unfollow them. All this increases your numbers and you're perceived as influential as a result. The really successful turn this number into more than just a number and actually show substance to the following they've built. This is why if you follow a lot of people, you'll naturally build your following, especially if you provide some sort of value on top of that.

The game goes farther than Twitter though. In the blogging world it's simple. There are several strategies to this "game". You blog a lot, provide value in the content you post, and link to a lot of people to get them reacting and responding and linking back to your post. Or, you focus on the SEO side so you appear in Google. As you do these things and provide value as you do it, people will naturally follow, and the traffic will come. Your readers increase.

On Facebook it's really easy - almost everyone you send a friend request to will accept it. Just send out a ton of friend requests to influential people and you'll max out your 5,000 friends really quick. Or, if you have a Facebook Page, take the blogging approach I mentioned above, throw in some Facebook advertising, and then measure like crazy to determine your proper ratio. You'll have thousands to hundreds of thousands of fans in no time.

Of course, some times you just get lucky. In that case, just gamble - try different things until something sticks.

You see, in every case above, there's some sort of "silly game" involved. True, you have to provide substance to gain the most benefit and to maintain your trajectory, but building numbers on any social network is just a game. Even the relationship building process (which I am much more about than the methods above) is part of that game.

On Empire Avenue the "silly game" is different though. Those that play it the way they do on Twitter and Facebook and in blogging will see some success, but they won't be the leaders in the network. I think it's a matter of socialism vs. capitalism.

Social vs. Capital Networks

In a "social" network, the focus is on gaming social relationships - how can you pique someone's interest so that they form a relationship with you? What are the psychological lures to get them into your network? What services can you share with one another to build that network? How can you complement each other?  How can I better learn from my close friends and family? How can I get the latest and most relevant news from (and about) those I trust? Most importantly, how can you find influencers that can further boost your potential? For the "right" way to do this, I recommend Guy Kawasaki's book, "enchantment".

In a "capital" network, the focus is different. The "capital" network is focused on gaming capital, and finding people with capital that can further boost your potential. How do you get that capital? You participate on the site and interact with people and promote other people that are doing well. In a way, Guy Kawasaki's book will help you with that as well. Except in a capital network you're rewarded for doing so. On a social network the reward is not so evident. It's important to note that a Capital Network is not a news sharing service. It's a relationship sharing service. You don't "subscribe" to anyone or anything on a Capital network - it's a 2-way relationship if you're going to have any sort of success.

In a capital network it's not about finding people that are already popular. It's about finding the little guy that will make you wealthy, and in the long-term, that will make you popular. In a "capital" network, like any investment-oriented society, you want the little guy that will go big (like Facebook a couple years ago). You don't want the guy that's already big (like Google or Apple are now). At the same time you don't care if they're popular or not - you do care that they are returning dividends for you because in the long run that produces dividends for your investors, making you a more lucrative investment. You want the guys that are participating most on the network and providing real value to their peers, in not just monetary form (because remember money on a capital network is based on activity and participation and trying to help each other out). In a way, each good "follow" or investment is in a sense another startup you're putting your money and words and influence behind, only you know the founders of that startup have held their weight and provide real, social value back to you.

Typical influencers aren't going to understand the "capital" network. It's an entirely new frontier. It's a place where the little guy can make a name for themselves and get on the radar of other influencers. At the same time it's an opportunity for influencers to maintain their influence and grow even further. Watch what my friend Chris Pirillo is doing - he really gets this, and in just 2 weeks has become one of the fastest growing investments on the network as a result.

New Frontiers

From a network standpoint, Facebook was a new frontier at one point. The influencers weren't allowed on it. It was just your college buddies and their friends. It was meant for the "little guy" to be someone. It was meant for them to make a name for themselves, and many people embraced the opportunity.

The web was another new frontier. That's where the Scobles and the Pirillos and the Winers and the Arringtons and others made a name for themselves. They were the influencers of that era, formerly "nobodies" (no offense intended, as they are certainly not such today) who took advantage of an era and made a name for themselves. They've maintained that reputation throughout the Facebook and Social era. That era was all focused on a subscription and news-oriented model.

We're in a new land grab on Empire Avenue, and I'm pretty sure there will be other competitors in the future. It's a capital-driven frontier, one where they require you to put your money where your mouth is, but also maintain your own value as you do so, so others can gain a return on you just as you gain a return in them. It's one where I truly believe there will be a real conversion rate that equates to real dollars, and people will offer goods and services based on that conversion rate.

The New Economy and True Conversion Rates

What do you gain from the Capital Network? Yes, you gain relationships as you find new people producing real dividends, but on this network there's actual money in it for you. Trust me on this one. There will be a real exchange, worth real money at some point as reward for those that truly focus on relationships, and those that ignore this will be running to play catch up. At the same time, those that really invested, those that really focused on real returns (aka dividends and people really involved on the network), not just influencers and people whose stock value grows (and focus on people that do the same) will be a close-knit community of people that know each other, that know each others' names, and that work with each other for even further influence.

Capital Networks Are More Than a Game - They're About True Relationships!

With Empire Avenue people are forced to truly put effort into building relationships. They're force to truly get to know others. They're forced to truly promote their friends, and build up their friends. And they're rewarded for such. To me, this is a much better network, one where I can know people truly care about me and my success, not their own "me" economy.

Ironically, it will be capitalism that will make us social.

If you want more information on how to use Empire Avenue effectively, I highly recommend, and agree with, Chris Pirillo's tips that he posted today (I am an investor, but proud to invest in him because he truly participates on the network, and produces dividends because he focuses on relationships as he does so). Be sure to read over Chris's tips, as they share further my vision for the service.  At some point I'll share my own as well.

In the meantime, you can follow me at STAY on Empire Avenue here (Click the last link if you haven't joined. Click this link if you're already a member.). Let me know if you're getting ready to join and I'll provide you with tips as well - I'd also like to invest in people truly willing to participate and focus on those that care about relationships (aka dividends).

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