Companies are flocking to social media and crowdsourcing platforms in the hopes of finding cheaper or more effective ways to market their wares. This is understandable for we all need to make a living, however, I think the real promise of social media is bigger than just a financial transaction. People give their time and money for reasons above and beyond financial gain.

Crowdfunding site Kickstarter is a great example of non-financial motives for giving. Kickstarter is a platform to fund creative ideas. It is not investing, project creators retain complete ownership of their projects.

“Project creators inspire people to open their wallets by offering products, benefits and fun experiences.”

The great thing is that people do fund projects for “fun experiences.” There are many people completely willing to part with a little cash in order to play a small role in a community. And yes, each project is a community because like minded individuals are connecting around a single idea.

At the time of writing this post, Bud Caddell has attracted $6377 in funding from 88 backers for his book project, The Bucket Brigade: How Everything in the Attention Economy Actually Works and 10 Rules to Profit from it. Pledges of $25 or more get their name and URL in the book. More than $100 earns editorial membership. Backing of more than $500 gets “special attention from me (Caddell) far beyond the production of this book.”

Think about that for a moment, if you donate more than $100 you also get to edit the book for free. Caddell’s successful funding proves that money isn’t the only motivator. I think this is a positive and very powerful cultural advancement. Some professional connections and engagements are more valuable than a mere financial exchange.

That to me is the real power of social media. We are connecting around ideas and beliefs and not only trying to sell each other something. As we develop as societies and continue to climb Maslow’s Hierarcy, money is becoming less of a motivator.

Caddell was only asking for $5000 in funding, which is not a lot of money to write, edit and publish a book. Clearly it is not only about the money for him either. Lumi Co. on Kickstarter said,

“Kickstarter is an incredible platform. Its obvious purpose is funding, but we find ourselves gaining so much outside of collecting pledges. For us, Kickstarter has been a powerful tool to connect with a community passionate about our work.”

Many of us blog, upload videos and pictures, contribute to open source projects like Wikipedia and Linux with little or zero financial benefit. There is definitely more to life than money. Being part of a community and connecting with fellow humans has value in and of itself. We really are putting the ‘social’ into social media.

Thanks to Edward Boches for inspiring this post.

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1. Abundance Breaks More Things than Scarcity

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We live in an age of abundance. If you disagree, go to any supermarket and look at all the different brands of toothpaste, cereal, coffee, soap or any other product. We have surpluses of food, automobiles and every other product imaginable. Relative to western standards of living, goods are essentially free. Even the poorest employed person can afford a quality of life beyond that of royalty just a couple of centuries ago.

Online abundance is incomprehensible. How many millions of blogs and websites are publishing free content and services? We are living in world when the old rules of economic scarcity have essentially vanished.

In traditional hierarchical corporations it made sense for managers to hoard information. That is how they kept control and increased their own value to the firm. It was in their self-interest to keep their knowledge scarce.

The economics have flipped. Time and attention are the only two resources that are not in infinite abundance. Everything else is basically in endless supply. We have to share and give valuable content and ideas just to catch the attention of a world awash in information, advertising and goods. Success is more a function of how much you give rather than what you keep for yourself.

Clay Shirky articulated this new reality in the quote;

“Abundance breaks more things than scarcity.” (Quote via Edward Boches)

That is a very powerful idea. Markets are being destroyed because of too much, NOT too little. Here are some examples.

• Craiglist (Free classified ads)  versus the newspaper industry.
• Blogs and websites versus magazines.
• MP3 songs versus the music industry.
• Amazon versus book stores.
• Skype versus long-distance phone charges.
• Wikipedia versus Encyclopedia Britannica.
• Chinese manufacturing versus US manufacturing.

The oil industry is not going to implode because of a shortage of fossil fuels. It will be made irrelevant when alternate and abundant alternative energy sources are developed. Storage and bandwidth are rapidly approaching zero marginal costs, just wait to see what clean and abundant energy will do to the world.

What happens when supply is infinite and prices are zero?
In an abundance economy, supply and demand are irrelevant. Supply is infinite and demand is almost non-existence because finicky consumers can not be interrupted to even consider your firm’s offering. It is a winner take all world.

A better exemplar of the new economic reality is the cult of celebrity. Riches go to only the top performer. Winner takes all.  A famous actor, musician, athlete or blogger can command huge incomes while all the wannabes struggle in obscurity.  Economic success is no longer  a product of the scarce resources you control. The only real differentiation arises from the quality of ideas and your ability to command an audience.

How will your company survive when you product or service is given away for free?
How can you  become a celebrity in your niche?

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1. Focus is More Important Than Knowledge
2. Social Media Marketing is all about Free Content
3. Business Model Management is the Only Way to Stay Competive

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Edward Boches of Creativity_Unbound has a great article framing social media into real business objectives.

I don’t talk to clients about Social Media any more.

He has five ways to reframe the questions.

Want to improve your organic search results?
Start a blog.

Looking for a better way to conduct real time qualitative research?
Listen in on ongoing conversations on Twitter and Facebook.

Would you like more out of your advertising creative ideas?
Try a crowdsourcing contest.

Interested in stretching your media dollars?
Use embedded YouTube videos and encourage sharing.

Looking for ways to increase positive word of mouth?
Introduce all of your customers to each other, on your site, on Facebook and on Twitter.

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1. Collaboration Through Social Media

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