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On social capital and currency

I like what Jay Deragon and Dan Robles write on their blog The Relationship Economy. OK, the economy, life itself and even our self-perception is relational but one can’t deny that economical, cultural and corporate changes are happening in what is called the ‘social media age’. And, although social media are not the key drivers in these changes, the ‘social’ dimension definitely is part of them. But let’s not get too philosophical.

The thoughts Jay and Dan post look a bit like the posts of Brian Solis and Olivier Blanchard now and then. Although all of them are very different, what they sometimes do have in common is the global view on what, well, one could call the ‘social economy’.

Back to The Relationship Economy. Dan Robles recently wrote another great post on the blog regarding a term which is going to get more and more attention in the years to come and which I tend to use now and then: social capital. He defines 5 components a financial system must have to sustain itself in what is a great read.

Dan explains how these components are developing in the “social economy” model. He defines them as: inventory, vetting; entrepreneurs and a business model. Dan deftly describes how each of these components will function in order to support the “social economy”.

The Knowledge Inventory

Data has been a growing part of our economy for some time now. We have been moving away from a resource and manufacturing model towards a service and information driven economy. As Dan points out, a knowledge inventory is growing as people use the web to establish their knowledge and insight value via such things as blogs and online communities.

This is where we should zoom in and understand something fundamental about the web – it is driven by communities. What gives the web purpose and life is the power it provides for communities to interact and develop. Within those communities, knowledge, insight and the ability to effectively relate and communicate that knowledge is gold. Those who have these skills gain prestige and that prestige carries value for community members.

We aren’t really talking about a barter system here. What we are talking about is the fact that real value can and does exist among community members based on their contributions. This value comes from the esteem of their fellow community members.

Social Capital

As you probably know, in Cory Doctorow’s novel, “Down and Out in the Magic Kingdom”, social capital was called “Whuffie” and can best be summed up as your community karma (remember Slashdot). In the novel this “Whuffie” factor determined your net worth and was constantly adjusted based on your actions within the community.

We aren’t close to Doctorow’s vision of “Whuffie”, but we are experiencing the first waves of a new economy which will probably change the world. Even now you can see examples of social capital being valued. Call it “Wuffie”, “Kudos” (“The Algebraist”), Brownie points or social currency: making a sincere effort to contribute to a community results in rewards and relational attributes have their value, even if it’s so-called influence. If there would not be such thing as “social capital” no business would be interested in you.

The Value Of Relationships

Is it that new? Hard to tell. I do know that there used to be quite some people in my home country, that “liked” me because I used to be what someone called “a walking Rolodex of the Belgian Internet scene”. What this really means is that my connections and relationships with people, especially media people, were seen as valuable. The best way to realize that is when you stop having or giving away the connections out of the sheer desire to connect and help out: suddenly you are less “liked”. It’s the same in the social media world in case you hadn’t noticed.

Today these connections and relationships, that you really only get if you don’t mess with people to put it simply, have become more valuable. And social capital is one of the reasons why it’s so important for your brand to be a part of the community you want to serve.

Don’t think in terms of doing business with that community first. Think about being a part of it and how you can contribute value to it. You undoubtedly have a great deal of information which is valuable social capital. if you invest that information into educating and thus, serving the community, you will see substantial returns.

When I was young the phenomenon was simply called scratching people’s back in the hope sooner or later someone would scratch yours. And although, there is never a “fair” quid pro quo in human relationships, in social media marketing it is really the way to go.

But let’s not be naïve: a business still wants a return.

However, the back scratchers, scale, currency and ways to get it are changing.

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