The ‘evil’ in exchanges.

Exchanges are a hot topic in the social capital markets. They are appealing in the sense of the efficiency they promise. Efficiency is good – and it also has a dark side. This dark-side, which I’m considering the ‘inherent evil’ in exchanges, is their tendency to disconnect/dissociate the ‘buyer’ from the ‘seller’. It comes out in things like the sub-prime mess and rogue traders.

So how do we get the benefits of this ‘masterpiece’ of capitalism?

By using exchanges to:

  • create and deepen connections;
  • increase the richness of information and communication in those relationships; and
  • craft and uphold agreements.

To me that means looking as much or more to social networks as it does financial exchanges. I know there are some folks working on local exchanges who have acknowledged this ‘evil’. I’ll be particularly interested to see how they address it – from all the angles I’ve looked so far it seems to be a tough balance.

This biggering is buggering… a call for a new vision of ‘prosperity’.

I attended a session for Sustainable Prosperity last week and was left with a pretty big realization that evolved for me into what blurted out in a strategy session for Windfall Ecology Centre on Friday as..

“This BIGGERING is buggering…”

Obviously, this is inspired by Dr. Seuss’ “The Lorax, (see the specific quotes here), but it also refers to a growing realization that the thing that economy is based on – continuously increasing consumption – is reaching a breaking point. To be clear, this isn’t a recession inspired ‘people aren’t going to consume as much anymore’ statement, it’s a ‘if people consume anywhere near what we’re consuming we’re all screwed’ statement. “Story of Stuff” by Free Range Media for the Tides Foundation makes a simple and decent case for that.

So getting back to Sustainable Prosperity, I can’t help but think that if any new definition of prosperity is going to have any impact, it has to address this, and the other underpinning of our society, if the individual doesn’t prefer it for their own selfish motivations, no level of altruistic appeal will change their behaviours. The 60 minutes “House of Cards” segment on the sub-prime mess shows some of that with a shocking display of people’s self-interest at play.

Putting those two things together then, any new definition must then:

  1. Not be dependent from continually increasing financial prosperity (growth)
  2. To the individual, be considered as comparatively superior to the conventional notion of financial prosperity

It’s easy to argue that’s not likely to happen – when the furthest our ‘greatest’ capitalists go is ‘creative capitalism’ (Bill Gates) – but I can’t see how anything but will have a chance of getting at the root of what we’re dealing with. Imagine though what Gates or Buffet could do if they backed that kind of a definition.

Things are broken. We need a new basis to start from. Personally, I can’t deny it anymore… this biggering is buggering and so I’m beginning again.

But before I begin my beginning, I’ll just share something from another great kids book, this one by Jamie Lee Curtis (whoda thunk?) and Laura Cornell called “Is There Really a Human RACE?”. I’ve posted the full text here, but will wrap with this provocative page:

“Do some of us win? Do some of us lose?
Is winning or losing something I choose?
Why am I racing? What am I winning?
Does all of my running keep the world spinning?”

The definitive definitions of venturing!

One of the surprising things that I came out of my latest exploration into the frontiers of venturing and venture investing is a set of definitions. I’m actually not one that likes to debate definitions ad infinitum but I found I needed to clarify things to be able to have meaningful conversations going forward. So here, is what I’ve come up with… for now (I’ll keep updating this definitions as the evolve so feel free to check-back or link here for reference).

  • Venture: An agreement among people to do things in service of a purpose and according to a set of values.
  • Venturing: The process of creating and evolving a venture.
  • Venturer: A person primarily involved in or responsible for venturing.
  • Operator: A person primarily involved in or responsible for operating a venture.
  • Entrepreneur: A venturer that also carries primary responsibility for operating a venture.
  • Frontiers of venturing: The effective limit of conventional approaches to venturing.
  • Frontiers of venture investing: Investing in ventures that are on the frontiers.

Crowd sourcing in venturing

Just saw this post tipping me to VenCorps which seems to be a venture fund using ‘crowd sourcing’. I’m going to be interested to see how it goes and expect they will do well by essentially ‘amping up the network’. My guess is that they will be better at dealing with ambiguity (related to progressing along stage of development) in ventures but I’m curious to see if it will help them deal with complexity (related to depth of systemic change). The thing that gives me a sense that they won’t be as effective here is the military style they are coming out with. That to me indicates a very linear, command and control approach which is not effective in dealing with complexity.

Looking forward to learning more and seeing how it does. Regardless of how it performs its great to see the innovation in venturing.

Giddy-up: getting better on the frontier.

Coming out of this first inquiry I’m left with new definitions for venture, venturing, and venturer and also a simplistic grouping that the process of venturing essentially requires agreement, action, and governance. It is important to note that these are a set of observations and interpretations that will continue to be evolved in practice. As such they represent a starting point for a concerted effort to ‘get better at venturing and investing on the frontiers’.


  • Venture: An agreement among people to do things in service of a purpose and according to a set of values.
  • Venturing: The process of creating and evolving a venture.
  • Venturer: A person primarily involved in venturing.

AGREEMENT: The venture profile
In getting better at venturing on the frontiers, it becomes apparent that the first things required in a venture are an articulation of:

  • purpose;
  • values; and
  • agreement, followed by action.

This is particularly so in an effort to address complex ambiguity and so also must include the foundational foci that are effective amidst complex ambiguity, namely distinct, discreet attention on:

These items become the core components of a ‘venture profile’ which is an articulation of the collective agreement on what the venture is.

Another interesting realization through these conversations and above definitions is that a venture, at it’s core, is an agreement. It starts with the first agreement between 2 or more people and grows with the deepening and addition of new relationships. Essentially a venture is ‘simply’ a bundle of relationships. Accordingly the individual relationships should also receive special attention through consideration and articulation of the essential process for evolution or termination of the agreement, and of each party’s:

  • acknowledgment of the other party’s venture profile;
  • their contribution;
  • the manner of contribution;
  • their compensation for their contribution; and
  • any other explicit responsibilities and expectations.

Collectively, the bundle of individual relationships along with each associated agreement form the essence of the collective agreement articulated in the venture profile and could be visualized through multidimensional maps which naturally will evolve as does the collection of individual relationships. Here there is a significant opportunity for new and improved practices in venturing. The collection of individual agreements also forms the basis for financial model. This is not the same as financial projections which are often an exercise in justifying an anticipated outcome but rather they are the basis for being meaningfully able to anticipate the results of the existing and anticipated agreements under certain conditions.

ACTION: A planning process
With the core profile in place we move into the activity of the venture itself which is best determined by those that have the authority to complete the action being determined. This follows from observations in systems science that planning only happens when action is the result and so can only be carried out by those with the authority to act. The most effective planning approaches will be recognized as intentional, co-creative, and iterative action planning. Established approaches from community and software development could be well applied here. For example, the methodology from the Institute for Cultural Affairs Technology of Participation are particularly effective when conducted with short time horizons (e.g. monthly and/or quarterly) within the context of the venture profile which itself is reviewed periodically (e.g. annually with the inclusion of strategic direction planning). Similarly the agile development process is particularly relevant for venturing on the frontiers.

GOVERNANCE: Cohesion and instability preemption

Governance of a venture (collective agreement and the action that unfolds from it) is best fulfilled through attention on the cohesion of the venture and on signals of incipient instability. Going back to the definition of a venture, this is about monitoring the changing trends in relationship status and agreements. This is perhaps the most unique discovery in these conversations. Changes in the tone of relationships is often one of the biggest and most consistent indicators of incipient instability. This by no means implies that relationships should remain static or that relationships should not be allowed to decline, that’s simply a part of evolution. What it does imply is that changes in the trends of relationships status are particularly powerful indicators of change including growth and incipient instability. For example what’s often described as ‘momentum’ is an upward trend in the strengthening and addition of relationships. Or a founder of an organization challenging the direction the venture is taking may be an indicator of a change in the collective agreement, particularly if it was well articulated at the outset (which is rarely the case). Of course, monitoring financial metrics and changes in budget/plans can also signal incipient instability and by no means should be excluded. Rather disciplined attention should be focused on the metrics that indicate potential instability. If the management system is attentive to incipient instability it will be able to minimize its effects or avoid it all together. The other dynamic of effective governance is attention to the cohesion of the venture itself. This means that ensuring that both PIE and CV are being attended to and that the dynamic between them is constructive.

There are of course more detailed design aspects to organizing and operating a venture, several key ones of which are described in Heart of Enterprise, but from my experience, research, and through the recent conversations I believe venturing effectively on the frontiers requires the essence of:

  • agreement and articulation of the venture (venture profile, relationship map, financial model);
  • action through intentional co-creative, iterative action planning (process, budgets, time lines); and
  • governance attentive to cohesion and able to anticipate and preempt incipient instability (future indicating metrics, report card, ability to respond constructively).

Practically, there is significant opportunity in improving upon each of these areas and particularly in the area of relationships with the emergence of new ways and styles of connecting brought forth by virtual communications developments such as social networking technologies. And with that now begins the process of putting this into practice and an open invitation to those who want to embark on this with me.

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Gettin’ it goin’ without goin’ under: cohesion and incipient instability.

With requisite attention being held a natural propulsion will emerge.  The act of managing and nurturing that propulsion is attended to with a focus on cohesion and being proactively aware of the emergence of incipient instability.

These concepts are addressed in depth in Stafford Beer’s viable system model (my reflections here on reading Heart of Enterprise) and are really about holding the tension between future (vision), and here and now (operations) [see last post for more on requisite attention]. Cohesion has a lot to do with articulating purpose as so well described by Collins and Porras in Building Your Company’s Vision. And incipient instability is about monitoring trends in financials, plan performance, and relationship status (after all, ventures are systems, concentrated bundles of relationships), and then spotting changes that indicate that something is becoming instable in a way that could harm the cohesion of the system as a whole. 

Again, both of these concepts seem relatively straight forward, and in fact are things that play out automatically in any natural system including ourselves. But as ventures are intentional human constructs we need to be intentional about them for the system to remain viable. On the frontiers, the pressure to focus on ‘getting things done’ leaves little space for this to happen, and unfortunately the models of doing this tend to come from linear management theory that takes more of an audit and control function which is of little interest to the venturer and begins the dance of storytelling through massaged metrics. Accordingly bringing this into practice needs approaches that are lightweight and constructive – some concepts for which will come in the next post.

(special note: this has been a difficult post to keep short, there are many offshoots and explanations possible in every sentence — something best explored in conversation and specific context)

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Venturing on the frontier: requisite attention

Venturing on the frontiers requires distinctly holding attention on two discrete aspects of any venture:
– Productive, iterative, exploration of the complexity dynamic
– Core venture viability

Simple to say but in practice, venturers who aren’t stuck in perpetual analysis and thought, are pulled toward focusing on linear, or hopefully exponential, growth of the most promising aspect at hand particularly after attracting professional investment capital. Stop thinking and just do it right?

Well, avoiding the trap of perpetual analysis does not have to mean stop thinking and exploring, it simply means actively cycling through observation, reflection, interpretation, and decision that moves the venture forward. It means not getting stuck.  There are many models for doing this with the key aspect being that the focus of the exploration tends toward the deeper purpose, that the cycles are measured in weeks and months as opposed to quarters and years, and that the results change the venture in some way.  Explicit attention on this process will ensure that the venture continues to innovate and work toward it’s purpose including continually improving upon it’s ability to achieve that purpose.  Another important consideration in this exploration is that the greater the chasm between the purpose and the daily activity of the organization (as is the case with ventures on the frontiers), the greater the flexibility the venture needs to be able accept and meaningfully enact the outputs of the process. This flexbilty is informative in understanding what is meant by ‘core’ venture viability.

Core venture viability at its essence is the ability for the venture to maintain its existence in service of its purpose.  Commonly, and importantly, a key aspect is financial viability. Early-stage ventures tend to be perpetually resource constrained making the flexibility required of the outputs of the exploration process described above, very difficult.  This is where ‘core’ viability comes in.  The core viability does not have to do with maintaining the venture as it is but rather maintaining the ventures ability to continue to serve its purpose which often does not require doing everything that is currently being done. It could be a subset of what is being done, it could be something entirely new. Usually it boils down to concentrated set of people and relationships and the synergistic activity/supports among operations. Taking this perspective can often illuminate the amount of activity that could be done with out.  It also will enter into decisions about growing operations and help to clarify what actual purposes of growth related activities are.  Another way to look at it might be refined bootstrapping. 

The tension created by these two attentions inherently have the potential to compel the venture toward being more efficient and focused with less risk of failure and higher probability of meaningful achievement of its purpose. And like everything else, easier said than done right? Yup.

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The dynamics of the frontier: complex ambiguity

The frontiers of venturing are the places where conventional venturing and planning approaches become least effective. It is the effective limit of conventional approaches to venturing that define the edge of the frontier with the deepest depths of the frontier being the pre-concept stage of a systemically focused venture.

Conventional approaches loose effectiveness the earlier a venture is in the development phase because of increasing ambiguity.  The less that is known the harder it is to do linear modeling and planning.  Choices made continually reduce ambiguity as the venture moves along the development and into the realm where conventional planning approaches can be effectively used.

On the depth axis, the more systemic the purpose, the greater the complexity. As the system changes, so will the problems and opportunities being addressed as will the community addressing those challenges and opportunities. The interrelatedness of planning decisions and planning context can be an all consuming black-hole. The more you are trying to shake things up, the less you know how things are going to shake out.

While all ventures face a degree of ambiguity, the depth of your foray into the frontiers depends on the depth of complex ambiguity being taken on – a function of complexity and abmiguity.  Conventionally, managing this is accomplished either through blind faith in the entrepreneur and management team or by reducing the complex ambiguity by advancing the planning horizon and responding to situational opportunities and problems. Taking the latter approach often serves to reduce near-term operational risk but also severely limits or eliminates the potential for achieving systemic level impacts, while the former approach is limited by the abilities of the entrepreneur/management team in the unique situation of this specific venture. Neither option suggest even modest probabilities of success particularly at the depths of the frontier… which describes the venturing and venture investing community as it currently operates.

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Social blogging

Fred Wilson at USV had a post exploring the differences in twitter and tumblr from other things like blogs and social networks.

I am sure there are a lot of people reading this who think “how is this different than blogging?” I’d like to suggest that everyone try this

I blogged earlier about a simple way to give twitter a try (here and here) and think that both of these need to be experienced to get a sense of what they are like. There’s something about the ambient nature of twitter (think the value of fb status updates amped up). It’s of course much more than that and I’m finding tumblr encourages me to explore and share creatively. So much of it has to do with the sharing of pictures, videos, music, and quotes that I’m finding it interesting to watch what it is that interests me in what I’m posting or reblogging. I think it keeps me on the frontier – exploring things that I can’t quite articulate yet and certainly finding things that have prompted a breakthrough in my thinking in ways never intended.

Give it a try – both twitter and tumblr and add me if you do (igniter on twitter and on tumblr).

Macroshift (Ervin Laszlo) — Doomsday or Breakthrough?

I’m only through the first two chapters of Ervin Laszlo‘s book Macroshift, but thought I’d better post these snippets before I get caught-up in the flow of the week.  I came across this through a client who pointed to this as the best description of what their work is responding to.  I couldn’t agree more… and know a few others that will feel the same way… and am hoping more people will join those ranks. 

The Four Phases of a Macroshift are the core theory and pretty easy to follow and digest.  They are also applied directly to our current position here.

Interestingly the book has helped me articulate the relevance of social media to my focus on transformative venturing and restoring balance among people and the planet… and it’s that social media represents the first time that technology is encouraging a deepening of connections between people – a key reversal in the trend that technology has been playing since the industrialization wave that has shaped our society into the position it is in. 

One key quote in this is:

“The insight emerging from this four-phase dynamic is simple and straightforward. Macroshifts are triggered by technological innovations that destabilize the established structures and institutions of society. More adapted structures and institutions await the surfacing of a more adapted mindset in the bulk of the population. Consequently, a macroshift is a transformation of civilization in which technology is the driver and the values and consciousness of a critical mas of people the decider.”

Anyone get a feeling that social media is going to play an important role?

I highly recommend buying the book – it’s a much easier read that the last book I posted on.  In the meantime… enjoy… here are some of the other highlight quotes from the first two chapters.


“… a vital point: the future is not to be forecast, but created.”

“… where desire, transformed into the masterful administration of the unforeseen, makes for a selection between a scenario of breakdown and scenario of breakthrough.”

“Today’s transformation is not just economic, it is a civilizational process.”

“The message of this book is that ours is an era of total-range evolutionary transformation that could, and ultimately will, go beyond economic globalization to pave the way toward a shift in civilization.”

“Just as the present has emerged out of the past, the future is likely to follow from conditions in the present. After all, where we are going has much to do with where we have been.”

“Given the unsustainability of many trends and processes in today’s world, the dynamic of development that will apply to our future is not the linear dynamic of classical extrapolation but the nonlinear chaos dynamic of complex-system evolution.”

“A macroshift is a bifurcation in the evolutionary dynamic of a society – in our interacting and interdependent world it is a bifurcation of human civilization in its quasi totality.”

“…’catastrophic bifurcation’. Here the system’s relatively stable ‘point’ and ‘periodic’ attractors are joined by ‘chaotic’ or ‘strange’ attractors. These appear suddenly , as chaos theorists say, ‘out of the blue.’ They drive the system into a supersensitive state, the state of chaos.”

“The slightest distrubance would shift the evolutionary trajectory of the world’s weather from one of the wings to the other. The weather, it appears, is a system in a permanently chaotic state – a system permanently governed by chaotic attractors.”

“Living systems maintain themselves in the physically improbable state far from thermal and chemical equilibrium. … Living systems do not move toward equilibrium, as classical physical systems do, but maintain themselves in their improbable state by constantly replenishing the energies and matter they consume with fresh energies and matter obtained from their environment.”

“When a human society reaches the limits of its stability, it becomes supersensitive and is highly responsive to the smallest fluctuation. Then the system responds even to subtle changes in values, beliefs, worldviews, and aspirations.”

“The evolution of the dominant culture and consciousness – the way people’s values, views and ethics respond and change – determine the outcome of the system’s chaos leap (the way its developmental trajectory forks off).”

“The macroshift moves toward a successful conclusion if, and only if, a critical mass of people in society evolve their mindset: if they generate and embrace values, worldviews, and ethics that mesh with the conditions that were inadvertently spawned by the technological innovations of their predecessors.”

“The present time was associated with local space, and the future was seen as a continuous recurrence of the rythms experienced in the present. The seasons were known to follow each other, but there were no new seasons; all times had already been experienced.”

“These communities had a high level of integration. The individual was an essential part of the clan or tribe, which in turn was embedded in nature and governed by cosmic forces. Nature and humans did not exist in separation, much less in opposition. Humans had empathy with all they encountered. … In the seventeenth century Europe’s mechanically colored Logos culminated in the concept of the world as a giant machine, which was elaborated by Giordano Bruno and Galileo Galilei. Newton’s mathematical demonstration of the universality of the laws of motion confirmed galileo’s pioneering insights and provided a basis for embracing a world concept that became the hallmark of the modern age. …The universe was a divinely designed clockwork that was set in motion by a prime mover and then ran harmoniously through all eternity. It was believed to operate according to strict laws of nature. A knowledge of these lawss was said to enable the rational mind to know all things past, present and future. … and as Laplace was reputed to have commented to Napoleon, God was a hypothesis for which there was no longer any need.”

“… countless civilizations failed to survive, victims of changing conditions to which they could not adapt. This failure is not one we can contemplate today.”

“If our Logos-dominated civilizations fails to adapt to the conditions it has itself created, the entire economic and political structure of our world will come crashing down.”

“… the macroshift from national industrial societies toward a globally interdependent yet locally diverse world.”

“It is the flexibility and creativity of the people that creates the subtle but all-important “fluctuation” that decides which of the available evolutionary paths the macroshift will then follow.”

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