Revenue Sharing

In my last blog entry I talked about the perils and evils of debt for both the lender and debtor.  Here I’d like to discuss an alternative which I believe could replace the entire concept of debt.

Revenue sharing, sometimes referred to revenue-based finance and income-contingent loans, is just recently starting to take off. The White House is making a big push for income-based repayment of student loans.*  And at least two private (and highly capitalized) startups are launching soon to provide revenue-based financing options for individuals who agree to pay a portion of their future income in exchange for cash upfront.

With U.S. consumer debt topping $2.5 Trillion and student loans now totaling over $1 Trillion, it’s no wonder that there’s a lot of interest in revenue-based finance. Let’s look at several common debt scenarios and see how they could be different — and better for all parties — if they were based on revenue-sharing instead.

There are many ways to structure a revenue-share …

Education 2.0

In what turned out to be the most popular TED talk of all time, Ken Robinson asked us to wake up and smell the coffee: our system of education is stuck in the Industrial Revolution where it was invented.  Moreover, it’s killing creativity, crushing spirits, and preparing students, not for success and wellbeing, but rather unemployment and dysfunction.  Waiting for Superman confirmed this this, adding that the public schools in the U.S. are bankrupt, both financially and morally.

Yet, all around the world, there are signs that the Berlin Wall of education reform is crumbling. Here are a few shining lights:


No single institution or movement has done more to spark educational change than  Hundreds of millions of people are watching their videos and learning from inspiring individuals sharing ideas and experiences that cannot be learned in a traditional school environment.  And there’s an acceleration effect because many of the talks are about education and the transformation that’s going on in …

Investing in Superstars, part 4

[NOTE: I updated this post with more detailed examples]

Background: part 3part 2 and part 1.

In the interview with Jon Gunn in Part 3, I mention that I’ve been thinking of what “version 2” of the Personal Investment Contract might look like.  Here’s the model:

  1. Investment Amount – Same as before, intended to give the individual some time to pursue their passion (or figure out what that is) without having to worry about how to support themselves.
  2. Maximum Return – The cumulative total amount that the investor can receive as return on their investment.  If and when this amount is reached, the contract is over.
  3. Annual Exclusion – The amount of annual income the entrepreneur can make without having to share any of it with the investor.
  4. Minimum Revenue Share – The minimum percentage of gross income the entrepreneur returns to the investor after deducting the Annual Exclusion.

Following are some examples of various different career paths and uses for a …

Investing in Superstars, part 3

For the background to this post, start with part 2 and part 1.  The follow up is part 4.

I get a lot of questions from folks who are interested in learning more about Personal Investment Contracts and so I felt it was time to synthesize some of the most common ones and give you some answers.

Who is the first person you invested in?

A film maker named Jon Gunn.

What is your relationship with Jon outside of this investment?

He is my brother-in-law, and a former business partner of mine in an instructional DVD company we co-founded with Phil Gordon.  I’ve also invested in a couple of his independent films.

Why did you invest in Jon directly?

I have been a big believer in his talent for a long time.  None of the ventures I just mentioned though have made me any return on my investment.  Phil had been suggesting for a while that if we simply invested directly in …

Innovation as Moral Leverage

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”  (Margaret Mead)

“Be the change you want to see in this world” (Gandhi)

There is an idea virus within American culture that has the power to destroy.  The idea is that technology and innovation are fundamentally good.  Whether you consider yourself a technologist, an entrepreneur or a scientist (all labels I use to identify myself at times) I’d like to propose an alternative to to this idea and an inoculation against the virus.

Observation #1: Innovation amplifies whatever values and beliefs are held by the innovator.

For instance, if I value my time, I might invent the first clock, or start a business to create time-management products, or devote my life to unlocking deep mysteries of the physics of time.  And if I believe clean drinking water is a fundamental human right, I might invent a new method of water purification, or …

Complex Adaptive Monetary Policy

Complex Adaptive Monetary Policy (CAMP) is, in essence, a reconciliation of Keynes’ top-down view of macroeconomics with Hayek’s bottom up view.  The particular details of the proposed policy below are not as important as the recognition of the fundamental forces at play and empirical evidence that we are at a very dangerous chaos point in history.  Both Keynes and Hayek have deep truths to tell, and we discount one or the other at our collective peril.  For those who want a primer on the great debate, this rap battle sums it up better than any text book could.  Now on to the idea…

The fragility of the global financial system (as measured by the US dollar) is a function of the gap between rich and poor.  In the past, only a small ruling elite could decide to use capital to purchase all of the following: food/clothing/shelter; savings; insurance; personal free time; investment; starting a business; buying a private jet; leverage/volatility; political influence; fame.  Today an …

What is Fear?

Based on an informal assessment and polling I’ve done recently, here’s what we fear:

  • Identity
      • Death / Pain / Insignificance
      • Self-Exploration / Failure / Change
      • Being Found Out / Self-Expression / Lying
  • Control
      • Power / Anticipation / Fear-Itself
    • OTHERS
      • Intimacy / Just Doing It / (Lack of) Freedom
      • Disaster / Crisis / Unknown-Unknowns
  • Authority
    • RIGHTS
      • Being Unworthy / Unmet Expectation / Meaninglessness
      • Unfairness / Inequality / Injustice
    • RULES
      • Doing it Wrong / Shame / Guilt

Each of us has a unique profile of what fear is depending on how we related to various value dimensions (intrinsic, extrinsic and systemic).  For me the scariest are: (1) Unknown-Unknowns (2)  Power (3) Being Wrong (4) Self-Expression (5) Injustice

How about you?…

Getting Things Undone

Have you ever felt overwhelmed by your inbox, meeting schedule, and list of phone calls to make or return?  Have you ever wished you could include a wide audience in your one-on-one communications so that we could all benefit from wisdom of the crowd?  If so, you might like my new policy for all business-related communications.


  • Non-private: instead use Accelerating Possibilities FB Group.  (and I don’t do FB private messages).
  • Private: I read every email but only respond if I feel it’s truly a private matter and I’m interested in responding.

Phone & Video Chat

  • Non-private: Create a Vokle Event and post the subject of the discussion to the FB group above.  If I can make it, I will, but hopefully others will join you regardless.
  • Private: Email me your phone number and I will put you on my list of people to call when I have time.  I can’t promise if/when I will call you though.

In Person Meetings

  • Non-private: Try me at 

The AI-Box Experiment

Several years ago I became aware of Eliezer Yudkowsky’s “AI-Box Experiment” in which he plays the role of a transhuman “artificial intelligence” and attempts (via dialogue only) to convince a human “gatekeeper” to let him out of a box in which he is being contained (resumably so the AI doesn’t harm humanity).  Yudkowsky ran this experiment twice and both times he convinced the gatekeeper to let the AI out of the box, despite the fact that the gatekeeper swore up and down that there was no way to persuade him to do so.

I have to admit I think this is one of the most fascinating social experiments ever conceived, and I’m dying to play the game as gatekeeper.  The problem though that I realize after reading Yudkowsky’s writeup is that there are (at least) two preconditions which I don’t meet:

Currently, my policy is that I only run the test with people who are actually advocating that an AI Box be used …

A New Cancer Mentality

This interview was done as part of the New Cancer Mentality initiative:

New Cancer Mentality is a grassroots organization focused on giving cancer patients a virual townhall to ask their questions to leading oncologists and researchers about their work. Furthermore, New Cancer Mentality focuses on bringing about collaboration between researchers as well as giving researchers an online forum to share their views and what needs to be done to cure this disease.

If you’d like to learn more or join the movement, check out blog and contact David.…

Biological Immortality

There’s a scientific paradox in the world of nutrition about what the optimal diet is.  A new theory may resolve the paradox.  Oh, and help you live forever too.

The majority consensus is the “post-agricultural revolution diet” is best, which says that a majority of your intake should be vegetables and fruits, and that you should severely limit your animal product intake, especially red meats.  Some proponents (like T. Colin Cambell of China Study fame) go as far as claiming that a strictly vegan diet is best.

The other camp argues for the “paleo” or “caveman” diet, which says we need to eat what our paleolithic ancestors ate: lots of foods high in animal fat and animal protein, and avoid industrialized grains altogether (some fermented natural grains are fine).  Fermented foods in general are encouraged, honoring the fact that before preservation, refrigeration and pasteurization we evolved a symbiosis with bacterias that are critical for our digestion and processing of nutrients.

Both sides agree that processed …

The Most Important TV Show in America

Remember Jamie Oliver’s TED Prize Wish?  Well tonight is the prime time season premiere of his Food Revolution show on ABC.  The Huffington Post called Undercover Boss the most subversive show in America, and I can’t disagree.  But in terms of importance to the future of America (and by extension every country which imports American TV and culture), Food Revolution I can’t imagine a more important show.

It’s not just the lives of individuals who eat crap (which is most of the country, frankly, even though they have no idea how toxic what they are eating is).  It’s the happiness and achievement potential of today’s youth.  It’s the emperor with no clothes at the center of the healthcare debate.  And it’s a lynchpin for economic recovery and sustainability.

Watch the premiere, and spread the word……

TED Prize Wish: Teach Every Child About Food

Approaching a Cure for Cancer

James Watson, co-discoverer of DNA’s double-helix structure recently called for a back to basics approach in dealing with cancer.  In previous post threads I’ve discussed cancer’s complexity and in particular the confounding and scary implications of somatic evolution, which underscores some of the reasons we are not winning the “war on cancer.”  Here I will discuss some cutting edge approaches to treating and preventing cancer and how they might pan out in light of the complexities of the disease.  The categories below are not mutually exclusive, and the examples cited are nowhere near exhaustive, but this should give you some food for thought.  If you have ideas, questions or know of approaches that should be highlighted, please comment.

Target & Kill Approaches

Biris and Zharov are making some exciting progress in using nanotubes to tag and then track cancer cells inside the body as they move around.  They propose to kill the cancer cells by heating up the nanotubes using lasers, while others are

A Theory of Scalability

One of the hidden themes of The Feast this past week has been how to scale successful social ventures.  This has been on my mind a lot recently as I have been working informally with both Self Enhancement, Inc. (SEI) and Decision Education Foundation (DEF) on this puzzle.  SEI is extremely successful in the Portland locale where they began 25+ years ago, achieving 98% high school graduation rate (working against hard socioeconomic realities).  Like with many models that are very successful “in the small”, the biggest challenge is to translate that same success to larger scales (e.g. all across America, or all around the world).  DEF is attempting to build scalability into its model from the start, and has found that this is extremely challenging.

In thinking about this I am reminded about a duet of innovators who spoke at the Pop!Tech conference last year about scaling.  Both Bunker Roy and Paul Polack have some profound lessons to teach us about scalability.  You will …

The Link Between Food & Healthcare Reform

Also must-read this Sunday is Michael Pollan’s NY Times Op-Ed piece from Wednesday.  Nice cap to my week of ranting on the dismantling of rationality when it comes to lifestyle choices that directly impact one’s health, here and here.…

Rafe Issues Challenge to Statin Industry

I have been trying to get the straight scoop on whether statins actually decrease mortality and morbidity in a significant way and I haven’t been able to find any real evidence that they do.

If you ask a cardiologist it’s clear that they believe unequivocally that statins work, mostly because they see what statins to do blood cholesterol levels.  But remember, cholesterol numbers in and of themselves do not matter.  They are a proxy variable for cardiovascular health.  Plaque buildup matters.  At one time blood cholesterol numbers were the only non-invasive indicator we had of plaque buildup, but that’s not true anymore.  However, drug companies are highly incentivized to prove that statins improve health.  So they fund lots of studies.

Notwithstanding the systemic bias when there are profit motives and publication motives, we can turn to these studies and see if statins actually work.  The best way to remove bias is to look at large-scale meta-analyses, like this one.  If you simply read the …

If You Had A Billion Dollars…

If you had a billion dollars to make the world a better place, how would you spend it?…

Should You Use Sunscreen?

This is a very complex topic, as the following talk suggests:

The main takeaways from this that I got are:

  1. Cancers for which sunlight deficit is a risk factor are orders of magnitude more prevalent than the few for which overexposure is a risk factor.
  2. People who are using sunscreen regularly are precisely the ones who shouldn’t be.
  3. We should be very careful and sparing about recommending sunscreen usage or sun avoidance, and always temper such advice with the tradeoffs of not getting enough sunlight.

As someone who wonders on a regular basis whether the public has the right information to make informed decisions about health-related tradeoffs, I am curious… does the above strike you as surprising?  What do you currently do regarding sun exposure, and are you likely to change anything based on the above?  What do you think the overall message that reaches the masses is regarding sun exposure?…

Something Fishy About Mercury

Here is a fascinating discussion on NPR’s Forum from earlier this year on the subject of mercury and fish:

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If you’ve listened to this the whole way through (which you should), I’m curious as to how it will affect your habits, if at all.  And why?…

Name That Financial Debacle!

The following quotes are from a book describing a real set of events:

[The incident] is an extraordinary example of what happens when you get… a dozen people with an average IQ of 160… working in a field in which they collectively have 250 years of experience… employing a ton of leverage.

It’s hard to overstate the significance of a [government-led] rescues of a private [corporation].  If a [company], however large was too big to fail, then what large [company] would ever be allowed to collapse?  The government risked becoming the margin of safety.  No serious consequences had come about in the end from the… near-meltdown.

Was the incident:

a) The savings and loan scandal

b) The collapse of Enron

c) The sub-prime mortgage meltdown

d) none of the above

First correct answer gets to invest in an exciting new bridge project I’m involved with in New York!…

Should We Tax Poor Nutrition?

I just tweeted on a subject that I suspected would cause a stir, and so it has, I’m moving it here:

RafeFurst: I strongly support a soda tax! RT @mobilediner: check it out:  a Soda Tax?

coelhobruno: @RafeFurst what about diet soda? Would it be exempt?

RafeFurst: @coelhobruno no diet soda would not b exempt from tax.  Tax should be inversely proportional to total nutritional content.  Spinach = no tax

Lauren Baldwin: I do as well … and while they are at it they should tax fake fruit juice too.

Kevin Dick: I think this would be an interesting experiment. I predict a tax does not cause any measurable decrease in BMI.

Kim Scheinberg: New York has had this under consideration for a year.  Perhaps surprisingly, I’m against it. In theory, people will drink less soda. In reality, it will just be another tax on people who can afford it the least.

Leaving aside the “rights” issues and …

Violence on the Decline

From Monday’s Washington Post:

The District, New York and Los Angeles are on track for fewer killings this year than in any other year in at least four decades. Boston, San Francisco, Minneapolis and other cities are also seeing notable reductions in homicides.

Full article is here, in which more sensible police approaches are given credit for the decline.…

Robin Hood Foreclosure Fund, part II

Pursuant to my earlier post, it turns out there already is such a group:

Foreclosure Angel Foundation

Thanks to Marissa Chien who found it and pointed me to it.  She also suggests that people who are having trouble with their mortgage should seek advise from HUD.  Information is power and many people (I’ve learned) are irrationally scared of approaching their lender and negotiating.  More and more lenders are willing to cut deals to avoid foreclosures.…

Is Hunger Really a Problem in U.S.?

Given everything I hear about obesity stats in the U.S. and malnutrition in the developing world, the last thing I was expecting to find in my inbox this morning was a plea to join a Facebook cause to help end hunger in America.  Really?

I’m usually not skeptical in this way, and I’m loath to focus on the negative when it comes to philanthropy, but I can’t get these thoughts out of my head and I’d like some perspective from those who are better informed about the alleged U.S. hunger crisis.  In the mean time, here’s my food for thought:…