Have a look. Let us know what you think.

Related posts:

1. Simulating Angel Investment: Kevin’s Remix
2. Robin Hood Foreclosure Fund, part II
3. Robin Hood Foreclosure Fund

• Does feeling like a fraud make you act like one? Researchers gave experiment subjects designer-style sunglasses from boxes marked “authentic” or “counterfeit”. They then put the subjects in situations with an incentive to be dishonest; far more of the subjects who were told they were wearing counterfeit designer glasses acted in a dishonest manner. Possible conclusion: wearing the “counterfeit” glasses (in reality all the glasses were authentic) made people feel like they were dishonest, and they acted accordingly.
• Battle-bots with a moral compass: A roboticist is collaborating with the US army on combat robots (e.g. predator drones) that can weigh military objectives against civilian harm, and adhere to codes of international law. Personally, I’d rather trust human beings with moral decisions, but seeing as we have robots fighting our wars already, putting some safeguards in them is better than nothing.
• Proof by blog: Fields medalist mathematician Timothy Gowers decided to run an experiment on his blog by challenging his readers to collaboratively prove a mathematical that he himself could not. Six weeks and hundreds of collaborators later, the theorem was proven, and is planned for publication under the name DHJ Polymath. This success inspired the creation of the polymath project, which aims to advance mathematics through “massively collaborative mathematical research programs”.
• Conditional microfinance: The website kickstarter.com matches prospective philanthropists with artists, journalists, inventors, and others needing funding for their projects. The twist: unless a project attracts enough funding to meet its needs, no one pays a dime. So you don’t need to worry about throwing money at something you’re not sure anyone else will invest in; just pledge and see what happens!
• SmartTrash Here’s a case where I’m not so excited by the invention itself (a garbage can that scans barcodes items as they go in to see if they can be sold for money) as with the general idea it portends: I’ve always thought of our trash system as one of the worst inefficiencies in our society, in both economical and environmental terms. Outfitting garbage cans with microchips is a possible first step in designing a waste management system that isn’t actually wasteful.

Finally, there’s one “idea” that involves a complete misunderstanding of evolutionary game theory, as far as I can tell. I’ll give this one a separate post when I get around to it.

Related posts:

1. The Challenge
2. X Prize Annuity Funds
3. Truthocracy – Part III – MIT Center for Collective Intelligence

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 learn these lessons by watching Roy talk about Barefoot College and by watching Polack talk about his Out of Poverty approach (also see BarefootCollege.org and PaulPolack.com).  But despite all of the incredible wisdom to be gleaned from observing how Roy and Polack achieve scale, I’ve been wondering about how their success can be translated to other realms.

Replicators

In creating a general theory of scalability, I think there is a key conceptual anchor from Susan Backmore’s TED talk on the third replicator.  Now, I have to pause here because as simple and great as the universal Darwinism principle is, I know from conversations that many people have a really hard viewing evolution in non-biological systems as anything more than a good metaphor.  It’s hard for most people to see that “true evolution” — the kind that Darwin was talking about — is actually what is happening in these non-biological systems.  I will address this in detail in a later post, but ask that you indulge me for the time being so that we can talk about replicators.

When we talk about scaling sociotechnical systems, really we’re talking about one of two things: either growing the original system to handle “more”, or replicating the original system (or enabling it to replicate itself) with appropriate variation for the new context.  Growth models are the more familiar and comforting to governments and policy makers for reasons that should be obvious to anyone who has noticed how scared these types get when faced with systems that scale via replicators.  Formal organizations (corporations, non-profits, governments, anything with a legal structure or formal set of rules) are growers; networks of cooperating agents (open source software, social change movements, revolutionaries, anything that is formed in a grass-roots / bottom-up manner) are replicators.

I am not here to argue that either type of system is dispensable, indeed they are both essential.  I will leave it as an unproven conjecture that we are at a point in history wherein the ecology of sociotechnical systems is dominated by growers that are straining and stretching to the edges of their dynamic range.  Societal edifices are crumbling under their own weight, and are thus vulnerable to subversion by an algal bloom of replicators in their midst.  For those that want the argument and evidence, go read The Chaos Point by the grandfather of complex systems theory, Ervin László.

And I will leave alone in this theory of scalability the entire grower side of the equation.  It’s been systematized and refined since at least the days of Machiavelli;  we know it today as management science.  Instead I want to suggest that there is lacking an entire half of the formalization project for a unified theory of scale, and that’s a formal model for scaling via replication.  The reason this formalism has eluded us for so long is the same reason Darwinian evolution is so hotly contested: it requires a fundamentally different way of thinking than the Western analytic tradition is based on.  That’s not to say that the complex systems paradigm is not scientific, just that the scientific method as it exists today has not yet incorporated the bottom-up, emergent calculus required to be complete.

The first question we must ask is what exactly is being replicated, and only then we can ask how that replication is achieved.  Blackmore names three classes of replicators which I would like to refine by pointing out (as she does) that these are really self-replicators.  In her TED talk she observes that biological self-replicators exist (i.e. what we normally refer to as “life”), that mental self-replicators do indeed exist (though most people don’t take this notion seriously enough yet), and that technological self-replicators are in the process of being born.  If we think about it though, it is easy to see that certain forms of this third replicator already exist: computer viruses, bot nets (e.g. as are used in DDoS attacks), digital agents in artificial life simulations and genetic algorithm systems, and others.  What Blackmore was hinting at with the her more restrictive definition of technological self-replicator is one in which the artifact being replicated has a physical form (as opposed to digital information form).

I must digress here for a moment to point out that it is a red herring to try to neatly circumscribe the system being replicated (the “artifact” or agent) from its environment.  In reality there is no such thing as a true self-replicator; there are always some resources or information that is outside the self-replicator that is required for replication to occur.  Neither the chicken nor the egg can recreate itself.  And if you (rightly) view the chicken/egg system as the thing self-replicating, you only need observe that food is also essential (as are many other things) for replication to occur.  Given this truth in the realm of biology, is it really so far fetched to view digital cameras self-replicating technological agents, that is replicators of the third kind?  Sure they require humans, manufacturing processes and other technology from their environment to replicate, but I’ll reiterate that there are no biological life forms either that are entirely self-replicating.  (This blog post puts an even finer point on it all, if you are still not convinced).

Principles

The scaling brilliance of Bunker Roy and Paul Polack was hard-won, after many years of solving specific problems at the bottom.  It was only after gaining a deep understanding all of the interacting subsystems was it possible for each of them to engineer an overall system that was scalable via replication.  Looking at various attempts to scale sociotechnical systems, both successful and unsuccessful, a pattern starts to emerge of the key principles and dynamics.  Here are a few:

• Counterintuitive: Brilliant solutions are only obvious in retrospect.  Crazy. Crazy. Crazy. Obvious.
• Self-Replicators: It is important to identify the parts of the system that are — or that can be made to be — self-replicating.
• Fecundity: Digital information replicators are more easily replicable than mental constructs (i.e. memes), which are in turn more easily replicable than organizations of humans.
• Mutation: The more fecund the replicator, the easier it is to co-opt for ulterior motives, and the more likely it is that random variation will throw the overall system off course.
• Environment: It is easy to mistakenly believe that a prospective environment is suitable for replication when it’s not.
• Side-effects: With any complex dynamic process there are always side-effects. If ignored, this usually leads to collateral damage, but on the flip side there is usually an opportunity to accomplish other goals and turn side-effects into new benefits.

In thinking about how to engineer a system to bring solar electric installations to rural villages around the world, it is counterintuitive to think that poor, illiterate grandmothers (with no formal education and very little social standing in their village) could learn to be solar engineers.  To further think that they could be taught by illiterate trainers (who don’t speak the same language) is crazy.  Until Bunker Roy proved it was possible.

Microcredit was crazy too, until Muhammad Yunus proved that it wasn’t, and then it was obvious.  So obvious in fact that it became a viral meme and has spread all over the world.  The concept of microcredit is a very fecund self-replicator.  Unfortunately, the practice of microcredit in many places has ignored the nuances of different environmental contexts and unintended side-effects.  Add to that a high mutation rate: the model being tweaked to confer greater benefit to lenders (at the expense of borrowers); the introduction of middlemen who screw up the incentive structure and unwritten social contracts; etc.  The net effect has been that in some areas microcredit has been a net negative to the economy, and especially negative to the borrowers, whom the model was originally designed to help most.

Polack’s franchise model (an indeed all franchise models) are inherently replicators.  They are also good self-replicators because customers and other locals get exposure to the idea of becoming an entrepreneur themselves. And some of them end up as franchisees.  That is replication.  But to move from solving one problem (e.g. clean drinking water) to solving a very different one (e.g. locally available energy), new technologies that are also “radically affordable” have to be created on a regular basis.  And this type of innovation does not self-replicate.  So Polack created an entirely separate institution, the non-profit R&D lab, specifically to tackle the problem of replicating franchises (i.e. going from an electrochlorinator franchise to a solar concentrator franchise).

Applications

With this nascent framework in mind, I’d like to invite you to evaluate some of the social ventures that I encountered at The Feast (and a few of my favorites from Pop!Tech last year) and see if you can predict how scalable their model will be based on the replicator principles above.  And in cases where they have achieved some amount of scale (like charity: water and frontlineSMS), can you explain their success using the theory?

• SHE (Feast talk Session #3 starting 0:46:30)
• charity: water (Feast talk Session #4 starting 0:01:30)
• frontlineSMS (Feast talk Session #3 starting 0:25:45)
• Yellow Brick Road (Feast talk Session #1 0:31:37)
• 9th Ward Field of Dreams (Feast talk Session #4 starting 0:59:20)
• Change.org (Kitchen)
• International Transparency Solutions (Kitchen)
• Madecasse (Kitchen)
• Parent Earth (Kitchen)
• Srina (Kitchen)
• TrustArt (Kitchen)
• VotaVox (Kitchen)
• Global Citizen Year (Pop!Tech)
• Vittana (Pop!Tech)

I would love to hear your thoughts, both on the specifics of these ventures, and on the theory of scaling through replication.

Related posts:

1. Alfred Hubler on Stabilizing CAS
2. Autocatalytic Systems
3. Daniel Nocera’s Gift

Related posts:

1. The Good, The Bad & The Ugly
2. Is Hunger Really a Problem in U.S.?
3. Homelessness

I posit that the hotel I stay in (let’s call it the Imperial Palace) though low end by Vegas standards is nicer than the normal living quarters of 75% of the world’s population. Given that I am in the room to sleep and shower, do I really need a nicer place? Is it karmically bad to stay in a nicer place that I’m not really using?

We came up with the following idea. On my next trip I will stay at the IP again but donate half the difference between its cost and the cost at Caesar’s Palace to a charity for the homeless. So now my frugality has a point.

The accommodation scenario is easy. It gets more complex when I decide between Subway meatball subs and the meatball appetizer at Rao’s…

Thoughts?

No related posts.

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.

Related posts:

1. Robin Hood Foreclosure Fund
2. Unwinding Mortgage Backed Securities
3. Name That Financial Debacle!

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:

• Generally speaking when I get a Facebook cause request it’s from a friend (or a Friend), but this one came from Causes itself: “Please join the Kellogg Company and Causes as we take small steps towards creating BIG change.”
• When you go to the Causes page it features a giant banner ad for Kellogg and Kellogg as the well-branded sponsor.
• Then when you go to the website the first thing that catches your eye is an image of this family who supposedly is suffering from hunger:
• On the Feeding America website I tried to educate myself on hunger facts but all I could seem to find was poverty statistics and stats related to food-related programs (like how many people used food stamps).
• I understand poverty is a big problem, but unlike in other parts of the world, starving in America is nearly impossible to do.  A friend of mine who works tirelessly to provide meals to homeless admits that the food is just a hook to get folks into a graduated self-sufficiency program.
• Being malnourished in the U.S., on the other hand, is becoming increasingly easy to do, especially if you eat Kellogg products which have very few nutrients relative to whole foods, particularly veggies and fruit.  Malnutrition in the U.S. manifests itself differently than in poor countries though: obesity, diabetes, metabolic syndrome, heart disease, cancer, et al.
• I went to Charity Navigator to look into the Feeding America and was surprised to find it gets great marks.  I was even more surprised to find that its revenues are $650 Million per year(!)  And since they have such an incredibly low overhead rate and spend nearly 97% of all money raised directly on programs to feed the hungry, I’m flabbergasted.  Hunger must be a huge and totally unappreciated problem in the U.S. if it can’t be solved with the billions spent trying.
• Looking at the breakdown of the $650M in revenue from their annual report, $560M of it is from “Donated goods and services”.  Presumably that’s good and efficient.  However I can’t help but wonder how much of that is food grown with subsidies from the government, which then Kellogg writes off against its taxes as an in-kind donation.  Does anyone know whether this is the case?

I expect to be taken to task on this, but isn’t it really just a PR move by big businesses who’d rather give away product rather than feed people farther from home at greater expense (or better yet help them become self-sustaining)?

Related posts:

1. Homelessness
2. The Most Important TV Show in America
3. Should We Tax Poor Nutrition?

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1. Is Hunger Really a Problem in U.S.?
2. Daniel Nocera’s Gift
3. Designing for Generosity

I was concerned that it may look noble but that they might be profiting from the bid/ask spread, so I wrote and asked them.  Here is their response:

No fees, except the 5% on top of any funds put into your account. That fee does little more than cover the credit card processing charge. For example, if you want to put $5 into your account, you will be charged $5.25, and you will have $5 in your account to trade with. After a while, maybe you’ll have grown your account to $50, all of which you can ask us to give away to the charity of your choice. No fees on donations. Another way of saying it is that 100% of the funds that are in trading accounts will eventually be given away to charities chosen by the winners.

Very cool, I hope it takes off.

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1. Prediction Markets for Valuing Private Companies
2. Peer-Review vs. Info Prizes and Markets
3. Chasing the Dragon

Big Problems

There are some very big problems in the world that can be solved but only if there is collective will to do so. Global warming, curing cancer, poverty traps, and so on. Free markets alone cannot get us there because of inherent externalities and insufficient market structure geared towards the problems at hand. One way this has been addressed is via internalizing externalities (e.g. pollution markets). But such an approach requires global political consensus for most big problems. Another approach that obviates this roadblock is to externalize incentives with large cash prizes, ala the X Prize Foundation. What I propose is to set a self-organizing system for the X Prize approach, but for arbitrary problems of interest to a critical mass of philanthropic citizens.

A Proposal

The basic idea is a series of close-ended prize funds targeted at specific problems with specific fundraising goals. There are three stages: fundraising, pre-award, post-award. In the first two stages the fund returns interest. Once the prize is awarded, the principal is a charitable donation and the fund is dissolved. Each individual investor (be it a person or an organization) receives one vote irrespective of their capital contribution. Each year during the pre-award stage the fund votes on whether the goal has been achieved. Once it has, all claims on the prize are vetted and formal decision process is used to award the prize, possibly across multiple claimants in differing amounts.

Example: Cure Cancer Annuity Fund

• Opens in 2010 with the simple goal to “cure cancer”
• Fundraising target: $10B
• Minimum investment: $10K
• Interest rate during fundraising: 15%
• Fundraising goal is reached in 2013
  • Fund consists of a combination of 9347 investors
  • Includes individuals, corporations, charities and trusts
• Guaranteed interest rate during pre-award: 5%
  • Award is adjusted for inflation
  • Excess returns beyond 5% are dividended out pro-rata
• Cure cancer goal vote achieves super-majority in 2020 after creeping up each year prior
• Prize is awarded in differing amounts to 34 different recipients
  • Range is from $4B to $2M
  • Recipients include individuals, corporations, academic institutions, non-profits and collectives thereof
  • Decision process is done via percent allocation aggregation:
    • Each investor gets 100 units to allocation to claimants in any combination
    • Allocations are added and normalized to 100%

• Depending on each investor’s local tax structure they may receive credit for:
  • Capital contribution post-award
  • Capital contribution at point of investment
  • Exemption from tax on interest
  • etc.

Please note that the above is straw-man example, just a starting point. No doubt the model can be improved upon in many ways. If you have ideas on how to do so, please share below in the comments!

Related posts:

1. $100,000 Reward: Y Prize
2. Open Letter to Gotham Prize
3. Prelude