History is made in the future

History is a reconstruction of the past.

Things look very different when you look at them backwards in time. We apply the rules of logic to explain the causes and the effects of past events.

We are hardly ever aware of the impact today’s events will have on the future, yet in retrospect, certain events are clearly tagged as mile stones.

We like to observe the past from a rational standpoint but when the event that triggers true change actually take place, it is rarely acknowledged as such by the ‘rational’ bystanders.

History is an ongoing sequence of human behaviour. All the wars, the erratic movements of financial markets and what people vote for in democracies provide us with ample proof that humans are hopelessly irrational, especially when they act together.

Furthermore, the ‘rational’ mind is formatted by past experience so in a way, ‘rationality’ draws from a reconstruction of erratic sequences.

Rationality is highly overrated.

You can probably go crazy if you think too much about all this, and I guess that is precisely why most of us avoid doing so. Analyzing the past is probably not the best way to put your intellect to work.

Let me try to make my point with a few examples.

Imagine you are living in the Victorian era at the end of the 19th century. The British, Austrian and Ottoman Empires rule the world. Do you think it would be easy to convince people that all these empires will soon give way to the United States of America as the world’s dominant power? It is likely that people would probably tell you to have your head examined because, at the time, the USA was mostly a lawless and dangerous place on the frontier.

However, the truly visionary observer should have seen that it was the USA who was best positioned to make much more out of the industrial revolution than the elitist powers of those times because it was a land where opportunity was more equally divided among the ambitious immigrants that formed its society. Simply put, it was a place where enterprenneurs existed in abundance and was established on the premise of a land of opportunity.

Today, just try telling people that two of the future super-powers to reckon with are Nigeria and Turkey, most people will wonder what you have been smoking. Same story as with those in the 1980’s who dared to claim that China and Brazil would become very important in not too distant future. In those days China was mostly seen as a backward thinking communist state while Brazil was simply too corrupt and informal to have a future…

Here’s something a bit more far-fetched:

Back in the 1970’s, when we saw how the crew of Star Trek’s USS Enterprise heavily relied on a communication device that resembles today’s smart phones. We did not stop to think that the mere idea of such a device would completely transform the way we communicated in the future. Instead, our ‘rational’ mind merely entertained it as a gimmick on a TV show. It did, however, inspire some people out there to make it a reality.

By the way, why can we still not be ‘beamed up’? Who is working on that project?

Still in TV land, when the remote control was brought into people’s homes, the only people who truly freaked out were the TV station executives because they realized their life had suddenly become a lot more complicated. Now, if people didn’t like what they saw, they could easily switch to another channel without even having to get up.

Looking back, this may well have been one of the milestones that changed the future of entertainment into the fiercely competitive industry it is today. However, I don’t think anyone tagged it as such a game changing event when it actually happened.

I could go on and on but the crazy thing is that, deep inside, we continue to trick ourselves into using the past as a shelter against the unknown perils of the future.

Don’t be afraid to have wild ideas about what is to come. It always makes sense to analyse them.

But beware because the ‘rational’ people around you will try to prevent you from doing so.

They will supply you with many reasons why it didn’t work in the past.

They will work overtime to defend the status-quo because the future is simply too uncertain and they really want it to look very much like the past….

Here we go again..

The empire strikes back

Something very big is about to happen!

The US government is working hard to pass a law that would allow them to censor the Internet!

This law is known as the Protect IP Act and it is disguised as a way to protect intellectual and artistic property.

20111120-210736.jpg If the law gets passed, the US government will have the discretion to block access by US internet users to certain sites.

The result would be that the USA now moves closer to the realities of China and Iran, where censoring if the internet is a daily reality.

This trend will be seen as confusing because most of us would have expected countries like these to eventually evolve towards societies with more freedom of expression, not the other way around!

This move is quite suspicious because in the US, companies already have a legal framework that allows them to sue those who infringe property rights. What is happening here only makes you wonder what is really behind this coup for further control.

It certainly seems that the revolutions in Northern Africa that were recently sparked by the open channels of social media, have left the world’s leaders spooked.

What we are seeing here may well be a desperate measure by the US government to protect themselves. Have the social networks simply become too powerful?

If this law is passed, the social networks may be negatively impacted because they will probably be forced to apply more draconic measures to avoid the posting of copyrighted content by it’s users.

Some say the Protect IP Act is a misguided effort to solve the copywright issues. It may well risk destroying what makes the internet so attractive to not only investors, but people who use the internet to share information and be informed, like you and I.

Will the American people really let their leaders take away their freedom?

Is the risk of a revolution in the USA more real then we actually may want to believe?

Anyway, Pandora, the online music streaming business – has just announced that they will be running presidential campaign ads on their page. Smart move, and it goes to show that this is may be only the first episode of a long and entertaining series….

Here’s a short and interesting clip that puts the above in some further perspective.

PROTECT IP Act Breaks The Internet from Fight for the Future on Vimeo.

Hide and Seek

Here is the second chapter in our series of Social Media for Fund Managers that I am co-writing with Ole Rollag, principal of www.muranoconnect.com . In this piece we look at what we call ‘Inward’ use of social media.

When we refer to ‘inward’ social media for asset managers, we simply mean using social media as a means to conduct research on your target client base.

As an example, the use of it could be the use of a platform such as LinkedIn as a means to find out who is the most appropriate person within a company to approach as a prospective investor. The term could also refer to scanning user groups as a way to better gauge the market.

In the strictest sense, ‘inward’ does not result in outgoing communication, but rather the effort of gathering intelligence.

The proliferation of the internet and the rise of social media have clearly rendered corporate structures more transparent. One of the remarkable things about how people interact with social media is their willingness to share information.

The public posting content in the form of links, articles or discussion topics can help asset managers to better understand the individual opinions of investors which in turn could help us to identify possible solutions or investment needs in line with their offering.

However, the question that often arises is whether the use of such information is an invasion of privacy.

In our opinion, this type of debate is too far-fetched given that it is essentially up to the individual users of these networks to decide how much information they wish to share with the rest of the world.

From our perspective, there are obviously limits on how information should be used and good manners combined with common moral sense should always form the base of any action taken.

It is also fair to think that investors who elect to share information would often expect asset managers to engage with them in a more targeted fashion because they have invested in transparency. In return, it is very likely that they would much appreciate asset managers to make sensible use of their limited time and attention span.

As always, to respectfully engage in a dialogue with such investors in the form of offering relevant solutions based on the shared information will often create the basis for a fruitful relationship.

This paradigm of transparency essentially works both ways. There are still a large number of investors that deliberately choose not to openly share much information about their investment activities. By doing so, they are often implicitly sending out a message that they would prefer to initiate the contact with the relevant fund managers themselves.

In other words, they would take advantage of the abundance of information by applying a procurement strategy that is driven by a more ‘internal’ approach.
The active prospecting of this second category by asset managers is unlikely to yield satisfactory results. A more feasible way for providers to win more business from the more ‘inward’ driven investors is by ensuring that their value proposition becomes more visible amid all the existing networks by directing their ‘outward’ efforts to the right places.

Essentially, the big challenge for asset managers is to strike the right balance between both ‘outward’ and ‘inward’ social media strategies.
In the following chapter, we will explore in more detail how managers can successfully design and implement an effective ‘inward’ social media activity.

Population is economic rocket fuel

The 7 billionth person on Earth was born last week.

It takes a nice and big round number like this to focus everyone’s perspective on the fact that the number of inhabitants on this planet is now more than double than it was since the 1970’s.

Indeed, within less than a lifetime, the world’s population has risen by more than 100%!!

For a long time, bulky levels of population have been considered to be a problem and the  reason why it may have been viewed negatively probably has to with the fact that we felt helpless about it and had to take dark and draconian  measure such as stifling growth as was done in China during the 1070s.  Too much population also led to increased poverty as we struggled to keep our infrastructure in line with rising demand.

What we have learned over the past decades of super population growth, is that increased life standards lead to lower birth rates. In other words, if we want to balance the demographics in this world, we need to invest into turning the poor into middle class citizens.

The key word above is ‘INVEST’.

Instead of donating money to charity or aid, we must INVEST in opportunities and projects that will create a larger middle class. I refer to education, manufacturing, food processing, healthcare, sustainable resources among other things that create value and employment.

The difference between investing and giving is that by investing, you create returns which can be eventually be re-invested to create even more returns. When you give, the money goes away, solves a specific problem and creates no accountability but rather installs only a dependence on the other side.

I would even argue that ‘giving’ is a very selfish act but this is a whole new topic upon which I will focus in the near future.

Today I wanted to introduce you to someone: for those who don’t know Hans Rosling, I am very pleased to present him to you. Hans is a very well-respected Swedish Academic and is probably one of the world’s most creative and entertaining presenters.

Below is one of his recent presentations. It is only 10 minutes long and conveys a message that will probably make you think differently about the role of population growth and about the challenges and possibilities in the future economic context of the world.

The fact that he US and European people are outnumbered presents more of an opportunity than a threat; provided we adapt to the new order and play a role of being the foundation for a larger and more sustainable world civilization.


Enjoy the clip!  Hans Rosling on global population