User-generated Content

User generated content continues to grow rapidly on the internet.  Every day, people upload photos, post comments or update their blogs (like I am doing here).  Much of this information is "trivial" (i.e. not important to me), but it's important to someone, and this importance is often more in the "sharing" than in the actual "quality" of the information.

I have almost finished a book entitled "Cognitive Surplus", written by Clay Shirky about how so called "amateurs" or "volunteers" are actually creating valuable tools and services that are adding real wealth on the internet (and this translates to real wealth in the real world.)

My favorite example of volunteer labor that Mr. Shirky cites in the book is the Apache web server, which was used by about 65 % of all web sites in Sept. 2011 (it's probably about the same today)...  (this graph was taken from the Sept 2011 Web Server Survey)

Many of these sites are e-commerce sites, generating real revenue for their owners, who are direct beneficiaries.  Let's also not forget the indirect beneficiaries, including all who make a living consulting or working for companies that build web-based software for customers who sell a product or service on-line.  This has been very true in my case.  I have been (primarily) a consultant for most of my adult working life.  Nearly all of the web development work I've done since 2001 has been using some version of Apache.

The most amazing thing about Apache is that it was built mostly by volunteers (who received no money for contributing), yet it blows away competing products that were built by paid programmers.   It's a marvelous thing.  Even though I've been immersed in the Open Source movement for many years, reading through this book reminded me of how valuable this piece of software really is.

Why art adds value

Why are the arts (music, literature, painting,sculptures) so important to us as humans.  Every civilization has an artistic component to it, and throughout history, artists were paid in one form or another for their work.

Art does not directly contribute to our immediate well being (in the sense of providing food, shelter, clothing), yet it is very highly prized in one form or another (Hollywood is a billion-dollar a year industry, as is the music industry).

So why is it so important?  I would say art connects us w/ each other, with our past, and with the deepest impulses of our nature... in fact I would say all great art in some way tells a story.

Story telling at it's core reminds us that we are not alone, that we are all part of something bigger than ourselves and I think that is part of the attraction of great art, whatever it's form.

Startups

Many (probably most) startups fail, but they are a fantastic engine of wealth creation which is why many (tech primarily) startups get VC funding.  If  you have a great new concept for a web company, if it starts to become popular, it can grow VERY QUICKLY, and with it the potential to reap huge rewards for the original founders as well as the initial investors.  So, if you have a good idea that you want to put out on the web, go for it!!

Adding Wealth By Helping Others

Essentially most of our work involves helping someone (your customer, your employer, your coworker) solve a problem of some sort.  In essence when we solve problems we are creating value in this world.  This is a very general statement, but really when you think about it, new products and services are always created as a direct or indirect result of simply helping someone solve a problem, or overcome an obstacle. 

So if you want to create a lot of value in this world, find a problem, an obstacle, an inconvenience, a handicap, an annoyance that people want to overcome.  If you can offer a solution that is more valuable to that person than their money (which ultimately represents their time), you will enrich yourself but also make the world that much richer.

Give and It Shall Be Given Unto You

"Give, and it will be given to you; good measure, pressed down, shaken together, and running over will be put into your bosom. For with the same measure that you use, it will measured back to you." - Luke 6:38 (New King James Version)

Wouldn't it be great to create something wonderful -- a product or invention that will benefit many people. When this product is marketed and bought by millions it will make you wealthy, because it has benefited others.

Hoarding Nickels

A US Jefferson Nickel is worth currently about 6 cents, according to this great link (from coinflation.com -- used for calculating the intrinsic value of us coins made from base metal). This does not include productions costs.  Nickels are still very common so you would be making an automatic 20% gain if you decided to start hoarding them, assuming you could melt them, which you can't -- it's currently illegal.   But it does underscore the deteriorating value of the US Dollar.

Data is the new measure of wealth

We are awash in massive amounts of data.  Emails, IM chats, Videos, Digital videos and photos, twitter feeds, ads, mobile conversations, the list goes on and on.  In 2004, world internet traffic reached 1 exabytes,   This is 10^18 bytes of information, or 1 million million Megabytes.   With the growth of very large data-intensive companies like Google, and Facebook (which didn't exist 10 years) we are seeing the increasing importance large amounts data will bring to the economy.    Facebook will (probably) get an initial valuation of 100 Billion dollars once it goes public based purely on the notion of collecting and linking large amounts user-generated content.  Data is becoming a new form of wealth.

The insanity of our tax system

My wife currently is studying for a her first exam in a class on the Federal Income Tax she is taking at City College (downtown SF).  I had forgotten how enormously complicated and convoluted our tax code really is.  You see, because I am self-employed I generally have filled out our (joint) tax return the same way every year, and do not have to deal with the many different permutations that the tax code covers.
Here is one example:

Persons not eligible for the standard deduction.  Your standard deduction is zero and you should itemize any deductions you have if:

* Your filing status is married filing separately, and your spouse itemizes deductions on his or her return.

In other words if either spouse itemizes they both have to.  In other words if either spouse uses the standard deduction, they both have to.  In other words, both spouses need to use the same type of deduction, even if they are filling separately.  My wife actually had to look elsewhere to clarify that is indeed the ruling. 

The current (2011) complete tax code now stands at 72,536 pages.  A great info-graphic can be found here:   http://politicalcalculations.blogspot.com/2011/07/2011-number-of-pages-in-us-tax-code.html.

While my wife pulls her hair in frustration trying to understand my own country's tax code, I have to ask, when will this madness stop.  It's sapping the energy and wealth, measured in the many hours spent trying to understand and fill out the information correctly -- either by doing it yourself OR hiring a professional to do the same thing.  This time and energy (or money, which amounts to the same thing) is lost productivity that could be spent creating better businesses and more jobs.