The Birth of the Social Economy

The market economy is predicated on the assumption that man is a rational agent that acts exclusively in his self-interest, and that the aggregate decisions made by such individuals will benefit society as a whole.

How apt of a description is this of human behavior? Our evolutionary and cultural history paints man as a much more social creature, one that has always thrived as part of a larger collective. My experiences have shown to me that many of us subdue our more communal instincts in order to conform to the prevailing socioeconomic order. But there’s been an awakening, one facilitated by the unprecedented growth of our communication networks which is beginning to manifest just how insatiable our desire to socialize and connect with one is, in ways that carry more weight than retweets and right swipes.

I won’t purport that my statements here carry the weight of science. I’m only 25 with a B.S. in Political Science and one successful creation under my belt (the other one is still in progress… more on that later). Instead, I propose that we approach the subject with an open mind, as history as time and time again demonstrated that many of the predominant assumptions about the world we take as given have been proven to be fundamentally wrong.

The Desire to Belong to Something Bigger than Yourself

I constantly hear people say they want to be more involved in their community. That feeling of connectedness which social media cannot satisfy, that wealth alone cannot provide, is something we as humans have craved since the days of our ancestral apes. It’s common knowledge now that communities have been in decline, and that one of the culprits has been the economic stagnation of American households; how can a person make time for communal life when they work ever increasing hours just to get by?

Communities, whether united by interests, identity, ideology, or geography, are the bedrock of a functioning democracy. But in our modern capitalistic system in which money is power, how influential can communities be if they lack the access to capital necessary to effectuate their collective desires?
Part of the problem is that our modern communication networks have not yet been paired with an efficient mechanism for allocating capital towards non-financial ends. It’s not to say that the technology necessary to create such an infrastructure doesn’t already exist, as is made evident by the proliferation of e-commerce, trading, and payments platforms. It’s that the existing services are still modeled under our traditional assumptions of how economics works: you scratch my back, and someday I’ll scratch yours plus interest.

The crowdfunding revolution which is underway has demonstrated that people sometimes want more than a financial return on investment. Charity has existed long before the days of the internet, but has always been relegated to a sort of peripheral status, in a position where it’s not taken as a “serious” mechanism for the creation of value. However, the explosive growth of donation and reward based crowdfunding (the latter of which is unfortunately being misunderstood as a form of “product pre-ordering”, which only happens to be the case for a certain type of campaign) and social entrepreneurship as a whole has revealed a serious interest in investing in projects which don’t necessarily result in capital gains.

Why did James Robertson, the man who had to walk 20 miles to work everyday, receive 13,000 donations from strangers on the internet? It’s the same reason why nearly 50,000 contributors wanted Solar Roadways become the foundation of our energy and transportation infrastructure, or why over 100,000 donated to recreate Reading Rainbow for a new generation of kids. They’re not pre-ordering anything, other than the expectation of seeing these projects come to life.

Something big is happening here, something which isn’t being explained by our classical assumptions of what drives human behavior. Here are millions of people making microcontributions, taking minuscule risks (or leaps of faith if you’re an optimist like me), collectively supplying money to sources which desperately need them, without ever receiving a penny in return. The incentive of these crowdfunders, which is the same incentive which drives the engine of this emergent social economy, is the desire to belong to something bigger than yourself. This is what our platform Loqalus aims to tap into.

The Limits of the Crowdfunding Model

Crowdfunding faces one crucial problem: most campaigns do not succeed in reaching their fundraising goal. In fact, some estimates across all platforms place the failure rate at around 90%, a number which has steadily increased over time. Part of the problem is exposure, as a person running a crowdfunding campaign on one of the major sites is only one of tens of thousands at any given moment. The other problem is being unable to tap into the crowd; most campaign runners can’t break out of their immediate network of friends and family, given that it’s difficult to incentivize people who don’t know you to make a contribution.

Our theory is that tapping into your community is the solution. It is the bridge between the circle of people you know and the internet at large. Loqalus, the web application my team and I have been building this past year, facilitates this participation by creating a platform for you to get involved with campaigns that are happening right now in your neighborhood. In addition, it allows you to find campaigns that you’re most likely to want to be a part of based on the interests you provide us, adding a much needed filtering mechanism.

An important factor to consider is that most people will only run a crowdfunding campaign on a handful of occasions. Therefore, the majority of visitors who go to our site will do so with the intention to give funds, not receive. This is a limited model because it will restrict us to a small market of philanthropic individuals who may only infrequently check the site. Therefore, to enhance our value proposition, we incorporate a strong social networking element by allowing users to promote local events as well as engage in conversation. By making Loqalus a tool to both discover and participate in your community, we give people reason to visit the site regularly, thereby providing campaign runners a larger pool of potential contributors.

Reinventing How Communities Work Together

Our ultimate goal is to empower local communities. We see too many people who hate their jobs, experience large degrees of social alienation, and feel politically disenfranchised. People feel disconnected from one another despite facing many of the same problems. We want to give them the tools to support each other by taking advantage of the fact that almost everyone in the developed world has discretionary income and internet access; we are channeling small amounts of money from large numbers of people into areas that desperately need them in order to make a visible impact in their very own communities. We are simply taking advantage of the connectivity that the internet has provided us and coupling it with the people’s desire to belong to something bigger than themselves.

If you share our vision of a future in which access to capital, where people can use technology as a means to interact in real life, to augment their social realities, then please help us out by making a small donation to our crowdfunding campaign on IndieGoGo and sharing it on social media. One day, I hope that the problems we faced as young, broke entrepreneurs will be solved by the very tool we’re trying to create. Until then, we’ll use what’s available us.

Take action here at www.loqalus.com.