Pay it Forward Business Model

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‘Pay It Forward’ was a brilliant movie – so inspiring & very sad at the end.  Its obvious from the economic challenges of the last few years that if we focus on benefit to others that we also benefit.  If we focus on only benefiting ourselves then everyone suffers.  The summary of the idea is as follows:

If someone did you a favor – something big, something you couldn’t do on your own – and instead of paying it back you paid it forward to 3 people…
And the next day they each paid it forward to three more…
And the day after that those 27 people each paid it forward to another three…
And each day each person paid it forward to three more people..
In two weeks that comes to 4,782,969 people.
New business models with this key piece held as central, can flourish amidst the wreckages & failures of the self serving models.  The free model that has sprung up on the internet seems almost a reaction to the selfish & greedy business models that have been crashing lately.  This model is currently morphing to find its own balance & establish revenue streams.  We are in the midst of a creative evolution of business, its a really exciting & dangerous time to be alive & to be in business.
I was reading an article ‘Pay it forward’ pays off: UC San Diego and Harvard deliver first experimental findings on spread of cooperation in a social network.  I have a lot of respect for Nicholas Christakis work, here are some quotes from the article:
The research was conducted by James Fowler, associate professor at UC San Diego in the Department of Political Science and Calit2’s Center for Wireless and Population Health Systems, and Nicholas Christakis of Harvard, who is professor of sociology in the Faculty of Arts and Sciences and professor of medicine and medical sociology at Harvard Medical School. Fowler and Christakis are coauthors of the recently published book “Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives.”
In the current study, Fowler and Christakis show that when one person gives money to help others in a “public-goods game,” where people have the opportunity to cooperate with each other, the recipients are more likely to give their own money away to other people in future games. This creates a domino effect in which one person’s generosity spreads first to three people and then to the nine people that those three people interact with in the future, and then to still other individuals in subsequent waves of the experiment.  The effect persists, Fowler said: “You don’t go back to being your ‘old selfish self.”’ As a result, the money a person gives in the first round of the experiment is ultimately tripled by others who are subsequently (directly or indirectly) influenced to give more. “The network functions like a matching grant,” Christakis said.  “Though the multiplier in the real world may be higher or lower than what we’ve found in the lab,” Fowler said, “personally it’s very exciting to learn that kindness spreads to people I don’t know or have never met. We have direct experience of giving and seeing people’s immediate reactions, but we don’t typically see how our generosity cascades through the social network to affect the lives of dozens or maybe hundreds of other people.”
“Our work over the past few years, examining the function of human social networks and their genetic origins, has led us to conclude that there is a deep and fundamental connection between social networks and goodness,” said Christakis. “The flow of good and desirable properties like ideas, love and kindness is required for human social networks to endure, and, in turn, networks are required for such properties to spread. Humans form social networks because the benefits of a connected life outweigh the costs.”
Thank goodness business is not Hollywood & we don’t have to sacrifice our lives to practice paying it forward!  What are your thoughts about the possibilities for pay it forward business?  Let me know in the comments below, thanks.
Written by
Pemo Theodore

Pemo Theodore is a Media Publisher & Event Producer and a great people connector.. She is Founder/CEO Silicon Valley TV which has served the San Francisco Bay Area for 11 years! She has produced Silicon Valley Events for Investors & Startups for 9 years. Pemo loves to video interview venture capitalists & founders to engage the human behind the success stories.. She has been Executive Producer of FinTech Silicon Valley for 5 years, organizing twice monthly FinTech talks & panels in San Francisco & Palo Alto. She believes in learning through a great discussion with experts in the domains. Pemo has a talent to bring the right people together and is an incredible networker. Pemo's events have been seen as supporting Venture Capitalists & Angels in sourcing great deal flow from startups who attend her events. Many founders have received funding through meeting investors at her events. Her favored medium is audio & visual media and she has built up a great body of work of podcasts & videos of panels & interviews in Silicon Valley.startup ecosystem.

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Written by Pemo Theodore