Pay it Forward Business Model

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.

Pay It Forward

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.”

‘Pay it forward’

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.