Digital Content: 'Free' No More?

Here's a new type of social media startup -- Flattr, out of Sweden. It's in private beta at the moment but it's already starting to cause social innovators and entrepreneurs to sit up and take notice. [Micah Sifry, the cofounder and executive editor of the Personal Democracy Forum, posted a short piece on it today on his techPresident blog and says he finds Flattr "intriguing."]

He's right. Flattr is a new micro-payment system that would make it possible for people to get paid for what they produce online -- directly from the people who consume it. "When you create, there's no good way right now to get money for that content, and when you find something you like, there's no good way to show love for it," Flattr's founders say. "The problem is universal for bloggers and their readers, musicians and their listeners, photographers, film creators, programmers and so on."

And it doesn't end there. "Before Flattr," the founders say on their site, "the only reasonable way to donate was to use Paypal or other systems to send money to people. The threshold for this has been quite high. People just ignore sending donations if it isn't for a really important cause. Sending a small sum has always been a pain in the ****. Who would ever log in to a payment system just to donate one Euro? And 10 Euros was just too high (a price to pay) for just one blog entry we liked..."

Flattr founders say they've solved the problem. Here's how it works: Once you register on the site, you're asked to put a small sum of money into an account there, which you then use to pay all of the people (or causes) you choose to "flattr" each month. The site lets you both send and receive payments. The idea? You can "flattr" people and they can "flattr" you back. (You can pay people for their content -- if you like it a lot -- and they can pay you for yours.)

Says Sifry: "This strikes me as very smart social engineering since it tackles the most obvious obstacle -- our propensity to want to get paid, more than pay others, right from the start. In effect, Flattr sets up a worldwide poker game and you have to ante up to play."

For more on Flattr, here's the video. The site's motto, translated into English from Swedish, says: "Many small streams will form a large river." What do you think?

Could this new "social micro-payment" idea help to bridge the so-called 'social action gap' (between talk and action) for many causes? Could it help to close the 'payment gap' for creators of online content and spark new levels of entrepreneurial activity? Let us hear from you.

-- Marcia Stepanek

(Illustration by Simon Oxley for istock.com)

Radical Investing

Today, three young social entrepreneurs -- setting a radical precedent in the social innovation sector -- announced that they are offering up a portion of their future income in exchange for immediate resources to scale their social enterprises.

The trio has created a Web site and a name for their request -- the Thrust Fund. They announced their bold move today on the Social Edge Web site in a post entitled, "Invest in Me, Take My Equity."

The three entrepreneurs are: Saul Garlick, 26, founder of ThinkImpact, a startup nonprofit that connects American students to rural villages in Africa to alleviate poverty; Kjerstin Erickson, 26, the founder of FORGE and a blogger on Social Edge, and Jon Gosier, 28, the founder of AppAfrica, a social venture investing in African software entrepreneurs to create jobs and build their own companies.

"(We) are announcing that we are ready to do something we had never heard of one month ago," the post reads. "We are going to offer equity in our life's earnings for an unrestricted infusion of cash today." Gosier and Garlick are each offering 100 shares in themselves, priced at $3,000 USD per share, to raise $300,000 each in exchange for 3 percent of each man's future earnings; Erickson is "selling" 200 shares in herself at $3,000 per share for a total capital investment of $600,000, in exchange for 6 percent of all of her future earnings. Interested investors are invited to fill out and sign a contract that further stipulates the terms of the unusual offer.

The idea of 1-to-1 investing isn't new in the nonprofit sector. But it's just starting to take off in the social enterprise space. The other week, in a piece for this blog entitled "Mainstream Medicis," I wrote about how one social investor had decided to give a young entrepreneur he believed in some investment capital in exchange for a percentage of her future earnings. That move, detailed by investor/entrepreneur/tech consultant Rafe Furst last fall in his personal blog, has spawned considerable discussion across the sector in recent weeks, but today's Thrust Fund announcement was the first time that any social entrepreneurs have stepped forward to offer themselves as candidates under the concept.

The idea isn't complicated. Instead of investing in start-up companies, angel funders could invest in individuals they believe in and then take a percentage of their life's income over time as the ROI.

"If we loved perpetual hand-to-mouth fundraising for our social enterprises, we'd never make this announcement," the trio wrote in their Social Edge post. "If the market were up to speed on the scalable potential of social entrepreneurship with engaged funders like the more advanced VC community that the exclusively for-profit sector looks to for scale, this discussion would be lame. But it's not and we are raising money hand-to-mouth when we know for sure that a modest infusion of capital would scale our social enterprises."

What do you think? Is the sector likely to see a flood of such investment deals, or is this idea still too new and untested to take seriously? Let us hear your thoughts.

-- By Marcia Stepanek

(Photoillustration, above, courtesy Social Edge)
(This post first appeared on Justmeans.com and is reposted here with permission)