Lunch and Learn with David Fossas – The Purpose Economy

I am a firm believer in the phrase “you learn something new everyday.” That’s especially true this summer when, as a Social Distillery intern, I have the opportunity to learn anything from Austin’s best hot dog place to how to use analytics in a client report.

At our most recent Lunch and Learn, we had the pleasure of sitting down with David Fossas, the head of strategy and planning at W2O Group. During this lunch and learn, I certainly learned something new as David discussed “The Purpose Economy – Business Principles for the Post-Capitalist Society.” Because I wasn’t initially sure what that meant, I was thankful David explained The Purpose Economy as the exploration of the convergence of innovative technology. More specifically, it is how innovative technology applies to the world of social media.

David began with The Reciprocity Theory that he compared to Newton’s Third Law of Physics: “For every action there is an equal and opposite reaction.” Or, as David put it, one positive interaction can cause one positive reaction. With the Reciprocity Theory, the individual can be recognized as an individual, but also as a part of the community. The overlap is a mix of purpose and influence where brands can come in if they act in an authentic way. Brands could then cause a positive interaction between individuals and their community.

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David continued by discussing Maslow’s Hierarchy of Needs. Originally, we had to focus on the base of the hierarchy: physiological, safety and security, love and belonging. Now that many have those satisfied they are able to ask why? What is my purpose? This is where Maslow’s hierarchy expands from five sections to eight. Added in was cognitive (knowledge), aesthetic (appreciation and search for beauty) and at the very top, transcendence, where one can help others achieve self-actualization. It’s estimated that only 10% even get into partial self-actualization and only 2% achieve it.

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With so much change occurring, David asked from where is this change coming. CEOs expect technology to drive the most change in their organizations over the next three to five years. As Author of “Good to Great,” Jim Collins points out, “Technology can accelerate a transformation, but it cannot cause a transformation.” Throughout the last 250 years, five successful technological revolutions have occurred and experts believe we are on the verge of the sixth revolution. We’re in the golden age currently, but starting to see the political unrest that tends to act as a pre-cursor to a technological revolution. After the age of steel, the age of oil and the age of information and telecommunications, what’s next? If you can tell us, you may have answered the million dollar question.

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In the current age of Information and Telecommunications, a lot has happened surrounding the social network. The pre-social networks were around the 1980s with a community of like-minded people. These social networks have since expanded and don’t seem to be slowing down. David discussed the 6 C’s of social networking: Communications, Connectedness, Common Experience, Content, Commerce, Cool Experiences (entertainment). Two-thirds of digital content is consumed and created by users making, capturing and utilizing these 6 C’s important for a successful social network.

But what’s so important about this social media network created by millennials and what does it mean for your business? Well, it might not just be a phase. Young adults are increasingly likely to have low incomes and the median household incomes among 25 to 34-year-olds dropped 8% between 2007 and 2012. Student loans have driven up consumer debt burdens and many millennials are trying to just fulfill the basic levels of Maslow’s Hierarchy. Millennials may be coping with social media and redefining freedom and status. Knowledge is now more powerful than land, labor or financial assets. This is the start of the experience economy. Here, there are four realms of an experience: Entertainment, Educational, Escapist, and Esthetic. Within these four realms are two dimensions: Participant (passive/active) and Connection (absorption/ immersion). The best brands have a sweet spot mix of these elements.

Four Realms of an Experience

Because of this, brands are now focusing on creating rewarding experiences for customers. Brands value design, technology, storytelling and purpose. Creatively-awarded campaigns were 12x more efficient creating a value of $12 for each $1 of marketing spend. Increasing the emotional response to a brand reduces its price sensitivity. You know a great place to tell a story that might create an emotional response? Social media.

To learn more about David’s view on The Purpose Economy, check out his SlideShare presentation. For questions or comments, feel free to reach out to me @Mare_McCoy.

 

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