MyBandStock: Defining Perk

MyBandStock is a revolutionary website that enables fans to support musicians through a process, enabled by the Internet, known as crowdsourcing. The idea is that fans buy "stock" in a musician, which is a monetary investment, which the musician can use to complete a project such as recording an album or touring the East Coast. Rather than receiving a financial reward for their investment, fans receive exclusive perks from the musician only available through the MyBandStock web service.

I recently had an opportunity to think about the wide variety of perks that fans may want to receive in order to induce them to purchase "stock" in a musician.

Along with two other interns working for MyBandStock this summer, we were instructed to devise as many realistic and feasible perks as possible. These two qualifiers have a drastic impact on the potential list of perks available. For instance, having these constraints eliminated the possibility of a flight to the moon or a lifetime supply of Aero chocolates (my favorite) as a perk for an investing fan.

This was no obstacle for the three music-teers (an ill-witted play on the three musketeers).

In preparing the group for this project, I proposed an interesting technique in order to develop our many ideas. I suggested that the less we think about the ideas, the easier they will come to us.

In Dr. Elizabeth Lloyd Mayer's book, "Extraordinary Knowing," she investigates some of the theories and science behind clairvoyance, ESP, and telepathy. She asserts that some of our clearest thinking occurs when we do not focus on thinking. By relaxing the posterior superior parietal lobe, deep levels of meditation can occur in which a sense of connectedness and intuition may be attained. Therefore, by opening our minds, I believed that we would best populate our perk ideas by utilizing this technique of knowing without knowing.

The results were phenomenal. Not only did this strategy allow us to come up with an ample list of perks that could be feasibly and realistically added to the current MyBandStock web service, but it also gave us new perspective on how to think about perks in general.

It occurred to us that perks come in three different, yet distinct forms. Recognizing the difference in perks will enhance the MyBandStock web service's ability to market to the appropriate demographic and will also add clarity to which sort of perk fans are most willing to invest in.

The way that our team distinguished between perks is by looking at them as:

• Access
• Merchandise
• Experience

Perks that deal with access involve exclusive insider information about the musician that can only be provided by the relationship between MyBandStock and the particular musician. By purchasing "stock" in a musician that gives one access to the perk, the fan is being admitted into an exclusive club of knowledge that they can only be admitted into by means of the MyBandStock web service.

Perks that deal with merchandise involve tangible objects that the fan can receive that relates to the musician. The extent of merchandise is limitless and musicians can determine any sort of object to personalize in their image.

Finally, perks that deal with an experience relate to opportunities that fans can engage in directly with the musician that they are a fan of. Experiences may vary, but the way that this is different from access, is that the emphasis is on the relationship formed between fan and musician, whereas, access is exclusive information.

Thinking about perks in these terms gives new scope and meaning to what a perk truly is. I think that by using this framework, MyBandStock will be able to grow their perks in the future in an organized, effective, and efficient manner that will enhance business functioning.

It was a fun assignment that I hope will add valuably to the MyBandStock web service as time progresses.

• Music For Thought
  

Tuition Intuition

How does one possibly offset the high cost of tuition to top-tiered academic institutions these days? After conducting a brief analysis of the top 25 ranked academic institutions based on U.S. News and World Report, the average tuition for one year is approximately $34,960. This is a remarkable sum of money to expend on education for a financially well-to-do family, but for a family who is impoverished, a sum of this magnitude is incomprehensible.

Education is the human right to derive knowledge and consume information about one's livable Universe. Ideally, it should be free to all of mankind. However, the rates at which academic institutions are raising their tuition is unfortunately keeping some individuals out of the academic mix. The cost of education has reached a point where it has begun to deny the inherent right of education to those who do not have the financial means.

In order to alleviate the financial burden placed on individuals attending academic institutions, I have proposed a strategy that may be worthwhile if explored further.

The idea that I propose is rooted in a University's Development Department. In University lingo, Development is a sophisticated word meaning "to raise funds from alumni and all individuals associated with the institution." University's have gotten this process down to a science, and that makes good sense seeming though a University is an academic institution that seeks to unveil the hidden mystery of the human condition.

Development departments usually structure their attacks by focusing their efforts on donors who are willing to give at various amounts. There are certain individuals who give millions of dollars away, likely attributing their present success to the foundation provided to them at their University. Other individuals give hundreds of thousands of dollars probably for very similar reasons. But then there are the smaller donors. The ones who typically give less than one thousand dollars a year. And it is these donors who perplex me.

I have to wonder, why is it that these people, the vast majority of the alumni of any academic institution, feel compelled to give small sums of money that on a personal level make little to no dent at all to the University's bottom line?

• First, I could consider that these individuals have a strong tie to the academic institution. Most top-tiered academic institutions are four year engagements, and it makes reasonable sense to me that any institution that one devotes his or her life to for four years would seemingly harbor some sort of connection. Sure, this is a reasonable reason for giving a small donation.

• Second, could it be that the individual was particularly connected to their field of study, and it is not in fact the anonymous institution that motivates these individuals to give their small donations, but rather the faint recollections of classmates, professors, lectures, and events that are truly at the core of the giving? I think this is highly likely as well.

• Third, perhaps the individual does not even care or think of their academic institution, but just out of being asked for a donation they are willing to part ways with even a small amount of money, because they have more than enough to survive on? I think that if people don't have any specific hatred towards the institution based on something "it" did to them "personally", it is quite likely for a donor to give even a small amount of money if they recognize that they can do without it.

• Fourth, maybe it is the donors understanding that the money that they give, although a small amount, will be utilized together in a pool of donor money in order to help the academic institution realize its greater goals.

• Finally, perhaps the means through which the donor was asked for a donation to the institution plays the largest role in their willingness to give. It is a challenge to get donations out of donors at these small levels of contribution. This makes sense intuitively. If you are a large donor, it is likely that your large donation will take up a larger portion of your thoughts. If you are a small donor, it is likely that your small donation will take up only a small portion of your thoughts (I like the symmetry here).

Donors at these small levels of contribution are typically found either through phone or mail solicitations. Obviously, with the help of the Internet, donors could instinctively go to the donation website, but it is unlikely that they will do so without being prodded. People generally don't feel the need to do something unless being specifically asked to do so or unless they are highly intrinsically motivated for some reason or another.

The final method that I suggested that may drive a donor's motivation is particularly compelling to me. For the past couple months I have worked for a University's Development Department, and my job entails calling and soliciting donations from these smaller donors.

I have been doing this work for long enough that I am already considered a veteran. There is hardly anyone on the calling floor who has been there longer than myself. In my time, I have seen people come and go; the turnover rate is incredible. But, what I have also recognized, is that there are people who are remarkably good at the job and those who just cannot get it right.

Over a short period in time, it is quite difficult to assess the quality of a caller, but over the longer term there is a marked difference in those people who either work very hard at improving their solicitation technique or just have a knack for the job. Some people are so skilled that they can get the smallest amount of money out of an individual connected to the institution even after they spend a couple minutes berating it. I propose that this isn't luck, but rather a reflection of the individual's ability to solicit money for a cause.

With that being said, I consider my own case again. For the past couple of months I have worked around 250 hours doing this sort of work for my academic institution. For my time, I am compensated at around $9.25 an hour which is a tremendous sum of money for a college student, and I am grateful that I was able to secure this job and receive the compensation I do. Doing a couple simple calculations, I've netted around $2,200 for my time after taxes.

However, in the exact same stretch of time, I have brought in around $20,000 for the academic institution for which I have called. I feel proud of this achievement and I'm glad that the money that I have raised is going to a worthy institution that I do in fact feel quite connected to.

Yet, in just a few months from now I will need to repay the massive student loans that I took out in order to finance my education here. The sum I will have to pay back is daunting and will take a calculated 15 years minimum (that is roughly 68% of my current age to this point).

I think that academic institutions ought to consider expanding their Development Department to include individual financing. This can be done in one of two ways as I see it.

• The first way would be to allow students to call alumni (as they do already), but enable the student to raise money on their own behalf to offset the high cost of tuition. The call would be very similar, but the donor would know exactly who the donation is going to and for what purpose, exactly. That is a step up in transparency from the current method.

• The second way would be for students to work together collectively to create a tuition endowment of sorts. This could be structured for each individual academic institution or perhaps institutions could even work together in order to enhance the size of their endowment. The interest paid on this endowment would go towards assisting students with tuition. As the endowment grows, and it will do so exponentially (due to compounded interest), tuition will find itself either leveling off or even decreasing.

Individual's expressing concern about this idea will posit that if money goes toward this tuition endowment or towards an individual needing tuition assistance, then the University loses out on that potential money which deteriorates the greater good that the University provides (research, art, etc.). While this is a completely fair assessment, I would contend that small donors could likely match the donations they give without any significant impact to their way of life.

Therefore, I believe it is just a question of effective reasoning and solicitation on behalf of the student making the call (a primary reason why I think small donors give over the long term). So long as the message is framed correctly, individuals will act. It is our nature.

MyBandStock at the Blind Pig

I've gotten myself involved in a truly revolutionary enterprise that is set to send waves through the music industry. As we find ourselves moving deeper and deeper into the information age, it is becoming harder and harder for musicians at the start of their careers to find funding in order to get them to the next level. Fortunately, for music bands and fans alike, there is finally a resource that uses the power of the Internet to harness rather than hinder these musicians progress.

Enter My Band Stock (MBS). MBS is a revolutionary website that uses the power of crowdsourcing in order to empower musicians at the brink of their careers find the monetary funding to accomplish projects that set them on a road a path to stardom. The idea is that fans buy "stock" in a musician that they enjoy (one that they are likely a fan in to begin with) and the band uses that money to fulfill various goals that they think would be most helpful to their success.

When a fan purchases "stock" in a band, they are not tying that investment to monetary increase or the potential explosion of a particular artist, rather, fans get perks from the band that they are supporting. This may be things like a free CD, signed drum sticks, cool t-shirts, or exclusive merchandise only available through the My Band Stock website.

My Band Stock is motivated by leveraging the personal relationship that one stands to gain in buying "stock" in a musician that they are a fan of. My Band Stock facilitates this relationship cultivation through entitling those who invest to the aforementioned merchandise, as well as, recognizing those fans for supporting music.

The website was launched in January of 2009 by students at the University of Michigan.

This past Friday, my duties as a music revolution intern included going to the Blind Pig in Ann Arbor, Michigan in order to market this revolutionary website as well as promote Charlene Kaye, a featured musician on the website.

The experience can best be described as fun-filled. We arrived early in the evening with My Band Stock merchandise and marketing materials and began setting up. Soon thereafter, the musicians who were going to perform began to arrive. The Blind Pig was featuring three wonderful female vocalists this evening and aptly called the event "Super Women."

The night started off with Anna Ash who has a soothing, pleasant voice, that I would liken to Yael Naim, who gained popularity through her Apple Macbook Air commercials.

She was followed by Laurel Premo, who incorporates a double bass into her act, which I was particularly fond of. The headlining act was performed by My Band Stock's very own Charlene Kaye. Charlene's voice and music are both exquisite, and I encourage you to listen and purchase "stock" in this up-and-comer.

Marketing for My Band Stock was not only fun but relatively easy. We were set up right next to the merchandise area for the respective musicians, and people would typically look at the CDs they could purchase, and then happened to glance over at what all this My Band Stock stuff was alongside it.

This is where I was able to engage with the various attendees of the event and help showcase this phenomenal concept. The dialogue was varied for each individual, but typically began by enthusiastically asking if the person had ever heard of My Band Stock. Most of the people who attended this event, even though it featured MBS's Charlene Kaye, were unaware of this remarkable music service.

This gave me an opportunity to enlighten people about the features of the website and why it is vitally necessary to the music industry. I found that people were highly receptive to the idea and were more than willing to check out the website. One individual was so impressed by it that he signed up there and then and even bought some "stock" in Charlene Kaye.

Overall, the event was a complete success and enjoyed by all who attended. I'm glad that I have the opportunity to help spread this phenomenal idea and interact with musicians and fans.

I hope I get a chance to share more details with you about my internship with My Band Stock as the summer progresses. Please be sure to check out the website, listen to some music, and buy some "stock"!

Trading

Several weeks ago I ran a survey through Those Answers Inc. which sought to look at the correlation between a person's likelihood of investing in the stock market if they engaged in a market based system in their younger years, trading cards.

The first thing to address when tackling this question is to define what a market is. A market is merely just a conceptualized form in which one good or service is traded for another good or service. There are countless forms of markets in today's modern world. There are more formalized markets like the stock market or the currency market or the futures market. But then, there are also far less formal markets, such as a yard sale or craigslist or even kids trading baseball cards (or any sort of cards) on the school yard.

The purpose of my survey was thus to verify whether informal markets had the propensity to lead to individuals partaking in formal markets. The particular type of informal market that I studied was the last example that I gave, that of young children trading cards with one another, and the formal market that I hoped to correlate these findings with was the stock market.

The underlying theory that gives me reason for this connection to exist is based on socialization. Sociologists use this terminology in order to describe the "process of learning one’s culture and how to live within it" (Source). I think that bartering is a human behavior that individuals must learn in order to survive. Therefore, I gathered that if individuals were exposed to market environments at a younger age in an informal setting, they may be more likely to participate in markets when they are older through socialization and conditioning.

It also may be more natural and intuitive for individuals to participate in formal markets when they have already taken part in informal markets.

That was the first objective of the survey I gave. The second objective was to seek out something far more psychological about the thought processes of individuals partaking in formal markets based on their socialization from informal markets. I sought to find whether or not individuals were likely to hold similar beliefs about the value of items with the influence of time.

• Results

The results are based on the survey results of 34 respondents. 19 of the 34 (56%) of the respondents were male and 15 of the 34 (44%) were female. The average age of a respondent was 22.6 years and ranged between a low of 19 years and a high of 42 years.

The first thing that I wanted to know from my survey participants was whether or not they had ever collected any sort of trading card. 65% of individuals (22 of 34) said that they had collected some sort of trading card.

Then I wanted to see whether the intent of the individual collecting the trading card was similar to the intention of formal market speculators. The way I did this was to ask whether the individual when collecting their trading card anticipated selling that trading card at a later date.

The answer to this question reveals a great deal about human behavior psychologically and culturally. A high percentage of individuals willing to sell their trading cards at a later date indicate that people instinctively collect belongings recognizing that they will part with them at a future date. This seems odd doesn't it? If I know that I am going to have no use for a particular item in the future, what is my motivation to horde that item now? I think intuitively it comes down to exclusivity.

When an item is highly desirable and highly exclusive the value of that item is inflated. This isn't because the item itself has gotten any better, but rather, the psychological drivers of desirability and exclusivity make an individual perceive a particular item to be more than it is worth. It is based on this premise that people will opt to collect items today in hopes that their perceived value will be greater later on (in effect, attempting to horde an item that has "stable" value, money).

Of the surveyed individuals, 63.6% (14 of 22), anticipated selling their trading cards at a later date.

Next, I wanted to figure out what those individuals who anticipated selling their trading cards at a later date thought would happen to the value of their trading card over time. I gave them the option of the value increasing or decreasing over time. A staggering 100% (14 of 14) believed that by adding time to the equation, the value of their item was surely to increase.

This reveals something quite compelling about the natural tendency of individuals partaking in informal markets. It illustrates that perceived value over time increases. If this is instinctive in informal markets, can the same be said about the value over time of objects in formal markets? If the socialization effect appears to hold, this could be a reasonable deduction to make.

Now, I began my inquiry into the interaction with formal markets of our surveyed participants. I asked respondents if they had any capital invested in the United States stock market (our formal market).

Out of all respondents, only 38.2% (13 of 34) had money currently invested in the stock market as of May, 2009. According to 2002 data by the Investment Company Institute, 35.9 million households, which represent 33.7% of the households in the United States owned either stocks or mutual funds or both (Source). Based on the close proximity of these two percentages, I can conclude that we are looking at a pretty representative sample of the United States stock ownership community.

This is where I can finally get at what I was really after. At this point, I can determine if there is a significantly higher percentage of individuals who traded cards when they were younger (in informal markets) who participate in the stock market (our formal market).

In order to perform my statistical tests, I used a one-proportion z-test for the four particular conditions that I had. The first condition was yes informal - yes formal (YIYF), the second was no informal - no formal (NINF), the third was yes informal - no formal (YINF), and the fourth was no informal - yes formal (NIYF).

• YIYF

After conducting the one-proportion z-test for this condition, a z-value of 0.55 was achieved which has a p-value of 0.2088. This is not considered a statistically significant value, and thus one cannot conclude that if an individual was involved in informal markets then that would predict for their involvement in formal markets. (A larger sample is needed to truly verify this result).

• NINF

A z-value of 3.4 was achieved which has a p-value of 0.0003. This is considered a highly statistically significant value, and thus one can conclude that if an individual was not involved in informal markets then that would predict for their non-involvement in formal markets. (A larger sample is needed to truly verify this result).

• YINF

A z-value of 2.27 was achieved which has a p-value of 0.0119. This is considered a highly statistically significant value, and thus one can conclude that if an individual was involved in informal markets then that would predict for their non-involvement in formal markets. (A larger sample is needed to truly verify this result).

• NIYF

A z-value of -0.59 was achieved which has a p-value of 0.7224. This is not considered a statistically significant value, and thus one cannot conclude that if an individual was not involved in informal markets then that would predict for their involvement in formal markets. (A larger sample is needed to truly verify this result).

These findings truly get at the crux of the survey. It appears as though there is no correlation between involvement in informal markets and formal markets.

The survey also sought to verify whether the beliefs held about perceived values were still consistent between informal and formal markets. Recall that in informal markets individuals believed, with a 100% success rate, that the value of their good would increase over time. When it came to formal markets, it appears as though beliefs mirror that of the informal market. 92.8% (13 of 14) respondents believed that the value of an investment is likely to increase rather than decrease over time.

This seems to be highly correlated. Beliefs seem to remain embedded regardless of the market type, and that belief is that value increases over time.

With the belief structure that value tends to increase over time it was not that surprising to find that only 59% (20 of 34) of respondents knew the difference between a long position in the stock market and a short position. Long positions are based on the belief that investments will increase, whereas, short positions take the stance that investments will decrease. A short position is probably counter-intuitive to a lot of people's thinking based on the results of this survey.

Thanks to all participants!

Stroke of Insight