“the negative impacts of their activism on the macro global economy…. now everyone seems to understand that systemic issues cannot be ignored, even for those with very short fuses.”

With these two comments I see the narrow view of this freeism and I quite agree about the negative impact of the global economics and systemic issues. In fact I do not see any financial value that has accrued to takers of this freeism.

I don’t use Craigslist. But I will pay to use a Craigslist look-a-like that gave me real value, such as tradable equity in an IPO where my free equity is worth 3, 5, 11, 20, and over 40 times more because of well-formulated ratios of owner’s equity to paying customers equity?

I see nowhere on these blogs and quotes the important numbers where the serious conclusion to this freeism is replaced by combining the pure financial needs of social media participants with the pure financial needs of start-ups in an exact new public company ratio. This ratio is the new Free Business Model that will produce the next crop of needed billionaires’ activists.

So lets elevate this freeism negative to the positive opportunity of introducing a certain amount of onetime micro cash say $30 bucks per members, and then permit free. Lets find the optimal macro social media numbers based on using the macro USA capitalist and free enterprise evolved data of 306 million citizens 18,600 public traded companies with a market value of $19.95 trillion. This macro view and solution is better from here where nothing is missed.

It is by the standard accounting formula for public companies that always 100% of the time creates 3, 5, 11, 20, and over 40 times revenue when annual revenue is greater than a constant.

The formula is x=(a*b)/c with ‘y’ shares where X is stock price B is earnings; C is rate of return with 61 million shares outstanding where 364 new billionaires are made in 2010. Because quite frankly it seems that only those destined to be billionaires have the intelligence and the ability to act on this formula under the right conditions.

The right three conditions are:

1. Assemble 14 million social media participants vote on 364 start ups that they will buy from
2. 14 million participants buy from these 364 new public companies in exchange for 46% or 2 shares each given free after an average purchase of $33 where the start up owners retain 31%.

The 364+ billionaires that these three conditions create are thrown alway! These 364 throw always are the mere catalyst to glue the network in non-competitive ways. It is the pure financial needs of 14+ million participants, to be exact 3.6 billion humans at $318 per day that are driving this global social network revolution.

When 14 million times $33 times (+ or -) $.63 divided by 61 million shares divider by (+ or -) .03 for a stock price of $159 is provided for 14 million participants daily then we have free equity driving the global economy replacing the negative free credit.

Yes! 14 million participants are happy with $318 per day and 364 new billionaires with $3 billion each!

Anyone with the vision, intelligence and the ability is encouraged to help make this happen…it is ‘the first open source Free Business Model’ with a pre-calculated structure.

Paul Katchings

I don’t agree Bill that even a majority looks at free as defensive– I am quite confident that many look at it as an offensive weapon.

Free justifies the existence of too much investment capital, but as you touch on Bill– it’s a risky game. For one thing Craigslist didn’t need a huge amount of capital, and for another there is no guarantee at all that follow on investment will emerge when one needs it, even when justified.

Unfortunately I am confident that almost all idealistic (and VC and every other type embracing freeism) are not capable of understanding the negative impacts of their activism on the macro global economy. Until a few years ago no one seemed to care– now everyone seems to understand that systemic issues cannot be ignored, even for those with very short fuses.

Cuban has it right I think — he’s looking at through the proper lens — an entrepreneur who has a longer term view of sustainable recurring/ profitable revenue, aka a real economist.

Prior to the massive over-investment of VC and IPO capital in the past decade, a very strong and lasting global e-commerce medium was emerging in a very healthy manner– built on the solid foundation of organic growth, complete with subscription models like we enjoyed with Virtual Franchise. That medium required growth capital in the many billions of dollars…. it did not need, nor could support investment in the many hundreds of billions (when including government, non-profit, corporate, and small business the number likely exceeded T).

My concern is for the macro global economy. Advertising will only support a small fraction of the current ecosystem online, and we surely cannot afford another bubble made of financial engineering, meaning something must give in a big way. The U.S. venture community may have started the global cold war online, but I’m not sure at all that it can afford to win the model.

The true entrepreneur’s perspective is still essential (like you I rather like the view from the sage of Omaha), despite conventional wisdom. Thanks, MM