We're Gifting Not Grifting
Backgrounder on the $Make Social Token
Earlier this month, Make: Community began rolling out a loyalty program to its subscribers. It’s a social token called $MAKE that can be used and exchanged as a gift within the maker community or redeemed like points for products. As we explain below, it’s an experiment built on blockchain that might provide a glimpse into a possible future. We wanted to find out.
Some people are upset that this loyalty program is built on a blockchain. Some can’t believe that we’d choose to use crypto now. Some accused of grifting or being unethical. We don’t think so. The goal of this backgrounder is to explain how Make: is using digital currency to develop a loyalty program that we believe can benefit the maker community.
We are intrigued by the future made possible through innovative technologies. Dale Dougherty, the founder of Make, has a history of experimenting. When the World Wide Web came to be (and some said we didn’t need it; that FTP and Gopher were fine), he created GNN.com, the first commercial website.. He coined the term Web 2.0 after the Web bubble burst. Now there’s Web3, and some people are rightly skeptical. Almost any technology is like Pandora’s box, but has the potential for good and bad uses, just like the Internet itself. We believe that we have a good use case for blockchain, and that we can test it out without promoting speculation or exploitation.
Blockchain versus Bitcoin
Blockchain is the fundamental technology behind any cryptocurrency such as Bitcoin. It is often referred to as a distributed ledger, recording both sides of a transaction without requiring a central authority to administer it. Years ago, as we learned about it, we became more interested in potential non-financial uses for blockchain; in other words, uses for the blockchain that were not about Bitcoin or the many other coins like it.
In 2016, the MIT Media Lab Learning Initiative Comakery.com enables collaboration on projects by using blockchain to who contributed, how much was contributed and when. Such information could be used to create a chain of ownership equity based on contributions.
We have also discussed that at a Maker Faire, we could give anyone who attended several “coins” that they could give to the makers whose projects they liked best. We had done something via text messaging at an early Maker Faire where you could text the number of a project to vote on it. Unlike a vote, the coin could be circulated in the community so that makers could gift it to another maker to express support or thanks for a service provided.
We never saw any platform that would allow us to realize the idea at the time.
Social Tokens
Last fall, Dale met Jeremy Vaughn of Rimark Technology. His startup had a platform for creating and managing social tokens built on blockchain. Jeremy had a background in music and was interested in how musicians could increase interaction with their audience directly. A lot of the current interactions were handled by ticketing companies, promoters or labels. The basic example is that the group of people who buy a ticket to a concert aren’t connected directly to the musician. The performer doesn’t get to follow up with the audience to tell them about a new release or some future event. A performer’s audience is the best way to promote (by word of mouth) the artist and their work, if they can communicate directly with them. How could the artist recognize and incentivize those who took such actions, which would help to build community?
A social token, used by an individual or brand, is a kind of gamification of the interactions that are most desired. (Here’s a Forbes article on how social tokens are used by creators.) Using Rimark, the musician can issue a social token to members of a community. What’s more, the social token can be exchanged within the community. We wondered how this insight could be applied to makers?
A Social Token for “Awards”
Our first use for a social token was focused on the Amazing Maker Awards. A social token could be used to reward people who registered to participate, as well as those who submitted a complete project and even those who were judged to have the best projects. A social token could recognize the value created by makers who participate. We could do this by integrating Rimark technology into our website, Make.co.
Once we had mapped out how we would distribute tokens to entrants in the Amazing Maker Awards, we thought we would give a small number of tokens for free to our subscribers and members. We sent out an email last week, explaining how they could go to Rimark, create a wallet and then we’d transfer an initial drop into their wallet. So far, we’ve had 700 people accept the token, so it’s off to a good start. We are exploring more use cases for our social token.
Why Not Use a Point System that Doesn’t Rely on Crypto?
One question we have had is why not use a point system that is not built on crypto. It’s true that systems for managing loyalty points exist. If you think of something like the Starsystem at Starbucks or the REI membership program, the company issues the points, determines their value, and also redeems them for its products. These are centralized systems, and the only flow is from the issuer to the customer and back. What’s different in using a social token is that these points can be exchanged within the community of people who use it. They can be gifted. This feature is not available yet but it should be rolled out in July.
Our goal is to promote the use of the social token and its circulation and use within the community. (If we gave out cash, instead of $MAKE, you could spend the cash but it wouldn’t circulate within the community.) Now we don’t know exactly how people might exchange it with each other, but that’s part of the experiment and what we would like to learn.
To say it another way, we didn’t want a point system that you could only use to buy our products. We wanted to create a social token as a means of gifting within the community.
How Much Is It Worth?
A social token, as a digital currency, has an initial value. Make provided that initial value by buying tokens on Rimark. (These are the $MAKE tokens we have gifted to subscribers.) We had to decide how much to invest in this system.
We decided to invest money that we’d otherwise spend on Facebook to promote our brand and subscription acquisition. (We do the same thing in direct mail.) It’s not a lot of money, a small bet on the future. We see that we are reinvesting our marketing dollars back in the community. To be honest, we don’t like giving money to Facebook.
Try, Try Again
This is an experiment, and it could fail, and we can live with that. We’ll move on and try something else down the road. We’re doers, not followers. This program is completely voluntary and those who wish may simply ignore it. Others who participate with us in this program may discover new ideas or new ways to use this technology. We will focus on how to make it successful.
We have already heard from a small merchant that liked our use of a social token and wanted to learn how they could use it as an incentive for their customers to come back or try a new product or service. Small maker businesses could piggyback on our work and use the $MAKE token for community promotion as well.
Imagine how a community of makers might be able to express appreciation for the work of other makers, or recognize the value of a piece of advice, or the sharing of a time-saving technique. We know that these kinds of interactions already happen informally, and that’s great. Yet might they happen more frequently and more broadly through the exchange of social tokens? That’s our goal. That’s what we hope to find out.
With the debut of $MAKE, we are optimistic about the potential for a gift economy for use by creative, productive and technical people of all stripes for their own benefit and build ties within the community. Trying new things is how we find out which potential future can be realized.
