Category Archives: Finance

Why I am backing Inspired Farmers – #localresiliency #localfood

I am backing the Inspired Farmers Project – they will start the first demo for Urban Farming in Charlottetown next week.

The project is lead by Karen Murchison of the Queen St Commons and her partners at the Murphy Community Centre (Where most of the “Farm” will be) The City of Charlottetown, Cycle PEI, Holland College and the Food bank and Soup Kitchen in Charlottetown

It’s a tiny project but has huge potential to make PEI more sustainable. If you want to make a difference that please help. Your help can be a few dollars or a donation of stuff.

You can donate $ here:

Or you can  help with stuff like this:


Here is how I see this project and why I am backing them and why if you care for the future of PEI, you might help too.

It starts often like this – with a community using a barren public space to grow food as a demo. The idea is to inspire us to think differently about the urban landscape. No longer only grass, concrete and isolated trees. When we see this in downtown Charlottetown, we can imagine how different our street could be.

This is not simply a new esthetic either. In World War II 40% of the food eaten was grown by people at home – most in cities.

At the heart of this is the food and the health crisis. By making urban farming – which uses very small spaces and high intensity – important we all learn how to grow our own food. This Saturday there is a workshop on this. We meet our neigbours in a new way. We are more active and we have better nutrition.

We start to escape the trap of being dependent on Factory Food.  The Food Bank becomes a hub of a network of people who help each other grow food and cook food.  Growing food and making meals return as skills that most of us have lost.

This is big – isn’t it? And you only have to make a small step to help.

We start this weekend!


Why I think Networked Artisanal StartUps are so important to PEI

We on PEI have to have thousands of new young immigrants living here in the next 10 years. So what will pull them here?

There are few jobs. 65% of GDP is government and even that is shrinking. They will only come here if there is a vibrant StartUp economy that is based on Entrepreneurs.

So what do those terms StartUp and Entrepreneur mean for PEI?

When I heard the word “entrepreneur” or “startup”, I used to think of Hi Tech Pioneers. But this never made sense for PEI. For if you want to do that, it is best if you are connected to the Tech Village in the Valley.  We are not close enough to where the real action is in Tech for a Facebook to emerge here.

I also used to think that every Entrepreneur worth her salt would want to grow the business to be very large. Then I thought of who has done this in Atlantic Canada. Sobeys, McCains and Irving. Not exactly a huge field and so not a useful ambition. We are not close enough to the financial centre. And if you make something we are too far away from the markets.

But all of our development is based on these assumptions. So what then will work?

An immigration/development strategy based on supporting the small artisan networking their way to dominance locally and then globally.

Sounds mad? Well here are the underpinning trends that will make this work – for it is working now on a small scale.

  • A New Market Based on Trust that can only be satisfied by the small in a network. More and more people do not trust the products and services of the Big. What is in my food? What is in my shampoo? What is in my drug? Why does my washing machine fail after 2 years? Why can I never get service? What is on my toy … The response to this is a movement towards what can be trusted. Meat raised in small herds where animals live the life they were designed to live by people we know and meet in the street. Soap made by people we know who use real ingredients in small batches. Tech service people who we know. Toys made in a person’s home. Clothes made by someone you know.
  • The Network Provides Scale and Ease of Access These artisans have always existed and have eked out a marginal living. But the new web based network is changing the game. Now we can buy direct and it is easy. Many pasture meat producers in a network = a lot of meat. Many small soap makers in a network = a lot of soap. Small and artisan no longer condemns you to the sidelines.
  • This model has access to the Network Effect and so offers better margins and financing than the traditional. As we have seen for Raymond Loo, Patrick Ledwell and Tim Chaisson, now the community of your customers will finance you. CSA is becoming how the new artisanal farmer gets her working capital. Community Equity, as with Justus Coffee, is how larger sums can be raised from your customers! Customers who now work for you. Customers who market for you and who sell for you.  The network effect also works at the scale of the node. Jen and Derek plant a wide range of plants and sell a basket, so if the tomatoes fail, as they did last year, they are OK. On a pasture farm, the cows help the pigs who help the chickens and vice versa.

This market for Trust is small in total but huge for PEI. It can only be accessed by the small. The large corporates will be shut out of it. It is growing as people wake up and see the risks that they take in buying mass market goods and services. These customers want their suppliers to succeed and will support them in all sorts of ways. It’s a common movement.

Talented people are also waking up to the fact that they cannot trust their future to a job in the old system and in the big cities. We are seeing a trickle now of talented people leaving the old life and coming to Atlantic Canada where they can make a living and where the key cost of a home is in reach.

Just as many Atlantic Canadians go west in search of a well paying job, life is very precarious in the big cities now. A one bedroom condo is about $350,000 in Toronto and more in Vancouver. The young are underemployed and locked out. Or if a couple both have jobs and a home, the loss of one job renders them homeless. The Toronto couple will not come here to get a well paying job, they want to come here and make a decent living. They want to make things themselves and not work for wages.

They want to make things and make a living doing something that is truly them. This is what the new networked artisanal economy offers both sides. This is why customers invest in their suppliers. All want meaning and to be part of getting independence from the corporate grip.

These are people who will set up deep roots here on PEI and like the Back to the Landers make a contribution. They are not here to get a passport but to have  a life and to make a living.

So how to support this?

Stop the vain focus on the big – they will never come and they will never grow here. They never have so why think they will now. But a focus on big misses the real opportunity to network the small into a big network.

Stop the vain focus on Jobs. A smart new company will not employ a lot of people full time. It may never offer a “Job” but it will offer work.  Jobs are not the thing – paid work is the thing. Only a fool will fix their overhead. Most organizations will be family based. If they want marketing, they will reach into the network and find a trusted supplier. If they want book keeping, they will do the same.

Stop the focus on Hi Tech. The real new artisans use a lot of high tech, but they use it to make things not as an end in themselves. The film makers at the Film Factory use it to make big films. The Great Canadian Soap Company use it to sell their products.

Instead help support the networks – support groups that get together – help them make it easy for people to buy local food and anything. Make it easy for people from away to buy artisanal good and services from us.

Instead help families who want to do this come here. Reach out to them.

In the Week of May 7, my pals from Start Up Canada will be here to help us get behind this and to help connect us to the Canadian and the Global Network. At the Queen St Commons on May 7 we will have a get together to talk about how all the artisanal sectors can help each other.

Join Us Please May 8 6pm Queen St Commons 224 Queen – $10 to cover food and drinks costs.

Our ambition to help PEI become as self sufficient and resilient as it was in 1900. Where 80% of what we need is supplied locally.

The Time for a Redesign of Capitalism is Here – Even the 1% Agree

From Davos via Bloomberg

International investors say capitalism is in crisis, with almost one in three backing radical changes to the system, according to a Bloomberg survey.

As the global financial and business elite gather in Davos for their annual forum, a majority in the Bloomberg Global Poll agree that income inequality hurts the economy and that governments need to do something to address it — ideas at the heart of “Occupy” protests worldwide. Those surveyed also voice reservations about the financial industry’s role in society, with seven in 10 seeing at least some truth in the argument that banks have too much power over governments.

“Capitalism is in crisis because there is a huge and growing disparity in income/wealth distribution in Western economies, and an equally divisive generational disparity,” poll participant Michael Derks, chief strategist for FXPro Financial Services broker in London, said in an e-mail.

“It requires government intervention on an enormous scale, because an economy cannot survive if it does not invest in the younger generation,” Derks said.

More than 70 percent of those polled believe the system is in trouble, with 32 percent saying it needs a “radical reworking of the rules and regulations.” The other 39 percent think the turbulence will ebb on its own, according to the quarterly poll conducted Jan. 23-24 of 1,209 investors, analysts and traders who are Bloomberg subscribers. Fewer than one in four say free enterprise is working as it should.

Seventy percent of those surveyed say Europe’s economic troubles will cause social instability in 2012, including riots or other unrest.

I am encouraged!

Need a Financial Business Guide? Ronda Bellefontaine is it!

I attended a Lunch and Learn today at the QSC where Ronda Bellefontaine was our speaker. Her topic was how a small business can maximize the potential of their year end. We all HATE this side of our business. I expected a technical talk – but as I have a new business I showed up.

I was blown away! In 45 minutes I leaned more about how to look at my business that at any previous time ever.  What Ronda does is to help you “see” things that we all miss because we are too close and don’t ask the best questions about.

If you want to see your business with fresh eyes and see new opportunities that you might have missed I encourage you to give her a call. Very pragmatic very personal – hence her business name “Like nobody’s business” for we are all different.


Here is a link that will tell you more.

How would a Credit Union become the “Bank” of the Future?

Bad News – Good News

How would a Credit Union change to meet the needs of the new networked customers?

There are two major elements in the new skills that you will have to acquire and one key attribute, Alignment.

  • The main work is Group Forming – Facilitating Community and Collaboration – Collaboration has to be your daily normal. You know that this is not who you are.
You will see that most of the hard work to get from A to Z will be based in your mindset and culture. To be successful we change this normal:
To this one:

This is not like learning a new credit skill or a sales technique. This is learning how to be a new and different person and a new and different organization. This is transformation.

To make this even harder, you also have to continue to run your old business in the old way as you grow this new and entirely different business.

No one can simply throw money at this challenge. But if you have the right cultural DNA, and you do, and you are smart and open, then you can do this.

Here is why this is so.

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What is the core of the new banking model? Trust!

The Theory in Action

What will the new banking system be like in practice? It will be all about how a bank uses Trust. The traditional balance sheet will diminish in relative importance and trust will become the new basis of leverage. This link will show you the reasons why this is so. 

Now we go beyond the theory and this post will offer case study of the emerging realities of the new post-industrial agricultural system – the Pasture Based system.

In it we will see all the rules of new Networked Banking system applied. In it we will see how Trust imbues everything.

Pasture Based Food is a response to the Trust and the Margin problems in our current food system.

I have picked the Pasture Based Food System because it is the Tipping Point of the shift from the prior industrial model to the new networked model. If we see this model clearly, then we see all that is to come. Remember there was an Agricultural Revolution before the Industrial Revolution. (More on this here)

Here we can see the Network characteristics embodied in the Pasture system. See how they change the essential idea of value towards Trust. See how this need for Trust changes relationships and then imagine how banking will have to change to serve this model.

  • It is made up of very small nodes. In the Pasture system, herds and operations have to be kept small so as the ensure the best fit with the animal to the environment. The farmer is selling Trust. Trust that the food is safe and that her practices help the environment. To do this, farms have to be small. They cannot scale vertically. These small limits are governed by how nature works and not by engineering.  500 hens drop 200 pounds of nitrogen an acre. The most that land can take up is 300 pounds. Any more is wasted or worse runs off. (Joel Salatin) The nodes are all designed around nature’s limits. The traditional farmer is locked into a war with Nature and so locked into the costs. Traditional farming cannot compete on its own terms with this as Scale is the opposite in the two systems.
  • Small Nodes are Scaled by Networks. 500 hens is a small supply but 1,000 flocks of 500 hens is a large supply. This is how “small” can be big and powerful. Visa International does a multiple of the transactions of any single bank. Visa is a Trust Mediator and Group Former. Thousands of banks are connected in a network of trust. This is how the small becomes huge and powerful. What bank wants to be ejected from Visa?
  • Most of the resources in Networks are attracted in for free. In conventional farming the war against nature drives most of the costs such as diesel, machinery, chemical inputs. All have to be purchased. It’s an arms race that the conventional farmer has to lose in the end. But nature and the animals do most of the work in the pasture system. Nature becomes an ally rather than an adversary.  So the need for capital is diminished and so is the need to draw down the natural capital and so lose trust. So in Networks, margins improve over time and effort is reduced. It is the opposite in conventional farming.
  • Over time Networks become increasingly diverse and dense which increases resilience. Pasture systems use several breeds of animals in rotation on the pasture. Each adds its own value. Even labour!  All the time the underlying core assets, the soil and the attendant natural systems increase in real value. The  Traditional Farmer is locked into monoculture and hence the progressive devaluation of the soil and natural systems. In the end the traditional farm has to fail.
  • Networks are governed by a purpose and by a few protocols. Pasture Systems have a declared purpose and a clear set of protocols or standards. Health is at the heart of this purpose. The epidemic of chronic disease is seen by many to be rooted in our industrial food system. There is a powerful convergence between the new farmers and the new market for Real Food. Such a high purpose drives trust and so brings in a broad movement of members that include the end customers and processors. The Traditional Farmer is locked into making a profit at the expense of all else. He is “owned” by the larger players in the system who all have their sole financial success as the goal. Over time the traditional system has to work against the interests of all except a few. In so doing they have to lose the trust and support of society.
  • Networks are based on real relationships and not transactions  – Most Pasture Producers sell direct to the public. Your real identity is vital. Even Whole Foods identifies its Pasture Farmers by name.  Quality and Trust are personal.  (This link shows you the math behind the limits to group size and trust) A personal system is trustworthy by design. Being personal means that the node cannot scale beyond the personal.
  • In the traditional system the vast scale makes all relationships impersonal. So quality is mediated by regulators. These are often gamed and co-opted. Over time quality declines and trust is lost.
  • As Networks Scale the value builds for all the members and not just for a few. Every class of member gets value. The producer, processor, distributor and the end customer. All add value to each other. This applies to services and goods than come in for free. This process is enhanced when formal trust mediation is established. Interac is a good example of this. The very opposite to the Traditional System where all the value accrues to a few at the top and trust is progressively lost over time.

So let’s now look more deeply at the new needs of the Network and see what a Credit Union would have to understand to meet these needs.

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The coming revolution in banking

Retail Banking is broken

Why and what can we do?

This graphic (HT Harold Jarche) tells us most of what we need to know to answer these questions. In the last 100 years we have lived through 2 paradigms for how society and an economy works. We are living in the transition to the third paradigm right now. Understanding these transitions will enable us to navigate to the next paradigm.

Each paradigm has unspoken but real rules. This post will expose the rules.

A new context

Transactional retail banking is very new. It is rooted in the regulatory changes of the 1980’s, the apogee of the industrial  way of life. A time when most people had a pay cheque and a job.  A time when investment banking and retail have been combined into a business based on the balance sheet.

But now fewer and fewer of us have a pay cheque or a job. A banking system based on simple job based algorithms will not work in a free agent society. (More on why here) Retail banking, as a vast vertically integrated, machine process and balance sheet based organization will be less and less able to serve the needs of the economy that is emerging.

The new economy will be made up of many ultra small businesses organized in powerful networks.  ( See this link for more on this point) The “banks” that will thrive in this new context will mirror their customer base. They will operate using the classic rules of eternal banking but with a twist.

They will have to learn how to apply these rules in the new network context. (See more on this idea – here)This will enable them to keep their costs low, their ROI high and will enable them to align to those they serve.

So let’s now look at the old eternal rules for banking and sense how the old may apply to the new. Then we will close by adding the full network context. We will see why Credit Unions have such an advantage.

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