A few months ago, Adriel Hampton convinced me through his incessant tweeting to give Empire Avenue a try. For those of you, who are not familiar, Empire Avenue—or EAv, as it often goes by—is a stock market for social media, where you can invest in people based on how they use social media.
Since I started using Empire Avenue, I have done a lot of thinking on how it works as a social media network. This will probably make sense if you are familiar with how EAv works. If you aren’t interested, that’s fine. So anyhow, here’s my take.
This too shall come to pass.
Nothing lasts forever. Once, MySpace was king. Then came Facebook. And Twitter. And now Google+. MySpace is fading away and nearly gone. Hopefully Empire Ave will have a long and successful presence on the web. But someday, maybe not today, maybe not tomorrow, this too shall come to pass.
When it does, will you remember your share price? Will you remember your total wealth? Your rankings on an index? Your divs per share or your daily earnings? Those are all fun things: the game elements of Empire Avenue set it apart from other social networking options. But I would posit, that in the long run, none of those things will matter much to us.
What will matter is the connections we make with others, and the opportunities those connections create. What is unique about Empire Avenue is how it almost forces us to get us out of our comfort zones to talk with those not within our usual circles of interest, our normal locations. If we take advantage of that, we enrich our lives.
I’ve done quite a lot of thinking about Empire Avenue, and how the game aspects of it work.
Mathematically, the single best way to earn money on Empire Avenue is to buy shares in somebody new and sell their shares once they plateau.Very quickly, you can double your investment, and without too much trouble, if you pick wisely, you can make much more than that. That is why so much of the social activity on Empire Avenue revolves around identifying new accounts that seem to have good potential.
For all the talk of dividends and ROI, daily earnings pale in comparison to stock flipping. Most people look for a ROI of 1% as an indicator of whether or not to invest in somebody. Keep in mind exactly what that means: with a 1% ROI, it takes 100 days for you to just earn back the money you invested. You do not make any profit until after that. If the person you invest in turns around and invests back in you, and depending on how many outstanding shares you have, your investment will start earning a profit faster.
But this magical 1% ROI that people look for? It's a completely arbitrary number. We could all decide that a .5% ROI is the gold standard, and that taking 200 days to earn back your investment is just fine and dandy. The higher the ROI, the better the investment, of course, but setting 1% as the minimum bar is just an arbitrary line in the sand.
And compared to flipping stocks, worrying about divs per share will just never earn the same amount of money if you are concerned about building wealth.
Flipping stocks takes a lot more time: you have to study to find who to invest in, and you have to monitor stocks to decide when to sell.
And perhaps for that reason, that is not how I decide to make investments.
It’s about connections.
By creating a game out of social networking, Empire Avenue highlights our share price, which reflects a combination of our social networking activity and the number of people who have invested in us: not the number of people who like our content necessarily, but often the number of people who indirectly like the way we interact through social media, based on our activity level and the “income” that activity generates. It also highlights our wealth, which again indicates a combination of how many people have invested in us due to how we use social media as well as how savvy we are in investing in others based on how they use social media.
But what does that share price and wealth really mean?
Both end up translating into earning eaves. The higher the share price you have, the more eaves you earn when somebody invests in you (although with the more people who have invested in you, you receive lower percentage of the investment). The higher your total wealth, the more eaves you earn per day, although that is depending on the average divs per share you receive, an indication of how savvy you have been in investing in those who are active on social media.
I would argue that the real purpose of those eaves we earn each day are to make connections. The more eaves we have, the more connections we can make.
I’ve often heard said that buy is the new like. I really wish that were true.
On Twitter, I follow people because I hope they will be interesting and relevant to the things I care about, and because I feel they will be interesting to interact with. On Facebook, I friend people because I know them in real life usually, and I want to further that connection through Facebook.
But on Empire Ave? All the incentives line up to encourage us to invest in the way people interact on social media, both in terms of quantity and quality. Whether or not we like their content does not really have much of an impact on the game aspects of Empire Avenue.
Personally what I probably enjoy best about Empire Ave, beyond the game aspects, is the interaction in the communities. I hope that the way EAv is working on improving communities will be a huge boon. I thought it was strange that you had to expend eaves to join numerous communities, so I am glad to see that going away. I have primarily been interacting in the Design, Gadgets and Technology, and Minnesota communities, along with the #StarWarsFans community, which I started due to my love of Star Wars and my desire to chat about it with others.
The group chats have been fan, and I'm hoping that moving the chats to the communities will create more opportunities to have more meaningful conversations rather than just discussing who to invest in: that's well and good, but conversations about interests seem to add a lot more value to my life.
What I particularly like about communities is the way that it allows for deeper connections than what is possible through the brief interactions created during the buying and selling of shares.
Surprisingly enough, shareholder mail has also become a place where better conversations can take place.
So ultimately I choose to invest in people where there is a potential for a connection. For a long while that meant buying shares in those who participated in the #XBar chats. Investing in others in communities of interest. And often, investing in those who have invested in me to further the potential of a connection there.
Because I am interested in connections, flipping stocks does not appeal to me as an investment strategy, even though it is far more profitable. To me it feels like creating a connection with somebody, but then terminating that connection once it is profitable to do so.
That’s also why I will often go through my investment portfolio, and will keep an eye out for those who I have invested in that have not invested back in me, as that’s sort of a sign that there is not a mutual interest in a connection, or that the other person is more interested in a profit than creating a connection. That’s not always true, and I’ll keep shares in somebody I have connected with through the communities or chats, even if they have not invested back.
And since I need to earn eaves somehow, I will also tend to look at ROI and divs/shares in determining whether or not to sell my shares in somebody who has not invested back. I don't think it’s the end-all, be-all, but yes, sometimes you need to invest in folks that will generate eaves, even if they do not make a connection back.
There’s more I need to learn as well. I need to do more to find ways to interact with the people I invest in, and the people who invest me, beyond simply the thank yous after an investment; I need to do more in particular to follow people on Twitter whose interests match up with mine: rightly or wrongly, Twitter is often a better platform for interaction around interests than Empire Ave currently is.
This has been a long post, so if you’ve gotten through this, congratulations. I’ve been thinking through these things for quite a while, and I decided to finally write down my thoughts on Empire Ave interactions.
I’d be really interested to hear your thoughts on how you like to interact with people through Empire Avenue and where you find value in the time you spend on EAv. If you disagree with my take on EAv interactions, I’d love to hear your thoughts. I’m hoping this can be the start of a good conversation.