Episode 17: The Insumer Model™: When Investors Become Customers

Welcome to the New Age of Ownership

Welcome back to the enlightening world of ‘Old Men, New Money®.’ I’m Douglas Borthwick, and today we’re diving into something that has truly become my life’s work: The Insumer Model™. As we launch into module five, allow me to awaken your curiosity with a scenario that might just change your perspective on investment and consumer rights.

Imagine this – you own a thousand shares of Starbucks stock, having held onto them for five years. You’re financially committed to Starbucks’ success. Yet, when you stroll into any Starbucks in America, you’re treated exactly like someone who’s never owned a single share. The same prices, the same treatment, and completely invisible ownership. Meanwhile, a gold cardholder who’s never invested a penny enjoys discounts and free refills. It’s an oversight that’s not just irrational but economically destructive. Enter blockchain technology – the tool that finally makes it possible to rectify this disconnect.

The Insumer Model™: Bridging Investors and Consumers

Here’s your 30-second primer: The Insumer Model™ merges investor and consumer identities through tokenized equity, instantly verifiable at the point of sale. Now, your ownership is portable, residing in your digital wallets, offering immediate benefits every time you shop. This aligns customer and investor interests, transforming transactional relationships into partnerships. Companies adopting this model will forge competitive advantages beyond the reach of traditional business models.

When this concept solidified for me in 2018, I was knee-deep in the fulfillment of INX’s SEC registration, having invested two years and millions proving compliant security tokenization. Yet, the real-world impact of portable and programmable ownership kept lingering. At a Starbucks in Manhattan, inspiration struck as I watched the juxtaposition of app-based rewards and stock portfolio checks. Why were these worlds isolated, my curiosity demanded? Thus, The Insumer Model™ was conceived, envisioning equity as tangible and accessible as a loyalty card.

The Power of Integration: Three Dimensions of Value

Explaining The Insumer Model™ to business owners involves illustrating three dimensions of value when customers morph into owners:

1. Customer Dimension: Traditional consumption remains unchanged – you purchase products or services you need or desire.

2. Investor Dimension: You own equity, supporting the company’s growth and anticipating ownership appreciation.

3. Recognition or Alignment Dimension: Your dual identity as both customer and owner yields benefits cross-directionally. Ownership translates to immediate customer benefits and customer behavior enhances your investments’ value—synergies pure customers or investors simply miss.

Bringing the Insumer Model to Life

This isn’t mere theory; it’s an ongoing reality I’ve labored to mold. Currently, businesses face a vast disconnect that forfeits billions, diminishing value for investors. Picture Apple, a brand with millions owning its stock while simultaneously frequenting its retail stores. Yet, the company remains oblivious to which customers are its investors. Blockchain technology dispels these barriers, as tokenized equity integrated into digital wallets enables instant ownership verification and rewards.

The world of NFTs serves as a verification solution, crucial in maintaining privacy while proving ownership at points of sale. An NFT in your wallet is akin to a hotel’s key card, authenticating your equity ownership without exposing your net worth or sensitive data. This verification layer is indispensable for the Insumer Model’s scalability, safeguarding private and secure transactions.

Embracing a Transparent Future

I’ve tested this theoretical blueprint with real-world endeavors, consulting coffee shop owners and retail brands about tokenizing ~5-20% of their equity, creating ownership tiers with specified benefits. Real-world outcomes reiterate the model’s promise: referred customers boast higher retention, loyalty program members spend more, and transparency captures committed stakeholders.

The Psychological Shift to Endowment Effect

Behavioral economics defines ‘Endowment Effect’ as our tendency to attribute greater value to owned possessions. The Insumer Model™ multiplies this effect, transforming abstract brokerage accounts into interactions at every transaction. Ownership translates into tangible, immediate benefits, fostering loyalty, advocacy, refined feedback, and extended investment horizons.

Dispelling Myths: Overcoming Challenges

Complex regulations, technical barriers, customer education, and liquidity standards require diligence, but these challenges are manageable. Navigating securities law, deploying legal and tech focus, and adopting customer education strategies set the stage for informed, engaged insumers.

Conclusion: The Insumer Future is Now

The age of artificial division between consumers and investors has concluded. Forward-thinking companies adopting the Insumer Model establish new norms and unlock unparalleled engagement benefits while evolving regulatory frameworks propel acceptance. Our next steps: hybrid tokens, brand loyalty, and empowered ambassadors.

As we prepare for the future of business relationships, let’s be true custodians of transformation. Share these insights with stakeholders ready to grasp the dawn of authentic, aligned, and impactful commerce. From student to steward, lay your claim in the future this conversation builds. Join us in the forthcoming episodes to dive deeper and pioneer this innovation’s potential.

About the Author

Douglas Borthwick is not only one of the voices behind “Old Men, New Money®” but also a visionary championing the integration of consumer and investor identities through groundbreaking concepts like The Insumer Model™. With practical experience intertwining stock ownership and retail benefits, Douglas invites you to join his journey of shaping tomorrow’s business landscape today. His books, The Insumer Model and Your Equity in Your Pocket are available on Amazon today.