The Insumer Model™: When Investors Become Customers

Welcome back to Old Men New Money. I'm Douglas Borthwick and today we're starting module five with something that's become my life's work over the past few years, the enshumer model. Now, before your eyes glaze over thinking this is some academic theory, let me hit you with a scenario that'll wake you up. You own a thousand shares of Starbucks stock. You've held them for five years. You're financially committed to Starbucks success. You walk into any Starbucks in America and you know what you get? Treat it exactly like someone who's never owned a single share. Same prices, same treatment. Your ownership is completely invisible.

Meanwhile, someone with a gold card who's never invested a penny gets discounts and free refills. This isn't just stupid, it's economically destructive and blockchain technology finally makes it possible to fix it. Here's your 30 second version. The enshumer model merges investor and consumer identities through tokenized equity that's instantly verifiable at the point of sale. Your ownership becomes portable, living in your digital wallets, providing immediate benefits every time you shop. This creates customer investor alignment that transforms business relationships from transactions to partnerships.

Companies that embrace this will build competitive advantages that traditional businesses cannot replicate. Let me tell you when this concept clicked for me. It was 2018 and I was working on INX's SEC registration. We'd spent two years and millions of dollars proving you could tokenize securities compliantly. But here's what kept nagging at me. Why are we tokenizing securities? Because blockchain makes ownership portable and programmable. Great. But what does that actually mean for real people in real life? And I was at a coffee shop in Manhattan, waiting in line when it hit me. The guy in front of me was using his Starbucks app for rewards.

The woman behind me was checking her E-Trade account, looking at her stock portfolio, and I thought these two things exist in completely separate universes. Her Starbucks stock and his Starbucks rewards never connect. Why not? And that was the genesis. What if your equity ownership could be as portable and useful as your loyalty card? What if those two separate universes could finally talk to each other? I started writing. What became the Insumer model and your equity in your pocket came from that moment. This isn't just theory. This is the future that I'm actively building.

Right now we live with a bizarre disconnect that costs businesses billions and wastes enormous value for investors. Think about Apple. Millions of people own Apple stock. Millions of people shop at Apple stores. These are often the same people, but Apple has no idea which customers are also investors. Their customer management system and their investor relations department exist on different planets. When you walk into an Apple store as a shareholder, you're invisible. You get no recognition, no benefits. Your years of financial commitment mean nothing at the point of sale. And this separation isn't a design feature.

It's a limitation of old technology. Before blockchain, there was no secure way to verify equity ownership in real time at the checkout counter. Stock ownership lived in brokerage accounts, completely disconnected from retail transactions. But blockchain changes everything. Tokenized equity can live in your digital wallet alongside your payment methods. When you tap your phone, ownership can be instantly verified and rewarded. The word ensumer combines investor and consumer. It represents someone who's simultaneously a customer and an equity holder in the same company. And this is a new behavior. People have been doing this forever.

You love Starbucks, so you buy the stock and you buy the coffee. You believe in Tesla, so you buy their vehicles and their shares. What's new is making this dual relationship visible, valuable, and integrated through technology. The ensumer model doesn't create something artificial. Rather, it recognizes and rewards something that actually exists, but has been invisible because we lack the technology to connect the dots. When I explain the ensumer model to business owners, I talk about three dimensions of value that emerge when customers become owners. First, there's the customer dimension.

You're buying products or services because you need them or want them. This is traditional consumption. Nothing changes here. Second, there's the investor dimension. You own equity because you believe in the company's growth. You want your ownership stake to appreciate. This is traditional investing. But here's where it gets interesting. The third dimension emerges from the connection between the first two, called the recognition dimension, or the alignment dimension. Because you're both a customer and an owner, you get benefits in both directions. Your ownership provides immediate customer benefits.

Your customer behavior increases the value of your investments. These two identities reinforce each other in ways that pure customers or pure investors never experience. The third dimension is where the magic happens. This is what creates the competitive moat. Traditional investment relations is weird if you think about it. Public companies have millions of shareholders, but they don't really know who most of them are. Your shares are held in street name by your broker. You're technically a beneficial owner, but the company also knows that Fidelity or Schwab holds X million shares. They don't know you personally.

For private companies, it's a little better. They know their cap table, but they still don't typically connect shareholder data with customer data. This separation creates massive inefficiencies, and let me give you some real examples. When Starbucks develops a new product, they do market research, focus groups, surveys. They spend millions trying to understand what customers want. Meanwhile, their shareholders, people who've invested their own money because they believe in Starbucks, never get asked for input. That's insane. When Apple makes strategic decisions, they consider institutional investor perspectives. BlackRock's opinion matters.

But individual shareholders who are also customers, people who understand both the user experience and the business model, have no voice beyond proxy voting. The insurer model fixes this. When companies know which customers are also shareholders, they can get higher quality feedback from people with skin in the game. Your customer investors care about both user experience and business success. They give you honest feedback because they benefit when you improve, identify your most loyal customers and reward them appropriately.

Instead of giving discounts to everyone who signs up for a free account, you recognize people who've literally invested their money in your success. Reduce marketing costs because your customer investors become natural advocates. When someone recommends your business and they own equity in it, that recommendation carries weight. People know they have financial motivation, which actually increases credibility. Raise capital from people who already use and love your products. This is patient capital from committed stakeholders, not venture capital demanding 10x returns in five years.

Now, here's where NFTs come in and I'm not talking about digital art or PFP projects. I'm talking about NFTs as a verification technology. The problem we need to solve is how do you prove ownership at the point of sale without revealing sensitive information about your holdings? And this is where NFTs shine. A non-fungible token in your wallets can prove you own a certain level of equity without revealing exactly how much you own or what you paid for it. Think of it like this. You walk into Blue Mountain Coffee, you tap your phone to pay and NFT in your wallet communicates with the point of sale system.

The system verifies this person owns at least $1,000 worth of equity tokens because that's verified. Apply the silver tier discount transaction completes in three seconds. You just got 15% off your coffee. The business knows you're an owner and treats you accordingly, but the barista doesn't know your net worth. The person behind you doesn't see your account balance privacy preserved verification instance. The NFT isn't the equity itself. The NFT is the membership card that proves you hold the equity. You can think of it like a key card for a hotel.

The key card proves you're registered, but it doesn't contain your credit card number or your personal information. This verification layer is critical. Without it, the insurer model doesn't work at scale. You need instant, private, secure verification. And let me give you examples from my actual experience because I'm not just theorizing, I'm building this. In my book, Your Equity in Your Pocket, I wrote about Blue Mountain Coffee as a fictional example. But the principles come from real discussions I've had with coffee shop owners, restaurant chains and retail brands. And here's how it actually works in practice.

A local business tokenizes five to 20% of their equity. They create three to four ownership tiers with clear benefits at each level. Bronze tier might be $1,000 to $5,000 invested, gives you 10% off all purchases. Silver tier is $5,000 to $10,000, gives you 15% off plus priority access to new products. Gold tier is 10,000 plus, giving you 20% off exclusive events and input on major decisions. They integrate a simple point of sale system that recognizes ownership NFTs, customer taps phone, system verifies tier, discount applies automatically.

They build community around ownership, monthly owner meetups, quarterly business reviews, annual strategy sessions where owners give input. The results from early implementation show compelling patterns. According to research firm Deloitte, customers acquired through referrals have a 37% higher retention rate than those acquired through other channels. Harvard Business Review found that referred customers have a 16% higher lifetime value. I'm long to program members typically spend 12 to 18% more each year compared to non-members according to multiple industry studies. Let me give you a real example from a company I advise.

Pivotal Trend Service in Japan created the Pivotal Mining Notes currently available on Republic, a Bitcoin mining token that's an consumer model in practice. Insumers buy PMN tokens that give them exposure to Bitcoin mining returns. But here's the innovative part. Token holders get real time access to mining performance data, live dashboards showing hash rate and efficiency, transparent reporting of all costs and revenues, monthly distributions of mining proceeds. This transparency creates consumer dynamics. Token holders understand the business because they see the operations in real time.

They provide feedback on mining strategy because they have financial stakes and outcomes. They recruit other investors because they benefit from capital that expands operations. PMN crossed the $2 million in presales specifically because this transparency engagement model works. Investors become insurers of the mining service. When customers become owners, their psychology changes fundamentally. Behavioral economists call this the endowment effect. You value things more highly simply because you own them. But the Insumer model amplifies this exponentially.

Instead of owning abstract shares that sit in a brokerage account, you interact with your ownership every time you shop. Your investment becomes tangible and immediate. And this creates several psychological shifts. Your loyalty becomes financial, not just emotional. Switching to a competitor means forfeiting ownership benefits and equity appreciation. That's a much higher barrier than switching for a slightly lower price. Your advocacy becomes authentic. When you recommend a business you own, people know you have skin in the game. And research shows this actually makes your recommendation more credible, not less.

According to multiple studies, 92% of consumers trust recommendations from friends and family more than any other form of advertising. Your feedback quality improves. You care about both user experience and business success. You provide honest, constructive feedback because improvements benefit you directly. Your time horizon extends. You think long term because you want your equity to appreciate. You're patient with temporary problems because you understand business challenges. These psychological changes create behavior patterns. The traditional businesses can't replicate with loyalty programs or marketing campaigns.

Traditional loyalty programs try to create switching costs through artificial points, earn points, redeem points, lose points if you switch. But these points are essentially monopoly money. The company can devalue them, change the rules or eliminate them entirely. You have no recourse. Traditional investing keeps you completely disconnected from the business. You might own shares, but you never see operations, rarely hear from management and have almost no influence unless you own millions of shares. They can't be arbitrarily changed because you have legal shareholder rights.

You get transparency and access because companies benefit from engaged owners. You have influence through governance because management wants input from stakeholders who understand both the customer experience and the business model. When a company successfully implements the insurer model, they create competitive advantages that are almost impossible for traditional competitors to overcome. Customer switching costs become real. Your ownership stake and accumulated benefits make switching economically irrational unless a competitor offers dramatically superior value. Customer acquisition costs drop dramatically.

According to research, referral marketing can reduce customer acquisition costs by at least $24 per customer compared to traditional advertising. Word of mouth from owners generates high quality leads at essentially zero cost. Customer lifetime value increases substantially. Research shows that loyal customers are five times more likely to make repeat purchases and seven times more likely to try new offerings. Owners spend more, shop more frequently, and stay loyal longer. Product development improves because owner feedback is higher quality and comes from people who care about business success.

Capital access becomes integrated with customer acquisition. Every token sale is both investment and customer relationship, and these advantages compound over time. The longer you operate with the insurer model, the stronger your competitive position becomes. Now, I'm not going to pretend this is all sunshine. There are real risks and challenges. Security's regulation is complex. You must comply with all applicable laws. This costs money and requires expertise. Don't try to DIY this. Hire qualified securities lawyers. Technology complexity can be a barrier.

Not every business has a technical sophistication to implement blockchain based verification. Partner with platforms that have solved these problems. Customer education is essential. Most people don't understand tokenized securities. You must invest in clear communication and patient onboarding. Liquidity expectations need management. Owners expect to be able to sell eventually. You need plans for secondary market access, whether through an ATS or buyback provisions. Community management becomes critical. You're not just managing customers. You're managing stakeholders with government rights and expectations.

And this requires different skills. But these are solvable problems. They're not reasons to avoid the insurer model. They're reasons to implement it thoughtfully with professional help. And here's what I think happens over the next five years. Consumer facing brands start offering tokenized equity to customers. Coffee shops, restaurants, retail stores, local businesses first, then regional chains. Existing public companies begin offering tokenized versions of their stock that provide customer benefits. Disney, Netflix, Amazon Prime could all integrate ownership recognition. Loyalty programs evolve into ownership programs.

Instead of earning points, you earn equity. Instead of arbitrary benefits, you get ownership based recognition. A new category of business emerges. Community owned brands built around an insurer model from inception. And these companies will dominate their categories because their competitive advantages are structural, not operational. Regulatory frameworks adapt to support customer investor integration. The SEC and state regulators will create clearer pathways because the benefits are too obvious to ignore. What should you do right now? Well, if you're a business owner, read my books.

The insurer model and your equity in your pocket, both available on Amazon, provides comprehensive frameworks for implementation. Don't try to figure this out alone. Identify which customers would become owners. Survey your most loyal customers. Would they invest if given the opportunity how much? What benefits would motivate them? Research tokenization platforms. Securitize Republic Polymath tokenee. Talk to their teams, understand capabilities and costs. Engage Securities Council. You need lawyers who understand both securities law and digital assets. Start these conversations now. Design your initial offering.

Three to four tiers, clear benefits at each level. Simple enough to explain in 30 seconds. If you're an investor or consumer, start looking for insurer opportunities. Local businesses, startups, brands you already love that are offering tokenized equity. Educate yourself on digital wallets. You'll need one to hold ownership tokens. Get comfortable with the technology before you need it. Think about brands you're loyal to. Would you invest if you could? How much? What would make the value proposition compelling? And join Insumer communities. Follow companies implementing this model. Learn from early adopters, ask questions and share insights.

The Insumer model isn't coming. It's here. The technology works. The regulations are evolving and early implementations are succeeding. The artificial separation between customers and investors has lasted over a century. It made sense when we didn't have technology to connect them. Now it's just waste. Your equity doesn't have to sit invisibly in a brokerage account. It can live in your pocket, working for you every day. Your favorite businesses don't have to treat you like a stranger. They can recognize your ownership and reward your loyalty appropriately.

This transformation will happen business by business, customer by customer, token by token. The companies that embrace it first will establish competitive positions that traditional businesses cannot overcome. The individuals who participate early will benefit from both equity appreciation and ongoing customer benefits. In the next three episodes, we're diving deeper. Episode 18 covers hybrid security tokens and transition strategies. Episode 19 explores brand loyalty meets shareholder value. Episode 20 discusses community marketing officers and how shareholders become brand ambassadors. This is the future of business relationships.

Authentic, aligned, powerful. I'm Douglas Borthwick. This is Old Men, New Money. If this concept resonates with you, share it with a business owner or an investor who needs to hear it. This is how we build our future. One conversation at a time.