Do you ever have an idea that drives you crazy? Ever since I read "Wisdom of Crowds" a while back I keep wondering if it's true. I think about it all the time. A few months ago, I decided there was no reason not to test it. So I've built a new site called The Business Experiment where I propose we do just that.
Yes, you heard correctly. Business bloggers and readers will test their cumulative business knowledge by collectively starting and running a business – out in the open.Can we do it? I don't know. It seems crazy, and counterintuitive to everything that we think about business, but that is why I want to do it.
How will it work?
We will solicit business ideas for products and/or services from the registered users. We will vote on those ideas. The top two will be put to a second vote where majority rules. That's the business we pursue.
Who will write the business plan? We will vote on that. Who will we hire? Put it to a vote. What is our marketing strategy? Vote again. That is how the business will be run.
Yes, we will hire real employees. They will keep blogs. We will podcast their meetings. At least, that is my intent for now. Those of you who think business is cool can have a sort of reality tv experience by watching what goes on as the business gets started and gets off the ground.
Only registered users can vote, but once something is decided, it will be public. What about potential competitors? Well in addition to the "wisdom of crowds," we are also testing another concept – can the model of open-source software be applied to business? I think it can. If open source programs can compete with proprietary ones, open source businesses should be able to do the same.
Who will own the business?
My current breakdown is 60% will go to the "crowd." 10% will go to whoever submits the idea we decide to pursue. 10% will go to the site so that if this is successful we can fund future experiments. The remaining 20% will go to investors or sponsors or employees, or maybe back to the crowd, we'll see.
Every time you vote you get a unit. At some time, problemably when we make our first real sale, or something like that, we will say (60% equity) divided by (total # of units) times (# of units you own) gives your percentage ownership. That way you have an incentive to participate. It costs nothing, and you could actually make money if you do a good job. In addition, there may be opportunites to trade your time for more units so that you can save the company money. We'll vote on that later. Because I want to keep it worth your while to participate, I am limiting the registration to 2500 people. We may never get close to that, but if we do, only the first 2500 will own part of the business. After that you can register and watch, but can't vote. If a ton of people register, then maybe we can run more experiments. The second 2500 can take an idea that the first group didn't use and develop it. Maybe the third 2500 will try to buy an existing business and turn it around. There are tons of possibilites. Of course, keep in mind that failure is a huge possibility here too.
It's also possible that the SEC will not be happy with this. I think it's ok since no one is paying for their equity, but I'm not a lawyer. That's why I'm giving "units" initially instead of direct ownership, in hopes that we can find ways around any potential SEC issues.
A word on ideas
Ideas are a dime a dozen, and almost everyone has some good ideas that they will never pursue, so I don't have a lot of sympathy for someone saying that they don't want to contribute an idea because someone may steal it. However, I have taken a few steps to help you out.
When you register, you can list any ideas that you have in a box. These aren't displayed anywhere, but will be proof, if needed at a later date, that you too had the idea. I'm not sure that would ever matter, but it might make you feel better. Also, in the terms and conditions, I've asked that you please don't take an idea from this site and pursue it on your own for one year after it is posted here, mainly because we may use it for another experiment.
Lastly, if no one throws out any ideas, well, I have some I can supply. If you register, you can post an idea in the forum, or email it to me rob_business-at-thebusinessexperiment-dot-com. We'll start taking them in a few days.
I know some of you bloggers and blog readers prefer to remain anonymous. I've set up the profiles so that only your username is displayed and your occupation (and website, which is optional). But I do ask for lots of other information because 1)if you end up with ownership, we will need it and 2)I'd like to analyze the votes by occupation and industry. Of course, this whole thing may be illegal. Or if it isn't someone may take us to court to make it illegal. That's what usually happens when you break paradigms. Regardless, I will not sell your information to spammers. You don't want that and I don't believe in it.
I'm looking for sponsors for the site. Initially I'd like 10-20K to give the crowd as seed money. You can have a banner ad, and we can talk about a bit of equity in whatever business the crowd pursues. After that, I'd like to raise enough to hire a full-time programmer or two to build out the site if it's popular. I think Mark Cuban or Mark Burnett might like this idea, so if you know either them, send them my way.
I could use a few volunteers. I'd like someone to head up each major area, finance, HR, marketing, etc. and keep things moving along once this gets going. I also need some help from someone good with PHP and MySQL to make a few modifications and make sure it is secure. (It's Mambo based)
The site may crash if it gets a lot of hits. I'm an intermediate programmer and can't optimize it to handle lots of traffic. But if need be I'll move it to a dedicated server. This is a long term thing so a short outage doesn't concern me too much. We can fix it.
I realize this may crash and burn. It may get boring. Or, it may be a new way to do business. It may spawn lots of copies and lots of creativity. That's the goal. Either way, I no longer have to deal with that nagging "what if" feeling. Now I'll know.
I think this is the way the world is moving. Things like this have been tried before with sites that let people pool resources or let consumers make product decisions, but I want to take all that to the next level. When I think about the combined expertise of the business blogosphere, I think we can potentially produce something really cool. So go sign up.
I'd like to encourage comments on this post about how the final rules for this might be structured. Many people I've discussed this with are worried about the site developing factions and some people becoming too vocal or powerful. I'd like to limit that.
I've already had a couple of good business ideas sent to me. I think this could be fun. Send me an email if you want to participate as more than just a registered user.