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Thoughts/Crtiques on a Business Idea

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Hi there,

I was suggested to post this question at this forum. It's my understanding that there are some very bright people here, and I would appreciate feedback. This is all surrounding a business-model that I plan to implement shortly. I would greatly appreciate, questions, feedback, challenges, etc.

The idea that I've been thinking about, and on the verge of beginning

to implement, is a crowd sourced business. When I say this, I am

referring to a business model that is completely crowd sourced. All

decisions, management, and production are all done by the crowd. This

business is intended to be a "real" business. This

business is to operate partially as a co-operative. It is to

implement an open/transparent business model with a voting democracy

for it's decision making processes. It's whole organization is to be

determined by the crowd - even the naming of it. Primarily, the

business would be developing it's own framework - framework being the

voting system. After this framework has been completed, the business

would then implement new projects/startups which utilize this same

framework. All members of the business are able to submit project

ideas. The aim of the projects is to earn a profit, but the profit is

distributed across the contributing members. It's members would

consist of individuals with strengths in Internet Marketing/Social

Media, Business, Creative, and IT/development.

In my business model, the percentage of income would be dependent on the

number of hours contributed. For example, in September, you as a

programmer contributed 10 hours of work. Me as a graphic designer

contributed 5 hours of work. John as a social media expert

contributed 5 hours of work. Total, then, for September would be 20

hours and would be broken down as: You - 50%, Me - 25%, John - 25%.

Perhaps this one particular startup that we are all cooperatively

working on, has earned $5K profit in September. All profit are paid

to the contributing members based on their hours contributed. In this

example, you earned $2,500, and John and I both earned $1,250. Of

course, if in October we did not earn a profit at all, then no one

gets paid. There are a lot of other details I could explain

surrounding this, but I'm unsure if you'll have the time or interest

to read. In the end though, it's not even my decision how this works

out - it's up to the crowd.

Consider

this particular start-up that I am am proposing. What would I need to

do in order to help it come to fruition? Perhaps, it may look

something like this;

- Create a Business Plan

- Develop a website

- Develop a marketing plan

- The website needs registration capabilities

- The website needs voting capabilities

We'll call that list our Product Backlog. It can change, items can be

removed, added, etc. They are vague, and short. These are

voted up and down in order of priority. Your votes (by the way) are

relevant to the hours you have contributed to the project. Each week

(or every other week), the top voted "Product Backlog item" is

selected. Let's say "Develop a website" is the top voted item. We

then take this item, and break it in to numerous modules:

Develop a website

--- User Interface

--- Logo

--- Wiki

--- Forum

--- Registration Capabilities

--- Content

--- etc..

All of the modules are then "jobs" available to anyone. I'm not 100%

sure as of yet, how it would be determined 'who' to give the job to.

For example "Add a Wiki" could be a job, and perhaps there are 10

'applicants' volunteering to complete this job. They all submit how

many hours they wish to complete this. Only one person will end up

being responsible for this task. He says he will require 2 hours to

do this. At the end of this stage, our modules for the "Develop a

website" task looks like this:

Develop a website (23 hours)

--- User Interface (5 hours)

--- Logo (3 hours)

--- Wiki (2 hours)

--- Forum (3 hours)

--- Registration Capabilities (5 hours)

--- Content (5 hours)

--- etc..

Essentially, this is how the process works. All of these tasks &

modules are all for this startup Project. After working 'x' number of

hours, anyone can post projects, and the process repeats itself.

Perhaps you have an idea for a startup to design your own running shoe

on-line. You post the project, it awaits for votes to get 'accepted',

and the process begins again.

This is just a very high level overview of my concept. Again, it's

tough to even describe, because I'm not the 'decider' of it all -

everyone is.

I'm curious to know your thoughts in regards to this concept

Thanks

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So everyone is paid an equal amount for their time worked on a by the hour basis?

How are work hours tracked?

What if John worked 10 hours but got 1/3 of the amount of work done that I did?

Thank you for your reply - it's much appreciated.

This area is open as to how it should operate (as is the whole business model). The thoughts that surround this are:

a) Everyone is paid an equal amount for their time worked on a by the hour basis

B) Everyone earns a "point" when they complete a task (remember, all things that need to be done are split in to individual tasks). You only earn the point if the task is completed.

As I have brought this concept up to various people, this question has come up regularly.

What if I did Task ABC and it took me 3 hours. Then the same task comes up later, and John completes Task ABC in 10 hours - is he going to get paid more than me?

In Option A, the answer would be yes.

In Option B, the answer would be no - a task is a task is a task.

One could then argue "It took me 15 minutes to complete Task ABC, it took John 3 hours, therefore my time is more valuable and I should be paid more". Perhaps an equation which utilizes Option B x Reviews (just like any similar service, you could rate the completed work 5/5, 4/5, etc..).

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One question: Why are you searching out smart people in particular, to opine? Do you believe that smart people will give you better answers? Then why not also use this criteria when selecting decision makers for this business?

I don't know what your democratic process will come up with, so I can't offer specific critiques. But odds are, your process will come up with less competitive ideas and decision making than that of a business which appoints its leadership based on competence rather than willingness to participate.

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What exactly does this company/co-operative/organization do?

It promotes and provides the framework and leadership of an open, democratic, and collaborative business model that benefits its members as a whole. The primary goal of "Company A" is to develop this framework. To develop, promote, and utilize this type of open-business with this particular type of income earning potential. "Company A" is essentially, a network of like-minded, entrepreneurial, individuals. This network then goes on to develop and create new businesses which utilize this particular framework. Initially focused on web-based business ventures, the possibility exists for physical businesses to be created as well.

In short, what do we do? We work together to develop our framework, and then develop other business ventures - these ventures are decided upon by the members of "Company A".

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One question: Why are you searching out smart people in particular, to opine? Do you believe that smart people will give you better answers? Then why not also use this criteria when selecting decision makers for this business?

I don't know what your democratic process will come up with, so I can't offer specific critiques. But odds are, your process will come up with less competitive ideas and decision making than that of a business which appoints its leadership based on competence rather than willingness to participate.

No, I'm not searching out smart people in particular. I posted here based on the suggestion of one of your members. I am intrigued to post here as I am attempting to "feel out" potential issues that may arise.

I would have to disagree surrounding the less competitive ideas and decision making. By working within the current hierarchical structure of the traditional business, employees are at the whim of the leadership and it's competence. Would you say that the 18th century model will hold true until 2020? 2030? 2050? Or is it possible that the web could help produce a new way of doing things? I would also ask, is the leadership of the "standard business model" more competent than a crowd of similar individuals? If I were an Oil executive that leads a major oil company, would I be more competent than 100 oil and gas employees with decades of combined experience (and perhaps a higher degree of innovation)? I do hear what your saying. I'm not saying "Company ABC" would be the next YouTube or Microsoft or Apple and would compete right up there, however, even a 1-5% market share would earn all members a sizable income.

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I'm proposing another way. The technology today allows a single individual to create a business and to hire other people. Creating small units, of about 5 people, running as an individual company, where it is very clear to observe the professionalism of each worker, can be a solution for a large enterprise consisting of such mini-companies. So instead of having teams at a company, have sub-companies in a company. The management overhead can be handled by virtual secretaries. This is already happening today with startups, however, when I startup grows it should just create more startups, rather than bigger company with employees.

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The fundamental disagreement is on whether a democratic structure or a hierarchy is better suited to combine the knowledge of a number of people working together.

I don't think a democracy does a good job at combining everyone's knowledge. The majority voting don't have the capacity to understand and apply the knowledge of the few who are the smartest and most experienced. So, when the votes are tallied, the knowledge of the smartest employees will be completely ignored.

In a hierarchy, the smartest, most experienced person gets the final vote (on the important issues). He can apply not only his own knowledge, but he can understand and apply the knowledge of everyone working for him.

If I were an Oil executive that leads a major oil company, would I be more competent than 100 oil and gas employees with decades of combined experience (and perhaps a higher degree of innovation)?

If you're running an oil company, and I am looking for someone to run my 100 employee upstart, I'm not gonna get you to do it. You already have a better job.

I will however be able to pick one of my 100 employees to do it. If I pick the most skilled leader and qualified professional out of the group, to make the top level decisions, then that's the best I could do. He will then be able to figure out how to use the knowledge of each of his 99 subordinates, to make the best decisions their combined knowledge has the potential to facilitate.

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