The Business Experiment
Rob over at Business Pundit is conducting an experiment based on Surowiecki’s “The Wisdom of Crowds�? in which 2500 people will attempt to collectively start a business. Participants will generate the initial ideas and then vote through polls on the website with the intent that this participation will eventually translate into equity in the company.
“The Business Experiment is a site meant to explore three concepts: wisdom of crowds, open-source business, and the distributed nature of work. The goal is to have the registered users of this site collectively start and run a real business. Business plans will be written. Financing will be sought (if needed). Employees will be hired. Systems of accountability will be put into place. All major strategic decisions will be voted on by the registered users, and must be implemented by the employees. This will test to see if “the crowd” is really wise or not. Who do we hire? The crowd will vote on the candidates. What is our marketing strategy? Vote on it. How do we price our product or service? Vote again. It could be cool, or it could be foolish. But either way, it’s definitely different.”
At the moment, discussion among initial participants is taking place through a standard forum setup on the experiment website. We’ve joined and have just begun to poke around. The experiment is still in the “idea” phase — although some interesting governance questions have already emerged, like “how do you fire someone who is a voting member?” A lot of the proposed ideas are predictably whacky, but a few (including the current favorite, which I won’t reveal) are refreshingly low-tech and generally plausible. It’s a very cool idea, though many questions come to mind. Assuming that the experiment progresses to the point where employees are hired and meetings are held, blogs and podcasting will be implemented to keep the voters up to date on the status of business and actions of employees. Will all major decisions really be left up to the voters? How much information will need to be available for the voters to make truly informed decisions? I think the communication issues will be the most interesting aspect of the experiment to watch. Considering the number of people involved and the combination of message boards, blogs, and podcasting, there is potential for either a great innovation or a large-scale disaster. Either way, it will be a learning experience. Sign up here to be a part of the crowd.
