The domain "crowdbiz.com" is registered.

Here's how I see it;

A limited number of users say 20.000, register at crowdbiz and each pay for a share at a suggested prize of $50 (USD).

The site provides the framework for a business, a number of company online-tools for controlling budget, orders, stock-keeping etc.

When the shares are sold, a list of already existing (budding) businesses are presented that are for sale (the site provides vetting of the list) and by majority-vote a company is chosen.

The shareholders then control, edit, vote and discuss the company, it's policies and employees by using collaborative tools like chat, video-enabled meetings, vote-tools, e-mail-lists, forums, document-database etc..

Shareholders who wish to have an active role (this is indicated when registering to ensure enough people to oversee the company) apply for a set number of jobs defined by the business (administration, sales, promotions, development, legal, boardmembers etc). These active shareholders get paid a part-time salary.

A sharevalue of say 1 mill. USD is then split into a sum for buying the company (100K~300K) and the other part for running the business the next three years (700K~900K).

the CrowdBiz site can offer to oversee and ensure honesty in business-transactions for a percentage of the shares or a fee.

Advantages:

By having 20.000 interested owners, the business at first-go contain a large number of potential customers that view it's services positively.

The 20.000 pairs of eyes also constitute a formidable check-and-balance for any transactions and business-decisions taken, similar to how open-source projects are scrutinized for fake or damaging source-code.

20.000 heads just like here on CambrianHouse are a large asset for any company. Access to good ideas, sales-pitches, new goods and services, tip's about where to buy, facilitating contacts etc. would be revolutionary in terms of fusing the role of customer and owner.

Normally you never hear much from customers of a business regarding performance and satisfaction-levels on things like service and sales. They just go to another place for their purchases.

Now imagine say a food-mall suddenly able to rely on a huge percentage of it's customers for constant feedback on how it is performing and what is expected of it.

If you look at the success of the site that want to buy a football-club by "crowd-financing", I strongly believe CrowdBiz could be an interesting faciliator on the idea of "worldwide officeless businesses".

It might be a very slow moving business if 20,000 people need to approve most decisions.

Who will the employees report to? Maybe there needs to be one main person to be the representative, otherwise nobody would know who to talk to and everyone else would have their own opinions. Imagine trying to be a supplier to this company, there would be six thousand project managers!

Hi TSW.

You are right, a "normal" business-structure should be in place, and with shareholders making easy votes on a number of issues. It will be up to the active employees to meet and transcribe the decisions confronting the business so that it's easily readable and understandable for each shareholder.

A lot of details for how to run the site will be adjusted as we get more experience, to streamline the process. The potential benefit for the site, justifies the work needed to be done (legal, tool-creation, guide-lines etc.)

Torgrot

If you made it like a "Board of Directors" that met via a web based conference once a month. From the day to day opperations could be done by a manager. Much like a mutual fund.

I would suggest that aiming for 20,000 people may be too high, if you can get it closer to 1,000 with $1,000 shares it would be better.

i like the concept! it makes lot of sense

I also love the idea!!!!!!!

As I think about it more, this idea is pretty much the same way a standard public corporation is run. You've got your shareholders, you've got your board of directors, you've got your employees. The only thing you don't have is a product to sell. Which is certainly backwards! Maybe this way you can choose a product to sell that all your shareholders have experience selling, that would be beneficial.

Can you provide a hypothetical example so that I can get a better idea of how this works - still not clear to me how this differs from normal investing except that there is not initial product??

Who will be the "we'll make it a success even if hell freezes over" champion(s) of ideas, products, and processes? In my entrepreneurial experience, everything does go wrong. You need people to be able to overcome Murphy's law till the organization is strong enough to handle all the setback and prosper.

Champions, by nature, are headstrong and merciless business-wise. Not something a "communal corporation" could handle. Am I right or wrong?

Thank you very much for your comments DividedEye, Tergwin, Sebtoast, thestarwheel, bcforrester, stevesitv.

You bring up good points to the challenges in running a business.

- The value pr. share could definately be something to consider. While I like the idea of normal to low income people being able to jump into ownership, fewer users say 1000-5000 could more easily be "compiled" within a shorter timeframe. it all depends where the sweetspot in online-investment lies among the common websurfer.

- TSW I see the need for the company(ies) to conform to best practises in running the business. Here the shareholders should/could agree to include advisers offered perhaps by the site as part of the service, or an external paid service.

The golden aim is to stear the funds to last the first difficult years while growing. The good thing is that any business the shareholders agree to buy, would already have done a lot of groundwork since it up and running.

The vetting of the list of companies for sale by the CrowdBiz site whould include a fair description on market-potential, competition etc. for each business on offer.

- Steve you ask a very important point. I believe the percentage of people that sign up as active owners (100-200 out of 5000?) and actually are paid (smaller) salaries will be able to have a dynamic relationship with the CrowdBiz helpers and the external advisory companies they choose for support-services (legal, marketexperts etc.).

- BCf I will start work on a case-document with all details I can muster, as I strongly believe we have something tangiable here. It will take a day or two, then I'll PM all of you and link it here.

Also I want you to consider the synergy-effects here. We are not talking about only _one_ shareholder group, running one company but the posibillity for shareholders to do part-time services onto several companies they chose to buy into.

The positive feelings created when a majority of the shareholders vote consiously and voluntarily for a particular service, should not be underestimated.

Best
Torgrot

I think you have a great idea. the concept seems to be quite solid. Would love to know more details as well.

-buddha

Thanks BigB. I'll notify you when I get the mock-case together.

Torgrot

What happens if very few of your shareholders have relevant business experience? You may have heard the phrase, "too many cooks, spoil the broth?" I think this idea may be a recipe for disaster.

Hi Lucy.

There definately won't be "too many cooks" here. Every company normally have shareholders. What we see here is the emergence of a proactive shared owner-model that will make the company react and respond to challenges in a much more dynamic and fulfilling way.

Examples where shareholders can provide value;
----------------
- Regular opportunity to vote online for important decisions regarding the company
- Opportunity to discuss your company (and be heard) with the other holders and staff
- Follow the company's sale in any detail you desire
- Suggest new goods, services, companies to work with etc.
- Keep an eye on all the company's transactions and it's works
- apply your credentials for a paid part-time job within the company from anywhere in the world
- Join in vetting other applicants (if you are not applying yourself)
- negotiate business-connections between beneficial contacts you have access to in your "offline" life and the company you own a share in
- Access to the company services and goods at ownership prices
- The more the shareholders promote the company, the more it increase it's business and thus the value of your share and profit

-------
The CrowdBiz website helpers will make sure to give the best advice, if the human resources are lacking among the owners of a company. Two posibillities are that CrowdBiz staff participates by buying shares, or that they give the shareholders access to professional services from external advisory businesses.

The level of participation from the "crowd" will likely be adjusted in the beginning to gain a "best business-practice" environment for employees and the different shareholders.

Torgrot

Is the basic idea to get investment capital from a large group of average individuals instead of a small group of rich individuals? Where does the company leadership arise from? Due diligence to make sure the businesses are sound investments? I think the idea has some potential but still has some areas to shake out.

Hi Cool.

Definately there are some brainstorming to do yet on some of the details. I look forward to forming it according to best business practices.

Best
Torgrot

Unless I'm misunderstanding, the idea sounds quite similar to the Cambrian House. Not entirely sure why the Cambrian House would want to start another Cambrian House.

I think what you are describing as I understand your idea, is a co-op. This a member-owned co-operative, governed by an elected Board of Directors. Owners are shareholders, customers, and employees. You might be able to save yourself some work by looking at a few of these business models first. Maybe you might be able make your idea a little easier to understand by calling it a co-op in your title. In Canada, here are a few co-ops to check out:

http://www.mec.ca/Ma...;bmUID=1187358708074

http://www.peoplescar.org/

http://www.calgarycoop.com/

http://en.wikipedia..../Housing_cooperative

http://www.cambrianhouse.com (ironically)

Your idea has provoked me into a composing a very long-winded rebuttal. I think the idea you have proposed is an incredibly convoluted notion, one which presents all sorts of difficulties:

1. The difficulty of processing constructive ideas: The opinionated contributions of anywhere from 1,000 â€" 20,000 people is less of a helping hand, and more like chaotic noise.

2. The difficulty of getting things done: It’s incredibly hard for crowds of people to make sensible decisions and manage precise details. In a business, it’s essential that the people making the decisions have the time, loyalty and vision to lead the company in a clear direction. Crowds follow, they don’t lead: that’s a fact. Somebody, a person or a team, needs to be at the helm.

3. The difficulty of investing in nothingness: Asking people to contribute approximately $50 before a product, a business or a store even exists is not a business model. It’s either a setup for a scam, or it’s called venture capitalism, which is best left to those who know what they’re investing in.

4. The difficulty of building a credible alternative to traditional investing methods: If users wish to “own part of a company,� buying shares in a company that’s already functioning is definitely the way to go. As thestarwheel suggested, there are also co-ops for this purpose. Both of these are more reliable investment options than buying into a company that doesn’t exist yet.

5. The difficulty of getting qualified professionals: In a company, the job application process exists in order to get the best fit for the job. Letting anybody with the cash help run the business is a dangerous path, one that leads to vocal and incompetent individuals having too much of a say. Although, some might argue that’s already a problem with traditional businesses. :)

Your idea, as sketched, might work well for digital or online ventures (as Wikipedia operates), but when it comes to managing a real-life business, I think the commitment, passion and physical presence of a dedicated management team is vital for success. A business being led by a mob of 20,000 sort-of-interested shareholders would be messy, slow-moving and unproductive.

Your idea might be valuable if you simplify it completely, and divorce it from the concept of “letting the crowd run the business.� Get rid of that language, and get rid of the “reverse crowdsourcing� concept.

Instead, consider presenting it as a company’s personal CambrianHouse, or perhaps like an AskMetafilter or LinkedIn Answers, exclusively for the company and its shareholders. Present it as an interactive website for shareholders of a stable company to contribute ideas, and a place for company managers to request feedback. I see you are already starting to refine your idea to embrace this format, as outlined by your most recent comment, left on August 16, 2007 at 9:59 pm.

This website, like you outlined, would let users discuss, edit and vote on company issues, and talk about policies by using collaborative tools like text and video chat, forums, etc. It would be like an Intranet for shareholders, perhaps located at yourcompany.crowdbiz.com.

The very important distinction is, the managers still run the company. The website (and the shareholders) simply provide the inspiration, ideas and support. Instead of trying to revolutionize the way a business gets run, maybe you could revolutionize the way shareholders interact with their companies.

This is already done! Stocks not traded on the major NYSE & NASDAQ are traded on the side in what is knows as the pink lists or also known as penny stocks. These companies can be very small even up to just a few people working out of home to traditional small businesses. Most people don't consider them wise trades because most of the time you will lose just about your entire investment and it is rare to ever make a profit.

Now for the other part of your idea. You are thinking of mutual funds many stock companies all ready do this.

That or possible some kind of co-op.

Thank you everyone for your good and critical looks at how this idea works. Let me answer you all in detail;

christopherritter wrote:
"Unless I'm misunderstanding, the idea sounds quite similar to the Cambrian House. Not entirely sure why the Cambrian House would want to start another Cambrian House."

Answer:
Hi Cris. This idea is an attempt to do crowdsourcing, but instead of trying to push your idea for a business like at Cambrian House, we turn this on it's head so to speak, by letting the business-idea (that there are many of) come _last_. In addition, we jump the difficult start-up prosess and buy an already exisiting business, of the many that are for sale.

Hi TSW.
Good luck with your idea, it looks very promising and I like it a lot ;)

TSW wrote:
"I think what you are describing as I understand your idea, is a co-op. This a member-owned co-operative, governed by an elected Board of Directors. Owners are shareholders, customers, and employees. You might be able to save yourself some work by looking at a few of these business models first. Maybe you might be able make your idea a little easier to understand by calling it a co-op in your title. In Canada, here are a few co-ops to check out:"

Answer:
It would be somehow off the target to call this concept a co-op. A co-op normally depends on it's owner-customers for it's main income based on incentives the co-op can give them, like lower-priced offers, rebates on rental-cars or loans etc. In addition anyone can at anytime be a "member-owner", and there are normally millions of them.

This shifts the focus from a smaller number of shareholders looking to build a business and make a profitable investment (like we want to do), to a "communal" system where the advantage lies in rebates and special offers for all members.

TSW:
http://www.mec.ca/Ma...;bmUID=1187358708074

Answer:
This co-op is selling mountain-equipment, is open to continous membership, and relies on it's members for sale.

TSW:
http://www.peoplescar.org/

Answer:
This co-op again owns cars together, and share a service between themselves. It is not a bring-buy-build concept like CrowdBiz.xom

TSW:
http://www.calgarycoop.com/

Answer:
This shopping co-op is the basic type of co-op. It has millions of members it relies on for income, and does not focus on the limited share-member bring-buy-build idea we propose. A co-op advantage is in special pricing for members. We transcend that and let a set number of owners build the business for full profit guided by CrowdBiz.

TSW:
http://en.wikipedia..../Housing_cooperative

Answer:
A housing cooperative is in essence a non-profit system for a very limited number of owners that each get an apartment. You would notice this reading the Wiki-article.

TSW:
http://www.cambrianhouse.com (ironically)

Answer:
I think I have answered this one before :)

Kevin_Cox wrote:
"This is already done! Stocks not traded on the major NYSE & NASDAQ are traded on the side in what is knows as the pink lists or also known as penny stocks. These companies can be very small even up to just a few people working out of home to traditional small businesses. Most people don't consider them wise trades because most of the time you will lose just about your entire investment and it is rare to ever make a profit."

Answer:
Hi Kevin. A CrowdBiz shareholder business, does not have anything todo with pink lists, or stock-exchanges as such.

We propose to let a set number of members (1000-20.000) decide to pull together as a team (active or passive) to buy a start-up company that exists and that they are interested in. It is then up to us helpers at the CrowdBiz site, our pro. advicers and the shareholders to join together in a best-business practice to build these companies.

The unique thing is that CrowdBiz takes the hard part out of the equation of business-running by providing the tools, advice, part of the legal framework and the oversight needed to guide each business onto success.

From the shareholders perspective, they are free to participate at any level from passive to being a part-time paid employee (based on your credentials). I am working on a mock-up to show more in detail how to do this and the roles of each "unit".

Best
Torgrot

Hi Fruitvale.

I appreciate your in-depth thoughts on this. Let me answer you in detail.

Fruitvale wrote:
Your idea has provoked me into a composing a very long-winded rebuttal. I think the idea you have proposed is an incredibly convoluted notion, one which presents all sorts of difficulties:

Answer:
I look forward to your viewpoints on any "convoluted notions" that might exist here.

Fruitvale wrote:
1. The difficulty of processing constructive ideas: The opinionated contributions of anywhere from 1,000 --" 20,000 people is less of a helping hand, and more like chaotic noise.

Answer:
I agree in principle. You cannot have 10K people all talking at the same time. The solution is to grant "direct democracy" by allowing voting on a (limited) number of issues facing the company while at the same time maintaining forums for discussions where you can tag your opinion as a sharemember "neutral" "against" "infavour". You will see that most people that have invested their money, will use their logic minds to vote and perform on issues always with the benefit of the company (in essence themselves) in mind.

Fruitvale wrote:
2. The difficulty of getting things done: It’s incredibly hard for crowds of people to make sensible decisions and manage precise details. In a business, it’s essential that the people making the decisions have the time, loyalty and vision to lead the company in a clear direction. Crowds follow, they don’t lead: that’s a fact. Somebody, a person or a team, needs to be at the helm.

Answer:
If you read through some of my earlier answers, you would see how I suggest good solutions for running the company.

Shareholders that want to take an active part in the company-development can be volunteer or part-time employed (and paid) by the company. Together with assigned helpers from CrowdBiz and the pro. advicers that CrowdBiz re-sells to the shareholders, you get a dynamic group of professionals and enthusiasts pulling together towards the same goal.

CrowdBiz supplies the best-practice "business-intelligence" by giving shareholders access to a number of innovative and easy-to-understand business-tools that help them to keep everything in line with how a business should perform.

Many details are yet to be detailed, but one possible way is letting each shareholders pick a "Guild" they want to belong to; "the budget&finance Guild" or "the legal&copyright Guild" etc. ( yes Im a Pratchett fan :)

Fruitvale wrote:
3. The difficulty of investing in nothingness: Asking people to contribute approximately $50 before a product, a business or a store even exists is not a business model. It’s either a setup for a scam, or it’s called venture capitalism, which is best left to those who know what they’re investing in.

Answer:
I must say I find your opinion here a bit "convoluted" myself. I suggest that anyone should be able to be a venture-capitalist for the "pursuit of happiness" as I read somewhere..

The credibility of the CrowdBiz site is essential ofcourse, the same way it is for any online venture. There are a number of easy ways the seriousness of a site can be established.

Fruitvale wrote:
4. The difficulty of building a credible alternative to traditional investing methods: If users wish to “own part of a company,� buying shares in a company that’s already functioning is definitely the way to go. As thestarwheel suggested, there are also co-ops for this purpose. Both of these are more reliable investment options than buying into a company that doesn’t exist yet.

Answer:
But are you then able to influence and participate in your investment at the same level? CrowdBiz seeks to "democratize" the process of building a business, and I understand this might step on some toes here and there. A co-op is more of a "communal" system that relies exclusively on it's members and provides a comparatively small advantage in the form of rebates and discounts.

I am a strong believer in the common sense of large but limited group of diverse people that consiously invest smaller sums into a venture they actually like, and that they want to participate in running. I suspect such companies will be very ethical and perform excellent in terms of maximizing performance and avoiding in-efficencies.

A taste of this is excatly what we do here now in this comments, where the "business" is scrutinized forward and backwards to the benefit of all.

Fruitvale wrote:
5. The difficulty of getting qualified professionals: In a company, the job application process exists in order to get the best fit for the job. Letting anybody with the cash help run the business is a dangerous path, one that leads to vocal and incompetent individuals having too much of a say. Although, some might argue that’s already a problem with traditional businesses. :)

Answer:
Thank you for pointing out that there are a lot of less competent mangement in businesses today.

What I propose is qute unique; the power of the crowd for vetting applicants for job-positions. It's very powerful to compare two-three business-executives interviewing with 1000 prying eyes scattered all over the world. There are bound to be people that will know eighter the applicant or the credentials the applicant submits.

Fruitvale wrote:
Your idea, as sketched, might work well for digital or online ventures (as Wikipedia operates), but when it comes to managing a real-life business, I think the commitment, passion and physical presence of a dedicated management team is vital for success. A business being led by a mob of 20,000 sort-of-interested shareholders would be messy, slow-moving and unproductive.

Answer:
Your point is valid, but that is where CrowdBiz comes in. By providing the right business tools, combine it with best practice and have external advisory partners (businesses), we can leverage any demand that is needed in a physical business.

One alternative is to pay for outsorced management of the physical part of business. Given enough shareholders, there are bound to be a number of them that are physically close to any premises, and can be grouped into a "shop&employee-view Guild" for instance.

Fruitvale wrote:
Your idea might be valuable if you simplify it completely, and divorce it from the concept of “letting the crowd run the business.� Get rid of that language, and get rid of the “reverse crowdsourcing� concept.

Answer:
Im afraid that would render the whole experience somewhat moot. We need the enthusiasm and participation of a lot of brains to support a budding business. By sourcing it democratically from around the world, we create a unique, new and exiting synergy that combined with a framework (CrowdBiz.com) could be very profitable.

Fruitvale wrote:
Instead, consider presenting it as a company’s personal CambrianHouse, or perhaps like an AskMetafilter or LinkedIn Answers, exclusively for the company and its shareholders. Present it as an interactive website for shareholders of a stable company to contribute ideas, and a place for company managers to request feedback. I see you are already starting to refine your idea to embrace this format, as outlined by your most recent comment, left on August 16, 2007 at 9:59 pm.

Answer:
I am not ready to make a defined approach to how the business would be run. For now they are suggestions on the "open table". I am committed to let the shareholders avoid having to face the arrogance of corporate conservatism and at the same time empower their enthusiam combined with the tools needed to succeed in a competitive environment.

Fruitvale wrote:
This website, like you outlined, would let users discuss, edit and vote on company issues, and talk about policies by using collaborative tools like text and video chat, forums, etc. It would be like an Intranet for shareholders, perhaps located at yourcompany.crowdbiz.com.

Answer:
Yes you could call it an intranet, and this shareholders only environment includes not just access to all information from the company, but business-tools for budgets, expenses, profits, member-information, databases for repository, tools that outsorced service-companies can access, evaluation-tools etc. in addition to the chat/forum/video tools.

Fruitvale wrote:
The very important distinction is, the managers still run the company. The website (and the shareholders) simply provide the inspiration, ideas and support. Instead of trying to revolutionize the way a business gets run, maybe you could revolutionize the way shareholders interact with their companies.

Answer:
People are personally advantage-driven and as a customer they are emotionally driven. The longer term level of involvment from a minimum percentage of shareholders are essential as else it will differ and vary too much over time.

The framework CrowdBiz puts in place must be able to compensate for any such variation dynamically, and nurture ownership-empowerment within the best business-practice framwork.

A typical reverse-solution for CrowdBiz shareholders could be that the crowd-selected boardmembers (managers) answer directly to the crowd on a number of issues regarding business-operations and desicions. Sort of a "gods in the sky" entity that the managers have to "behave" towards to gain approval and recognition from.

In essence, a manager must not just be a pious subordinate but also show good decision-intelligence and a positive result-sheet. An interesting tool could be a confidence-chart that shareholders vote on to show the level of trust they have in the current management.

Managers should have no reason to object to this, as they often are subject to top-boss management (must report to them and gain approval for transactions etc.) and have limitations on their desicion-powers.

Best
Torgrot

The problem here is security laws. You would have to incorporate, which means shareholder meetings and all that mess... It just makes a easy idea hard.

I do like it but this step makes it hard

Hi Gods_Light.

That is what we have legal advice for. There are countless best practices tools and companies that help in incorporating properly, this is not difficult at all. The great thing of a global economy is that the company can be incorporated in a business-friendly country and have shareholders and employees all over the world.

The details on how to communicate and "meet" together as shareholders are solved by International companies all the time, especially in an outsorced world like this.

Thanks for your thoughts around it.

Best
Torgrot

Torgrot I am glad you have taken the time to think about that...

I like this but i need to discern more and take time to decide.

Sounds OK, but how do you convince investors to invest? Without idea, you would have to have an outstanding managing director who can convince, that he/she can implement the future idea, or to find another manager who can do that. Without clear leadership there is a risk of eternal discussions. An unknown manager (or team) implementing an unknow idea might be a bit too much for investors to swallow, so maybe one could narrow down like this: This guy (CV) will implement an idea in the sector xyz (where he's experienced), details up to you (the investor crowd) to decide?

Hi there Flix.

The direction and support that you argue should come from an "outstanding director", is in this case the CrowdBiz site and it's "best-business-practice" framework.

I think the problem some have in conceptualizing this idea is that it goes against the grain of how a business is imagined, with a top-boss taking all the decisions and a cobble of employees that work for a salary. In our system, the "boss" is elected and answers directly to the shareholders that double as part or all of the employees.

Here's a short essence in phases to explain;

STAGE 1:

First stage is to build a shareholder-group of say 1000 people. To do that they must understand what they are buying. One example is to let the users review a longer list of fine vetted budding companies that are for sale.

In addition there should be a good "click here to learn more"-wizard that shows them a typical progress from day one as a shareholder to fully working and profiting company.

When registering and paying their first share, they will go through a form that details what they want to do and what "Guilds" they would like to be part of (perhaps the same profession that they are working as "off-line"). A chat-forum (like on CH) will be available to answer any questions the shareowners might have.

You are free to opt out and be a passive shareholder, but from a 1000 willing to pay, there are bound to be a number of budding managers, secretary-pros, budget-workers, sales-people etc. CrowdBiz will assist in all these details using external pro. help if needed.

STAGE 2:

When the number of say a 1000 is reached, the project goes into phase two. The business-lists are now voted on by the 1000 members. Again Crowdbiz gives advice etc. When the necessary majority is reached for a business they like, the group goes to phase 3 and beyond, which is the actual process of buying and building the business then running it and making a profit.

Best
Torgrot

I like your idea of using the masses, but I am not quite sold with how the company will run, especially the voting system... What is a win? If 51% of the "shareholders" decided the company should cash out, and only the 51% people get the money, the 49% should just pack it up and leave?

The higher the percentage you decide, the longer it will take for the company make any progress... Take the scenario in reverse, not all 20K shareholders participated, and time's up. What does the few votes represent? A solid decision? What if it is actually heading to the wrong direction? This can be manipulated by shareholders that have their own agenda, and plays with the element of time.

Besides... who owns this bank account where everyone's money is? Crowdbiz.com of course, but who represents Crowdbiz.com at the bank? Is the representative the "management team", can shareholders vote on that? This kinda gets into the chicken and egg question... do we have the management team first, or do we vote for a management team first? What power does this management team have? Is the team execution only? Or drafting the next move for the company? If Crowdbiz.com is just a gathering of common wealth, then it kinda sounds like the Pink list... If Crowdbiz.com of a gathering of "wisdom", I am skeptical of whether it will be ran by the three wisemen, or the three stooges... After all, the 80/20 rule still applies even today...

Letting a crowd that not everyone has the business knowledge and/or vision to run a business, to vote and run a business... is a dangerous thing...

First very good job with Q&A.

"Hi Kevin. A CrowdBiz shareholder business, does not have anything todo with pink lists, or stock-exchanges as such."
Well, you do know that this is the same concept when you own the majority of stocks you quite literally own the company. There are also share holders boards and they vote on what the company should do.

Also, all of these people are investing in something that does not exist yet not even an idea. As an investor why would you want to invest is something that you have no knowledge of its existence.

Example: A team going to make a new military airplane. They right up a proposal others look at that proposal and say that looks sound then they invest.

You idea first invest. Then find an idea that magically everyone agrees on is sound. This makes no sense. Everyone is not going to agree on the same exact idea. It is just like this voting system not everyone gives someone a 5 star. They all don't agree it is a good investment.

Hi Moggu, thank you for a very good comment.

First, the concept as it stands today is not all ironed out. More evaluations against exisiting business-practises will be done.

I have created a "Core-Team" job for CrowdBiz that I hope will attract a small number of people that like the ideas and want to get down to details on it. They will become part-owners of CrowdBiz.

The roles between a company being built and it's shareowners when pertaining to selling- and majority-voting will have statures or guidelines that is defined within the framework of CrowdBiz in consultation with legal.

Thougths on the table;
---
- The voting/settling for a favourite company (or best of three?) would/could be compulsory before being allowed to purchase a legal share.

- A variant could be a phase 0, where anyone can get familiar with the CrowdBiz concept as a non-share member. The purchase of a "non-committed" share would then be the final move for the member into phase 1.

- For selling your share (only one allowed to each member for each company), a clause could be that CrowdBiz members would have preference in purchasing the share at the appropriate rate on a CrowdBiz "for sale" board. CrowdBiz could also itself buy the share in certain circumstances.

For the 80/20 realities of business;

- identifying the talents within the crowd is both CrowdBiz and the shareholders responsibility before buying a company.

- identifying the best business-angles are the responsibility of the elected company-board in consultation with the shareholders and a CrowdBiz representative.

- identifying the most profitable customers is the responsibility of the elected managers in consultation with the shareholders and CrowdBiz if needed.

Around all this we have the CrowdBiz best-business-practice framework that include a number of tools that the company uses to maintain a high level of business fidelity and budget integrity.
---

Some reflections;

Passive shareholders will naturally be in the majority. This is the shareowner's own decision, and will reflect on any votes. But there is nothing abnormal about this but similar to limited-time invitations from companies to an annual shareholders meeting etc.

I believe there exist a clear business-regime and regulations in most countries when it comes to such issues, and the CrowdBiz framework would ofcourse adhear to those.

Best
Torgrot

Hi again Kevin.

Kevin wrote:
First very good job with Q&A.

Answer:
Thank you :)

Kevin wrote:
"Hi Kevin. A CrowdBiz shareholder business, does not have anything todo with pink lists, or stock-exchanges as such."
Well, you do know that this is the same concept when you own the majority of stocks you quite literally own the company. There are also share holders boards and they vote on what the company should do.

Answer:
I must admit I don't know much about Pink Slip lists and how it works. If you got a good link I would be happy to compare more closely.

There are (in my view) a certain uniqueness to this proposed concept.

The first is that the focus is not on buying and selling stocks (each member one share), but rather to create a long-term positive environment or a shareholder-society where people as a group can discuss, assemble, vote and contribute dynamically in the growth of a favourite business (type).

We then combine this with the Crowdbiz structure that will include innovative and user-friendly business-tools that sharemembers can use, view and even be hired to manage based on their credentials and performance.

The business-lists that the members choose between don't have to be stock-exchange associated. They might include young or old companies in the range from mom-and-pop ventures to recently closed premises with a large inventory, that can be combined with another business.

It's upto CrowdBiz together with it's external service-partners to vet these companies and present easy to read reviews of their potentials and risk-factors.

Kevin wrote:
Also, all of these people are investing in something that does not exist yet not even an idea. As an investor why would you want to invest is something that you have no knowledge of its existence.

Answer:
The idea is there already, it's just to explain it clearly.

BRING-BUY-BUILD

1) BRING together the sharemembers and all what is needed to run a business, then have a look at any biz that you might fancy.

2) BUY into your favourite choice of company by owning a share and contribute your own talents to the process.

3) BUILD the company together in a limited direct democracy system with railings on all sides (Crowdbiz framework) to help you avoid falling and ensure the company grows in profit and size.

Kevin wrote:
Example: A team going to make a new military airplane. They right up a proposal others look at that proposal and say that looks sound then they invest.

Answer:
Yes this is the old paradigm of how to do a business. I propose a different (reverse) system that might create some unique synergies.

Kevin wrote:
You idea first invest. Then find an idea that magically everyone agrees on is sound. This makes no sense. Everyone is not going to agree on the same exact idea. It is just like this voting system not everyone gives someone a 5 star. They all don't agree it is a good investment.

Answer:
This is true. But even so, a final candidate is choosen each week at CH and goes on to greater heights.. The collected wisdom of the (large) crowd ensures that healty ideas go to the top, based on the simple assumption that the voters also represent a typical customer-base. A little like a spontaneous market-research.

The small amount of shareholder that might decline to to be part of the business, are able to offer their share for sale, freeing them to use that investment with another crowd.

Socially aware members could even describe or create a group within CrowdBiz which state certain criterias for a company of preference.

Such preferences could include ethical and moral considerations the company had to adhere to (no weapon-production/child-labor etc.) before they would agree to join and work on it.

Best
Torgrot

Torgrot:-

I think your idea, although not entirely unique both off (Co-ops) & online (Crowdspirit.com, myfootballclub.co.uk), has credibility as long as issues of trust, transparancy, credibility, ownership equity, voting rights and technological issues can be resolved.

The concept of Business entrepreneurship thrives on individual creativity and flexibility. Especially, the idea of re-evaluating your position on any given subject after careful delibiration and after-thought as well as having an exit strategy.

Modern day traditional off-line business start-ups face the most stringent of obstacles, both from Government regulation and private commercial competition.

An individual or a handful of persons may consult and collectively offset these obstacles together and succeed together as well. This is so because they are intimately involved with the given enterprise.

But how do you apply the same concept of advice gathering and collective responsibility to, say, 20'000 people?

Personally, I think its not possible.

That is why the business must inevitably have the same amount of directors and overall management upper-tier to guide the operations as any regular business enterprise.

If this is so, then how much credibility will the concept of "crowdsourcing" have. Where do we apply it? Voting?, Debating?, sharing?,.. Consuming?!

These areas have already been successfully applied in most post 2004 Web 2.0 startups.

My only advice to you would be, take the idea of collective ownership, together with all the mechanisms of Voting?, Debating?, sharing? and Consuming? - but apply it to the Web - and successfully so.

Be honest from the very beginning. This means being clear about the issue of ownership and share equity. Your role in the venture, as well as everyone else involved.

I really think the web have revolutionalized the idea of business quite extensively. Your idea and the following conversation that we are having is a testament to that.

Don't purchase an existing business - but create and gain the satisfaction!

Anyways.. I really hope you succeed!

Torgrot,
There is a fund kinda of company that is doing something similar. I found them when I was researching my idea...They get investors to pony up first then the fund managers go and look for a company to buy or vc a start-up...Its my understanding that, the fund managers, get 10% of the total take as their fee and need to act in 18 months.

I think they are doing it at a much larger investment though. So this is possible and doable...but you might need to bump your investment limitments..

Hi Guled.

Your comments are very much appreciated and to the point.

I will let them stand as they are and soon post a draft-document that tries to answer all (most of) the questions posed here in the comments and elsewhere.

hro_jim you are right.

Most of the ideas this idea proposes have been practiced in parts many places (the co-op, the funds etc.). The new approach is to pool and combine all these interesting tools together online, and see if we can create some unique results that make sense commercially and "globally".

Thank you for your support.

Best
Torgrot

I'm not sure this would work. It is a great idea, but I think there are too many obstacles.

Majority rules, but say that 51% vote for and 49% against the product/service that will be sold. That means you have nearly 10,000 people who are against the idea. How would you guarantee these people will still participate in the project.

Also, as this is quite novel you'll always find innovators and people who want to try something new. At a price of $50 per share this should not be a problem. Getting 20,000 people to cough up $50 could prove to be very difficult though.

I am also not convinced that the active shareholders can run the company without actually meeting the other active shareholders. I understand that in 'real' business a lot of business is also done via e-mail, phone, teleconferencing etc etc, but there is always some form of human contact to.

Than there is the fact that the active members will not know who they will be working with. Can they get along or not? What happens if they can't?

For me personally I'd be more willing to let go of $50--and surrender some of my say in how it should go--than to invest $1000 and then feel like I had to stay on top of it. I guess it depends who your market is and that will probably be determined by your investment amount. I would do it for fun but wouldn't want to have to do market research or crunch numbers......if you can find a bunch of people who care, but don't care too much--I think it could work.

Davelfc and beincollusion thanks!

Davelfc wrote:
Majority rules, but say that 51% vote for and 49% against the product/service that will be sold. That means you have nearly 10,000 people who are against the idea. How would you guarantee these people will still participate in the project.

Answer:
If you think about the business itself (which business to choose), I think a 75% - 85% agreement should be possible, based on shortlisting and democratic arguments for and against.

A small percentage might want to sell their share as they don't agree, and they should be allowed to do that. Other non-share members might want to pick those up, so for every 20.000 group, there could be a surplus of members say 10% that list themselves as interested in buying a share coming up for sale.

As for voting for new products or services to sell, I think only those products that seriously affect budgets need to be voted in or out. Again it's up to the management to argue for a product democratically.

Davelfc wrote:
Also, as this is quite novel you'll always find innovators and people who want to try something new. At a price of $50 per share this should not be a problem. Getting 20,000 people to cough up $50 could prove to be very difficult though.

Answer:
Yes, it remains to be seen if it is possible. The CrowdBiz site could start by doing test-runs on a smaller scale to be able to promote a successful portfolio. This will boost confidence.

Davelfc wrote:
I am also not convinced that the active shareholders can run the company without actually meeting the other active shareholders. I understand that in 'real' business a lot of business is also done via e-mail, phone, teleconferencing etc etc, but there is always some form of human contact to.

Answer:
That is not a major problem. The low percentage that are active on behalf of the rest, can both use video and travel at intervals to meet and discuss. It should be possible within a healthy budget.

Davelfc wrote:
Than there is the fact that the active members will not know who they will be working with. Can they get along or not? What happens if they can't?

Answer:
Each active member or employee will have his/her profile and photo/video available in the CV database, for everyone to know each others basics and credentials. Then quarterly meetings could be arranged for those that want to meet and greet. This could be arranged by CrowdBiz as a part of it's business-tools.

beincollusion wrote:
For me personally I'd be more willing to let go of $50--and surrender some of my say in how it should go--than to invest $1000 and then feel like I had to stay on top of it.

Answer:
That is perfectly ok. There will be different levels that you as a shareholder could choose. The one's I imagine for now is;

- Passive Shareholder
- Volunteer Shareholder
- Shareholders with Guild-association
- Shareholders that are employees with salaries

These levels are just tentative. We might imagine more active shareholders paying less for their shares or other incentives similar to here at CH.

beincollusion wrote:
I guess it depends who your market is and that will probably be determined by your investment amount. I would do it for fun but wouldn't want to have to do market research or crunch numbers......if you can find a bunch of people who care, but don't care too much--I think it could work.

I agree. People will fit into different participation-level and the CrowdBiz framework should incorporate all those levels.

It's about empovering the member, while keeping it sane. Channel the energies of 20.000 people and you might just be unstoppable. :)

Best
Torgrot

Great idea, electrifying passion! Will I bet a $100 for crowdbiz? If I can put more than that to "sleep" in a bank, why not? If half of those 20,000 people are entrepreneurs, then its no longer primarily about money that will propel it to success -- instead its the science and wisdom of the enterprising crowd. :-)

Is this just plain cooperativism? I don't think so. Some old elements of the coop are there, but definitely there are essential innovative aspects. Maybe you can call it Coop2.0. Keep going. Your idea has broken my fast.

Dear LoveTech.

I am blushing, thank you for your encouragement :)

Best
Torgrot

What's the current status?

Very interesting idea. I believe that it will work.

A first draft of an explanation of the crowdbiz-concept and mock-case details are now available at http://www.crowdbiz.com in Word format and as a Webpage.

Please read through it if you want to understand more on the details of crowdBiz. It's a first draft so the doc. is not complete neighter is it final in it's details or langauge.

Timeconstraints also limit this first draft from going deeper in detail, and it may contain smaller inaccuracies.

Best
Torgrot

Hi Torgot.

Great idea, there is however one major "Hiccup"
If you propose such a transaction( to more than 15 investors) in the USA and a few other jurisdictions around the world, without a complete offering memorandum and Prospectus (Cost around $500, 000), you will get thrown in the can.

Your idea is great, but please consult a securities lawyer or even a friendly stockbroker for advise.

Good luck.

CharonV thanks for your info.

Then there need to be a tool that allow the shareholders as a group to act as a unit instead of idividual investors.

One way of doing this could be to incorporate the members as a holding company which then buy a chosen business in effect acting as a unit. This holding company would likely be part of the offered CrowdBiz services.

Kindly
Torgrot