Lessons Learned from The Business Experiment*
The Business Experiment [TBE] was based on a Peer Production or Wisdom of Crowds model.
http://www.businesspundit.com/50226711/the_business_experime nt_what_i_learned_about_the_limits_of_peer_production_wisdom _of_crowds_and_other_web20_philosophies.php
People need incentives to act and not everyone is motivated by money. Other incentives include power, popularity, passion for an idea, curiosity, and knowledge.
When establishing incentives, you have to think about the marginal value of incentives. The value of some participant`s time may be too high for them to stay dedicated to the project.
Crowds are only smart under certain conditions
- Since a crowd doesn`t know anything about your industry, you shouldn`t rely on it for advice in your industry.
- There have to be processes for people to make their own individual decisions and reap the rewards/consequences of their individual decisions.
- Crowd members are influenced by other crowd members.
Crowds don`t understand the context associated with each task
Each task comes with a history from each person that has worked on it. That history must be understood for another person to take over and continue the task from its current state.
Crowds don`t pick difficult decisions since they want to choose what`s fun or exciting. They most likely won`t make key compromises necessary for the long-term health of the business.
Groups need leaders and direction
When all members have an equal voice, not much productive decision-making is made. Self-direction (of the entire crowd) doesn`t ever materialize.
The TBE deteriorated after their business was chosen because those not interested in the idea stopped participating.
A preset idea could have attracted the right people; instead, the project mostly attracted people that wanted to discuss their idea so it would be picked.
Once a leader was selected, the community business was not much different than any other business because decisions were made at high levels when there wasn`t time for a vote.
Some of the most successful community-driven projects are the exception instead of the rule. Linux, for example, is driven forward by a handful of excellent individuals with passion for the project.
Altruism, sharing, and group decision making is sexy. But is Web2.0 really just a bubble?
*Information copied/summarized with permission.