[extropy-chat] Internal Idea Futures market

[Hal Finney]

The New York Times has an article today about a company which is
running an internal Idea Futures market to identify new product and
market opportunities:

http://www.nytimes.com/2006/03/26/business/yourmoney/26mgmt.html

> Instead, they focus on an internal market where any employee can propose
> that the company acquire a new technology, enter a new business or make
> an efficiency improvement. These proposals become stocks, complete with
> ticker symbols, discussion lists and e-mail alerts. Employees buy or sell
> the stocks, and prices change to reflect the sentiments of the company's
> engineers, computer scientists and project managers - as well as its
> marketers, accountants and even the receptionist.
>
> ...
>
> At Rite-Solutions, the architecture of participation is both businesslike
> and playful. Fifty-five stocks are listed on the company's internal
> market, which is called Mutual Fun. Each stock comes with a detailed
> description - called an expect-us, as opposed to a prospectus - 
> and begins trading at a price of $10. Every employee gets $10,000 in
> "opinion money" to allocate among the offerings, and employees signal
> their enthusiasm by investing in a stock and, better yet, volunteering
> to work on the project. Volunteers share in the proceeds, in the form
> of real money, if the stock becomes a product or delivers savings.
>
> Mr. Marino, 57, president of Rite-Solutions, says the market, which began
> in January 2005, has already paid big dividends. One of the earliest
> stocks (ticker symbol: VIEW) was a proposal to apply three-dimensional
> visualization technology, akin to video games, to help sailors and
> domestic-security personnel practice making decisions in emergency
> situations. Initially, Mr. Marino was unenthusiastic about the idea
> - "I'm not a joystick jockey" - but support among employees was
> overwhelming. Today, that product line, called Rite-View, accounts for
> 30 percent of total sales.
>
> "Would this have happened if it were just up to the guys at the
> top?" Mr. Marino asked. "Absolutely not. But we could not ignore the
> fact that so many people were rallying around the idea. This system
> removes the terrible burden of us always having to be right."
> ...
> Back at Rite-Solutions, for example, one of the most valuable stocks on
> Mutual Fun is the stock market itself (symbol: STK). So many executives
> from other companies have asked to study the system that a team championed
> the idea of licensing it as a product - another unexpected opportunity.
>
> "There's nothing wrong with experience," said Mr. Marino, the
> company's president. "The problem is when experience gets in the way
> of innovation. As founders, the one thing we know is that we don't know
> all the answers."

One thing I thought was funny was the name of the market, "Mutual Fun".
Long time list readers may remember a Ponzi scheme from around 1999
called EMutualFun that we had some guy (Frederick Mann) promoting here.
It was part of a fad back then of "virtual stock market" games that
paid guaranteed returns.  They often used e-gold as a payment system
because it was supposedly non-repudiable, that is, players couldn't get
their money back even when they were defrauded.  Anyway, that's largely
ancient history, the name just reminded me of that old scandal.

This new market seems like a great idea.  I've worked for many companies
that had extremely smart people, but the management structure was not
always such that good ideas could easily percolate upwards.  This market
bypasses all those filters and lets good ideas attract interest without
a manager being able to shut them down.

One of the books I've been reading lately is The Wisdom of Crowds,
by James Surowiecki, which discusses the kinds of institutions and
mechanisms that let groups effectively consolidate their ideas and
information.  When done right, crowds can actually be smarter than their
smartest members; but when done wrong, a committee often seems as dumb
as their dumbest member.  We've probably all seen examples of that.
Surowiecki tries to tease out what works and what doesn't.  One of the
key ideas is to preserve independence so that everyone is free to give
his input and doesn't feel shut out.  This internal idea futures market
sounds like it would do a great job of that.

Hopefully that last idea will work out and this will turn out to be
something that can be packaged, commercialized and made available on a
larger scale for other businesses to try out.

Hal