primitives dip their toes in structuring a new business

[BattleHymn]

http://www.democraticunderground.com/10027216723

Wed Sep 30, 2015, 05:49 PM
GreatGazoo (1,584 posts)

I'm looking for a way to structure a new business such that each contributor shares proportionally

to their input. I'm thinking this is maybe some kind of scoring system where each contribution -- hourly labor, loans and investments, key skills, and one-off tasks/projects -- gets scored and then the total score is divided by an individual's total score to get that person's share of the company, voting and equity. The overall total is going to keep rising which makes each person's share dynamic.

Kind of like crowd sourcing with a paycheck or equity in return for your investment of time, money and passion.

Is there something like this? a model I can look at?

I have been in start-ups and non-profits that get stagnated or where early investors wind up very diluted. I am very interested in a crowd model that encourages and allows people to have a direct daily stake in the success of the company. And where each person's talents and skills can be rewarded fairly.

(btw, is there a better forum or group for this kind of question?)

Wed Sep 30, 2015, 08:26 PM
Massacure (5,955 posts)
12. Sometimes I've thought about this myself.

This may be a bit crazy, but sometimes I wonder what would happen if a company like Wal-Mart were to just get up and start paying people in company stock instead of cash. Granted the first $7.25 an hour (or whatever the state's minimum wage is) would have to be paid in cash. But it would be interesting if they paid a new cashier $7.25 plus 0.03 share of stock per hour, if they paid a department head $7.25 an hour plus 0.11 to 0.13 shares of stock per hour, if they paid an assistant manager a salary of $23,600 (the minimum salary for an exempt employee) plus 300 shares of stock per year, if they paid a store manager a salary of $23,600 plus 1200 shares of stock per year.

Such a scheme is high-risk high-reward though. On one hand you have companies like Procter and Gamble where employees who started there out of high school have retired in their late forties or early fifties with a million dollars in their retirement accounts because of their generous profit sharing. On the other hand you could end up working for a place like Enron and end up with nothing because the company went belly up.

Wed Sep 30, 2015, 07:59 PM
Star Member JI7 (53,036 posts)
9. seems impossible

You will spend more time on trying to make it work than actually running the business.

Wed Sep 30, 2015, 07:37 PM
Star Member panader0 (12,632 posts)
6. What's the product?

Isn't that the most important part?

Wed Sep 30, 2015, 08:20 PM
GreatGazoo (1,584 posts)
11. can't say it yet. the idea is to get a structure that will let us scale rapidly

because this is something that others have been close to but no one yet has seen this tweak. We are trying to get servicemark or trademark and patent in place before really unveiling it. I always believe that longterm execution is more important to success than the idea but there is an opportunity on this one for the first mover to define the category around themselves, kind of like how GoPro became THE mobile camera. Like the way Xerox became a verb.

[thundley4]

Wed Sep 30, 2015, 05:49 PM
GreatGazoo (1,584 posts)

I'm looking for a way to structure a new business such that each contributor shares proportionally

to their input.

Wed Sep 30, 2015, 08:20 PM
GreatGazoo (1,584 posts)
11. can't say it yet. the idea is to get a structure that will let us scale rapidly

because this is something that others have been close to but no one yet has seen this tweak.

Great, just great. Another DUmmie that thinks THEY can make communism work this time.

[freedumb2003b]

to their input. I'm thinking this is maybe some kind of scoring system where each contribution -- hourly labor, loans and investments, key skills, and one-off tasks/projects -- gets scored and then the total score is divided by an individual's total score to get that person's share of the company, voting and equity. The overall total is going to keep rising which makes each person's share dynamic.

There is such a system.  It is called CAPITALISM!  The scoring system is compensation or earned wealth (depending on the nature of the nature of "-- hourly labor, loans and investments, key skills, and one-off tasks/projects").

[DumbAss Tanker]

Great, just great. Another DUmmie that thinks THEY can make communism work this time.

This one is actually talking about distribution proportional to contribution, which isn't Communism even if it isn't much of anything else that would actually work.  Doomed to break down in catfights about how much Person A did versus Person B, the only way to prevent that is an ironclad rule process to weigh contributions.  Though the DUmmie is clearly contemplating weighing quality and uniqueness, not just hours worked or capital contributions, so such a rule process would be impossible to implement without essentially having a dictator and everyone acquiescing in the decrees he or she issues (Fat chance).

[SVPete]

There's already an "excellent" example of a "business" run as a collective. It's called Pacifica Radio. It's a money pit, and even some Libs & Progs will admit that it makes dysfunctional look good (think DU's Alert and Jury system or the Obama-PUMAcrat conflict or the current CHILL-Bern conflict). Founded in 1949, Pacifica Radio has all of 5 stations. Wowzers!

As a contrast, Salem Communications, which has a Christian and conservative perspective, was founded some time in the 1980s or 1990s, and has 99 radio stations, even more affiliates that run Salem programming, and several syndicated programs (e.g. Hugh Hewitt, Michael Medved, and Dennis Prager). They also own Townhall.com, HumanEvents.com, and much, much, more.

How much of Salem's success is message acceptance and how much is business acumen, I won't hazard a guess, though I do think both are significant factors. Looked at from the other side, Pacifica Radio is both an ideology and a business fail.  Pacifica Radio isn't dead, like 'Err America, but bare survival in a tiny size isn't exactly impressive.

[thundley4]

This one is actually talking about distribution proportional to contribution, which isn't Communism even if it isn't much of anything else that would actually work.  Doomed to break down in catfights about how much Person A did versus Person B, the only way to prevent that is an ironclad rule process to weigh contributions.  Though the DUmmie is clearly contemplating weighing quality and uniqueness, not just hours worked or capital contributions, so such a rule process would be impossible to implement without essentially having a dictator and everyone acquiescing in the decrees he or she issues (Fat chance).

True enough.  It has about as much chance as communism/socialism has of working.

[USA4ME]

The business model wouldn't be that hard to develop, but setting up the scoring system is where the complications come. I'd especially be interested in how "loans and investments" get scored.

.

[98ZJUSMC]

There's already an "excellent" example of a "business" run as a collective. It's called Pacifica Radio.

*ding*  *ding*  *ding*

A case study is progtarded stupidity.

[Mr Mannn]

I would like to see these lazy a$$ DUmmies actually get together and make a commies business. They would show up to claim their share, but after that you would never see a DUmmy even push a broom.

*** If liberals had the will to make a magic socialist business, all the media would be pointing to its success.

*** If liberals can't give to charity, how could you trust them to share the profits? Methinks only the elite at the top would profit

Come on DUmmies. prove me wrong. Use this method to make a business. Who needs investors when you have the poor downtrodden to serve as your willing minions. This is the point to stand tall and present the positive side of socialism. and at very last, no one will ever turn the channel to FOX News.
Besides the earwig lady and a walrus could use a bit of a pick-me-up job

[USA4ME]

Erich Bloodaxe BSN

3. I wish you luck, but I can't think of any.

The one suggestion I have is that any capital input should always be in the form of a loan. Otherwise having capital in the company becomes a permanent drain on the 'sharing', even though no further investment is made, no further work done. Having money is neither a skill nor a talent, but simply a state of being. Loans should have a return on investment, but not be a way to take control of the company.

So if the capital is tied to ownership, the person who has skin in the game might want to actually get their money back (hopefully with a return) one day, and one way to do that is to use their ownership of the company via stock holdings to grab up assets of the company when they see things are going downhill and they want to try and recoup what they can before it's too late, and that's bad.

Ok, you nut job, then who's putting up the collateral for the loan?

1939

7. A lot of companies started this way.

One of the problems that occurred was that the upfront fixed charges each year (i.e interest on the loan) are often too much of a headwind for a startup. Giving capital an equity position in the company avoids the upfront fixed charges because you don't have to pay dividends if you can't afford it or could better use the money to expand the business.

Duh!

Erich Bloodaxe BSN

8. Sure. And a lot of companies wound up stripped away from their starters and in the hands of equity, too. It's a deal with the devil, and different people make different decisions. But I think in the 'crowdfunding' era, you can probably find a lot of small investors willing to risk small amounts for minimal interest. When the banks are offering 0.something interest, you can probably find lots of people willing to sign up for, say, 5% annual whose loans you could buy out at your own pace.

Oh sure, there's just a ton of small investors out there willing to risk their money on a start up just because they're nice people.

Erich, you're what normal people call an idiot. But that's only because they're being nice. 

.

[JohnnyReb]

It's called piece work.....a fixed wage for each piece done. But then you have one person that is energetic and willing to excel at the job. Then everyone else is jealous and demands equal pay for unequal work.....and we're back to minimum wage for the dope smokers.

[Carl]

It is asking a bunch of useless malcontents and freaks that think sometimes showing up is adequate contribution to entitle them to a six figure wage how to start a business?

 

[Maverick1987]

It's called piece work.....a fixed wage for each piece done. But then you have one person that is energetic and willing to excel at the job. Then everyone else is jealous and demands equal pay for unequal work.....and we're back to minimum wage for the dope smokers.

THIS!

[VelvetElvis]

It's simple, silly!  Just pay everyone involved $70,000 a year and problem solved!
It worked really great for that genius at Gravity Payments in Seattle, so what are you waiting for...oops, it's not working, you say???. http://www.seattletimes.com/seattle-news/seattle-company-copes-with-backlash-on-70000-minimum-wage/..Never mind.

[Texacon]

It's called piece work.....a fixed wage for each piece done. But then you have one person that is energetic and willing to excel at the job. Then everyone else is jealous and demands equal pay for unequal work.....and we're back to minimum wage for the dope smokers.

I love working high commission or piece work.  I've done it many times and one of the best to work for on piece work was Chicago Bridge and Iron.  I made a lot of money with them.

KC

[SVPete]

*ding*  *ding*  *ding*

A case study is progtarded stupidity.

One of Pacifica Radio's 5 stations is KPFA, about 50 miles and a galaxy NNE of where I live. In Berserkeley, of course. From what I occasionally hear, the place has more jealousies and back-stabbings than a daytime soap opera (do those exist anymore?). And local Libs & Progs eat up the drama.

[BannedFromDU]

     All of this is nice DUmmythink, except for two facts of life:

1. Liberals want equal outcomes, not marginal valuation of work product. As soon as someone is rewarded for hard work and ingenuity, the shit will hit the fan.

2. Capital talks, bullshit walks. He who commits the capital rules the world. DUmmies think the guy who empties the trash cans should be an equal equity partner to the guy who puts in his cash. That's why they're DUmmies.

This is all academic, anyway. A DUmmy can never and will never have a marketable product or idea.

[DumbAss Tanker]

     All of this is nice DUmmythink, except for two facts of life:

1. Liberals want equal outcomes, not marginal valuation of work product. As soon as someone is rewarded for hard work and ingenuity, the shit will hit the fan.

2. Capital talks, bullshit walks. He who commits the capital rules the world. DUmmies think the guy who empties the trash cans should be an equal equity partner to the guy who puts in his cash. That's why they're DUmmies.

This is all academic, anyway. A DUmmy can never and will never have a marketable product or idea.

Oh yeah, what about LaserAss?

 

[obumazombie]

I worked for a company that also employed piece work employees.
They took full advantage of the compensation and are within the top 10% of total compensation amongst all employees.

[GOP Congress]

The fact that the dummy is trying to figure out a system that is actually the tenets of capitalism shows the dearth of knowledge that these dummies have about economics in the first damn place.