Like all the rest of the companies working in collaboration tools, crowdsourcing, crowdfunding or any of the other “Social Commerce” domains, the biggest challenge at BountyUp seems to be “Cognition Friction”. Which is a fancy way of saying that people have no idea what we’re talking about.

The best way to address this seems to be by analogy - unfortunately, we’ve yet to find a sufficiently universal analogy, to which all of our current (and future) users can relate. But as I hinted at in a previous post, we’ve been considering the Stock Market.

Why? Whether the participants realize it or not, it’s a massively collaborative experiment in Social Commerce - with literally MILLIONS of strangers pooling their funds to support (and capitalize on) companies around the world. In fact, it’s the closest thing to BountyUp that exists.

Here are the gaps:

1. In the stock market, you invest in companies as a whole. With BountyUp, you invest directly in the project or product you’re interested in.
2. The stock market can only be used for investing - BountyUp can be used for investing, purchasing, or donating.
3. Investments in the stock market are immediately at risk - BountyUp pledges are actually incentives, not true investments. The upside is that they’re never at risk - if the product or project is not completed, you get your funds back. The downside - you have no claim to company returns that are outside of the Bounty contracts.
4.  There’s no “tool” (outside of the Annual General Meeting) to chat with other investors in the Stock Market. BountyUp provides a forum as well as a marketplace.

On second thought, perhaps this analogy is reaching a bit. What do think? Can you think of a simpler, better way to explain what crowdfunding and crowdsourcing is, and how to do it?

As part of our marketing efforts at BountyUp, I’ve been combing the net looking for ongoing discussions of Social Commerce, Crowdsourcing, Crowdfunding, etc. But it wasn’t until yesterday, when I rewrote the wikipedia article on the topic, that I finally accepted the fact that it’s just not happening yet. So I’m going to kick it off with my own (obviously subjective) ‘Ontology of Social Commerce’. But first, a random metaphor:

Imagine any market transaction, as a ride across a stony field, on the back of a donkey.

The donkey is the seller, and, as every buyer will tell you, he needs to be motivated. So we’ve got a carrot, on a stick. The carrot represents our buyer (or his motivation), and the distance across the field, the product itself.

Crowdfunding, is using more than one carrot.

Crowdsourcing, is taking your carrots and walking through a barn full of donkeys, waiting for a promising donkey to come forward.

And the Community (or Crowdcasting, if you like) is everything else in the story - how the donkeys got into the barn in the first place, whether the carrots are all the same size and shape, who gets the leftover carrots if there ARE any leftovers, etc. You get the picture. (more…)

Along with Todd, I’ve struggled over the past few months to explain to people WHY, if BountyUp is such a good idea, it doesn’t already exist. And the answer seems to be “Market Coordination”. I found a great quote this evening (from “How to Change the World”, by David Bornstein) that illustrates this well, in the context of sending children from low-income backgrounds to college:

“Imagine that it costs $1000 to privde the guidance for a kid to get into college who currently has a 2.5 GPA and would otherwise become a parking lot attendant, which is fine, but does not fulfill her potential,” explains Furbush. “Say the kid goes to college and that $1000 investment yields a $500 net benefit for the firm which, five years from now, she’s going to end up working for; but, of course, we don’t know which firm that will be. Say $100 accrues to the high school which can brag about getting kids into college. Say $400 accrues to the city that wouldn’t have to pay to assist her and another $200 accrues to the college that’s paying people to find her, and so on, including tax collections, indirect effects on her peers, and most of all, the benefit to her wealth and well-being.

“What if it turns out that all those smaller amounts add up to a return to society well in excess of the $1000 that changed her life, but any single one of them wouldn’t be enough to economically justify paying to change her path? It’s hard for markets to arise when that coordination is difficult.”

In the context of this example, of course, it’s a leap of faith for any of those mentioned (organizations, the city, the future employers, etc) to contribute to such a program - since they have no way of knowing ahead of time if it will work. But in the case of a Bounty, no such faith is required. If it doesn’t work out - you get your money back. All that’s required is a temporary suspension of doubt.

BountyUp is essentially a tool that facilitates collaborative commerce. Traditionally we have had private goods, which have a subjective value to us and to which we can also ascribe some sort of monetary value. Examples of this would be: an ice cream cone, a car, a plane, or a building; all of which we can define a value for, and then determine if we want to buy it or not.

On the other side of the spectrum of goods have been the public goods, for which we also have a subjective value, but which are too large or nebulous for us to accurately attribute a monetary value. Examples of these would be: clean air, a legal system, space exploration and parks. All of these are goods that we want, but nothing to which, as individuals, we are able to ascribe a monetary value. Traditionally, again, we have paid taxes and elected people who, presumably, know where these funds should be directed in order to meet the needs of the general population.

BountyUp has created one of the first tools for a marketplace that addresses what I’d like to refer to as “a semi-public” (or semi-private) good. An organization such as NASA that can define the success metrics of any particular task (in the form of a Bounty) and put money on the table, allowing any other organization to add to the Bounty. If NASA, for example, starts a Bounty for setting up a station on the moon, then anybody could contribute towards that particular success metric (designing a particular type of rover, or engine, or camera) and individuals or institutions can contribute, knowing that if the Bounty is not completed by a particular deadline, everybody gets their money back.

Or say you want a park with a place for your children to play. You might want to put 50 bucks down for a park with certain dimensions and a swing set. Well, people with children in your city might also feel that they would like to, essentially buy a park for 50 dollars. Get 10,000 people together, and you have a half-million dollar Bounty. A real estate developer can buy a piece of property, plant some grass, put in a swing-set - and collect the Bounty. What if the city put in the park, and collected the Bounty? They could even put some money towards a Bounty for a mass-transit system, or a sewage treatment plant, or anything else - and the people that value that, can contribute towards that Bounty. Crowdfunding as a fully distributed, decentralized method of acquiring semi-public goods - that, themselves, are crowdsourced for delivery? Yes, governments of the world… you too can evolve.