DemoCORPcracy (a barcamp boston 7 post)

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I went to a presentation urging new startups to use a democratic, user based method of corporate governance. The presenter basically asserted that users, in many modern startups, are the most important and least transient stakeholder in a company, and that therefore users should be given stock for participation in the company, with full rights and benefits thereof. This is s model that was only suggested for companies whose product is, for lack of a better term, virtual (imaginary? ;-).

The presenters opinion was that any user, essentially, should be given stock. I think this is going to far.

What I had in mind was power users: think gardeners on wikipedia, how power users on digg or , user/moderators on *overflow…the people who spend significant amounts of time on your website, generate significant content and draw to your website or company. I think if “stockholder” was one of the rewards of a website that already had good draw, you could have a very powerful model indeed. Plus, by the time that any user reaches the point they start earning stock for the corporation, they’ve already made significant investments in that most important, most limited currency that a user has: time. And, with a proper reward/acheivement model, it could also ensure that the only contributers who earn stock are the ones having a positive effect on your company.

For the right type of company, I do think that this could be a very powerful model. Obviously, you would want to have a certain classification of stock, and you wouldn’t want this to be a direct democracy. It would be a representative democracy. But this in many ways makes much more sense to me than stockholders as we currently see it. I’d like to see someone try it.

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