Pretty much all company owners (or the respective investors) believe that they are most knowledgeable about what’s the best way to reinvest income. Unfortunately, mostly they overestimate their own knowledge in this regard.
The idea that random customers would be better at corporate budgeting than the people who work in those companies and think about corporate strategy every day, is a really strong claim, and you should try to offer evidence for this claim if you want people to take your fintech idea seriously.
Suppose I buy a new car from Toyota, and now I get to decide how Toyota invests the $10K of profit they made by selling me the car. There are immediately so many problems:
How on earth am I supposed to make this decision?? Should they spend the money on ramping up production of this exact car model? Or should they spend the money on R&D to make better car engines in the future? Or should they save up money to buy an electric-vehicle battery manufacturing startup? Maybe they should just spend more on advertising? I don’t know anything about running a car company. I don’t even know what their current budget is—maybe advertising was the best use of new funds last year, but this year they’re already spending a ton on advertising, and it would be better to simply return additional profits to shareholders rather than over-expand?
Would it be Toyota’s job to give me tons of material that I could read, to become informed and make the decision properly? But then wouldn’t Toyota just end up making all the decisions anyway, in the form of “recommendations”, that customers would usually agree with?
Wouldn’t a lot of this information be secret / internal data, such that giving it away would unduly help rival companies?
Maybe an idea is popular and sounds good, but is actually a terrible idea for some subtle reason. For example, “Toyota should pivot to making self-driving cars powered by AI” sounds like a good idea to me, but I’m guessing that the reason Toyota isn’t doing it is that it would be pretty difficult for them to become a leader in self-driving technology. If ill-informed customers were making decisions, wouldn’t we expect follies like this to happen all the time?
How is everyone supposed to find the time to be constantly researching different corporations? Last month I bought a car and had to become a Toyota expert, this month I bought a new TV from Samsung, next month I’ll upgrade my Apple iphone, or maybe buy a Nintendo switch. And let’s not forget all the grocery shopping I do, restaurant meals, etc innumerable small purchases.
What happens to all the votes of the people who never bother to engage with this system? What’s the incentive for customers to spend time making corporate decisions?
It seems like you’d need some kind of liquid-democracy-style delegation system for this to work properly, and not take up everyone’s time. Like, maybe you’d delegate most coporate decision-making power to a single expert who we think knows the most about the company (we could call this person a “CEO”), and then have a wider circle of people that oversee the CEO’s behavior and fire them if necessary (this could be a “board of directors”), and then a wider circle of people who are generally interested in that company (these might be called “shareholders”) could determine who’s on the board of directors...
The idea that random customers would be better at corporate budgeting than the people who work in those companies and think about corporate strategy every day, is a really strong claim, and you should try to offer evidence for this claim if you want people to take your fintech idea seriously.
Suppose I buy a new car from Toyota, and now I get to decide how Toyota invests the $10K of profit they made by selling me the car. There are immediately so many problems:
How on earth am I supposed to make this decision?? Should they spend the money on ramping up production of this exact car model? Or should they spend the money on R&D to make better car engines in the future? Or should they save up money to buy an electric-vehicle battery manufacturing startup? Maybe they should just spend more on advertising? I don’t know anything about running a car company. I don’t even know what their current budget is—maybe advertising was the best use of new funds last year, but this year they’re already spending a ton on advertising, and it would be better to simply return additional profits to shareholders rather than over-expand?
Would it be Toyota’s job to give me tons of material that I could read, to become informed and make the decision properly? But then wouldn’t Toyota just end up making all the decisions anyway, in the form of “recommendations”, that customers would usually agree with?
Wouldn’t a lot of this information be secret / internal data, such that giving it away would unduly help rival companies?
Maybe an idea is popular and sounds good, but is actually a terrible idea for some subtle reason. For example, “Toyota should pivot to making self-driving cars powered by AI” sounds like a good idea to me, but I’m guessing that the reason Toyota isn’t doing it is that it would be pretty difficult for them to become a leader in self-driving technology. If ill-informed customers were making decisions, wouldn’t we expect follies like this to happen all the time?
How is everyone supposed to find the time to be constantly researching different corporations? Last month I bought a car and had to become a Toyota expert, this month I bought a new TV from Samsung, next month I’ll upgrade my Apple iphone, or maybe buy a Nintendo switch. And let’s not forget all the grocery shopping I do, restaurant meals, etc innumerable small purchases.
What happens to all the votes of the people who never bother to engage with this system? What’s the incentive for customers to spend time making corporate decisions?
It seems like you’d need some kind of liquid-democracy-style delegation system for this to work properly, and not take up everyone’s time. Like, maybe you’d delegate most coporate decision-making power to a single expert who we think knows the most about the company (we could call this person a “CEO”), and then have a wider circle of people that oversee the CEO’s behavior and fire them if necessary (this could be a “board of directors”), and then a wider circle of people who are generally interested in that company (these might be called “shareholders”) could determine who’s on the board of directors...