Justin Laing

Here’s the company I want to work at:

Every employee gets a base salary. Say $50K/year, doesn’t really matter too much as long as it’s not too high.

Every employee gets a yearly budget. Say another $50K/year.

Employees organize them selves into projects that they create and pool their budgets to fund the projects.

Here’s how it would work: I’ve got an idea, maybe I spend some time making a small prototype or hashing out the idea in some way so that others can get their mind around it. Then I find other people within the organization that want to form a team with me around that idea. I might find a programmer, or engineer, a marketing person, a sales type person, whoever I think I’ll need to be successful. You each bring your budget to the project. So if I get 3 other people on board with my project I’d have a budget of $150K/year to get my idea off the ground. If my idea grows into something that is really cool more people will want to join it and contribute their budgets which will fuel the fire.

Now here’s where it gets interesting; the profits. If my idea is successful it will eventually start to make a profit. A cut of that profit would go back to the organization as a whole, in essence it would be redistributed so that all the people in the organization can keep those salaries and project budgets. But the rest of the profit is for your team and is distributed to them based on the total amount of money they have put into the project using their budget. So if a project starts with just one person in the end when the project is making a profit they will have added the most money to the project through their budget and thus will be getting the largest slice of that profit. And if the idea is spun off as a separate entity ownership of it is determined in the same way as profit sharing.

The company would provide the infrastructure for these projects to grow from, but it wouldn’t be commanding from on high. Evolutionary type pressures would allow the best ideas to rise to the top. It would provide an environment where it was safe to experiment because you’d always be getting your base salary and it would reward those who come up with brilliant ideas.

There would be no rules as to how you could spend your budget except that you could not spend it on paying yourself or anyone else within the company more money.

Of course their would have to be some oversight, some way to get rid of non-performers etc, and many other details in its implementation. Those are all beyond the scope of this thought experiment.