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How Idea Marketplaces work

Guest post by: Sergio R. Samoilovich

Article Overview: Ideas are difficult to define, and much more to buy and sell. However, there were some good attempts to create efficient idea marketplaces in the past, and there are now public mechanisms to create idea marketplaces, or something close to it. News aggregators can be adapted to this function, with most of the necessary features.

How Idea Marketplaces work

Ideas are hard to define, and more to buy and sell, so an Idea Marketplace is a tough challenge.
The globalized world is extremely open to idea flow, to dismay of a few dictatorial governments. But flow is not necessarily trade, and quantity does not imply quality. A good idea marketplace should have a way to tell the golden ideas from the sand, and deliver them to those who can appreciate them and turn them into profit.

A well-deviced but unsuccessful approach to the Idea Market

Around 2000 there was Ideaexchange.com, where ideas could be bought and sold. The ideas had a short public description, and a longer hidden explanation. If you paid the price, you would access the whole thing. Idea authors charged for their complete ideas and the website collected a percentage. Buyers could call for an idea on a certain topic and also comment on the ideas they bought for others to join or beware.

To my deception the website did not last. I do not know why, because in my opinion it was a hell of an idea. Possible failure explanations: Ideaexchange.com did not have a mechanism to convert ideas into projects. The fact that idea posters had to pay a small fee beforehand probably prevented them to reach critical mass. Also, the ideas were too wide (proposals together with jokes, gossip and varied information).

The word “idea” has many meanings, and the marketplaces should limit itselves to measurable ideas, and to ideas that can have any useful follow-up or consequence.

Idea Futures

There is also the concept of Idea Futures, which implies prediction power about the truth of an idea. A nice website called Ideosphere tries to predict events using the reputation of the predictors. Those who earn points predicting accurately are more credible at predicting new issues. The site covers future facts or hidden facts, like science issues.

So, this site deals about Future and Hidden Facts, not just “ideas”. Predictions often deal with the stock market or sports results, and those activities are heavily regulated, which limits this peculiar subset of the idea marketplaces.

Got an idea? We will invest on it!

There are several inventor-investor matching sites, where business ideas can develop into projects. However, most of them are inefficient, with worthless ideas and false investors. Worthless ideas rank from perpetual movement to cold fusion in the kitchen, with better mousetraps in the middle. False investors include those who require a “fee” to analyze the idea and then disappear, and those who are willing to invest up to 10 dollars in your idea, plus those who demand the inventor to fill a 100 page form before anything, with no assurance that even the title will be read.

I have seen them all and I recognize that good matching requires many right properties on each part: financial, geographical, language, age. Also, like in romantic matching, there are many hard-to-define human qualities.

Regulating the entry of both parts (good inventors – real investors) would be an assurance of quality for these idea marketplaces, but that requires time and money. It is hard to find someone able to predict which idea will fly and which will not take off. Who could that be? An academic? A successful businessman? A psychic? Probably none of them. Most likely, a committee with the three of them.

The Web 2.0 is about filtering trash

The Web 1.0 had many data covering the valuable information. Search engines still post: “Results 1 - 100 of about 7,190,000 pages”. 95% of all email is spam.

The news aggregator systems like Digg.com, Reddit.com and Meneame.net (Spanish) became recently very successful as typical Web 2.0 mechanisms. They use qualified voting, social networks and automated quality rating for entries, usually news.

You probably are reading this article because you found it on Digg.com or similar aggregator.

Aggregators as idea marketplaces

Are News Aggregators feasible idea marketplaces? Can you post an idea and see if it catches on? I assume you can .

Business ideas can be filtered by the News Aggregator public and that could be a predictor of its future acceptance by the general public. If the idea is accepted by the masses, savvy investors will be able to catch them.

Political ideas can also have a similar mechanism. Anyone could launch a proposal and the politicians fishing for good ideas could profit from it. Conversely, someone who reaches Top-Digg user status (good Karma in the pligg-like systems) can become a good real-life politician.

Empty domain names are like business proposals, and are also subject to Aggregator treatment. Such Aggregator could be the ideal automated domain valuation system.

Aggregators could be used for painters to test their sketches, for advertisers to test their logos or catchy phrases, for models-to-be to expose their beauties, or for conferences looking for appealing speakers. The Barcamp geeky Web 2.0 conferences use such a system.

There are a few necessary conditions for an aggregator to be successful: good coding, critical mass and some of the features described above in IdeaExchange and Ideosphere.

Finally, I started one aggregator for business ideas at www.business-ideas.com.ar and one for local political ideas at www.ideaspoliticas.com.ar . I am ready to start others by request.

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