Snake-oil Salesmen Won’t Cure the World: The Tragedy of the Online Competition Commons

Anyone remember that bumper sticker, “it will be a great day when schools have all the money they need and the pentagon has to hold a bake sale to buy a bomber?”

Well, here’s a new take on that:  “it will be a great day when social enterprises have all the money they need and Goldman Sachs has to win a popularity contest to raise money.”

Is anyone else tired of the barrage of contests and votes that are now the main staple of social enterprise funding?  The entrepreneurs behind GSSE ventures AYZH, Mama Carts, and PowerMundo know exactly what I’m talking about. And so do their friends and family.  Look, I don’t mind voting every day for three weeks if I believe in the venture, but is someone’s ability to wrangle a bunch of votes really correlated to the value or viability of a venture and the team that’s behind it?

Mama Carts, for example, was recently engaged in a spirited competition to win a bunch of money from The Hult Prize.  All they had to do was get thousands of people to cast more votes for their video than the competing videos. Seemed simple enough, except they were several thousand votes behind their competitors.  Game over…  They only needed to find a way to get a fraction of the students at our university to take 30 seconds out of their day to vote for them.  Tragically, however, most students are busy voting for the next American Idol,  or which new Doritos flavor is most delish.  Otherwise, winning this competition would have been a piece of cake for Mama Carts.

Snake Oil Cures All

Snake Oil Cures All

To be clear, I’m not saying they were the best idea in the Hult competition (although they clearly were).  I’m merely suggesting that putting it out to a pseudo-vote, in which nobody really knows who the voters are or what, if anything, they know about hunger in urban slums isn’t the smartest way to invest your money or pick a winner. It might be a good way to pick a good snake-oil salesman, though.  We certainly need more of them.

-Carl

This entry was posted in Impact Investing and Startup Financing, Leadership and Communication, Sustainable Enterprise and tagged , , , . Bookmark the permalink.

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