Don’t be a business Bolshevik
A market beats a committee. And yet that isn’t how we run our businesses.
Jane Street is a quant trading firm that made $13M per employee last year. They're famously strange. They built a realtime auction to allocate GPU compute using a currency called “Hive Bucks." Anyone can bid, outbid, or kill a project they think is wasting cycles. No approval. No meeting. The market clears itself.
Most companies don't have a compute problem. Yet. But they do have constraints. And the most common solution is a State Planning Commission with better catering. You have three AI engineers and 20 business owners who all want them. You have a $40M innovation budget and 80 pitches. A steering committee meets twice a quarter to allocate by feel. The engineers end up with whoever yells loudest. The dollars end up with whoever makes the prettiest deck. But Drilldown Dave wants to learn more about the numbers, so the decision slips another six weeks.
We call it prioritization.
The Soviets called it planning.
Google ran an internal prediction market called Prophit from 2005 to 2010. A fifth of Googlers participated. Researchers found the markets beat expert forecasts by up to 25%. Ford Motor Company, Eli Lilly and Company, and Best Buy ran their own versions and got similar results.
Most of those markets are dead now. Not because the math failed. When the market predicted bad news on a key project, the Planning Commission quietly shut the market down. The crowd was right, but they were off-message.
Jane Street's design handles that by going further, not pulling back. The market isn't a forecasting layer bolted onto a Politburo. It IS the allocation system. There's no Planning Commission for the market to embarrass.
The hard part was never the mechanism. It's creating a culture where a 24-year-old can kill a 44-year-old's project and the 44-year-old emails them a thank-you note. Most companies don't have that culture. They have a roomful of Drilldown Daves.
You can buy GPUs.
You can hire engineers.
You can budget dollars.
You can't buy a culture where the market is allowed to clear.
We already know free markets beat central planning.
So why do so many companies run their AI portfolio like Brezhnev ran a tractor factory?