Winning a Prediction Market

normaldistr Prediction Markets have intrigued me for some time now. I've been reading about them in books such as 'The Wisdom of Crowds' and 'We are Smarter than Me' and 'Wikinomics'. The examples they give are inspiring. But still I find the number of examples, also on the Internet, quite limited. And I think I understand why now. I'll explain why below.

But first something great happened to me some time ago. For one I joined the 2.0 Adoption Council. Which is a great group of enterprise 2.0 practitioners and enthusiasts. It simply is a group of people in this area that want to learn from each other. And then recently the 2.0 Adoption Council set up a Prediction Market. Ah, this is great, I thought, it would give me the chance to experience a Prediction Markt in practice. So I jumped in!

This prediction market was focused on Enterprise 2.0 business and technology. Several statements in this area were put up and the market kicked off.

Every participant got $10.000 to use as virtual money. You could put money on a certain statement based on how convinced you were you'd get it right. But before you did that you'd be ask what the probability was the statement would come true.

This Prediction Market ran for a couple of months. The results will be used in a broader survey of the Enterprise 2.0. But now comes the greatest part of this whole experience: I won the Prediction Market! Wow, I knew my predictions weren't crazy, but with all these smart people in the e2.0 field I didn't think I would win. But I did. Here's a link to the post to prove it!

Back to why aren't prediction markets so visible? For one I think because we're still learning to use the "low-hanging fruit" of web 2.0 in enterprises. Like wiki's, blogs, rss and bookmarking. How do we use these interesting platform in daily corporate practice? How do we get employees to understand their underlying concepts? Etc.

Another reason is the fact that although the idea of a prediction market is easy to understand, actually participating in one isn't. It's not extremely difficult, but it not easy to just click away. You have to have some understanding of statistics. You have to understand how a normal distribution works.

A final reason - that I could come up with - is many people think you need a very large number of participants for a prediction market to be useful and accurate. Crowdcast told me this is not true. They get very good results with groups of 50-75 participants.

So, we have some explaining to do, which is good anyway. My next steps are to look for areas within the company I work for and experiment with Markets. And, I'm also looking for money to go to the Enterprise 2.0 conference in Boston. My prize for winning the Market is a full-conference pass! Now I just need to get their by plane and stay in a hotel somewhere.

Popular posts

Keep the Intranet Small

Image
This tweet by Jonathan Phillips ( @digitaljonathan ) triggered to finalize this post, that's been burning in my draft box. I've always been intrigued by how unsuccessful many intranets are. And there are all kinds of good reasons for intranet failure. One of the things that is hardly ever mentioned is: Shouldn't the intranet be smaller? Usually intranets are huge. Lots and lots of pages with lots and lots of content. With complex navigation. The intranet  evaluation surveys almost always show employees only use the news page and people finder. But still we build and maintain nice big intranets. Not only stats point to smaller intranets. There are others reasons as well. I came up with a few. If you have more, just leave a comment. Here's my list: -            user requirements: users don't require large intranet -            search/navigation: searching and navigating a small intranet is easier than in a large intranet -            mobile: the content of the
Read more

Enterprise 2.0 Research

Image
There's not too much fundamental research on Enterprise 2.0. Deloitte recently published interesting research done on enterprise 2.0 implementations and their return-on-investment. In the EU research has also done as well. Study is being done for the European Commission and it was carried out by Tech4i2, IDC and Headshift. What was the goal of the study? Goals of the study To provide a clear definition of Enterprise 2.0 is, describe the market and the positioning of EU industry, also in comparison with US and Asia; To analyze the take-up of Enterprise 2.0, the organizational requirements, and the role on the transition to a knowledge based low-carbon economy; To collect evidence on its macro-economic impact, as a market opportunity for the European Software industry and as a productivity tool for European business; To identify and analyse both the direct and contextual challenges, including the need for Next Generation Access and the legal barriers; To analyse an
Read more

Innovation in Turbulent Times

Image
I love reading articles about innovation. And every now and then you read one that is very interesting. "Innovation in Turbulent Times" by Rigby, Gruver, Allen (in HBR, June 2009) is one of them. This article takes fashion companies as an example for continuous, year-by-year innovation. And how successful fashion companies are usually led by two people: a left-brainer and a right-brainer. "If you don't have highly creative people in positions of real authority, you won't get innovation. Most companies in other industries ignore this lesson." They extend this to show that successful non-fashion companies have the same kind of leadership. And this kind of leadership is usually also characterized by a long-term relationship. I think this concept can also be extended to teams and projects as well. More often than not, people are good at one or the other: thinking up great concepts or ideas, or, making them. In teams and projects we can learn from this as
Read more