Prediction Markets Round-Up

Prediction Markets are a tool for collecting group opinion using market principles. The price is usually based on a conversion of an opinion of the percent likely an event is to happen (i.e., the probability), for example there is a 40% change that Candidate X will win the election. The premise is that there is a lot of hidden information that can be sharable but there are not mechanisms to share it because information-holders either cannot or do not wish to share it (for example that a current work team project may not finish on time). Some research has found that prediction markets may beat polls or experts in terms of forecast accuracy [1].

Figure 1. Prediction Market Example

To aggregate hidden organizational opinion and expertise, Prediction Markets are in use at 100-200 large US organizations as of June 2014: Paypal, HP, BestBuy, Electronic Arts, Boeing, Amazon, Harvard, GM, Hallmark, P&G, Ford, Microsoft, Chevron, Lockheed Martin, CNN, Adobe, American Express, and Bosch. There are several enterprise Prediction Market vendors for enterprise idea management: Consensus Point, Inkling, Spigit/Crowdcast, Bright Idea, and Qmarkets. The main applications of Enterprise Prediction Markets are revenue forecasting, demand planning, and capital budgeting; innovation life cycle management (rate, filter, and prioritize ideas), and project management and risk management.

There are Enterprise Prediction Markets and also Consumer Prediction Markets for event prediction such as politics: election results; economics: box office receipts, product sales; and health: pandemic prediction. Some of the leading markets are Iowa Electronic Markets (and Iowa Electronic Health Markets), the Hollywood Stock Exchange (film box office, TV shows, celebrities), simExchange (gaming: video game consoles, video game launches), CROWDPARK (general), and LongBets (futurist). A new market, SciCast, has recently launched for detailed science and technology predictions.

Markets are typically real-money, reputation-based, or anonymous. In the wake of Intrade’s regulation-forced closure, Bitcoin Prediction Markets are enjoying a surge of trading activity; markets like Predictious, Fairlay, and Bitcoin Bull Bear.

More Information: Prediction Markets @ Singularity University

[1] Trepte, K. et al. Forecasting consumer products using prediction markets. MIT. 2009.

Interconnected Big Data World: API Services Marketplaces

A feature of the data-driven modern world is different companies (e.g.; Walgreens, BestBuy) and web properties (e.g.; eBay) offering access to their data and services via API (application programming interface).

In some part an ingenious crowdsourcing ploy and more broadly having the effect of enmeshing even more deeply the interconnected data world, API access requires a lot of coordination.

A new market segment, API management services, has sprung up to facilitate both public and private (white-label) access. Some of the leading companies in the segment include: Mashape, the cloud API platform, offering developer access to hundreds of APIs, Mashery (acquired by Intel in April 2013), an API network with standardized and richly-documented access to over 50 APIs, and Apigee, a leading provider of API services for enterprises and developers. Other related companies include 3scale, WebServius, and Layer 7 Technologies. A related company Zapier enables task-automation between online services like Salesforce, Basecamp, and Gmail.

API management services are growing marketplaces for the management, distribution, and consumption of APIs. Developers gain the ability to have a standard interface for quickly accessing and working with data from hundreds of sources. Web properties and corporations gain a standardized and outsourced management solution to coordinate external developer interactions and extend their ecosystems.

Newtech: enterprise social networks

Like email, instant messaging, and wikis, the latest newtech spreading into businesses is social networks, essentially serving as a private internal version of Facebook and Twitter. Enterprise social networks are used for a number of purposes, first and foremost, status updates to work teams, but also for real-time messaging with colleagues including document transfer, broadcast announcements, and opinion capture via polls. There are several companies in the enterprise social software sector (Gartner chart). Among the most vibrant are Yammer and Chatter (affiliated with salesforce) each of which has over 100,000 corporate customers in a wide range of industries from finance to entertainment to professional sports; Jive is a third large company in the space. The standard pricing model appears to be freemium-based, free for light-users and $5/seat/month for power users. Enterprise social networks are typically externally-hosted.

Two of the key challenges that come to mind with enterprise social software are: consolidation with other internal communications platforms and data mining. As with enterprise instant messaging, archival and retrieval is important, both at the personal level (for productivity) and organization level (for information systems backup and compliance). There need to be effective ways to consolidate and mine multi-platform internal communications. Formalizing the explosion of casual interaction as it naturally occurs could be abstracted into value-added tools such as a codification of internal knowledge and expertise in the internal wiki for training purposes. It might also be possible to integrate communication flows unobtrusively and automatically into prediction markets or other sentiment analysis algorithms to capture opinion about key upcoming events like product launches and quarterly sales results.