Nostradamical Opens Its Prediction Market. Outlook Hazy.
We all love to prove that we’ve been granted the gift of foresight, either through our wealth of knowledge or more fantastical means, like The Force. In the last year or so major websites have been trying to capitalize on this by introducing "prediction markets", which allow readers to make guesses about upcoming events ranging from hot news items to celebrity gossip, and also generally significantly increase page views and engagement.
Today sees the public launch of a new prediction site called Nostradamical (named after the well-known seer) which is emphasizing the social nature of making predictions. Users initiate predictions in articles similar to brief blog pots, where they can include videos, photos, and text describing why they think something will happen and why it is important.
There is a lot of hype around prediction markets right now, particularly as a tool for enterprises. Having ten years of experience in the enterprise area of what is sometimes (poorly) known as ‘idea management’, there is plenty of evidence to show that prediction markets are not an effective enterprise tool, and even if they do partially work, there are cheaper and more effective ways of achieving the same goals.
I am writing a paper on this right now, but I can share just one of the problems…
Pubic domain prediction markets benefit by having access to millions of internet users - and so the number of potential visitors to these sites is relatively high. Given a large number of potential visitors, is is not impossible to get good traction. Moreover, when the prediction market is on a simple task where there is great interest, such as an election or working out who will win the World Cup football (soccer!) there may even be a reasonable amount of trading going on.
In a company world, the dynamics are quite different. People do not have time to waste to go into a system, read a large number of ideas or options, and make a reasonable judgment. Also there are obviously fewer employees in a company than there are global internet users - which means that you are playing with fewer potential visitors and contributors to start with.
In a company world, you would like to process several topics at the same time, not a simple ‘yes or no’ option for a known problem. The time it takes to cognitively process the idea and related content is not trivial when you are looking at 20 - 50 ideas… and this session duration rapidly extends to being ‘unreasonable’ in terms of time (ideally a session in a volunteer system like these should take 4 - 6 minutes, and not more than 12 minutes - unless it is part of your day job). So the volume of content and the fact that people have day jobs, dramatically reduces the activity rate within a company prediction market system.
Having said all of that, there are other ways of tapping into the collective genius - mass intelligence - whatever you want to call it - to solve problems faster, better, cheaper. I would urge people to have a look at Imaginatik (www.imaginatik.com) as we have coimbined web technology with a people and leadership process to actually deliver real benefits. For example, just in cost savings alone we have firms like Wal-Mart reporting $36m+ benefits from using crowd intelligence to save money on electricity consumption. Our web site, incidentally, has several case studies on the topic.
Thanks for the article!
Mark Turrell
CEO, Imaginatik plc
http://www.imaginatik.com