Over a 6 week period, Logica used Consensus Point’s prediction market platform to engage their employees, their customers, leading academics and key decision makers to better understand and predict the future of the cloud. The market, named “Logica FutureScope”, aggregated the disparate opinions of 100s of cloud and business experts and highlighted the factors that are both driving and inhibiting the growth of cloud today. This valuable market research includes future trends and insights on many critical areas, such as the impact of security events on the demand for cloud services.

Logica was looking for new ways to engage and source the “wisdom of the crowd” in order to better understand the direction of future trends. Consensus Point’s prediction market provides them with an environment that encourages insightful debate and contributes to true thought leadership.

If you’re interested in learning more about how our prediction market software can help put your company’s finger on the pulse of market research, innovation and thought leadership, contact us at sales@consensuspoint.com.

Focus groups and surveys have been online for years, but companies have been slow to shift their focus from what researchers are calling “Me” research to “We” research that uses the wisdom of the crowd to gain valuable insights into consumer groups.

At Consensus Point, we see the value that Prediction Markets add to the research process as a way to gain access to collective insights. They represent the next wave of market research innovation focusing on the “We”, but they rely on methods that are vastly different from traditional market research and can be quite a leap initially.

The good news is that Prediction Markets have been proven time and again to be as accurate or even more accurate than traditional research techniques including polls, surveys or monadic concept tests. This is because they rely on people’s judgments of others rather than on people’s understanding of themselves. Academic research has shown that humans, as a rule, are quite brilliant at noticing what others are doing and predicting their behaviors but tend to have blinders on when it comes to understanding their own motivations. Prediction markets harness our innate observational talents by asking respondents not “what they would want or would do”, but by asking them to make a prediction about “what others would want or would do”. This a simple but powerful difference between prediction markets and traditional market research methods and explains how prediction markets can be so accurate with a smaller sample and less target market representation.

The 2009 paper, “Me-to-We Research”*, proves that Prediction Markets are:
1. As accurate as Monadic testing with a correlation of 0.91 versus top quartile Monadic testing
2. More discriminating than Monadic testing with the ability to separate good from average ideas
3. Better at identifying potential breakthrough ideas
4. Comparable across markets and categories

Prediction Markets offer numerous benefits to research because in addition to providing better data, the small sample sizes that they require provide time and cost savings to research companies and their clients. If you are interested in finding out more about how Prediction Markets can help your business, please contact us at info@consensuspoint.com.

*Kearon, John and Earls, Mark. “Me-to-We Research: From Asking Unreliable Witnesses about Themselves to Asking People What They Notice, Believe and Predict about Others.” ESOMAR (2009).

2011 has been an amazing year for us at Consensus Point. We were excited to expand our team, including the addition of three outstanding managers and VPs, Lead Software Architect, Jason Vowell from Apple, VP of Development Brian Evans from FanLab and Ashton Brand Group, and Marketing Manager, Hayley Hovious from E.J. Gallo Winery. And we launched a sports public market, Football Futures, with Gannett and the Tennessean. This public facing market successfully predicted the Heisman Trophy winner days before it was announced and has successfully provided a new way for Tennessean readers to engage with the paper.

Additionally, Consensus Point won numerous awards in 2011. Of notable recognition was being named to the Nashville Post “Tech Top 25!” Our CEO Linda Rebrovick was also recognized as a Nashville Business Journal “Technology Power Leader”, one of Nashville’s most powerful women by the Nashville Post, and as a YWCA Woman of Achievement, and still found the time to do numerous interviews, including an interview on board governance with Corporate Board Member.

And our clients continue to do amazing work with prediction markets as well. We are proud to highlight the work of Logica, a leading global, UK- based consulting firm, for the 2011 results of LogicaFuturescope. This public market generated some valuable and insightful insights about the future of Cloud Computing for their clients and consultants! Please let us know if you are interested in the latest LogicaFutureScope Cloud Computing predictions.

We can truly say that 2011 has been memorable, and all of our predictions indicate that 2012 will be even better. Happy New Year!

He [Rami Levy, a technologist with the Motorola's mobile devices business] says the combined revenue from product-based ideas and cost savings from internal innovations is “conservatively” 5 to 10 times TIX administration costs, which largely involve two to three dedicated employees. The cost to purchase and implement prediction-market software — called Foresight Server, from Consensus Point — was “under $100,000,” he says.

CFO.com has an extensive write-up of the customer success we’ve had with Motorola, and we are impressed with Mr. Levy’s ability to concisely identify the bottom line value that our Foresight prediction markets platform is capable of delivering to the enterprise.

Further, the article is an elegant case study of the sort of business scenario that is a perfect opportunity for the use of prediction markets, the path to implementation, and the ultimate value.

What we like best about the article, in fact, and consider a true success for Motorola’s implementation of our solution, is that the value goes beyond raw consideration of the bottom line:

But additional, softer benefits were key goals for the program, too. These have been realized through collaboration forums that allow employees to see and comment on others’ ideas, which are thus improved by the crowd’s input. The forums facilitate people from disparate regions and company organizations forming relationships, working together on ideas, and avoiding duplication of effort, Levy says. Motorola actually introduced the forums in 2005 along with the voting mechanism, but participation spiked after TIX was introduced and continues to rise.

The bottom line, says Levy: “TIX has proved to be an excellent conduit for enabling collaborative innovation and creating new value for Motorola in a fun and enjoyable way that encourages participation at a minimal cost.”

When was the last time you implemented something for the enterprise that not only created cost-effective value but was also fun?

You can read the full CFO.com article here, and you can contact us about Foresight here. We predict customer success if you do.

Linda Rebrovick, CEO of Consensus Point, discussed effective uses of prediction markets, based on multiple years of supporting effective enterprise prediction markets in large companies and government organizations.  She explained that effective enterprise markets require 3 key components:  a proven and expert consultant, a solution that targets key business problems, and the right customer environment and implementation plan.  Rebrovick discussed several use cases highlighting customer examples across several industries and business problems. 

Click Here to Download Presentation (PDF)

Rami Levy, Distinguished Member of the Technical Staff, Technical Lead and Manager of Motorola’s Open Source Technologies Team, explained how Motorola added the TIX Market, powered by Consensus Point, in 2007 to address the challenges of increasing idea backlog and missed opportunities. Levy explained the evolution of the TIX Market and how, over time, the prediction market has streamlined the innovation process, yielding benefits of 55% decrease in disposition days and 40% increase in idea pursue rates. 

Click here to Download Presentation (PDF)

Robin Hanson, Chief Scientist of Consensus Point, discussed the advantages of prediction markets and how to develop effective markets to efficiently yield meaningful outcomes. 

Click here to Download Presentation (PDF)

Michael J. Mauboussin’s Think Twice: Harnessing the Power of Counterintuition

Accurately projecting holiday sales is a crucial task for retailers.  A forecast that is too low leaves shelves bare and profits lost, while too much optimism leads to dusty inventory and pressure on profit margins.  So retailers have come up with a precise sales estimate.  To do so, most merchants rely on experts—individuals in the organization who gather information, study trends, and make predictions. 

                The stakes are especially high for consumer electronics firms because they generate so much of their revenue during the gift-giving season and the value of their inventory depreciates rapidly.  The pressure is really on the internal experts at consumer-electronics giant Best Buy, one of a multitude of retailers that rely on specialists.  So you can imagine the reaction when James Surowiecki, author of the best-selling book The Wisdom of Crowds strolled into Best Buy’s headquarters and delivered a startling message: a relatively uninformed crowd could predict better than the firm’s best seers.

                Surowiecki’s message resonated with Jeff Severt’s, an executive then running Best Buy’s gift-card business.  Severts wondered whether the idea would really work in a corporate setting, so he gave a few hundred people in the organization some basic background information and asked them to forecast February 2005 gift-card sales.  When he tallied the results in March, the average of the nearly 200 respondents was 99.5 percent accurate.  His team’s official forecast was off by five percentage points.  The crowd was better, but was it a fluke?

                Later that year, Severts set up a central location for employees to submit and update their estimates of sales from Thanksgiving through year-end.  More than three hundred employees participated and Severts kept track of the crowd’s collective guess.  When the dust settled in early 2006, he revealed that the official forecast of the internal experts was 93 percent accurate, while the presumed amateur crowd was off by only one-tenth of 1 percent. 

                Best Buy subsequently allocated additional resources to its prediction market, called TagTrade.  The market has yielded useful insights for managers through the more than two thousand employees who have made tens of thousands of trades on topics ranging from customer satisfaction scores to store openings to movie sales.  For instance, in Early 2008, TagTrade indicated that sales of a new service package for laptops would be disappointing when compared with the formal forecast.  When early results confirmed the prediction, the company pulled the offering and relaunched it in the fall.  While far from flawless, the prediction market has been more accurate than the experts a majority of the time and has provided management with information it would not have had otherwise.

Robin Hanson, PhD., Associate Professor of Economics, George Mason University and Chief Scientist, Consensus Point

Rami Levy, Technical Lead and Manager, Open Source Technologies team, and distinguished member of Motorola’s technical staff, Motorola, Inc.

For more information, contact Consensus Point at info@consensuspoint.com.

San Francisco, CA (PRWEB) May 31, 2009 — The Prediction Market Clusters in collaboration with Aurora WDC, Consensus Point, University of Chicago Gleacher Executive Center and many others announces the Prediction Markets Summit and Collective Intelligence Cluster Friday 6 November 2009 in Chicago, Illinois, USA.

Prediction Markets Summit and Collective Intelligence Cluster The venue is the stunning University of Chicago Gleacher Executive Center in Chicago, Illinois, USA. 

Learn how prediction markets, social media and collective intelligence networks are fundamentally altering the enterprise landscape. New forecasting techniques and technologies are driving executive decision making, leading collaborative forecasting and optimizing supply chain management. Engage with experts in knowledge markets that are reshaping all practices of knowledge management (KM), advancing innovation and propelling enterprise knowledge ecologies of the future.

“There is not much that any of us do that is more important than telling the company what we know.” Jeff Severts, EVP, Best Buy

We are thrilled several key scholars and thought leaders will join your cluster including:
Robin Hanson, Professor, Economist, Polymath, George Mason University
George Neumann, George Daly Professor of Economics, University of Iowa

In 2004 James Surowiecki published his now-famous book, The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. For many this milestone introduced the era of collective intelligence for people, business, institutions, the environment and civil society.

“Thanks for organizing an extremely useful and informative workshop!” – Professor Tom Malone, MIT Center for Collective Intelligence

Testimonials

New ways to share, trade and aggregate information using Internet-based markets are exploding. These powerful Web 2.0 social media and network knowledge markets help companies, schools, governments and individuals to acquire and master ever-growing bodies of knowledge. These prediction market capabilities achieve mastery knowledge management (KM) and collective intelligence with stunning speed, efficiency and accuracy.

“Prediction markets are brutally honest and uncannily accurate.” – Geoffrey Colvin, Fortune Magazine

New collaborative market mechanisms and social innovations are driving collective intelligence networks. They resolve questions of science, technology, management, strategy, planning and policy far better than experts or management.

Collective intelligence inhabits the ceaseless flurry of self-correcting social exchanges, social networks and collective knowledge markets. They cover everything from politics and business plans to sports and new product features. Enormously potent, these social networks and markets generate new ideas and amass and refine knowledge and collective wisdom with blinding speed, low cost and accuracy.

Collective intelligence networks and knowledge markets have become commonplace in the enterprise. Top firms using prediction markets are Best Buy, Google, Microsoft, Eli Lilly, Abbott Laboratories and Yahoo! to name a few. Major analysts firms declare prediction markets critical to Enterprise 2.0 information and knowledge management portfolios.

“A company that can predict the future is a company that is going to win.” – Bernardo Huberman, PhD, Senior HP Fellow, HP Labs

Cluster sessions are focused, practical and conversational. They are for executives, directors, mangers, users and practitioners having immediate needs to apply collective intelligence networks and market mechanisms to advance enterprise business outcomes through mastery of collective wisdom.

Pricing and Availability

Registration for the Collective Intelligence Cluster is open and available now. All are welcome. The event participant tuition, including full-day experience, meals, refreshments, books, reception and materials is $399.00 Secure online event check-in and registration in advance required. Early-bird registration ($299.00) is open until 30 September 2009.

Prediction Markets Summit and Collective Intelligence Cluster

Collective Intelligence Cluster Sponsors

Sponsors of the Collective Intelligence Cluster are the world’s leading producers of prediction market software, services, exchanges and expertise. They supply continuous innovation in prediction markets and collective intelligence networks. They include Aurora WDC, ConsensusPoint, Mercury-RAC, Prediction Market Clusters and many others.

About Prediction Market Clusters

The Prediction Market Clusters, founded in 2004, are the global industry commons and open community for prediction markets and collective intelligence networks worldwide. The open, agnostic network is a focused collaboration of vendors, academia, traders, users, developers, markets, regulators and stakeholders. The goal is to provide awareness, diffusion, adoption and pull-through for enterprise, institutional and consumer prediction markets. The Prediction Markets Cluster is the worldwide Next Practices leadership network for collective intelligence networks practices, tools and theories. For more information, please visit Prediction Markets Cluster.

For more information, discounts and to sponsor the Collective Intelligence Cluster, please contact Jennifer Hulett, Tel: 714-458-3826 Fax: 714-572-3742, for details.

In these cases good tools, representations, interfaces, etc. can greatly help people join together in a spirit of constructive camaraderie to build documents, analyses, plans, etc.   People then appreciate the additions and edits of others in building a common product that all will admire.  False or misleading contributions can be quickly detected and eliminated.

The big problems for most collective intelligence tools come when the topics are controversial, and the contributions involve a lot of judgment.  For example, consider folks elaborating a schedule of which projects will be finished when, or designing a budget of which potential projects shall be funded.  Here folks are often justly concerned that many “contributions” will be self-serving attempts to make them or their groups look better or gain more resources.

Prediction markets were designed for exactly these sort of hard problems – contributors know they face a risk of losing as well as gaining from their contributions.  So folks think a little more carefully about what they might say, and choose not to speak when they doubt they have something useful to say.  Prediction markets allow organizations to tap the collective to aggregate info on their most important and controversial topics.  But of course they aren’t the only or best way to support collaboration on all topics.

Brian Spears
GE Hitachi Nuclear Energy

Christina LaComb
John Interrante
Janet Barnett
Deniz Senturk-Dogonaksoy
GE Global Research Center

ABSTRACT
We present the outcome of an idea market run for one of GE Energy’s sub-businesses in July and August of 2006. GE Energy used this market to elicit and rank-order technology and product ideas from across the sub-business. In this experiment, we examine the behavior of traders that have submitted the ideas on the market and their influence on the market’s outcome. An idea’s submitter is clearly motivated to have his idea valued highly by the market, both by the funding given to the top idea as well as smaller prizes given to the top three ideas. In general, founders tended to buy their suggested ideas at prices above the volume-weighted-average price (VWAP) in significant volumes. We discuss the implications and mitigation strategies. A survey of market participants yielded mixed results regarding the market’s effectiveness at ranking ideas but very positive results regarding the quality of ideas proposed. 

Click here to read the full paper.

The Journal of Prediction Markets (2009) 3,1 17-39