Playing for Keeps: The Perfect Profile for Prediction Market Success

The anecdotes of prediction market pilots in major organizations are everywhere. Often they are tried in a small, almost clandestine manner within an isolated corner of a company by someone fairly junior. His forecasts tend to take on one of two characteristics – fun forecasts (sports, elections, etc.) or forecasts that are business related. The business-related forecasts are usually trivial and center on uninteresting metrics, or, more interestingly, they’re compelling enough that they get someone’s attention and the project is promptly killed. A junior person with an anonymous crowd can feel like a lynch mob to this middle manager who has previously ‘owned’ the forecast.

Where we have seen prediction markets thrive is where they get early senior support in the company. These executives vocally support a new way of forecasting and embrace the fact that there is knowledge that is not getting to their desks. The culture they support values and respects the opinions of their employees. They are not concerned about putting their key performance and risk indicators front-and-center for their reports to forecast and discuss openly. In these organizations, the adoption is high, sustained participation is healthy, and, yes, the forecasts are accurate. Management is able to make mid-course corrections more swiftly, and iterate product development in a more agile manner.

Prediction markets are not about ‘gotcha,’ they are about measuring and mitigating risks that are key to the business.

It is this ideal client, where the company is truly making a shift in the way they collaborate, who we look for in our engagements. This is one of the reasons we have made the decision not to employ a freemium model, offering a lower-end DIY version on our site and an enterprise-version to those who are so inclined. The inexpensive, ill-designed, and soft-pedaled implementations that result from this do a disservice to what we can really do for a company that’s all in.

Are you all in?