Upstart corporate prediction market success story
Melody
Corporate prediction market startup Crowdcast in the New York Times:
During a pilot period, five large companies, including Warner Brothers and General Motors, have been using Crowdcast to predict revenue, ship dates or new products from competitors. About 4,000 bets have been placed, and predictions have been about 50 percent more accurate than official forecasts, Ms. Fine said.
At a media company with a new product to ship, 1,200 employees predicted a ship date and sales figures that resulted in 61 percent less error than executives’ previous prediction, according to Crowdcast. A pharmaceutical company asked a panel of scientists and doctors to predict regulatory decisions and new drug sales using Crowdcast, and they were more accurate than the company’s original prediction 86 percent of the time.
Pretty impressive. Crowdcast has debuted a new type of collective forecasting mechanism that you can read about here.
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Reader Comments (3)
I always wonder if the good results we've seen from crowdsourcing are essentially the application of good focus testing. I once read an article that said that 90% of focus testing is useless; what you want from focus testing is (a) to see if your product or strategy or whatever is disliked by a very wide slice of your target market, or (b) to see if there's some major factor you're not aware of. So, for example, if you're a builder and you want to decide what site to build on, you can focus group it. Then if 80+% of the sample hates the site OR if just one person says there's a toxic waste dump or Indian graveyard under there, then you change your plan. You ignore all other results.
With crowdsourcing, it seems like you are looking for that kind of information (e.g. the Harry Potter spoilers that were revealed as a result of prediction markets). I wonder if the good results of crowdsourcing vindicate that approach to focus groups.
On a side note, I came here from MR largely because your name rang a bell, and I realized that it's because I see it from time to time on invitations to Tufts alumni events on Facebook. I didn't know you worked in modeling & simulation; I worked on a couple of "serious game" projects in my previous job. Perhaps we should compare notes.
asg-
It's an interesting comparison; both approaches certainly do value the group over any single individual's opinion. I would put crowdsourcing in its own category, though -- it can actually create something big rather than just be an evaluation tool.
Ah, nice to make the alma mater connection. Would love to compare notes. E-mail me at melody dot hildebrandt at gmail dot com.
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