Prediction markets and innovation in 2009
January 5th, 2009Happy New Year to everyone! I hope that 2009 is happy, healthy and prosperous for you. I specifically wanted to thank you as a reader of this blog, and those who have linked to my posts here. Google recently refreshed their PageRank for Mercury’s Blog, and it now has a PageRank of 6/10! Though I don’t post often, I do try to write long-form news and analysis, and I’m glad you’ve found it useful.
What I expect for prediction markets in 2009
I’m probably going to regret doing this by the end of the year, but I’m going to put on my forecasting hat and try to predict what will happen this year in the field of prediction markets.
- Prediction markets in 2009 are going to become even more well-known and wide-spread, but there will be no single event that brings them to the attention of the public. It’s going to be a slow, but steady, growth.
- All of the prediction market vendors will mature their business offering/proposition. Both InklingMarkets and Xpree have made recent business development hires, and Inkling recently redesigned their website with a stronger business pitch and case studies. I think that business cases for prediction markets will be more clear and more developed in general because of this.
- HubDub will continue to only be the only strongly popular play-money prediction market. (HSX is probably similarly popular, but is a single-industry prediction market.) With Hubdub’s partner program and social networking features, they will see significant growth this year.
- While a couple additional software vendors may appear, I get the feeling that the market for prediction market software is largely saturated. People working on projects part-time and selling them may proliferate and be suitable for the lower end of the market, I don’t see many more serious prediction market software companies starting up in 2009.
- I’m looking forward to see how the CantorExchange develops. Will there be enough customers? Will the market see the effects of other studios trying to bid the prices of their competitors’ films down? Or will it be seen more as a financial hedging tool for institutions involved in the film industry? There are lots of open questions to evaluate here, but I still maintain it’s a great step forward for the prediction markets industry.
What to expect from this blog in 2009
I’m going to continue posting on both prediction markets, but continue talking more and more about how collective intelligence can be used in other contexts. Specifically, I’ve become really interested in how groups of people develop new ideas and new innovations.
As I’ve written before, I really don’t like the word “innovation.” Bruce Nussbaum at BusinessWeek has written a few things lately that I really like:
“Innovation” died in 2008, killed off by overuse, misuse, narrowness, incrementalism and failure to evolve. It was done in by CEOs, consultants, marketeers, advertisers and business journalists who degraded and devalued the idea by conflating it with change, technology, design, globalization, trendiness, and anything “new.” It was done it by an obsession with measurement, metrics and math and a demand for predictability in an unpredictable world.
and
“Innovation” is inadequate as a concept to deal with these changes. You have “game-changing” innovation, which is big but rare and incremental innovation which is small but common.
The truth about innovation is that it takes groups of people a lot of work to find and develop new ideas and turn them into innovations. Scott Berkun has a great chapter in his book “The Myths of Innovation” where he destroys the myth of the lone creative genius.
We know it takes groups of people to make innovation happen, so where are the tools for it? A lot of time, money and effort has gone into social networking software to connect people, such as Facebook, MySpace, etc. But I have to agree with Tim O’Reilly: we need to stop throwing sheep and do something worthy. But those tools can be very useful to us in helping foster innovation. I reviewed the software for idea and innovation software recently, but was left generally unimpressed.
These are some of my current thoughts. I plan on thinking out loud more in 2009 on these topics and seeing where it takes me. I look forward to your feedback.
