“Slow burn” isn't a diffusion method or metric, just a description of growth. Not dying, but also not “burning like wildfire.” It's continued, steady growth.

I agree that PMs aren't an academic backwater; far from it! Yet they've also not been adopted widely. I have no idea where you see order-of-magnitude growth per year, and would love to see evidence of it. That leads to your last point…

I would love to set up an PM on diffusion and adoption, but am a bit stumped on what exactly to trade! Ideally it would be on some metric of number of clients and/or revenues of the PM software companies, broken out between software and consulting fees. But since everyone is private none of that information is available.

“Slow burn” isn't a diffusion method or metric, just a description of growth. Not dying, but also not “burning like wildfire.” It's continued, steady growth.

I agree that PMs aren't an academic backwater; far from it! Yet they've also not been adopted widely. I have no idea where you see order-of-magnitude growth per year, and would love to see evidence of it. That leads to your last point…

I would love to set up an PM on diffusion and adoption, but am a bit stumped on what exactly to trade! Ideally it would be on some metric of number of clients and/or revenues of the PM software companies, broken out between software and consulting fees. But since everyone is private none of that information is available.

Thanks for the reply. You may wish to look at the 'bible' of technology adoption, “Diffusion of Innovations,” by Everett Rodgers –

http://www.amazon.com/Diffusion-Innovations-5th…

I'm not sure there is a diffusion method or metric called a 'slow burn.' By most measures, slow burn would mean failure, at least from the perspective of diffusion science.

PMs are no longer a curious academic backwater. The factor growth you need to see is in play.

Anyway, one view that informs the community is Malcom Gladwell's observation, “The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social skills.” More than ever those skills are in place and operational. That's not easy and takes a while.It is a critical success factor.

BTW, is there a market for PM diffusion and adoption someplace? Why not spin one up? It would be popular.

Thanks again, good discourse.

Cordially,

John

While I certainly see growth, and even strong growth, I haven't seen evidence of order-of-magnitude growth, and don't believe it will happen this year. Last year many people said that 2008 would be the big year because of the US election and all of the press on prediction markets there… hasn't happened. You're saying 2009 will be the big year; I'm just saying that I think it's still going to take some time.

Each year for the past ten years companies have been saying that *that* year was going to be the big year for innovative uses on mobile phones; yet it was only once Apple came out with the iPhone (arguably, when they came out with the 3G iPhone) that the industry finally started to radically change for the better. I'm just wary that if I start saying that *this* is the year for prediction markets, that I'll look like a fool. I'm not going to say it until and unless I have really good reasons to believe it.

If you had more concrete evidence (sales growth, etc.) I would certainly be open to changing my mind, but I haven't seen anything like it.

Again, as I wrote in my post, prediction markets have the capability to explode at any given time; what's limiting their adoption is that they approach the problem completely differently from current solutions. It takes time for people (let alone organisations) to wrap their heads around new ideas.

While I respect your opinion, I disagree. I think prediction markets will see continued growth for quite some time, but don't believe that 2009 will see “sharp growth.” (This depends on what you mean by sharp growth; if we had a market on this question it would need to define this. I would use a metric of an order-of-magnitude growth in the industry in 12-18 months.)

As I wrote in the post, I think prediction markets are a kind of technology that will see a “slow burn” in growth for quite some time; it will be many years before we see any truly dramatic spike. Again, this doesn't mean that they're not useful, just that they're a different enough tool that it's tough for companies to adapt to use them.

The global prediction market community and cluster are more bullish on the ascension of PMs in 2009. Judging from the popularity of your PM Clusters, stunning enterprise case studies, renewed investment and talent, it is safe to conclude sharp growth in PMs in 2009 and beyond. This growth is also consistent with Gartner Research and PMs exiting the “Peak of Inflated Expectations.” See:

http://www.pmcluster.com/NYC09.htm

Cheers,

John

This is partly what I was getting to in my post. Traditional forecasting (such as FMCG for hundreds/thousands of SKUs) will probably be best served by traditional techniques. If the product demand is relatively stable, I don't see how prediction markets would add a lot of value.

But I have seen some impressive case studies for prediction markets where a company is trying to forecast something that's not been forecasted before. Mat Fogarty (of Crowdcast) used prediction markets at EA to forecast quality scores for new games. The prediction market forecasts reduced the error rate in half!

There have also been some great examples of prediction markets being used in project management, specifically to assess the probability that a project will meet specific milestones. (I wrote a bit about that here: http://blog.mercury-rac.com/2008/07/14/rag-stat… )

The general trend here is that prediction markets can be used to ask more strategic questions that are difficult to assess analytically.

In general I agree that the industry needs specific, successful examples of great prediction markets. Inkling has started posting some here (http://inklingmarkets.com/homes/howtouse) but even those don't have real specifics.

I'd be happy to help talk you through some ideas; you can e-mail me at jed (dot) christiansen (at) mercury-rac.com.

One example of skepticism comes from a client in the FMCG industry who already has a strong demand forecasting model based on sales data. In a sense aren't their consumers participating a giant prediction market all the time, voting for outcomes by simply buying goods? What information could an employee based PM take advantage of that weekly sales data hasn't already factored in?