Bill Gates, Warren Buffett, and all the Giving Pledge billionaires, should rather do what Peter Thiel does -go investing their cash and/or (liquidated) fortune in futuristic projects. – [VIDEO]

This morning, I wrote that I disaprove Bill Gates and Warren Buffett&#8217-s Giving Pledge operation, because I rather favor billionaires investing in young startups lead by visionaries. Well, just after the publication of that post, I stumbled on the &#8220-Audacious Optimism&#8221- event, which satisfies my request.

The Thiel Foundation is encouraging philanthropists to donate more money to scientific pursuits that could lead to big breakthroughs in medicine, artificial intelligence, and nanotechnology, among other fields.

Note that Peter Thiel draws a distinction between “extensive” technologies, which “take things that are working and replicate them&#8221-, and “intensive” technologies, which try to “take the things that are best in the world and make them qualitatively and dramatically better&#8221-.

Risks pay off -sometimes. – [VIDEO]

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Peter Diamandis on risks and innovation:

Peter Diamandis:


Finally I’d like to address the issue of risk. In contrast to individuals who speak about reducing exposure to risk, I want to speak in favor of accepting more risk.

There is no question that there is risk involved in winning the X PRIZE, as well as risk in going to the moon or Mars or opening any portion of the space frontier. BUT, this is a risk worth taking!

As American many of us forget the debt we owe to early explorers. Tens-of- thousands of people risked their lives to open the &#8216-new world&#8217- or the American west. Thousands lost their lives and we are here today as a result of their courage.

Space is a frontier and frontiers are risky! As explorers and as Americans, we must have the right to take risks that we believe are worthwhile and significant. We owe it to ourselves and future generations. In a time when people are risking their lives in motor sports or bungee jumping, it seems a bit shallow to be concerned about the risk involved exploring space.

It is also critical that we take risk in our technology development and that we allow for failure. Without risk and without room for failure we can not have the very breakthroughs we so desperately need.

A breakthrough, by definition, is something that was considered a &#8220-crazy idea&#8221- the day before it became a breakthrough. If it wasn’t considered a crazy idea, then it really isn’t a breakthrough, is it? It would have simply been an incremental improvement.

Remember those immortal words, &#8220-Failure is not an option?&#8221- If we live and work in an environment where we cannot fail, than breakthroughs may not be an option either.

I urge both this Committee and NASA to take steps which will help the American people understand that space exploration is intrinsically risky, yet a risk worth taking. Let&#8217-s make space explorers heroes once again.

Do businesses need enterprise prediction markets?

Competitive advantage can be obtained either by differentiation or by low cost. Enterprise prediction markets certainly don&#8217-t foster the innovation process, and they are surely not the cheapest forecasting tool. EPMs require special software, the hiring of consultant(s), the participation of all, and a budget for the prizes. EPMs are costly, and they take time to deliver. As of today, I can&#8217-t see why any sane CEO should be implementing EPMs as a decision-making support. At the contrary, I would say that any sane CEO should fire any employee who tried to sneak in internal prediction markets, and should dismember any existing corporate prediction exchange. Right now.

It has been suggested that EPMs have helped Best Buy getting it right on the ‘HD-DVD versus Blu-Ray’ issue. It&#8217-s a boatload of bullsh*t. I know a lot about technology intelligence. It should be done by a smart and curious operator. There is no need of enterprise prediction markets to do this task. The tools you need consist of a bunch of IT news aggregators and a good search engine. Consider this:

The Inevitable Move Of iTunes To The Cloud

In the &#8216-cloud&#8217- piece above, there are facts and there are speculations. You&#8217-ve got much more technology intelligence reading the &#8216-cloud&#8217- piece above than you would get from a crude, plain and simple prediction market. Gimme a break with EPMs. Make no sense at all.

Contrast EPMs (which are costly) with public prediction markets (a la InTrade or BetFair), where probabilistic predictions are offered for free. That makes all the difference for the reason that the added accuracy brought by prediction markets is very small. Market-generated odds are handed out for free to journalists &#8212-still, few of them take the bait. The market-powered crystal ball is worth peanuts.

The reason CEOs are paid millions is that only a small percent of the population of business administration managers has the ability to cut through the non-sense and the balls to cut the cost of the non-sense. It is a rare skill. I am calling on CEOs to end EPMs. Right now.

VIDEO – Robotic Mule

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Nigel, you should set up some kind of prediction market about that at HubDub.


Via the ultra-interesting Robin Hanson &#8212-who, for once, does not write a soporific post.

Un-Important Technical Note: The video above is dated 2008, while Robin Hanson links to a 2006 video, in his post.

Previous blog posts by Chris F. Masse:

  • This is why I said that those who believe that Hillary Clinton has a chance to be on the Democratic ticket are “clueless”.
  • WEB EXCLUSIVE: — The annoted, historical, compound chart that those triple morons at the BetFair blog are hiding from their readers’ view. — It is located in a secret cache, linked to behind a picture of Hillary Clinton. — Curious place to locate a prediction market chart. — I bet nobody downloaded that chart. —
  • Knows the similarity between Google, Craig’s List, and the Drudge Report?
  • “Listening to each other is core to our culture, and we don’t listen to each other just because we’re all so smart. We listen because everyone has good ideas, and because it’s a great way to show respect. And any company, at any point in its history, can start listening more.”
  • 2 days after my ringing the alarm bell… THE FREE FALL
  • Tech News Of The Day — Friday Morning Edition
  • VIDEO: Why Hillary Clinton will never be the Vice President of the United States of America.

Using enterprise prediction markets too early in the innovation process is BAD.

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Jed Christiansen:

I don&#8217-t think that prediction markets need to be the incentive.

I think that when it comes to generating ideas, you need to be as open and inclusive as possible. The process should allow anyone that submits or helps develop an idea to share in any rewards from that idea. Once it&#8217-s developed, then it can move to a stage where you can do forecasting via a prediction market.

Using a prediction market too early can do two things:
1- Poor forecasting due to social influence.
2- Limit revolutionary new ideas.
It&#8217-s too easy to short an idea that looks strange, when in fact it looks odd because it&#8217-s revolutionary. The idea process should foster and develop ideas, not make them compete against each other.

I&#8217-m glad to have sparked a little discussion here.

Previously: Innovation Mechanism = Voting Mechanism + Prediction Market Mechanism

Innovation Mechanism = Voting Mechanism + Prediction Market Mechanism

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Xpree&#8217-s Mat Fogarty (responding to Jed Christiansen, even though Jed didn&#8217-t talk to him but to Emile Servan-Schreiber :-D &#8212-argh, kids, today, interrupting adults&#8217- conversations :-D ):

We have had success combining voting to rank the ideas, then prediction markets to analyze the potential of the top ranked ideas. The phrasing in the prediction market needs to be quite specific, if we invested in idea A, how long would it take to get to market? how much would we sell in the first year? If the company does not invest in idea A, then the money bet in the market is returned to the user.

With long development cycles this can be challenging as it requires keeping the market active until ship, or for the sales estimate, one year after ship.

Of course, you could use a preference market – but this has issues of information cascades and rewarding of group think.


Here&#8217-s the Xpree stuff which Mat is talking about.

Previous blog posts by Chris F. Masse:

  • Since YooPick opened their door, Midas Oracle has been getting, daily, 2 or 3 dozens referrals from FaceBook.
  • US presidential hopeful John McCain hates the Midas Oracle bloggers.
  • If you have tried to contact Chris Masse thru the Midas Oracle Contact Form, I’m terribly sorry to inform you that your message was not delivered to the recipient.
  • “Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S & P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”
  • Meet professor Thomas W. Malone (on the right), from the MIT’s Center for Collective Intelligence.
  • Tom W. Bell rebuts the puritan and sterile petition organized by the American Enterprise Institute (which has on its payroll Paul Wolfowitz, the bright masterminder of the Iraq war).

CFTC Oversight May Not be a Boon.

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I want to quibble with one of Dave Pennock&#8217-s comments on the CFTC request. Pennock wrote &#8220-It&#8217-s not often that an industry in its infancy cries out for more government oversight.&#8221-

It&#8217-s actually quite common. The term in the economics literature that includes this is regulatory capture. When there&#8217-s a regulatory body specific to a particular industry, it&#8217-s very common for industry to be the major source of expertise in the area, and so for the regulators to be reasonably friendly with the businesses. The businesses can work for regulation that limits entry, and cuts down on competition that reduces profits, and they can work together to ensure that public relations problems are addressed in a cohesive way. But cutting down on competition often means fewer choices for consumers by way of tighter controls on what products are offered.

In our case, the thing I worry about is a narrow ruling that only &#8220-socially valuable&#8221- questions can be asked, and an expensive process for deciding what innovative questions can be posed. It seems likely that some interests will work to ensure that sports and entertainment questions be declared off-limits. The companies that have the strongest interest in fighting that faction are mostly persona non grata in the CFTC&#8217-s eyes, since they currently operate outside the law (TradeSports) or outside the country (BetFair).

The narrower the set of approved questions, or the more expensive the process of getting approval, the less chance that markets will be commercially successful. I think the experiments within companies have indicated (though not proven) that a mix of valuable and popular claims is necessary in order to attract continuing participation.

My biggest worry about fighting for CFTC regulation at this point is that they&#8217-ll approve something narrow, and this won&#8217-t produce enough successes to demonstrate that loosening the restrictions over time would be beneficial. The alternative is to continue to find ways to introduce markets under the radar and demonstrate their value to the academic audience, which could lead to a friendlier hearing in a more distant future after prediction markets have demonstrated social value and little risk of harm.

Of course the other likely outcome is that the novel experiments don&#8217-t happen because of the threat of litigation or regulation. But that seems unlikely given the growth in internal markets within companies. I think there&#8217-s more likelihood of long-term success without regulation than with it, and we&#8217-re better off waiting until the chances that the regulations will provide a broad approval are significantly higher.

(Cross-posted from