In his spare time, Nate is learning how to box, so watch out.

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Would he hit a bombastic blogger with his 2 little fists?

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These markets were quite popular. The 475 traders made over 27,000 transactions in the 139 available markets. As a matter of reference, that is about 200 transactions per market while in Google’s market this ratio is 260.

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There was a mix of both socially redeeming topics (issues of interest to the Business School such as how many internships the undergrads would get this school year) and others designed to attract interest (politics, sports, entertainment, finance). I was surprised to see that passions– and trade volume– ran quite high even in the more serious markets. For example, one contract’s expiry was based on whether the XM-Sirius merger would be consummated by March. When the DOJ announced its approval at the end of that month, there was only a small price increase. As the comments below suggest, this was not because the traders were asleep at the wheel but rather because they had a good understanding of the regulatory environment.

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Inkling Markets provided the platform for our markets (if you are unfamiliar with Inkling, they have active public markets which you can sample). Inkling’s software and support is really ideal for classroom markets. There are nice features for both the people running the markets (James and I) as well as for traders (the students).

For the market admin:

- it is a snap to set-up and administer new contracts

- Adam Siegel and Nate Kontny are very responsive to questions, often responding within the hour

For traders:

- an intuitive trade interface, which is accessible even for those without experience with financial markets (though this can be a drawback if you would also like students to become familiar with order books)

- lots of goodies (customizable profile pages, market-specific discussion boards, graphs) leads students to visit the market a lot

- the daily/weekly top traders list encourages participation

I would strongly recommend others give prediction markets in the classroom a try. I found them to be both a great pedagogical tool and also one which the students really, really like. Students learned first hand about the role of information discovery as well as the biases often seen in prediction markets (though I will add it was difficult to illustrate the home town bias given the success of the athletic teams at my school this year). Feel free to get in touch with me if you have questions about how to set-up your own classroom markets.

Taking his propos and applying them to Adam Siegel and Nate Kontny, you’d get that:

• The key is Adam Siegel and Nate Kontny’s determination. They refuse to fail.
• The key for Nate Kontny was to find out a good co-founder —that was Adam Siegel.
• [M]arket is the biggest determinant in the outcome of successful startups. [...] Smart people [like Adam Siegel and Nate Kontny] will find big markets.

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Same things could be said of David Perry and Ken Kittlitz, or Emile Servan-Schreiber and Maurice Balick.

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Psstt… By the way, thanks to all the publicity on their frontpage and on Midas Oracle, there are now 60 prospects (from big companies to academics) who have opened a free, private, play-money betting exchange for forecasting purposes. Obviously, Adam Siegel and Nate Kontny are onto something. Consensus Point and NewsFutures will have to react, soon or later.

UPDATE: I have installed OpenID. Let me know.

Adam Siegel and Nate Kontny of Inkling Markets

Q: Didn’t the Internet craze die back in 2001? Why launch an Internet business?
A: The Internet craze didn’t die in 2001. Companies with no path to profitability, no plan, and excessive irrational behavior died in 2001. The possibilities of the Internet in relation to consumer behavior and transforming business are still as potent as ever.

Q: Where did your idea come from?
A: Our idea came from doing consulting for several large companies and working in one for several years. We watched the lack of quality information flow between the hierarchies. We saw how people with relevant knowledge, whose input should be key in strategic decisions, were completely left out of the process, and we saw broken business processes for innovation and coming up with new ideas. We also read a lot about collective intelligence and the wisdom of crowds, paired our understanding of those two worlds, and out came the idea to do Inkling. We certainly weren’t the first to say prediction markets should be used by corporations, but we think we’re taking an approach that sets us apart from our predecessors and current competitors. [*]

Q: What is your elevator pitch?
A: Inkling helps you capture the collective wisdom of a diverse group of people to give you insight about what may happen in the future vs. relying solely on high paid consultants or individual experts. This is important because it can help you mitigate risk, make better strategic decisions, spawn innovation and entrepreneurship, and change your corporate culture.

Q: How is your proposition different from earlier generations of online business?
A: Online business services, beyond eCommerce solutions, still usually required an expensive consulting component. There also was not traditionally a focus on ease of use. We’ve tried to address both by creating “do it yourself” tools to allow anyone to manage their own prediction marketplace. We’ve taken something as complex as trading in a stock market mechanism and made it easy enough for our Mom’s to use. Related we’ve obsessed on our user-interface and iterate on it constantly to make sure people can use it. After all, you can’t say you sell software that helps you capture the wisdom of a crowd if the crowd can’t use your software.

Q: How will you make money?
A: We make money by selling service agreements to large and small businesses to set up and maintain prediction marketplaces. We also do a fair amount of customization work for our larger clients.

Q: Why will you succeed? What are your biggest successes so far?
A: In less than a year we have attracted several thousand users to our public marketplace and have about 20 clients. We are working with Abbott Labs here in Chicago, ABC-KGO in San Francisco, the Government of Singapore, AlderTrack, think tanks, a video game maker, and an array array of small businesses and non-profits. We think we will continue to see success because of our well designed product and because we think this is a blue sky market that people are just beginning to think about as a way to changing the way they do business. We also think we’re going to be successful because we are largely self-funded. When the success of your business means you can or cannot pay the mortgage and your bills, it makes you a little hungrier.

Q: What is your age and previous business experience?
A: The two co-founders of Inkling are Adam Siegel and Nate Kontny. We are 33 and 29 respectively. Adam worked at Accenture here in Chicago for 10 years in the Accenture Technology Labs and was a senior manager when he left. Nate worked at Accenture as well in the same group and left as a consultant to work as a senior developer at Digital River.

Q: Have you received funding? If so, how much and from whom?
A: We received a small amount of funding (18k) from yCombinator when we incorporated but have taken no funding since.

SMOCKIN’!!!…

[*] I think that what separates Inkling from the rest of the pack is that they have integrated the “Web 2.0″ factor.

Psstt… I would like so much Inkling to do CDA, too, by the way.

Bodog founder hunted down in Tora Bora.

Only three days after the arrest of Betonsport’s Gary Kaplan [BetOnSports founder Gary Kaplan, fugitive — BUSTED], news is breaking that the Department of Justice have finally got their hands on their number one target, Calvin Ayre of Bodog. The arrest allegedly occured at 3am GMT in eastern Afghanistan.
As yet unconfirmed reports, suggest that Ayre had gone to Afghanistan to check out the possibility of relocating his company Bodog to Tora Bora, an area located in the White Mountains in eastern Afghanistan, southeast of Kabul and southwest of Jalalabad, near the Pakistan border.
In 2001 Tora Bora was used by al-Qaeda and was suspected of being the headquarters of the world’s other most wanted man Osama bin Laden. It was variously described as a multi-storeyed cave complex harnessing hydroelectric power from mountain streams, or a lower-rise dwelling with hotel-like corridors capable of sheltering more than 1,000 telephonists. It was also said to contain a large cache of ammunition, such as FIM-92 Stinger missiles left over from the earlier Afghanistan War.

A friend of Ayre’s who did not wish to named told bettingmarket.com:

Calvin has never been the same after he failed to appear in the Forbes’ 2007 List Of World Billionaires. He wanted to put himself back into the spotlight and what better way to do it, than to move Bodog to Tora Bora, lock, stock and barrel. He figured out that as the US had not been able to get Bin Laden when he was holed up there, there was little chance of them finding him. Moreover, the location would have allowed him to extend the reach of his charitable foundation into neighbouring Pakistan.

Unfortunately for Ayre, a contingent of US marines were still searching the Tora Bora complex for Bin Laden, in the belief that he might still be holed up in one of the many secret caves.
Some reports suggest that one of the marines just happened to have a copy of the 2006 Billionaires Issue of Forbes magazine, with Ayre on the cover. Other reliable sources, such as Gambling 912, suggest that the estate agent was in the pay of the Department of Justice. Whatever the truth, April 1 2007, will be a day that Calvin Ayre and the online gambling industry will long remember.
Additional Reporting for this article was provided by our Afghanistan correspondent Lirpa Loof; with pictures provided by the Wan King picture agency.

FREEZE.

Calvin Ayre busted in Tora Bora, Afghanistan, by the Marines (or Navy SEALs)??

It’s a hoax. You got me, Niall O’Connor!!

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Addendum: Inkling co-founder Nate Kontny seems to have output an April’s Fool joke, but you need to be an IT geek to got it.

Other Jokes: Sacha Baron Cohen (aka “Borat” and “Ali G”) to teach innovation course at Harvard + Google Really Takes April 1 Seriously. + Yahoo Underground: Fringe News Featured

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Addendum #2: Niall O’Connor explains…

There were two clues, with regard to the fact that it was April Fools Day, or, as the French say, poisson d’avril.
“Additional Reporting for this article was provided by our Afghanistan correspondent Lirpa Loof; with pictures provided by the Wan King picture agency.”

- Lirpa Loof = April Fool backwards.

- Wan King = wanking (crude, I know) – a name employed in the City when one is spinning a piece of bullshit.

[...] I created the first internal corporate idea futures at Xanadu in 1989, and in 1994 my design and inspiration led to one of the first web markets, then called Idea Futures, for which I received the Prix Ars Electronica Golden Nica, a prestigious electronic art prize. Now called the Foresight Exchange, it is still the only web market where users can add claims to trade. My papers inspired the NewsFutures market, and the Hollywood Stock Exchange uses my proposed market makers. [...]

Yes, Doc, but for that they should “join” the Foresight Exchange and interact with the rest of the Web-based organization. And an independent judge (independent from the owner of the claim) should be appointed among the volunteers. So, it’s “user-created and user-managed”, but not “DYI” (“do it yourself”). The Foresight Exchange is more the story about a play-money prediction exchange managed by an open group of volunteers (which is great).

I still view Inkling Markets as the pioneer of DIY, play-money prediction markets (which is great, too).

Inkling Markets was launched in March 2006 and pioneered DIY, play-money prediction markets in May 2006.

Flutter (later absorbed by BetFair) pioneered the concept of user-created, real-money prediction markets in May 2000 —it seems.

I say “it seems” for Flutter because I haven’t been able to check the facts directly. So I can’t say whether the “DIY” label can really apply to Flutter.

As for Inkling, we know now, from Inkling co-founder Nate Kontny, that the idea of DIY prediction markets came from Adam Siegel.

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