Inkling Markets:
“-Yet to take off,”- however, does not equate to “-bad idea.”- The facts are that uptake among companies has been increasing year over year, more business schools are covering prediction markets in their curriculum, industry analysts have begun to track progress in the space, and an increasing number of management consulting firms, market research firms, and system integrators are adding prediction markets to their repertoire of services.
Inkling Markets
Previously:
– How vendors are scuttling the field of enterprise prediction markets —and the prediction market industry, as a whole
– The Economist: The enterprise prediction markets are flopping, big time.
No TweetBacks yet. (Be the first to Tweet this post)
Perhaps they could publish some financial numbers to back up their pitch?
Niall, I catch your drift.
However, Adam Siegel is one of the most honest people I have ever met online, so if he says what he says, it has some reality.
@Niall @Chris
I’ll bet any amount on Adam/Inklings side.
I am not taking sides. It is simply common place when analysing an industry to see some numbers. These would appear to be lacking when it comes to the prediction market space. How much do these companies make? Are any of them in profit? I cannot see why it would be difficult to answer these questions?
“How much do these companies make?”
Less than $500K a year.
—
Daniel, any disclosure to tell? Are you in bed with Inkling or any other prediction market companies?
—
PS: Among the prediction market companies, Adam Siegel of Inkling Markets is one of the most trustworthy persons, in my view.
Times are tough out there. The CEO of William Hill, one of the world’s biggest bookmakers, recently said, something akin to the fact that we would need to be seeing the end of the world, if his company William Hill were not able to refinance their debts.
Roll on a few months and what happens; the company today announced a 1 for 1 rights issue at 105 pence per share, a deep discount to yesterday’s closing price of 246.75 pence. It said;
“Decision to issue equity driven by the dramatic deterioration in credit markets since August 2007, which has resulted in banks seeking to reduce their overall lending to borrowers. This has not made it possible for William Hill to refinance the Group’s existing bank facilities in full in the bank market.”
William Hill had just reported gross win of ?1,022.5m, net revenue of ?963.7m and operating profit of ?278.6m.
Times are hard out there; the prediction market industry will not survive on the back of blind faith alone.
“the prediction market industry will not survive on the back of blind faith alone.”
Agree 100%.
Chris, Niall –
No, I have no relationship with any PM company whatsoever.
“Year over year” – Are you proposing that 2008 was smaller than 2007?
One of the advantages of being a private company is not having to disclose financial information.
I agree that many market participants are likely to fail. Still, I would bet on Inkling if I could.
You don’t necessarily need numbers to see trends. Inkling, NewsFutures, ConsensusPoint, and Xpree/Crowdcast all made hires this year; most made two or more. Of those, only Xpree/Crowdcast has raised venture capital. To me, it’s a very reasonable assumption that the revenues for each of them are increasing. (Particularly as it’s rare to keep significant levels of debt in software businesses.)
.
And I’ll second Chris in saying that Adam is very trustworthy.
Jed, hires are a good metrics. However, there are lies spread when a prediction market company announces a hire, and, in fact, that hire is a part-time hire. The person works in fact for many companies. I have spotted this situation in *all* the 3 companies that you cite above. Nothing wrong with that in essence, but there is no full disclosure.
Betfair, a private company, has published its results from day one. The likes of Betdaq and Intrade have not, and they give the impression that they have got something to hide.
The publishing of results, will put a foundation beneath the rhetoric, and consequently allow people to more objectively analyse the industry.
Failure to do so – looks defensive, and leads many to the conclusion (rightly or wrongly), that this industry is all hype
Niall, agree 100%.
Betfair has published their results from day one because the British Government requires it. Whether they would have done so otherwise is something we will never know.
BetFair is quite “open”, most of the times.
@Niall – If you want private companies to be compelled to publish financial information, that’s really a much larger argument for another place. If one industry participant were to publish their financial information, they would be putting themselves at a relative disadvantage. A private company not publishing financial information is indicative of absolutely nothing.
@Chris
Don’t you have some Gartner picture of the technology lifecycle?
Didn’t Gartner pull prediction markets off their technology lifecycle this year?
I am talking about a generalized picture on technology adoption, a picture I think I’ve seen here before.
Niall,
Daniel,
Grab a gravatar:
http://www.gravatar.com/
In my humble opinion, you cannot expect a gigantic spread of a business tool in a very short period of time, it is almost the general truth in the enterprise world that change takes (more) time. I personally consider the penetration of markets in the business world as both healthy and sustainable.
Niall,
You are right to question this stuff. There is a lot of bullshit out there and frankly I cringe when I see articles or statements about the “accuracy” of markets because it hurts everyone in the long run. It’s why we’ve written 3 or 4 times on our blog about what “accuracy” in a marketplace really means – that you can’t just look at 5 or 10 markets and say “we nailed it.” Unfortunately it’s something we have to deal with because the application is called a “prediction” market afterall so it’s the first question that naturally comes to mind. That said I wish Chris wouldn’t make blanket statements about “the vendors, e.g. Inkling Markets” getting the use cases all wrong in enterprise prediction markets. Because frankly, for quite some time “accuracy” has been a secondary argument to a number of other advantages we discuss about markets (in fact on the page on our website that describes the value proposition to companies, we don’t even list “accuracy” as a key benefit. This is also an expectation we set with our clients right from the beginning.
Anyways, I made the statement about business increasing year over year based on our own experience/numbers and as Jed mentioned, by looking at the activity of some of our competitors who have made hires, added clients, etc. I also base the statement on the types of professional services companies we are working with/hearing from and our discussions about prediction markets and what they are going to try and do in the future. I don’t think so many would be interested in adding markets to their toolset and expending resources putting together offerings if they didn’t see them as a long term, worthwhile business capability. So for those that agree with Chris that 6 years is enough time to evaluate a new business capability, I’d like to politely disagree. I could be wrong but these things haven’t been used beyond the experimental/pilot stage in companies for more than 2 or 3 years. We’re just at the cusp of understanding what benefits they’re going to bring. We’ve seen some promising trends, we’ve also seen people try to use Inkling for something and it failed miserably. This is just standard lifecycle stuff, especially for a capability that is designed, as I said in my blog post, to bring about more transparency and break down organization barriers.
The very modest growth of enterprise prediction markets since 2003–2004 was largely due to hype (”we nailed all 50 states”) from InTrade, which the EPM companies lived off. The problem is that, in November 2008, InTrade did not “nailed all 50 states” this time. And the media are now either totally ignoring the field of prediction markets or publishing bearish stories.
An uncertain future – A novel way of generating forecasts has yet to take off. – by The Economist – 2009-02-26
http://www.economist.com/busin…..d=13184829
Another problem with assessing the field of EPMs is that prediction market vendors do not delete old customers on their client listing. A pilot program done years ago, and abandoned since, is still listed as current.
Chris,
sounds like Intrade is to you what betfair is to me.
Maybe both will turn out to be succesful.
Adam,
“problem” is, prediction markets are pretty damn accurate. Anyone who has turned the betfair historic data upside-down-inside-out looking for an edge knows about this. I would be rich by now it that weren’t the case.
We have two options going forward IMO, we start from scratch and call them probability markets, or we educate the public. Both are tough options. Both should be considered. The third option, downplaying the accuracy statement may be the best choice from a business perspective, in the near term, but it goes very much against what I believe in – that in the end the truth will always prevail.
I deliberately say “in the near term” because I take into consideration the possibility that “your” markets have not come to maturity yet, and are therefor not as accurate as I suspect.
“The very modest growth of enterprise prediction markets since 2003–2004 was largely due to hype (”we nailed all 50 states”) from InTrade, which the EPM companies lived off.”
–
Chris, I have to respectfully disagree with you here. While InTrade’s results in the 2004 election may have been hyped in the mainstream press, I rarely if ever heard vendors talk about it (except InTrade itself) and even more rarely heard any potential client ask about it.
–
A FAR, FAR more important element in the growth of prediction markets was The Wisdom of Crowds book. While it came out in ~2004, I still meet people that have only just read it and gotten excited about prediction markets. I firmly believe that if there’s any “hype” driving prediction markets, the root is in the Wisdom of Crowds book. You’re giving too much credit to InTrade’s press!
When The Economist, the New York Times, the Wall Street Journal, etc,. introduced EPMs to the world, they always started their articles with an introduction about InTrade nailing “all 50 states”. Then, they would go on EPMs.
As for “The Wisdom Of Crowds”, if you looked at the ABC program, you will see that James S. states that InTrade nailed “all 50 states”.
http://abcnews.go.com/Business…..038;page=1
http://www.midasoracle.org/200…..0-intrade/
So that book perpetuated the hype.
[Overall, James Surowiecki has a scientific approach.]
Perhaps they could publish some financial numbers to back up their pitch?
Niall, I catch your drift.
However, Adam Siegel is one of the most honest people I have ever met online, so if he says what he says, it has some reality.
@Niall @Chris
I’ll bet any amount on Adam/Inklings side.
I am not taking sides. It is simply common place when analysing an industry to see some numbers. These would appear to be lacking when it comes to the prediction market space. How much do these companies make? Are any of them in profit? I cannot see why it would be difficult to answer these questions?
“How much do these companies make?”
Less than $500K a year.
—
Daniel, any disclosure to tell? Are you in bed with Inkling or any other prediction market companies?
—
PS: Among the prediction market companies, Adam Siegel of Inkling Markets is one of the most trustworthy persons, in my view.
Times are tough out there. The CEO of William Hill, one of the world’s biggest bookmakers, recently said, something akin to the fact that we would need to be seeing the end of the world, if his company William Hill were not able to refinance their debts.
Roll on a few months and what happens; the company today announced a 1 for 1 rights issue at 105 pence per share, a deep discount to yesterday’s closing price of 246.75 pence. It said;
“Decision to issue equity driven by the dramatic deterioration in credit markets since August 2007, which has resulted in banks seeking to reduce their overall lending to borrowers. This has not made it possible for William Hill to refinance the Group’s existing bank facilities in full in the bank market.”
William Hill had just reported gross win of ?1,022.5m, net revenue of ?963.7m and operating profit of ?278.6m.
Times are hard out there; the prediction market industry will not survive on the back of blind faith alone.
“the prediction market industry will not survive on the back of blind faith alone.”
Agree 100%.
Chris, Niall –
No, I have no relationship with any PM company whatsoever.
“Year over year” – Are you proposing that 2008 was smaller than 2007?
One of the advantages of being a private company is not having to disclose financial information.
I agree that many market participants are likely to fail. Still, I would bet on Inkling if I could.
You don’t necessarily need numbers to see trends. Inkling, NewsFutures, ConsensusPoint, and Xpree/Crowdcast all made hires this year; most made two or more. Of those, only Xpree/Crowdcast has raised venture capital. To me, it’s a very reasonable assumption that the revenues for each of them are increasing. (Particularly as it’s rare to keep significant levels of debt in software businesses.)
.
And I’ll second Chris in saying that Adam is very trustworthy.
Jed, hires are a good metrics. However, there are lies spread when a prediction market company announces a hire, and, in fact, that hire is a part-time hire. The person works in fact for many companies. I have spotted this situation in *all* the 3 companies that you cite above. Nothing wrong with that in essence, but there is no full disclosure.
Betfair, a private company, has published its results from day one. The likes of Betdaq and Intrade have not, and they give the impression that they have got something to hide.
The publishing of results, will put a foundation beneath the rhetoric, and consequently allow people to more objectively analyse the industry.
Failure to do so – looks defensive, and leads many to the conclusion (rightly or wrongly), that this industry is all hype
Niall, agree 100%.
Betfair has published their results from day one because the British Government requires it. Whether they would have done so otherwise is something we will never know.
BetFair is quite “open”, most of the times.
@Niall – If you want private companies to be compelled to publish financial information, that’s really a much larger argument for another place. If one industry participant were to publish their financial information, they would be putting themselves at a relative disadvantage. A private company not publishing financial information is indicative of absolutely nothing.
@Chris
Don’t you have some Gartner picture of the technology lifecycle?
Didn’t Gartner pull prediction markets off their technology lifecycle this year?
I am talking about a generalized picture on technology adoption, a picture I think I’ve seen here before.
Niall,
Daniel,
Grab a gravatar:
http://www.gravatar.com/
In my humble opinion, you cannot expect a gigantic spread of a business tool in a very short period of time, it is almost the general truth in the enterprise world that change takes (more) time. I personally consider the penetration of markets in the business world as both healthy and sustainable.
Niall,
You are right to question this stuff. There is a lot of bullshit out there and frankly I cringe when I see articles or statements about the “accuracy” of markets because it hurts everyone in the long run. It’s why we’ve written 3 or 4 times on our blog about what “accuracy” in a marketplace really means – that you can’t just look at 5 or 10 markets and say “we nailed it.” Unfortunately it’s something we have to deal with because the application is called a “prediction” market afterall so it’s the first question that naturally comes to mind. That said I wish Chris wouldn’t make blanket statements about “the vendors, e.g. Inkling Markets” getting the use cases all wrong in enterprise prediction markets. Because frankly, for quite some time “accuracy” has been a secondary argument to a number of other advantages we discuss about markets (in fact on the page on our website that describes the value proposition to companies, we don’t even list “accuracy” as a key benefit. This is also an expectation we set with our clients right from the beginning.
Anyways, I made the statement about business increasing year over year based on our own experience/numbers and as Jed mentioned, by looking at the activity of some of our competitors who have made hires, added clients, etc. I also base the statement on the types of professional services companies we are working with/hearing from and our discussions about prediction markets and what they are going to try and do in the future. I don’t think so many would be interested in adding markets to their toolset and expending resources putting together offerings if they didn’t see them as a long term, worthwhile business capability. So for those that agree with Chris that 6 years is enough time to evaluate a new business capability, I’d like to politely disagree. I could be wrong but these things haven’t been used beyond the experimental/pilot stage in companies for more than 2 or 3 years. We’re just at the cusp of understanding what benefits they’re going to bring. We’ve seen some promising trends, we’ve also seen people try to use Inkling for something and it failed miserably. This is just standard lifecycle stuff, especially for a capability that is designed, as I said in my blog post, to bring about more transparency and break down organization barriers.
The very modest growth of enterprise prediction markets since 2003–2004 was largely due to hype (”we nailed all 50 states”) from InTrade, which the EPM companies lived off. The problem is that, in November 2008, InTrade did not “nailed all 50 states” this time. And the media are now either totally ignoring the field of prediction markets or publishing bearish stories.
An uncertain future – A novel way of generating forecasts has yet to take off. – by The Economist – 2009-02-26
http://www.economist.com/busin…..d=13184829
Another problem with assessing the field of EPMs is that prediction market vendors do not delete old customers on their client listing. A pilot program done years ago, and abandoned since, is still listed as current.
Chris,
sounds like Intrade is to you what betfair is to me.
Maybe both will turn out to be succesful.
Adam,
“problem” is, prediction markets are pretty damn accurate. Anyone who has turned the betfair historic data upside-down-inside-out looking for an edge knows about this. I would be rich by now it that weren’t the case.
We have two options going forward IMO, we start from scratch and call them probability markets, or we educate the public. Both are tough options. Both should be considered. The third option, downplaying the accuracy statement may be the best choice from a business perspective, in the near term, but it goes very much against what I believe in – that in the end the truth will always prevail.
I deliberately say “in the near term” because I take into consideration the possibility that “your” markets have not come to maturity yet, and are therefor not as accurate as I suspect.
“The very modest growth of enterprise prediction markets since 2003–2004 was largely due to hype (”we nailed all 50 states”) from InTrade, which the EPM companies lived off.”
–
Chris, I have to respectfully disagree with you here. While InTrade’s results in the 2004 election may have been hyped in the mainstream press, I rarely if ever heard vendors talk about it (except InTrade itself) and even more rarely heard any potential client ask about it.
–
A FAR, FAR more important element in the growth of prediction markets was The Wisdom of Crowds book. While it came out in ~2004, I still meet people that have only just read it and gotten excited about prediction markets. I firmly believe that if there’s any “hype” driving prediction markets, the root is in the Wisdom of Crowds book. You’re giving too much credit to InTrade’s press!
When The Economist, the New York Times, the Wall Street Journal, etc,. introduced EPMs to the world, they always started their articles with an introduction about InTrade nailing “all 50 states”. Then, they would go on EPMs.
As for “The Wisdom Of Crowds”, if you looked at the ABC program, you will see that James S. states that InTrade nailed “all 50 states”.
http://abcnews.go.com/Business…..038;page=1
http://www.midasoracle.org/200…..0-intrade/
So that book perpetuated the hype.
[Overall, James Surowiecki has a scientific approach.]