Marketplace Activity Reports Take Two

A few weeks ago we began sending marketplace participants a daily recap of the activity in their marketplaces. The goal was to keep people aware of what is going on even if they aren't actively trading and hopefully entice them to click on something of interest they see.

We got a lot of positive feedback about the reports which in many marketplaces caused increased trading activity, but also some complaints that daily is a bit too often. We've taken the feedback to heart and made a couple changes:

First, instead of listing out every trade and comment for every question which often made for a very long email, we've consolidated to simply say how many trades and comments have been made in each active market. Second, we've tried to provide more interesting information by including the probability of the currently leading answer and the percent change since the last report was sent.



Finally, we've changed the default delivery schedule of these activity reports from daily to weekly, but have left it configurable, so if you want to continue to receive daily updates, you can adjust that setting for yourself right from your marketplace homepage or on your settings page. If you choose to receive the reports on a weekly basis, they will be sent on Thursday's beginning at 3:30pm local Chicago time which is -5 GMT. If daily, they will be sent at that same time each day.

This prediction market will now be tweeting

Funny how these things work.

3 years ago when we first launched Inkling, people were clamoring for us to have RSS feeds. Then we were told we weren't doing enough with email, especially for corporate cultures where email is still king, so we introduced new market alerts, expiring market alerts, and most recently, a daily activity feed from the marketplace, all via email.

Now as regular users of twitter, we decided it would be useful for our own purposes (we're traders too) and for others to get tweets about a marketplace.

But we didn't just want to replicate alerts we send via email and RSS, we wanted to add new content as well to the twitter bot to make it more engaging and worthy of people following it. We've set one up for our own public marketplace with the name @inklingpredicts. It still announces new markets and expiring markets, but it also tweets the top 5 most actively traded markets of the day and the current leading answer.

Here's what the bot has tweeted the last few hours:



Minimally, following the bot should provide some nice fodder for those heading out with friends for the evening or to impress your S.O.: "Hey did you know there is a 1 in 4 chance the unemployment rate will start to go down in August?"

Astonishment at your wisdom will certainly ensue.

But the best part is we didn't just introduce this for ourselves. Any public Inkling marketplace can create their own twitter bot by going to the twitter signup page and setting up a new twitter account. Then login to Inkling as an administrator, tell us the bot's username, and it's ready to start tweeting. Just go to your "configure marketplace" page to set it up:

Inkling launches tgethr.com

We just launched a new product today:

tgethr

It has little to do with our "day job" of running a prediction market platform for companies, but it was something we built for ourselves to use internally and decided it was useful enough we should turn it in to a product.

Basically it's the "ANTI-sharepoint/googlewave/socialnetwork/lotsofoverheadcollaborationtool" - it's just an extremely simple way to collaborate with a project team, friends, family, club, or sports team via email.

Setup a group name, i.e. "team@tgethr.com" with whomever you want to participate, and write to it. We keep a private-only archive of everything you write on the web. You can cc: or bcc: to it, tag your correspondence, search for stuff, and it's secure with both ssl and email encryption.

The original reason we built tgethr was for security reasons. We use a secure chat room every day to work together on minutiae and other hosted tools for customer support tickets, bug tracking, code repositories, etc. but most of those apps send an email when they're updated - convenient, but also insecure.

We also wanted something that was simple. We communicate constantly within Inkling, but also have groups of friends and family we want to easily stay in touch with as well. We found our options to be a google group, basecamp, or using a white label social network. Nice tools, all, but also a lot of overhead for simple correspondence. And let's face it, the vast majority of us are still creatures of email. These apps feel clunky when all we want to do is securely send quick messages back and forth either in front of our laptop or on our iPhones.

So we decided much maligned email is still the easiest way for us to communicate. Why not try and play to its strengths vs. fighting it and forcing a browser experience down our throats?

Inkling Markets is still our love and first born, but hopefully people find Tgethr as useful as we have so far and find ways to put it to good use.

Just like in Inkling you can "try before you buy" and set up a free group.

We're anxious to hear what everyone thinks so don't hesitate to contact us if you try it out.

Inkling Cares

Yesterday in our hometown of Chicago was the annual Chicago Cares Serve-a-thon. Companies, schools, non-profits, church groups, and every other type of group you can think of put together teams to meet up at Grant Park in the morning, then take buses to area schools and playgrounds for a day of manual labor: painting, cleaning up playgrounds, doing some landscaping, etc.

Inkling put together a team and were assigned to the Piccolo school on the city's west side with about 50 other people. The school is named after Brian Piccolo, a back up running back for the Chicago Bears in the late sixties who died of cancer at 26. Piccolo was a great running back, breaking records while at Wake Forest, but he was always a back up while on the Bears, running behind the legendary hall-of-fame running back Gale Sayers. Brian's story was tragic but was made much more famous by the made for tv movie "Brian's Song."

At the school we collectively painted 4 classrooms and two long hallways. It looked pretty nice when we were done, thanks to the several volunteers guiding us through the day doing quality control. To top it off, someone figured out a way to play the radio over the school loudspeaker and tuned it to an eighties station. Manual labor is better when you're listening to "Don't You Forget About Me" by Simple Minds on the Breakfast Club soundtrack.

Here's a picture of Nate and myself at the end of the day waiting in the school lobby for the bus to take us back to Grant Park:

Winner, winner, chicken dinner

Over the past few months we ran a competition for MBA students to see who would do best in a prediction market over a period of 4 months. Questions were related to global business events and pop culture. 15 schools participated and we had about 150 active traders. Not bad for our first go-around and word of mouth marketing efforts. We learned a lot about how to run it and definitely plan on running another competition in the fall semester coming up.

We ended the competition at the end of May. The top prize was a party for the top trader and 20 of his/her friends. Last night at Nevin's Pub in Evanston, IL, Chris Fletcher from the Kellogg School of Business celebrated his win with a party to watch Stanley Cup hockey.

He sent us this picture of the festivities. Can you tell who he is? :)

Exclusive Access

Because most corporate prediction markets use fake money as their currency, an administrator must think of other incentives besides the ability to make real money. Of course even with fantasy currency, the better you trade, the more currency you accumulate, so it's natural when thinking about how to incent people to participate to offer a reward to the "top trader" in a marketplace.

Unfortunately while sounding good on the surface, this incentive often falls flat as people in positions 5-x feel like they don't have much of a chance of catching up. Unless you have other incentives in place (and you're not creating new markets on a regular basis as Nate blogged about a few weeks ago,) your participation may slowly dwindle.

One incentive that doesn't get much attention is granting "exclusive access" to traders. The most successful format we've seen of this is picking those who are regularly participating in the marketplace, i.e. "20 random traders with 20 or more trades" and inviting them to a roundtable with a (very) senior executive on a monthly or bi-monthly basis. At this roundtable, discuss company issues related to questions being asked in the marketplace. Keep it casual and off the record. Have the executive stress that in addition to carrying out daily duties, participation in the marketplace is another valuable way to contribute to the success of the company. In other words, make people feel...like insiders.

This also applies more generally to internal social networks which often have some sort of point accumulation mechanism as an overt incentive to complete a profile, participate in discussions, answer questions, etc. iPods and gift certificates are nice, but think about saving your money. Especially in a large corporation where so much is dependent on your level and title, feeling like a player for an afternoon may be all the reward you need to offer.

yCombinator's Paul Graham (and Inkling investor) on the cover of Inc.

Inkling was in the second crop of start-ups that came out of yCombinator. Back then no one had really heard of these guys. Now they've funded over 100 startups and have many regional copy cats. Even though we're a little biased, Paul's philosophy of making many little bets in his investing strategy vs. fewer big ones really resonates with us. As such, we're glad to see they've really taken off.

We regularly hear from people who are thinking of applying for yC - especially those who aren't doing consumer apps. If you're one of those, feel free to contact us. We're happy to give you an honest and open account of our experience.

Here's the article (click the button in the corner of the viewer to go full screen - it's a much better reading experience):
Inc. Article About yCombinator

Publish at Scribd or explore others: Science literature null

Crowdsourcing Creativity

From Ryan Hahn at IFC in the World Bank Group:

"A few weeks ago, I had the good fortune of attending a conference on prediction markets hosted by Inkling, a prediction market platform provider. The first presentation of the day actually had little to do with prediction markets, but still had everything to do with tapping into the wisdom of the crowds. (Or, better yet, the wisdom *in* the crowds.)

Mike Samson, one of the founders of a very cool site called Crowdspring, discussed his efforts to create a marketplace for creativity. Any small business (or large corporation for that matter) can go on the site and post specifications for a project, e.g. designing a logo or building a website, and anyone around the world with internet access can submit entries. Hidden talent seems to crop up in unanticipated places (there was one tale of a janitor winning projects who had no formal training in visual design)..."

Read more here...

We surveyed users in a company after running an internal pilot and here's what they said

We recently helped one of our clients - a large retail chain - conduct a survey after they ran a 3 month internal pilot targeted to manager level and below from locations around North America. The data (fortunately - whew!) showed a lot of positive signals and the team we're working with was able to incorporate the results in to the business argument for continuing the marketplace beyond the pilot phase.

We were mostly encouraged too, like the 97% of people who said they will continue to use the prediction market beyond the pilot. But there are also areas to improve. Even though the strongly agrees and agrees far out-weighed the disagree/strong disagrees, we'd like to see the trend be even more in the positive direction and get some of those no-opinion folks off the fence!

I personally was most interested in the "primary reason you traded" question. Although 48% of respondents said they used only personal knowledge to trade, the fact that the other halfsaid they did minimal or extensive research, then traded, shows a different type of engagements than only contributing what personal knowledge capital you have. These are people willing to broaden their own perspectives in order to effectively trade and get smarter about operational and strategic issues in the company. That is a benefit of prediction markets we always see that needs to get more love when we describe the value proposition.

We plan on conducting this survey again with this company in a few months to continue the feedback loop and are doing the same with other companies. We'll be sure to keep you apprised of how things are going even if we still have some of those pesky no-opinion types.

Here are some of the results:

Resend invites to users

Email can be a tricky thing. Too often messages get stuck in junk mail or deleted accidentally. For awhile we've given users the ability to have an Inkling invite resent to themselves on the login page if they didn't get the registration email.



And now we've provided the ability for marketplace administrators to send their users a new invitation if they need it. In the "manage users" area of Inkling, select the users you want to send new invites to and use the drop down menu to select "Send User(s) a New Invite":

Capture More Information About Traders

Sometimes you want to understand not only what the outcome of a question you're asking is going to be, but how specific types of people are trading.

For a long time we've allowed administrators to capture additional information about people when they complete their profile pages, but now we give you the option of making some of those questions required during the registration process.



For example, a consulting firm we're working with is requiring people to enter a Department Code during registration. They can now cross-reference this information with trading information and gain new insights about the behavior of the community, e.g. People from one department think the chances are high an event will occur, where as people from another department don't agree.

Prediction Markets in the Insurance Industry

A few weeks ago I wrote about some ideas we had for prediction markets for the logistics and freight industry. We're close to finishing similar write-ups for several other industries and I wanted to share a draft of what we've written for the Insurance industry.

Insurance companies we've worked with or spoken to are naturally worried about much more these days than business continuation plans and natural disasters. They're under tremendous pressure in the current financial environment to achieve sufficient return on investments, respond to increased claims and fraudulent activity, and keep attrition rates down, all while addressing increased competition and calls for a more stringent regulatory environment.

Here are some potential uses in a few key business processes:

Business Performance

• Forecast quarter over quarter or year over year growth in individual policy areas;


• Understand impact of marketing campaigns and new policy programs on new customer acquisition; and


• Predict customer behavior: attrition, loyalty, and satisfaction levels

Company and Business Partner Health

• Predict returns on investments to understand impacts on capital levels;


• Forecast ability of reinsurance providers to write new business (or vice versa to understand need if you're a reinsurance provider);


• Understand agency performance locally, regionally, and nationally


• Predict metrics related to claim levels; and


• Ramp up fraud protection activities by understanding what types of fraud will be most prevalent in a future timeframe

Competitive and Regulatory Environment

• Compare market share performance and other publicly available metrics with primary competitors;


• Understand impacts of changes in public policy, the likelihood of legislation passing, and budget allocation;


• Leverage employees, partners, agencies, subject matter experts, and other players in the value chain to gain comprehensive view of sector trends; and


• Predict impact in marketplace of competitor's marketing campaigns and other strategic moves

Marketplace Activity Feed

If you're a user of Facebook, LinkedIn, or practically any other social network, you're familiar with the concept of an activity feed - a "stream" of activity to let you know what's going on amongst your network of friends.

Over the weekend we introduced this same concept to Inkling marketplaces. Now featured prominently on the homepage of every marketplace is the marketplace activity feed. Currently in the feed we include trades, comments, and the introduction of new users in the marketplace. This can be configured to show you everything going on, or only events directly related to you, i.e. events occurring in markets you've traded in or created.



Notice the cute monsters? They're generated from the Gravatar service. Gravatars are a universal thumbnail/profile image service. Upload thumbnails of yourself to Gravatar and any site supporting Gravatars will automatically show yours so you don't have to upload profile images to each site that has profiles. If you don't have a Gravatar, you get a monster representation of yourself. (Any marketplace administrators who don't like this can request to have Gravatars shut off.)

We think the activity feed continues to make more headway in our never ending quest to make an Inkling marketplace an interesting and fun place to keep coming back to. In the coming weeks we'll be adding more events to the marketplace activity feed to make it even more interesting to track: new friend relationships, profile updates, market expirations, etc.

If you have other ideas for what we should include or how we can make the activity feed even more powerful, let us know.

Inkling Administrator Conference on May 7th in Chicago

Space has been reserved, the morning OJ and bagels have been ordered, and the lanyards to hold badges should be in shortly.

In two weeks on May 7th in Chicago, Inkling is putting on its first annual Inkling Administrator Conference. The term "conference" seems a little misplaced, however, as we've purposely limited the number of attendees, have shunned sponsorships, and designed the day for lots of discussion and informal presentations. Even the room will be set up like a big horseshoe so it will be easy to dialogue with one another.

Our goal will be to focus exclusively on sharing war stories, practical advice, and valuable applications, and for Inkling administrators to meet each other and swap notes and business cards.

The agenda we've put together should make for a compelling day. Representatives from Sears/Kmart, Kraft, Procter & Gamble, Chevron, and The World Bank will talk about their marketplaces: their lessons learned, their growing pains, their results.

Arik Johnson from Aurora WDC will talk about applications in competitive intelligence, Jared Heyman from Infosurv will discuss results of their work with clients using Inkling for market research, Steve Goldberg will share his ideas about prediction market applications in the non-profit space, and I'll be presenting some thinking we've been doing around prediction markets applied to value chains.

We'll also discuss the challenges of going from pilots to scale, how organizational/bureaucratic pitfalls can be overcome, and share some insights on the success factors of marketplaces we've seen over time.

We're really looking forward to meeting everyone in person and listening to our speakers and attendees share their thoughts.

If any other current or prospective Inkling administrators reading this would like to attend, you can contact our intern phil@inklingmarkets.com, who has been helping us organize the day. We can probably fit a few more people in the space we've reserved, so he can tell you if we still have room and answer any questions you might have about the day.

Jellybean guess is good for $25,000

On the rare occasion I'm invited to a social gathering and people ask what Inkling is about, I often find myself reverting back to the story of the jelly bean jar. Have one person guess how many beans are in a filled jar and they will inevitably be off. Ask 100 people and average their answers and they will collectively be quite close to the answer. "Now you understand what Inkling and prediction markets are all about." I say.

"Ah" they say, "brilliant!"

But then this woman had to come along and ruin it all. :)

Trade Directly From Email

This weekend we rolled out a complete overhaul of our marketplace "New Market Alerts." Traditionally if you subscribed to them, you got an email each time new markets were created. These emails were very simple and told traders what the new questions were and included a link to the market. As Nate wrote about in his last post, these emails are critically important as they consistently drive new interest in the marketplace. But there were two problems with what we had: the emails become monotonous over time, and the only action you could take was to go to the market. So if you wanted to trade in a new market you needed to click on the link, login if you weren't already, then click a few more times to make a trade.

More importantly we've gotten feedback from several of our administrators that they would like to be as inclusive as possible of executives; that it's hard to get executives to try out new applications and what could we do to help get them more involved more often. We know that most executives are addicted to their Blackberries (crackberries?) and iPhones so what better way to try and get them involved than through these new market alerts.

So now, instead of just getting a link to the market, you actually get links to make trades directly from the email. And we've formatted the emails in such a way that they look and work great on mobile devices.

Here's what the new market alerts look like:



Here's what they look like on an iPhone:



And when you click one of the trade links on an iPhone:



Now even if an executive doesn't want to become a "power user" they can very easily express their opinion every once in awhile right from their mobile devices. And for the rest of us who do trade casually or regularly, the process has become that much easier to express your opinion right away. Just one click!

The Key to Keeping your Prediction Marketplace Active and Successful

This post is about a key, maybe THE key, to keeping your prediction marketplace active and successful. The short answer?

Create markets more frequently.

Prediction markets are just like any other social media community. For example, the most popular use of social media is blogging. Assuming you already have something interesting to blog about, what is likely the number one way of starting a blog and a community of people who follow and participate in it?

Blog more.

You don't see many vibrant blogs where the author only blogs once a month, or creates 10 blog posts in one day then doesn't touch the blog for a month or two.

Likewise, you can probably expect, that as an administrator of a prediction marketplace, it's important to keep the frequency of posting new markets high and consistent.

One particular client from an analysis we describe below was found to be creating markets about once a week, and they get great participation.

On the other extreme, a very promising marketplace that had a ton of early participation hasn't created any new markets since the second week it launched and participation has flatlined. They want to keep the marketplace going but they're essentially starting over to get people interested again.

So a good rule of thumb to take away from this: put a date on your calendar at least once a week to make sure a new market is created.

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When people first explore using prediction markets they still ask: "Do they actually work?" and "Will people understand them?" I think we've done a pretty good job addressing that they do indeed work:

http://inklingmarkets.com/homes/dotheywork

And from our interaction with both users and administrators using the thousands of Inkling powered marketplaces out there, people from all demographics understand and enjoy them. Here's a quote from SwelJoe at news.ycombinator.com on startups that got started with Y Combinator:

"...A couple of others have really impressive reach outside of the usual Web 2.0 set and into the 'real world' (Loopt, in particular, though Inkling Markets is everywhere, too...my dad has used Inkling's product, and he just got broadband for the first time last week)."

But to avoid the problem described above of the marketplace languishing, administrators should perpetually be asking themselves: "How do I keep our prediction marketplace active?"

We've blogged and written about incentive strategies and know that people need SOME form of incentive to participate in a marketplace. And as we've said before, most people we talk to immediately think of awarding prizes to top traders. But we've found the biggest incentive in prediction markets, and more broadly in any social media, is simply to create an interesting place to go. "Interesting" means participants will get something out of it either by communicating with others, learning something new, or feeling good about contributing. It is not just about giving prizes or having a slick interface.

------------

But words are words and proof is proof. We decided to see if we could analyze some Inkling data to see if there is a real correlation between how often markets are made and user participation.

We randomly picked 40 Inkling powered sites to start analyzing.

Since Inkling marketplaces that are largely about elections and sports behave much differently than markets predicting revenues and project deadlines, we picked all private marketplaces run by companies.

We wanted to make sure we had marketplaces that were making a serious effort to invite people and get market questions made. So these sites all had 15 or more users, and 20 or more markets created during their lifespan.

These 40 sites span various industries (energy, consumer products, real estate, gaming, entertainment, etc.) and they were created at various points during Inkling's history. Some of them are currently active and some of them are not.

A further selection criteria was then applied. The average trader had to be at least 90 days old in the Inkling system. We did this because we wanted to look at continued participation in the marketplace 2 months after their first trade and not have this study influenced by the novelty effect, which you'll see below.

Following this filter, 15 sites made the cut. The 25 other sites either didn't run their pilots long enough or were too new to be included.

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What's a good variable to determine how active a prediction marketplace is? Well that can be a bit arbitrary. But let's choose something that has a low bar that seems worthy of improving.

How many people in your marketplace make a trade 2 months after their first trade?

This allows the novelty to wear off.

The other variable chosen is the percentage of an Inkling marketplace's "lifetime" spent creating markets.

"Lifetime" is defined as the time in between a marketplace's 5th trade and it's last trade. This was picked to avoid the kicking the tires phase where someone signs up for a pilot and makes a few test trades before taking some time to really launch the marketplace.

We created a scatterplot of these 2 variables.



And it does seem that there is a linear relationship between the two variables with a Pearson correlation coefficient of 0.73.

The correlation coefficient also appears to be statistically relevant. If our null hypothesis is that the two variables are not correlated, we look at our T statistic, and it's 3.84. 3.84 with 13 degrees of freedom (a sample size of 15 sites), has a p value less than 0.01, which is definitely smaller than the popular cutoff of 0.05. So we can reject the null hypothesis and accept the alternative hypothesis that the two variables are indeed correlated.

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This exercise was fun and informative, but correlation doesn't mean a cause and effect relationship was found. Both of these variables could be dependent on a third variable that isn't analyzed here.

It could be surmised that both of these variables might be equally influence just by time. For example, both administrators and traders are influenced by a company's holidays and business cycle.

However, we might be able to anecdotally disprove that from our interactions with the sites analyzed here. Most of them represent large international businesses, where the Inkling administrator is not tied to the same projects and timelines as most of the traders.

To prove a true cause and effect relationship here, it would be necessary to perform a well designed experiment, and maybe this correlation could inspire one. Perhaps an experiment analyzing this type of relationship has already been performed, even about other social media systems like blogs.

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Prediction markets are like many other systems. You get what you put in. If an administrator puts in the effort making questions, cashing markets out on time, communicating with traders via the discussion boards, announcements, newsletters, etc., the traders of a prediction marketplace return that investment by continuing to come back and offer their wisdom in the form of trading and discussion.

And making more markets doesn't have to mean more work for an administrator. Inkling makes it easy for all participants to create their own markets and we encourage every administrator to keep this feature turned on. And if you're plumb out of ideas for new markets this week, you can always just borrow some from our public site.

Managing multiple Inkling sites

Having purview over lots and lots of Inkling marketplaces means we get to see meta-trends in how people use our product.

One trend we've been mindful of for awhile is the duplication of questions in many of these marketplaces. While our clients are busy asking questions related to their business operations, competitors, and industry segment, they also ask timely, "fun" questions according to what's going on in popular culture and business across the globe to keep their marketplace fresh and active. For example, questions on public policy and politics, financial market performance, industry-wide metrics, who is going to win American Idol, and soccer match results in Europe and Latin America are concurrently being run across dozens of marketplaces .

Coincidentally we also have a vibrant public marketplace where many of these questions are being asked every day and where the same traders and administrators who are using our private marketplaces are registered because that's where they first experienced Inkling.

Finally, add to the equation the terrific publicly available Inkling marketplaces that have their own niche audiences that many of our public marketplace users also enjoy participating in.

Taking all this in to consideration we decided to introduce two new capabilities:

• A "marketplace switcher" allowing you to hop from any marketplace you are registered in, to another; and
  
• The ability to replicate a market from one marketplace in to another
  

Marketplace Switcher

If you belong to multiple Inkling marketplaces and use the same email address or openid amongst those marketplaces, you'll now be able to click on the marketplace's name in the upper right hand of the screen like this:

And a drop down will appear like so:

When you click on a marketplace in the menu, you'll be taken to it. Simple as that. And if you've discovered open-id you don't even have multiple usernames and passwords at these different marketplaces. Sweet.

And of course each person will have different marketplaces available in their marketplace switcher depending on where they've already registered and what email address they used. If you belong to multiple marketplaces but used different email addresses, you can always go into settings and start using the same email address to take advantage of the marketplace switcher.

Replicate Markets From Any Marketplaces

If you have multiple marketplaces in your switcher, now you can replicate any market from one marketplace to another.

Let's go through an example. Just like many of our clients do, we run a private marketplace (The Inkling Labs Marketplace) where company employees, friends, and colleagues trade on the performance of features and project ideas we're thinking of rolling out. Sometimes we even ask some of these questions in our public marketplace first, then ask them in Inkling Labs.

A week or so ago on our public marketplace, we published a market about how many people would use a feature called "pages" or "spaces" that would allow someone to group a bunch of markets together and provide meta data and a discussion area about that group of markets:

We thought this would be a great market to run on Inkling Labs as well. So all we have to do is hover over the market listing:

Hover over the options menu and select "Create Replica..."

And a box pops up letting us choose which marketplace we can replicate this market to:

Assuming we're logged in to the target marketplace, we're sent to a confirmation screen:

We click continue and the market is replicated on another marketplace!

Make any other tweaks needed (e.g. expiration date, further details, etc.) and we can then submit it for publishing or publish it directly if we're administrators.

This obviously can also work the other way. If you're from ACME Corp. and have a question you would like to pose to the general public, replicate it to our public marketplace and submit it for publishing.

We've been using these new features ourselves quite a bit the past couple days and hope you'll find them valuable as well - especially since publishing new markets on a regular basis is one of the keys to a successful marketplace. We've made it dead easy so no more excuses!

The Logistics and Freight Industry

Given the popularity of the case studies we shared on our corporate web site a couple months ago, we've been working on a new section where we describe use cases for about a dozen different industry segments where we've seen "low hanging fruit" for the use of prediction markets. One write-up we finished recently was for the logistics and freight industry. We've done some work with a couple of these types of companies and while it may not sound like the most glamorous industry in the world, what they do is actually damn interesting. Here are some of the things companies have been doing and some ideas we thought up as well:

Supply Chain Management

• Understand risk probabilities of supply chain interruptions and inefficiencies (e.g. network congestion, equipment failure) and unexpected costs
  
• Forecast equipment supplier performance on service level agreements and quality control
  

New Product/Service Development & Business Process Change

• Forecast changes in performance metrics because of changes in business processes or new technologies
  
• Improve product/service development lifecycle: better forecast timelines, human resource and capital requirements, and budget requirements
  

Competitive and Regulatory Environment

• Understand impacts of changes in public policy in countries where business is being conducted related to operational costs, safety measures, and security protocols
  
• Leverage employees, supply chain partners, customers, and subject matter experts to gain comprehensive view of sector trends
  
• Compare idle time, distribution volume, and other available metrics with primary competitors
  

Customer Relationship Management

• Forecast demand of individual customers and other business performance metrics
  
• Contribute to profit margin and operating margin forecasts
  
• Predict customer satisfaction levels (ahead of time)
  

What's notable about these use cases is they all tie back to operational risk factors freight and logistics companies regularly experience, so figuring out something like the Annual Loss Expectancy (ALE) which can ultimately lead to the calculation of a Return on Investment (ROI) is pretty straightforward - a topic coming soon in another blog post. :)

Improved admin menus

We launched a new admin menu design this weekend.



We found the old menus weren't ideal in a few ways. For example, when the new market listings were released, the old menus covered up some useful pieces of data immediately when hovering over the row.

These new menus allow folks to have the menus stay a bit more out of the way until you really need them, just hover your mouse over the "Options" menu item on each market row.

New support/forums site

Today we are launching our new support and forums site: support.inklingmarkets.com.

A tad unfortunate, but if anyone had a username/password at our old forums.inklingmarkets.com site you'll have to create a new account at support.inklingmarkets.com in order to customize what issues you're notified of and how you receive updates.

The good news is that you don't even really need to create an account if you don't want to. You can create new topics with just your email address and without registering for anything.

There's also plenty of other good news.

There's now a knowledge base that's entirely searchable. In fact, when you search support.inklingmarkets.com, you'll be searching through discussions and knowledge base articles to help find the answers or insight you need.

The forum is now entirely synchronized with email too. So both you and the team at Inkling can reply and create new discussions all from within email without having to go back to the forums site at all. This will allow us to help answer any questions or issues even faster.

Stay tuned for more knowledge base articles and answers to frequently asked questions.

We think you'll like the improvement.

WYSIWYG, character counters, user reports

Last night we deployed the TinyMCE "what-you-see-is-what-you-get-editor" (wysiwyg) from Moxicode on market/stock descriptions as well as announcements.



That should make it even easier to add links and images and some formatting to your descriptions


A couple other things that were added recently
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To make it easier to create market questions and stock names in the bounds of how many characters are allowed, we added a character counter below a few things to give you an indication of how many characters you've already used up:



Also for admins using the user report, we've added users' answers to your profile questions in that report. For example on our public site (home.inklingmarkets.com), our admins see these added fields to the report:

Open Source Prediction Markets - $1,295 prize

The guys at Thoughbot; are running a new marketplace about how popular some open source projects are going to be. They are using for a metric the number of people watching each project on Github;.

https://opensource.inklingmarkets.com/;

This was a great idea! :)

And for those savvy Inkling traders who are also developers, Thoughtbot is offering a free training class (worth $1,295) to the top trader on Friday.

---

An impetus for the marketplace was to get help in choosing open source projects to use for certain tasks. This is a problem that follows developers no matter where they work, whether large enterprises or small 1 person shops. We don't want to reinvent the wheel so we look for open source projects or off the shelf software that we can integrate and help with our jobs.

I won't go into too much developer speak, but many of us are faced with this decision of "Should I buy/use X or Y or Z?". If I choose X, does something better already exist out there, or will exist in the near future. And will X continue to be supported?

Too often we choose things that become obsolete.

---

So here might be a good example that we can all relate to.

About 5 years ago, I was doing some moonlighting and building an auction site for construction equipment. I had carte blanche in choosing how to build the thing. This was in my Java days. So I picked what I thought was going to be a strong framework of the future: Keel.

I won't go into the nitty gritty details of the technology, but for background, Keel was a bit more like a meta framework that wrapped together other frameworks and projects. Things like: database persistence, scheduling, security, MVC.

Anyways, it sounded like it would save me oodles of time from having to wrap all this stuff together myself.

And Keel was getting tons of press. It was mentioned in so many technology magazines and blogs. This was going to be awesome.

And then it wasn't.

http://keelframework.org/

5 years later, and the site just says "Keelframework has been deprecated."

The auction site definitely had other business issues during it's execution, but it wasn't helped that even a year or so after it was built, the framework was dying out, and developers didn't want to work inside this obsolete project that wasn't getting maintained anymore.

That was a FAIL in choosing a technology. If I had a prediction market back then that said something like "The keel framework has 30% chance of still being maintained in 2 years" or some proxy for it's health (like github watchers), I would have stayed away and hopefully have found something with a bit more life to it.

For example, 2 years after this project I was faced with the same type of decision. Which technology should we use to build Inkling? I chose Ruby on Rails. And so far, this was a very good choice compared to the one I made with Keel.

In fact, it's the lessons I learned with Keel, that actually gave me confidence that Rails was a different thing altogether. I now knew some warning signs to look for.

----

Now I'm not saying prediction markets are going to solve this 100%. None of these prediction markets are saying "you have 100% chance of succeeding with this". But we give you some level of confidence though of what your chances might be. Use them as another weapon to fight obsolescence.

It's definitely a good way to get the opinion of other folks that have been down this road before and have lessons to share when they place their trades or share their comments in the market discussion.

If the authentication project in Github only has a 30% chance of having a ton of watchers in a few months compared to other authentication projects, you might want to think pretty hard about that decision.

You don't want a "your framework is deprecated" message staring you in the face.


-------------------
And Coming Soon...

For all the folks that like using multiple Inkling sites, we are releasing a site switcher soon to make it much easier to trade in multiple different Inkling sites you have going on. For example "home.inklingmarkets.com" is always fun, but it should be easy to switch back to the one you have at work and other great ones out there.

Also you'll have the ability to clone markets from one marketplace to another. So if you see someone already asking some great question, a couple clicks and you can publish the same market into your marketplace.

How to save money, even on personal shopping, with prediction markets

I have a few stories about using Inkling's prediction markets for my own personal shopping habits. Maybe they'll spark some new ideas on using them to save money.

The biggest win was when I used a market to save $100 on buying a new TV.

The basic gist is that I feel I can save some money, if I could predict whether or not new products or sales are coming soon.

Especially the sales part.

I can take the probability of a sale happening, multiply it by the money I expect to save, and that gets me my "expected savings". Expected savings is like expected value, a fun lesson from probability.

---

Let's look at saving money on a TV.

My wife and I were fortunate enough to be able to buy a new TV over the holidays. We had been saving for awhile, and finally got to replace a 200lb+ analog TV we've had for about 7 years. Needless to say we were excited to see what this HDTV stuff is all about!

I'm an extremely conscientious shopper, especially with these big ticket items. I debate and debate and debate. We finally settled on a Samsung LCD LN52A650, and decided that we'd get it in time for company and entertaining over the holidays.

Just as I was about to buy the thing, the worrier in me that hates seeing electronics fall in price just after I buy something, decided to see what the odds might be of the price coming down. Specifically, would the price of the TV come down at least $100 before Xmas. If the odds were pretty low, I'd probably stop spending all this time looking online and get the thing already:

http://home.inklingmarkets.com/stocks/53693/trades/new

And even though this only ran for a few days, the market had a little better than coinflip odds that I could save at least $100.

In other words, my "expected savings" then was at least $100 * (50 to 60%), so about $55 or more I could save if I wait. If the odds had been 20%, my expected savings would have been about $20, and I probably would have just gotten the task done with immediately. All the looking online costs me time, of which little I have.

But $55+ in expected savings seemed worth it.

So I came back to Amazon a few more times over the next few days, and sure enough, the price came down, and I pulled the trigger.


---

Not time to buy a new Apple laptop.

Running a software company, I go through a lot of technology, including various computers. These days I have a 15 inch Macbook Pro that has 4GB of memory. And crazy enough, the memory just isn't enough to run all the things that I need to run day to day.

In January, Apple announced a new 17 inch laptop that can run 8GB of RAM. Now the 17 inch is far from ideal for me, and I don't want to carry it around. But that extra RAM and horsepower sure would be useful.

Again, I went to Inkling to get an idea of how probable would Apple release a 15 inch laptop supporting 8GB in the next 6 months. I figured if the odds were too low, it might not be worth waiting, and maybe I could bear the heavier/bigger laptop so that I could get the benefits of a more powerful machine today.



From a cost savings perspective, I'd probably have to spend at least $300 more too on the 17 inch.

With the chances of a 15 inch 8GB Macbook Pro coming between 70% and 50% (about 60%), my expected savings of waiting for the 15 inch this summer would be about 60% * $300, or about $180. Now $180 dollars isn't that much in terms of the time I waste in my CPU/memory problems right now. :)

But I just wanted to walk through the expected savings example.

So savings + not really wanting to get such a heavy machine, at 60% chance of seeing the laptop I do want by this summer, I'll wait it out.

---

What video games are coming.

I've also started to use Inkling to help with shopping for video games. I was recently in the market for a new Wii game. Well, I really want to play a first person shooter game on the Wii. So I went looking, and found that a game called The Conduit is coming soon in 2009.

I thought I'd check to see what the odds might be for The Conduit coming in the first half of 2009, as well has how good the game might be.







The chances have been in between 50 and 70% that it would make it's release date. And also no one wanted to move the price off of a Gamespot score of 8.

I'm not an extremely frequent video game player so there's no real urgency in getting any particular kind of game. I just don't want to have a good probability of it going to waste when I could have waited for a much better one.

So with 50-70% chance of having a pretty good first person shooter by June 2009, I'll wait until this summer to get a new game.

Give and collect tips at Inkling

Thinking about how to incent people, as we just mentioned in our previous blog post, is an important key to the success of your marketplace. Many people like to trade on Inkling for the competition alone, whether it's amongst the entire community or the friends in their friends list. Other people do indeed like more tangible goods, anything from mugs and tshirts to plane tickets and cash.

But even if you do end up offering some prizes, it's yet another task you have to take on: buy the gift certificate, design and get the Top Trader t-shirt made, etc.

So as an experiment, we've introduced the concept of "tipping" to Inkling. Any trader can now tip, with real money, any other trader. Think someone made an insightful comment? Tip em'! Think someone is running a good market? Tip em'!

One 3rd party service that allows this commerce to take place is called Tipjoy (http://tipjoy.com) (also a company from Y Combinator, where Inkling originated).

In fact, a few weeks ago we tipped everyone off (no pun intended) to the fact we were thinking of doing this on our public marketplace.



And the market expressed that there is an 85% probability 50 tips will be made by one month from the launch date of the feature (today). So it felt like something worthwhile to get out there and start doing.

Here are the nitty gritty details about enabling Tipjoy and using it:

----------------------------------------------------------

The ability to use Tipjoy needs to be turned on by an administrator of the Inkling site that you are using. We've turned it on at our public marketplace for example.

Now that it's on, when you visit anyone's profile page at home.inklingmarkets.com, you'll see a tip button.

Let's go through an example. I'd like to tip "wstritt" at home.inklingmarkets.com. Not only has he been a top trader for quite some time, he's very helpful in letting us know about markets that need to be liquidated. He deserves more than a tiny "tip" of a quarter, but to get the ball rolling, I go to his profile page and click the tip button:





A box will pop up like the following:





If you don't have a Tipjoy account you can still supply your email address and tip amount here, and Tipjoy will go ahead and create an account for you.

The integration isn't as seamless as we want yet. For example, if wstritt hasn't entered his Tipjoy account info on his settings page yet, he won't know someone has tipped him yet. We are working on making this automatic, but you might want to go ahead and message ("Send message") the user you just tipped letting them know.

Also to make sure you can "claim" tips people are giving to you, you need to have a Tipjoy account and make sure to add that Tipjoy username to your settings page:



This will allow us to prove you are who you say you are to Tipjoy.

And as you collect tips and make at least $5, you can cash out those tips for real money to be paid to your Paypal account or gift card.

We hope this is fun to use, let us know how you like it.

The challenges of getting from here to there

The Economist published an article today about prediction markets with the headline: "An uncertain future - A novel way of generating forecasts has yet to take off."

The article then goes on to discuss some corporate examples (some of whom are Inkling clients) and some challenges that companies have been facing in implementing prediction markets.

While we selfishly would love for the headline to one day read that prediction markets have now grown to be a multi-billion dollar business, in the macro view of the Economist, they indeed have yet to "take off." But I think the headline masks some promising examples within the article itself and what has been going on in the trenches day to day at numerous companies.

Like many evolutions of business management, prediction markets are a challenge to introduce. Especially because one of their byproducts is additional transparency, they are, by nature, a disruptor. Their advantages are many but most companies find they must crawl before they can walk and then run.

"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.

Practically speaking, there is a right way to introduce prediction markets to your organization that will greatly increase the likelihood of their continued growth and usefulness. What I often tell people is imagine yourself sitting in front of your boss after 3 months of piloting an Inkling marketplace. What are some of the steps you need to have taken so moving forward is a no-brainer?

1. Communicate appropriate success factors at the beginning of the project.
   This may sound weird because they're called "prediction markets," but only focusing on accuracy of the markets is a recipe for failure when you have other benefits that are potentially more lucrative: risk mitigation, exposure of underlying pessimism or over-optimism, real-time ongoing feedback of business performance, increased collaboration between organizational stovepipes, external business partners and customers, and the list goes on.
   
2. Identify business process "pain points" where organizational bureaucracy, politics, or even geography is keeping information from flowing as it should or where there are blind spots in what the company knows.
   You've got to prove there is value in doing this, otherwise all you're proving is that you can get a group of people together to use a tool, and there's little value in that.
   
3. Utilize the data created by all the trading activity.
   What insights did you gain? Splicing the data demographically is always of interest, i.e. the marketing team was consistently optimistic about X, but the product development team was consistently pessimistic.
   
4. Have buy-in from the participants themselves (along with as many executives as you can line up.)
   We just had a client survey traders asking them what they found useful about their marketplace, what they could do to improve, etc. They got lots of positive feedback. That's great ammo.
   
5. Don't blow off having a communications and incentives strategy.
   What do people really care about? $25 gift certificates for ice cream or an opportunity to have lunch with the CEO? Prizes are people's first pass at incentives but not always the most appropriate. Getting people passionate about participating often means getting in to their brains, not padding their wallets.
   

Whenever: an easy way to do cron jobs from Ruby

Since Inkling got started over 3 years ago, we have always used something called a cron job. Cron jobs have been around for ages and are a tried and true way of scheduling things to happen on our servers. Timing out sessions, sending out mail asynchronously, etc.

A cron job is run from something called a crontab file, and though it's not "rocket surgery", it's not the most intuitive thing to use in the world. Especially when you compare how much more intuitive (not perfect, mind you) many facets of ruby, and rails are.

Over time, cron jobs have kind of been tough to keep sorted out. Especially as we keep growing, adding/upgrading servers, etc. The problem of managing our cron jobs came to a head, as Javan was tasked with creating a version of Inkling that could reside behind some corporations' firewalls. When your talking about installable software, having a way to deploy changes to these cron jobs didn't really exist.

Javan knew there must be a better way, so he created Whenever.

Whenever allows us to write all our cron jobs out in ruby and even includes a capistrano task that deploys those changes to cron to our production servers.

Whenever has been taking off in popularity. Today it made the front page of Hacker News (news.ycombinator.com). And on github it has over 185 people "watching" it. Sounds like some other folks really needed something like this too.

Nice job Javan. Very cool contribution.

Get an Inkling MBA Prediction Competition

Today Inkling is launching the first annual MBA prediction market competition at 16 business schools across the country. The competition will be conducted over a 3 month period and will give students the opportunity to see who can make the most (virtual) money by forecasting future business events and executing astute trading strategies.

Inkling is already being used in a lot of business school classrooms and we thought it would be fun to run a competition specifically among this group. Small prizes will be rewarded throughout the competition for good comments in the discussion threads, creating interesting markets, etc. but the big prize will go to the top trader who will get an all expenses paid party for him/herself and 20 of their friends. It should be a nice way to cap a tough school year.

Here are the schools participating. If you're a student and you would like your school included, contact us. There may still be time to get you in.

• Kellogg School of Management at Northwestern
  
• University of Chicago Booth
  
• Harvard Business School
  
• Cornell Johnson School of Management
  
• University of Michigan Business School
  
• University of Kansas Business School
  
• The Wharton School of the University of Pennsylvania
  
• University of Virginia Darden School of Business
  
• New York University Stern School
  
• Columbia University Graduate School of Business
  
• Duke University's Fuqua School of Business
  
• UCLA Anderson School of Management
  
• University of North Carolina School of Business
  
• University of Minnesota School of Business
  
• University of Iowa Henry B. Tippie School of Business
  
• Indiana University Kelley School of Business
  

Marketplace News Get a Makeover

In addition to quick trade we also released an overhaul of Inkling's marketplace news and announcements features.

Getting traders information from outside sources is an important part of keeping a marketplace lively and active. As a marketplace grows, trader's demands for new information also increases. Instead of making traders spend the time searching for information, administrators were increasingly requesting easier and more powerful ways to bring information directly to the traders to make the marketplace eco-system even more valuable.

Our one allowable RSS feed import and crude marketplace announcements system just wasn't fitting the bill anymore, so we made some changes.

• Want to import a blog written by the head of your department along with a news feed from Bloomberg, Yahoo, and the Wall Street Journal? No problem! Administrators can now import as many RSS feeds as they want to the marketplace.


• If importing news from 3rd parties isn't enough, administrators can now write as many announcements as they want.


• Announcements can be "pinned" to the top of marketplace news so they are readily apparent over a period of time


• A new marketplace news page aggregates all this information: RSS feeds, custom announcements, and sorts it by time


• In addition to announcements being made available on the marketplace, administrators can choose to email the announcements directly to all registered users in the marketplace.


• A new navigational element called "News" has been added to provide immediate access to all this information
  

We hope you enjoy these changes. As always let us know if you have any suggestions for improvement or new ideas we should consider.

Quick trade unveiled

As our venerable and dependable trading interface continues to hum along, we have for some time wanted to come up with an alternative interface power users and new users alike would find even simpler and quicker. So early this morning we rolled out "quick trade."

To access quick trade, you hover over any market in the list of markets and you'll see an icon pop up:



Click on it and the quick trade interface shows up from wherever you are:



Now all you need to do is click the up and down arrows and you're told how much money it's going to cost you to move the chances/number up and down. Click "place trade" and that's it! If you want a little more detail about how many shares this involves you can click on the "see more details" link. And of course you can always use Inkling "classic" trading by clicking "show me detailed trading options..." if you still prefer to be walked through the process step by step.

While this may seem simple to implement, it wasn't. Javan, who worked for us as a contractor for awhile and then became part of our team full-time because he was so good, did the lion's share of the work here. So if any of you Inkling traders in Los Angeles run in to him on the streets, be sure to give him a pat on the back. He's doing fantastic work.

The Law of Addition

Adam and I spent time with some great folks at ORD Camp (a conference very much in the style of Foo Camp but strictly for us midwest geeks). We got to see some of the work of Dennis McClendon of Chicago CartoGraphics.

Dennis makes some seriously cool maps. The below were done for a book parents would read to their toddlers. Here's one of Chicago:




And one of Washington, DC:






For these stylized maps, Dennis mentioned that he is of an old school camp of cartographers that start with nothing. A blank sheet of paper. Then he adds to his design until the most minimal and necessary elements are there.

He mentioned an alternative and fairly popular approach is to take a large or "larger" data set of map features and stuff , and then proceed to subtract things from it until you feel only the necessary things remain.

We saw some of those maps that start with a lot and try to go to a little versus his maps that start with nothing. His approach of addition is better.

Sheep, dogs, horses, pigs...an inkling market

Introducing Inkling cloning!

Creating a market in Inkling already takes very little time but who wants to get a repetitive injury if they have to create the same market for 10 different sales regions, or launch the exact same market about a performance metric on the 1st of each month?

We've now given administrators and market makers the ability to clone any market. When you see a market you want to replicate, you hover over it and get its contextual menu, choose "create replica" and you're dropped in to the market details where you can change the end date, make any other adjustments, and publish it. For some markets that have many stocks, this can be a huge time saver.

Reports page now available

Inkling marketplace admins now have access to a reports page listing the reports available to them.  These are all comma separated files (csv) that can easily be opened with Excel.  As an admin you'll see a "reports" link on the top right corner of your page: 

Which should bring up a reports page resembling this guy:

If you cannot measure it....

John Wanamaker, the famous retailer once quipped "Half the money I spend on advertising is wasted; the trouble is I don't know which half." For many years, it was a quote that marketers could rely on if their campaigns were unsuccessful or if they were unable to show a direct link between marketing expenditures and sales. As we all know, the days of not being able to measure the effectiveness of a media campaign have essentially disappeared over the last 5 to 10 years. Those days are so long gone, that the mantra is just the obvious as evidenced by an event I recently attended.

The Executives' Club of Chicago sponsored a breakfast entitled: "Accountable Marketing: What to Measure and How to Measure It" which featured Chief Marketing Officers from three of Chicago's largest companies, Aon, Walgreens and CDW. One of the panelists, Philip Clement, Global Chief Marketing and Communications Officer for Aon Service Corporation, started the breakfast off with his mantra "If you cannot measure it, don't do it." While perhaps not quite with the same emphasis, the other panelists echoed Clement.

The other theme that came through loud and clear is that the days of setting a marketing plan, putting it in motion and then waiting to see what happens are also long gone. The Chief Marketing Officers of all three companies emphasized the imperative to test new things, learn from what is tried and then modify and refine. The CMO from Walgreens explained that early in the 2008 Christmas season, as Walgreens started to see how poor retail sales were, the company's top managers got together in the room and totally revamped the company's marketing plans for the next sixty days. They put together a plan, almost on a day-by-day basis, looking to see what was working and what was not. As a result of the company's efforts, its year-end sales were better than the average retailer.

As I listened to the panelists, it was obvious that prediction markets could play a key role in executing a company's marketing plans. Since marketing activities can now be measured with accuracy, they can also be asked about in a prediction market. For example, a company might launch a marketing effort that is expected to generate sales of $4 for every dollar spent on the campaign. At the same time the campaign is launched, the company should start a prediction market that asks its salespeople, marketing professionals and customer service representatives about the campaign and the level of new sales that will be generated. With the help of a prediction market, well before all the money has been spent, the marketing executive can consider making changes or even evaluate discontinuing an effort if the prediction market starts to show results far less than the 4:1 goal. Alternatively, if the market predicts better than anticipated results, the executive can consider extending or expanding the effort because of its likely success.

With marketing dollars such a scarce resource these days, it obviously makes sense for a Chief Marketing Officer to closely scrutinize every dollar spent. Usually that process takes place before a campaign is launched and after all the money has been spent. Prediction markets are a great way to re-evaluate plans mid-course and take the necessary steps to help ensure that a greater percentage of a company's campaigns are successful.