Inkling Corporate Blog - Business Intelligence Using Prediction Markets

How Mad Mimi created a $75,000 a month business in a couple years

2009-12-03T09:00:00.001-08:00

Mad Mimi is making $75,000 a month in just about 2 years. They did it with focus on a small niche, twitter replies, and obsessive customer service.

Mad Mimi is a web service to send out marketing emails to an email list. Email marketing. Not rocket surgery. Actually such a routine business that the competition in this market is pretty established and there's a lot of it.

I can rattle off at least 5 or 6 from memory that do things like this: MailChimp, Campaign Monitor, Aweber, iContact, Constant Contact, Vertical Response, Emma, on and on. Just look up email marketing in Google and be overwhelmed.

Huh, so you have to be nuts to want to enter this right?

A couple nights ago I attended a talk given by Dave Hoover of Obtiva about how he helped Mad Mimi get started. Dave's talk was recorded and hopefully will be up on Chicago Ruby soon, so I'll just mention a few things that really stood out.

Mad Mimi actually tried to get started in 2005. Apparently it failed in its first attempt. Not sure about the details. But it sounds like whoever was trying to build version 0.1 couldn't get it off the ground. But Gary Levitt the owner and founder of Mad Mimi sounds like a man with a vision and crazy persistence.

You've got dozens and dozens of competitors. And your first attempt at starting your new business failed. Give up?

Instead he contacted Dave with Obtiva to give Mad Mimi a second try. That effort seems to have paid off. Here's a few takeaways from Dave's talk that stood out.

1) Focus on one type of customer. Gary is a musician and wanted to focus on helping musicians. Mimi even stands for Music Interface something something :) As Mimi started, it was completely targeted at helping Gary's musician friends send out great emails to their fans.

Just like an example out of Geoffrey Moore's Crossing the Chasm's "Bowling Alley" theory, Mimi's success with musicians was like a bowling ball hitting the first pin. After that, it started to hit a lot more pins. The success has spread to clubs and spread to fans receiving those emails. And now many more non-musicians are on it. Seth Godin is a high profile marketing guy and he uses it for Squidoo.

2) Use twitter replies. They've won a lot of customers just paying attention on Twitter to people that need things. Someone having trouble with a competitor? There they are offering a nudge to check out Mimi.

3) Total dedication to customer support. An important feature for them was adding a "Chat to Support" button in Mimi that opens up a 37signal's Campfire chat. Customers love having someone to ask questions to in real time and only a click away.

Their customer support doesn't stop there. Here's one example of how crazy they are with paying attention to their customers' needs. The head of customer support (Gary's brother Dean) heard on Twitter that one of their customers was traveling to New York and was looking for a place to stay. Dean had that guy stay with him at his own place in New York. :)

Dave gave a great talk. I'll update this post if I see the video online. Obtiva and Mad Mimi seem to be a couple companies worth paying attention to.

[History] taught me that there is no such thing as the future, only multiple futures of varying degrees of probability.

2009-11-30T09:21:00.001-08:00

- Niall Ferguson (found via Designing Innovations)

5 Whys

2009-11-24T09:23:00.000-08:00

My car will not start. (the problem)

Why? - The battery is dead. (first why)
Why? - The alternator is not functioning. (second why)
Why? - The alternator belt has broken. (third why)
Why? - The alternator belt was well beyond its useful service life and has never been replaced. (fourth why)
Why? - I have not been maintaining my car according to the recommended service schedule. (fifth why, a root cause)

- From Wikipedia

Didn't realize someone (Toyota) codified a technique like this. Inkling is a huge fan of spending the extra steps in root cause analysis of a problem. It's hard to argue when you wouldn't want to at least figure out what the root cause of a problem is, even if you decide to just treat a symptom.

Yet doing the necessary drilling into the problem to get to the root cause often gets neglected. Even happens to us. And we love asking an annoying set of questions about a problem.

What you (and even Steve Jobs) could learn about customer support from JetBlue

2009-11-18T09:05:00.001-08:00

Doesn't matter what part of the organization you're in or how high you've gotten. You should still on some routine be doing customer support. When you don't, you risk playing the telephone game like a bunch of grade school kids.

The founder of JetBlue knows this. Here's an excerpt from Norm Brodsky's "The Knack", where Norm describes his flight:

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

As usual I was flying JetBlue. I boarded the plane with the other passengers, and the door closed. As we sat there, buckling our seat belts and checking out the televisions in front of us, a middle-aged man with slightly graying hair stood up in the front of the plane. He had on the long apron that all the JetBlue flight attendants wear, with his name stitched to it. "Hi," he said, "my name is Dave Needleman, and I'm the CEO of JetBlue. I'm here to serve you this evening, and I'm looking forward to meeting each of you before we land."

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

I don't understand why more people don't take the time to build the systems and processes that would allow all employees to take part in customer support. Why don't more CEOs serve burgers once every few months at one of the franchises in their empire for 8 hours. Why don't more CEOs answer the phone to answer the questions a home owner has to figure out the complexity of their home insurance policy. Why don't more CEOs spend an 8 hour shift at the customer support desk at their retail store.

When you grow your company you are naturally going to need to hire people to place in customer support positions. And as you continue to grow, you continue to find more and more people between you and your customers. Problem is, customer support is swimming with problems that should be opportunities.

We learned in grade school what happens when messages travel through people. The telephone game. The message starts as one thing, and by the end of the chain it's entirely something else.

My wife and I were amused watching it play out at dinner on Sunday night. We were at a new Greek restaurant across the street that opened just last week. We didn't have water or a waiter for that matter for about 15 minutes after sitting down. Finally a waiter arrived, and wanted to correct the water problem. So he told a busser to get some water. Well the busser was in charge of other bussers. So he told someone else to get water. That person had to go to the kitchen and load a tray of water glasses with water. When he made it back out, now someone else had to actually take the water to us.

You can guess what happened next. This fourth person in the chain had absolutely no idea who to bring the water to. We tried to flag him down, but he didn't see us, as he delivered the water to a table of newly arrived guests.

That's why when a problem comes into Inkling, we all get it. We all can answer it. We could very easily have hired some customer support staff by now, and made them some kind of front line. But then these problems would have to go through them, then sometimes passed to an engineer for further help, then maybe passed to Adam and I. We wouldn't be able to converse and brain storm with our clients like we do today.

Or if we (makers and designers in our business) weren't manning customer support, often problems like "How do I change my password" or "I didn't get my email" might get treated with just a routine boilerplate email pointing to an FAQ or online tutorial.

"Nothing gets you more focused on solving a problem than actually having that problem." - Jason Fried at 37signals.com.

Couldn't agree more. That's why I love working on things that I actually use. And doing your own customer support forces your customers' problems onto you. It's expensive to answer routine questions. Most of us makers would rather be making and designing things rather than sludging through log files and sending email troubleshooting browser problems.

So now their problem is my problem. This forces me to focus on making the problem go away for good. Forces me to focus on what we can do to make things easier to understand. Or forces me to pay attention to patterns and look for root causes to a problem.

I can only imagine what would happen if a CEO started doing an 8 hour shift every 3 months at say the Apple Genius Bar? Coming off that shift, and knowing there's another one just 3 months away, is going to light a fire to get some things improved or fixed.

P.S. This buffer between you and your customers is also a good reason to think about tools that better harness the knowledge of these front line customer support folks to answer all sorts of questions an organization is facing. ;)

If you want your company to be innovative, using carrot and stick incentives aren't going to work

2009-11-16T08:47:00.001-08:00

Dan Pink, previously Al Gore's speechwriter, displays evidence found that when doing innovative tasks, using monetary incentives actually has a detrimental effect in getting the task accomplished. Carrots like monetary incentives only work for routine tasks that have very focused rules and don't require right brain thinking.

He also provides even more examples of organizations that use things like letting employees work on what they want, when they want, and where they want to accomplish great things. That kind of autonomy is the right incentive to inspire creative work.

Hire employees to boss you around.

You are tone blind

2009-11-10T09:27:00.000-08:00

All the written electronic communication we do as a society has given us enormous gains, but most of us (including Inc. columnist and business owner Joel Spolsky in an example below) suffer from a frequent inability to accurately read the intention of this type of communication.

We are tone blind. Or more accurately, we are blind to more than a few communication cues that we more easily utilize using verbal communication like intonation and stress.

It doesn't help that we usually think adding emoticons and internet lingo is considered unprofessional and something for texting teenagers.

As humans, understanding someone's intention of their communication is of super importance, but it's not always an easy feat. Here's an example found on about.com:

-----------

I don't think he should get the job.

Meaning: Somebody else thinks he should get the job.

I don't think he should get the job.

Meaning: It's not true that I think he should get the job.

I don't think he should get that job.

Meaning: That's not really what I mean. OR I'm not sure he'll get that job.

I don't think he should get that job.

Meaning: Somebody else should get that job.

I don't think he should get that job.

Meaning: In my opinion it's wrong that he's going to get that job.

I don't think he should get that job.

Meaning: He should have to earn (be worthy of, work hard for) that job.

I don't think he should get that job.

Meaning: He should get another job.

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

Depending on where you put the emphasis in this sentence by using stress, the sentence has totally different meanings. The meaning here was only conveyed because I spent the time using Bold. But often we don't spend the time using tools like Bold and we blast off an email as soon as the words pass our fingers.

Here's an example from the real world I saw recently. Joel Spolsky, a personal hero of mine, wrote a column in Inc. magazine about some growing pains his company might be having. To more than a few people, they felt that the article is a bit of a subtle marketing piece. Right or wrong, that was their opinion. So one guy made a comment about such opinion:

"If increasing your growth rate is your objective, this looks like a very nice first step, Joel. You disguise a PR piece as an objective 'how to' in a national business publication, coming across as an authority, the underdog, and an all around nice guy who really cares about his customers. You're an engineer who claims to be 'weak' in the sales department, but all evidence to the contrary: nice 'sales hack'. Any reasonable person who takes your advice would be a fool if he bought from your competitor. Not bad for a couple hours work. Kudos."

Joel's reply:

"Jeez, everything is a conspiracy on Hacker News. How about I wrote it because I'm a columnist at Inc and I have to turn in one article a month? And how about, they hired me because they like columnists who are actively running businesses to write about the issues they face? (c.f. Norm Brodsky, the other columnist, who has some kind of a box storage business). None of the plumbers and dog shampoo-vendors who read Inc. do software project management. The number of leads I get from Inc readers is laughable. Also, you're confusing sales and marketing. They're different things. We're pretty good at marketing for a company our size. We're absolutely bad at sales."

Joel seems a bit insulted and attacked by the first commenter. Even though the first commenter cleared up in a later comment, that he WASN'T being sarcastic and was trying to genuinely complement Joel on his article.

I imagine this conversation in person would have been much more constructive and useful, if these 2 people were in person or talking on the phone and could read each other better through audible and visual cues like smiles, hand shakes, and the intonation of the comments.

This happens every day for us folks who manage projects and teams online. We have to use email and instant messaging very well to collaborate together. And for many reasons, it's our preferred communication channel at Inkling.

Email allows people to work asynchronously and schedule interruptions better so they can get more work done while they are in a zone. But often a discussion over email can easily turn into an unintended disagreement because the intention of the written word was inaccurately understood.

At Inkling, we've picked up a few habits to try and combat this, which might help others to keep in mind.

1) Emoticons and internet lingo (lol, brb, lmao, etc.) do have a place in "professional communication". They aren't just for teenagers.

A :) easily lets your reader know you are smiling when you are writing your words. Just like a ! helps share that you are heightening your voice or emphasis. Don't be afraid to use these tools even with your clients to help convey your mood and your intonation.

2) Compliment, compliment, compliment. Most of us don't feel appreciated enough for what we do for other people when times are good. And now given tougher economic and political situations, there's an air of stress in many places. Complimenting people and showing gratitude early and often is a big help in producing effective written communication.

Even if a later point you make in your communication is misconstrued, an earlier mentioned compliment or thank you easily sets up a better follow up note or phone call to clear up a matter.

3) And most importantly, know when to graduate communication mechanisms. We graduate to phone calls pretty quickly. It's amazing how often, what seemed like a disagreement over email turns into a very constructive conversation over the phone. Things get cleared up, and intentions more easily understood.

The written word continues to be increasingly important in how we operate together in teams and in projects over the internet. We've learned that it helps to spend a bit of extra effort in conveying the mood and intent of our writing. Hope some of these tips help.

Speed reading: How I started reading 3-4 times faster in just a short time

2009-11-03T10:33:00.001-08:00

I increased my reading speed by 3-4x recently. I was a bit skeptical that I could pull it off, but had a lot of hope, because I knew people that could do it. And now here's a couple tips on how I've accomplished it.

First of all, I credit my improvement to a 5 hour class I took at Iris speed reading.

I can share a couple of my notes and things I'm doing now, but a 5 hour class with Iris is totally worth it. It's one of the best 5 hours of learning self improvement type stuff I've done in many many years.

The reason people read slow is usually because of a mix of 3 things:

1) We often go back and reread stuff we just read. Either we didn't understand the last sentence, or we stopped paying attention. Either way, this slows us down a ton.

2) We use our eyes to glance at every single word. Growing up we learn to read by reading each letter at a time. No one teaches us to digest whole words or entire sentences using all of our vision. You absolutely have the ability to digest more characters and words than you are now. You already digest more words and characters in one glance than you did when you were 5 years old. Imagine if you trained that ability.

3) We subvocalize words. Similar to reading every single word with our eyes, often we read by actually vocalizing the words in our heads. Does it sound like you are talking to yourself in your head when your reading? A lot of people hear that voice. It slows you down. You can read a lot faster than you can vocalize words. So you need to force the voice in your head to quiet down.

Training your eyes

So here's one great exercise I'll share that helps stop these 3 things above. There's definitely more exercises, but this one is my favorite and probably the most effective.

Take 5 minutes, a book and just read it as friggin fast as you can.

The key is to just see words as fast as you can. Don't even try to understand what your reading. Pretend it's another language, one that you don't understand. Pretend it's Klingon. You don't need to comprehend anything during this exercise. Just see words, lots of them, and super fast.

Use your finger during this to trace underneath each sentence. Using your finger is exactly what your parents and your teachers wanted you to stop doing as you learned. Which is a shame, because that finger really helps guide your eyes.

Most importantly, it keeps you in a groove and stops you from going backwards.

After 5 minutes, take a break, rest your eyes, then do this exercise 2 more times for a total of 15 minutes.

Go try and read a book now, but this time in order to comprehend the words.

You'll probably be amazed at how much faster you are reading just after doing this exercise 1 time. But just like any other exercise, you can't just do this once. You can't just do this a few times and then be an expert.

Start with doing it 7 days in a row. Take a break, then do it for 14 days in a row. Just know that you'll need to revisit this exercise occasionally to keep your reading in shape.

Better comprehension from better skimming

So above was all about speeding up your eyes and your brain at seeing more words. But speed reading is also about comprehending better. For that, the technique I use is something akin to better skimming plus repetition.

I read every chapter 3 times.

The first time, I just read the first paragraph or 2 of a chapter and the final paragraph of that chapter. This gives me just enough to know what the chapter is about. I read at a pace that's comfortable for comprehending.

Then I go back to the start of the chapter for my second read. This time, I read the first sentence of each paragraph in the chapter. Sometimes I'll read a couple sentences if the sentence is pretty unremarkable. Again, I read at a pace that allows me to comprehend. I don't try and read fast.

Now, I go back to the beginning of the chapter for the 3rd and final time. This time, I try to read the chapter focusing on speed. I'll try and capture the main point of each paragraph. But I'll feel free to skip paragraphs I remember from my second reading as being kind of useless. And so I go through the chapter very fast.

Afterall, from the second reading, I have an outline already of what's kind of important and interesting in this chapter that I want more information about. I'm amazed at how many interesting chunks I can pull and remember from these books now. I'm learning better how to basically skip things I think are filler (determined from the second pass).

That's about it. Of course, I probably wouldn't read poetry like this or some kind of mystery novel. But this is an awesome technique when you are trying to get read through lots of other material. For example, I love reading business books. This is a great way to get past a lot of the fluff and redundancy. A lot of these books should be about a third as wide as they are now anyways, but that's another story.

Give it a go. But be warned, this is a great way to find yourself spending a ton more money on books. Now I have to manage all this book shopping I'm doing. I'm going to have to get a bit more handy with the public library.

Hire employees to boss you around

2009-10-26T11:50:00.001-07:00

"If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea."

- Antoine de Saint-Exupery

Hire people who can not only manage themselves but can even manage you.

You're going to laugh, and I'll probably lose 90% of readers here :) But for full disclosure: I've just now gotten around to reading 7 habits by Stephen Covey. There's actually some good stuff in there. Yeah, yeah, yeah. Mission statements, win-win, Synergy! :) yada yada yada.

But I've recently been working on speed reading, and upgraded my reading speed by 3-4X. So now I can pick up books and get a lot more value out of them, because their verbosity and redundancy isn't slowing me down or wasting my time. (I'll share some speed reading tips soon.)

Anyways, Covey has a good bit in there about him teaching his 7 year old son to take care of the lawn. He basically helped show him how and then gave his kid some basic guidelines. Here's part of the conversation with his kid, Covey begins:

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

"So you boss yourself. Now, guess who your helper is."

"Who?"

"I am," I said. "You boss me."

"I do?"

"That's right. But my time to help is limited. Sometimes I'm away. But when I'm here, you tell me how I can help. I'll do anything you want me to do"

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

Everyone's trying to figure out how to keep their employees motivated. So many of my friends and family express that the dread in their workplace is palpable. It's the economy, it's the weather, it's something. So I can't help notice the questions folks ask about hiring, or motivating their employees, or how to get them kick started again "to be innovative" :)

I've found the best "motivation" is to treat your employees like the smart adults they are. They become demotivated when they are treated like worker bees. Not every company feels they have the luxury to treat their employees this way, but look at the successes at 3M, Google, Facebook, 37signals, where they give tons of freedom to employees to invent their own projects.

Make sure your employees have some guidelines about where you want to go. Then go ask them what they want to and should work on. Maybe it can't be 100% of the time type of project, but you might be able to give them a good chunk of time to work on it. There's nothing more motivating than when they become their own bosses and start creating or just doing what needs to get done like a human being naturally does.

I make a habit of constantly asking - what do you think we should be working on?, what kind of technologies would you like to be working with?, and then we make an effort to try out those projects. I never had that kind of opportunity in my 7 years of working for other people, and I hated almost every minute of it.

I love it when folks I manage assign me tickets. "I added this feature we were talking about, can you take a look at it to see if it does what it should do?" or "I saw an issue and made the following change... can you double check it before I release it?" or "I'm thinking this new feature might really help people do..." This helps me manage my time by putting these things in the queue by priority and allows employees to move onto the next thing instead of waiting around for feedback.

Let me know what I need to do to help you.

Too many companies just want their employees to work like drones. If you want your employees to feel like drones, just keep feeding them tickets in the ticket system without opportunity for input.

Find people who can boss you around.

"My new Icelandic trainer's rule: what you ask of your horse, YOU must be able to do. I've been riding up hills, fast. I'm toast."

2009-10-26T09:44:00.001-07:00

- Kathy Sierra

Amazing sculpture at PopTech

2009-10-22T17:08:00.001-07:00

PopTech doesn't get enough press. Had the pleasure of attending it last year, and there's some awesome things going on there. I didn't get to go again this year. But you can still watch all their talks streamed live.

Here's some video of a gorgeous sculpture Reuben Margolin built that he showed off today.

"It is more noble to give yourself completely to one individual than to labor diligently for the salvation of the masses."

2009-10-22T09:54:00.001-07:00

- Dag Hammarskjold, former Secretary-General of the United Nations

Pay for your own dog food

2009-10-21T08:23:00.001-07:00

By now you probably haven't missed someone extoling the virtues of eating your own dog food. Just in case you have, all this means is that you use your own product.

Using your own product comes with a ton of benefits, because you become your own customer. The quality of your product likely increases because you can't ignore it's problems. They aren't just your customers problems. They are your problems.

But I know a ton of people that don't actually pay for their own dog food.

Starting a new product or business can be tough. One of the challenging debates is:

"How much should we charge" or "What should our pricing plans look like"?

Pricing can be a complicated discussion. Especially since you want to make sure you make profit over the costs of running whatever it is your selling.

But the best way to short circuit some of the debate is to simply ask:

What would I pay for this?

At Inkling we don't just ask.

We've gotten in the habit of actually taking out our own credit card and using it on our own account sign up page. Yes, it's a bit silly when the credit card processing takes some money off the top. But it makes the feeling very real that you are paying for this, and now it's an expense just like it's going to be an expense for your clients.

So when we started Tgethr (our simple tool to collaborate with groups over email), I stuck my credit card in to pay for the plan that met our own team's needs. Through doing this, I found I was paying $99 just to support the groups of family and friends and the folks at work with this software.

After a couple months of getting dinged that $100 for my particular situation, it didn't feel right. We were charging too much. So we tweaked the plans to offer more storage, more groups, so that I could move myself to a smaller plan and now start paying $49 a month, which feels much more realistic or fair to me as a customer.

So if you are debating how much you are going to charge for something, I'd start with doing exercises like this. If afterward, you find your pricing + customers don't support your costs, then you are going to have to provide much more value to justify raising prices.

(Part of this is a cross post of an answer I gave at answers.onstartups.com, a new and pretty useful site for startups who want to ask other entrepreneurs questions.)

If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.

2009-10-20T09:39:00.001-07:00

- Antoine de Saint-Exupery (found on Creatively Maladjusted)

How successful would a football coach be without ever having played a single game of football?

2009-10-19T08:18:00.001-07:00

Not very, right?

And yet constantly, people (a business owner, a manager) try and manage the production of something they have never had an ounce of experience producing themselves.

I get asked a lot by friends without any experience programming: "how do I build this idea for this software application without any experience?" or "how do I find technical employees or co-founders"?

To curtail the objections, I'm not saying a business owner of a software company needs to be a software engineer. I'm not saying a division lead of a consumer products company has to have run the stirring vats making soap.

Look at Mike Tomlin, the youngest coach to win a Super Bowl and the current coach of the Steelers. He hasn't played a single game of professional football. But he did play college ball.

I'm saying any experience in the thing you are trying to lead or manage will pay extremely huge dividends.

So if you are a "business guy" and you want to start a business that makes a new iPhone app. It would behoove you to buy the most basic iPhone building tutorial you can and try to at least get past the first chapter.

You don't have to work on the application you intend to build. You don't have to finish the book. You don't have to raise your blood pressure or feel even successful at the tutorial.

Just that smallest iota of that book: downloading some tool, making the iPhone beep or print "hello world", gives you a huge leg up in what you are trying to accomplish.

A great example of this is Adam, one of our founders and CEO. Adam isn't a developer. But he's learned a bit about Ruby, the language Inkling is developed in. It saves him an enormous amount of time when a little thing needs to be tweaked. He can do it himself rather than wait until a developer has the resources available.

Secondly, he has a much better idea of the effort many of the tasks might take that he needs to manage, design for, and communicate to our clients. His effort in experiencing the pain of development has been an investment he's made with a big return.

At Inkling we manage many functions being a small business. We aren't lawyers or PR people or trained marketing people, but we have experience now doing these things for ourselves. So when we do hire the experts to work on these things with us, that experience makes the conversations and projects we manage 100 times better.

The struggle and challenge you go through doing this type of exercise, will change your perspective about the people you want to lead. You'll have much more knowledge and confidence working with the people you now have to hire to actually get the job done well.

"Design's too important to be left to designers"

2009-10-16T10:02:00.001-07:00

Also a good bit in here about "Building to Think"

"The significant problems we face cannot be solved at the same level of thinking we were at when we created them."

2009-10-13T07:24:00.001-07:00

- Albert Einstein

Catching the Crazies

2009-10-12T09:24:00.001-07:00

My Sister a couple years ago introduced this great phrase to me which I try to use whenever I can. When she thinks I or someone else is being ridiculous she says: "Adam, you've caught the crazies!"

It seems every few months when something unexpected happens, journalists and pundits who monitor prediction markets "catch the crazies."

The latest example is the round of Nobel prizes. Today, Elinor Ostrom from Indiana University and Oliver Williamson from Berekely were awarded the prize in Economics. Conventional wisdom said Williamson was an outside shot and Ostrom wasn't even on anyone's radar screen. On our public marketplace, Williamson consistently had a 3 or 4 percent chance of being the winner. Did this mean Inkling "had it wrong?" No, it meant Williamson was perceived to have an outside shot based on the information available to people interested in these things.

Why is it consistently so surprising then to the media that the prediction market prices reflected this? It's not like they were reporting anything different. Prediction market prices are simply an aggregation of information available to people and their reaction to that information in the form of buying or selling shares. Markets about Nobel prize winners and the like are great fun but with a lack of information available to traders because of the secretive process, they're not going to be very useful.

Contrast this with a question asked internal to a company where a great deal of information is available, the traders are typically influencing the outcome or they know the actors who are, and there is usually historical precedence. That is an appropriate use case for judging prediction markets on their ability to not only match forecasted probabilities with reality, but provide tangible business value in the form of cost savings and risk awareness and avoidance.

The name "prediction market" is one I've never liked because it oozes having "crystal ball" powers which means there is inevitably going to be a backlash by the media and bloggers when public prediction markets fail to look like they had the inside scoop. Unfortunately I don't think many writers will suddenly explore the nuance of what a prediction market price means or a good question vs. bad as it's certainly easier to just say "they got it wrong" or "they got it right." It's a design challenge we continue to work on to see how we can continue to simplify the output of a prediction market and make it as digestible as possible. We also try to help people understand what prediction market results mean and when a question is going to garner good feedback vs. unreliable feedback, but it's clearly a road we still have a ways to go on.

"Criticize by creating"

2009-10-06T14:19:00.001-07:00

- Michelangelo

Great business card design on recycled cereal boxes

2009-10-06T08:18:00.001-07:00

Business cards seem so antiquated these days and yet there's still a constant need for them.

One day we might even all be able to bump our phones to exchange data. But "back in the day" we used to have infrared on our phones and PDAs that promised that same convenience of shooting our contact information over the aether. But alas, we never seemed to actually do that.

We still pass around bits of paper with our email and phone numbers on them. Because it's still the most convenient exchange in a meeting with someone new.

No one has to find a pen or clickity clack on their blackberry or iphone.

Business cards remain around, even if they just exist long enough to pass the email address to someone who proceeds to enter it into their address book and throws out the card.

Some business cards though still make an impression. Here's one that I recently saw that raised an eyebrow.

Caught my eye right away as the card isn't even cut straight :) But it gets the job done. The info isn't letterpressed or even laser printed :) Just a stamp. A crooked stamp at that.

Turn the card around and you see it's on the inside of a cereal box.

Still seems like a pain in he butt to be cutting these up and stamping them yourself. But now I'm interested in having my own.

(Nat & Hellens is a great store by the way if you are looking for cool gifts for babies)

"An interesting new study looks at how being able to count your own heartbeats - the most elemental form of biofeedback - correlates with better decision-making, at least when playing the Iowa Gambling Task."

2009-10-05T14:46:00.001-07:00

- Jonah Lehrer: Listening to Your Pulse

A failed project in a previous job. And Seth Godin's advice.

2009-10-05T07:40:00.000-07:00

"Today, R&D organizational work processes focus on generating the final specification that is handed off downstream to manufacturing. This work generates the equivalent of 5% of the total information created. More importantly, 95% of the effort and knowledge created along the way, critically vital information, ends up being lost unless processes, systems, and databases are in place to capture these critical organizational assets."

- Howard R. Moskowitz

I had the pleasure of presenting what prediction markets are all about to an audience at Palladium's 2009 Business Performance Conference.

One thing I touched on was a project that failed at a previous job. Let's call it Project Fail.

This project had already been going on for a few months with 5-6 people before I came on board. And they brought me on to put to add some finishing touches to help roll it out the door as something presentable to potential clients.

The specifics of the project aren't all that important.

What is important, is that the project was doing something that seemed an awful lot like another project I had friends on 4 years prior to this (Project Forgotten). Project Forgotten was shut down for various reasons, and I had heard of those reasons around the water cooler.

We didn't have social networks after all 9 years ago. This was just talk in a computer lab. We didn't all have our own computers back then either :)

So when I saw what was going on at Project Fail, I immediately saw some of the same things going on that happened on Project Forgotten.

I felt there was a major risk of Project Fail getting shut down.

I brought it up with my boss who had to bring it further up the management ladder to someone who could make the important decisions here.

I explained the evidence that there was a huge risk of this project facing those same legal challenges.

They heard me out.

But didn't take the threat seriously. I think they also felt that the project was far enough along, what could they do now anyways. They had to see it to some completion.

Wouldn't you know, a few days later my boss's boss gets a call from someone further up in the company that got wind of the project. This guy wasn't happy since some of those retail websites were clients of ours, and the competitive use of this data could be a big risk to those client relationships.

Project cancelled.

Seth Godin in the video below talks about the concept of "thrashing" he learned from Steve McConnel's writing and Steve's work at Microsoft. Thrashing is all the conversations and debate and meetings and more meetings that occur when more than one person starts getting involved in a project.

Seth Godin would have said we needed to start "thrashing" more on this project when it was cheap. When the project was just ideas and words on paper.

Thrashing this late in the game of new product development wasn't very useful. If I had had a way to pay attention to all the projects going on in my little group/world at this much larger company, maybe I could have raised this issue before they wasted months of money and time on this project. Maybe they could have steered the project in a direction to make these clients happy. Maybe they would have just killed the project. Before all the waste.

If we had had a social network or a more social project management experience that would have helped a great deal with moving the thrashing earlier in the project.

And I'm even more sure a prediction market would have given us the incentive to pay attention to those projects within our group.

Prediction markets are social networks for metrics.

Things get measured. A culture of metrics starts to form. And people have an incentive to keep paying attention to those metrics.

Seth Godin: Quieting the Lizard Brain from 99% on Vimeo.

To deal with an uncertain future and still move forward – they advise people to have "strong opinions, which are weakly held."

2009-10-05T06:22:00.001-07:00

- Bob Johansen about wisdom

Predicting Milestones with Inkling (ala Basecamp)

2009-10-02T13:04:00.001-07:00

Since we've launched widgets in Inkling, it's become trivial to integrate a prediction market with most other applications that could benefit from better decision making.

For example, now you can get some help coming up with your project milestones. We'll take a look at what this could look like using a scenario with 37signals' very popular (and rightly so) project management application Basecamp.

Let's pretend I've already setup a first crack at predicting that our company will have a hypothetical integration with Amazon's Mechanical Turk done by Friday, Oct 9. Here's the milestone in Basecamp.

We'll use a comment to this milestone as a container of our widget. So click on the comment icon to add a comment.

Now, let's go create a prediction market that asks when this milestone is going to be accomplished. (We won't go through the steps of creating a market here. There's plenty of instruction inside :) But please let us know if you ever need more help.)

Here's our market ready to go. I can now click the "Trade from your site" icon on the market page to get the embed code for the trading widget.

Grab the embed code your given or tweak it to match your desired design. And just add that to a comment in your milestone. Here we go back to Basecamp and add the new comment.

"Add this Comment" and now your Basecamp users will have a prediction market clickable right from inside Basecamp. They don't even have to login or give any care in the world that you're using Inkling.

And after I've shared my answer.

So there it is. Prediction markets in more places. You can have the power of better group forecasting without forcing your coworkers or employees to ever leave the applications they are most comfortable with and already enjoy using.

Hope that provides some more ideas of where you can use prediction markets next.

"We spent some time in our family talking about what's the trade-off we want to make. We spent about two weeks talking about this. Every night at the dinner table"

2009-10-02T09:07:00.001-07:00

- Steve Jobs on the decision making process he used to pick a washing machine.

"Of course, this wasn't really about washing machines; it was about passing along the concern for design to his children and perhaps to (his wife) Laurene"

Irrational Decision Making

2009-10-01T16:04:00.001-07:00