Thursday, June 29, 2006

The flys around the tail

or virtual communities, smart gatherings, etc.

For every subject of interest there exists a community of people connected to the value chain around the topic. These consist of the evangelists, the experts, the producers, the consumers , and the nearest neighbors and their communities. These communities are often distributed, with the various participants not knowing, perhaps never knowing, and thus, never being able to interact with the breadth of the community.

What is required is the ability to carve out dynamic communities around an ad-hoc topic and track this for the life of the topic. Search and even persistent search go part of the way there, but the extra bits are the interactivity or crowd sourcing that raise relevant information to the top ala Digg.

The long tail is a great concept and there are many companies that service the constituents in a variety of ways but they are mostly disconnected. Thus the flies buzz around the tail, sometimes running into each other but often times never even knowing the other exists.

Friday, June 23, 2006

The Perfect Moment

Ever since watching Spalding Grey's monologue, "Swimming to Cambodia" I've always kept a look out for those perfect moments in life. They exist on some ill defined emotional plane (perhaps a wikipedia entry is warranted), outside of logic or some conventional notion of happiness. Spalding's perfect moment was on a beach in Thailand up to his thighs in the surf and the sun touching down on the turquoise meridian of the earth.

One of mine came recently on a trip to New York City. Earlier in the day I had downloaded "Best of the Doors" into iTunes. I have been a fan of the Doors and Morrison's hedonistic transcendental rants since the early 80's but had not listed to them in a while.

I did some work on my flight then queued up my new purchase. As we flew toward the big apple I closed my eyes and let the music wash over me, letting pleasant memories associated with those songs resurface in a sort of auditory delicious tagging sense.

The last song in the collection is "The End." As we descended through the clouds on approach to LaGuardia this song began, "... this is the end, beautiful friend, the end...", we were circling low over Manhattan, near sunset, reflecting brightly off of the skyline and streaming through the airplane windows, almost blinding. For those ten minutes, the tumblers of life all fell into place and everything didn't have to make sense or have purpose. It just was.

Sunday, June 11, 2006

Prediction Markets

I just attended a one day seminar in Chicago covering the topic of prediction markets. So what are they? PM's are securities based on the possible outcomes of an event or question. The wisdom of crowds, or crowdsourcing is used to try and discover the probability that the event in question will occur. This has been used in sports betting for as long as anyone can remember, but is now being used to predict all sorts of things. The popularity of this phenomena has risen exponentially since the publication of James Surowiecki's book, The Wisdom of Crowds. Another good, although unstructured, source of information is Chris Masse's site.

I've logged a few of the notes here that came out of the meeting:
  • Market participants can bet on future outcome of question or event, question is packaged as a stock in a market, betting is buying and selling the stock.
  • Learns by weight updating like a neural net: those who are right get rewarded (wealth), and those who are wrong get punished, so on the next round, those with good info have a higher weight (more wealth to put in “stock”)
  • Reasonably good predictors when majority have better than even chance of getting it right. Even if this is not the case, those with low chance get weeded out and weighed down in early runs, and those with good chance get wealthy, until good players control the wealth-weighted majority of the vote
  • Important to provide enough incentive for participants to try their best to predict outcome
  • There has been limited success with some internal trials by companies (Corning, HP). Other examples are the Iowa Electronic Markets, InTrade (run by TradeSports), and the Hollywood Stock Exchange.
  • The market requires enough traders to provide liquidity in order to work. How many is enough. Someone's study showed that it didn't have to be a large number, just an active and informed group, perhaps as small as a dozen?
  • Don't charge participants to play. If you do it will be subject to gambling laws.
  • Rewards + Recognition + Relevance = Participation
Given the current momentum and people working in this area I believe there is enormous potential. I'm just not betting on it :)

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