May 11, 2008
Central Bank of Kenya - branchless banking goes rural
http://technology.cgap.org/2008/04/02/guest-post-central-bank-of-kenya-branchless-banking-goes-rural
May 3, 2008
The promise of prediction markets
This recent roundtable hosted by Mckinsey in Dubai
The idea of a prediction market is relatively new, although markets themselves are nothing new. All markets are predictive to some extent, as they can be seen as an aggregation of dispersed information, and usually the information is signaled through prices and or price changes. Predictive markets apply the market mechanism to specific questions in the hope of applying the collective intelligence of groups to make better decisions.
“The premise is that under the right circumstances, the collective judgment of a large group of people will generally provide a better picture of what the future might look like than anything one expert or even a small group of experts will come up with.”
“In most organizations, there’s a lot of knowledge that the people who are making the decisions don’t have access to. They may not know that it’s out there or they don’t know whom to ask. Even if they do, the respondents might not want to disclose this knowledge, because they’re worried about what the boss would say.”
“But for a crowd to be smart, it needs to satisfy certain criteria. It needs to be diverse, so that people are bringing different pieces of information to the table. It needs to be decentralized, so that no one at the top is dictating the crowd’s answer. It needs to summarize people’s opinions into one collective verdict. And the people in the crowd need to be independent, so that they pay attention mostly to their own information and don’t worry about what everyone around them thinks.”
The crowd can also be your own. As in the case of corporations who are using prediction markets comprised solely of their own employees, and who are hence using internal predictive markets as a business intelligence tool.
“Google appears to be into prediction markets in a relatively big way... We launched our prediction markets in April 2005, and since then we’ve asked about 275 different questions, and there’ve been some 80,000 trades.
“Almost all Google products have had, or still have, a prediction market about their usage.”
This is a fascinating insight into how Google leverages its human resources to assist organizational decision-making. By systematically encouraging and nurturing the use of such markets within its organization, Google is reaping an additional “information dividend” from its human capital base, and at the same time learning important information about how its organization functions.
“Besides getting good answers to the questions we ask, we really try to use these markets to understand how our organization works. For example, we have been exploring the cognitive biases in different parts of the company and the way information moves inside it through different types of networks.”
Some of the insights that Google has gathered are indeed quite useful.
“Do crowds learn over time? ... Our experiences suggest that they do. The longer you work at Google and the longer you trade in the prediction markets, the more calibrated you become and the likelier you are to have a successful trading record… The market as a whole also got smarter. The trades we observed two and a half years after launch were better calibrated than the ones in the beginning, and we could observe a steady improvement over time.”
“One important caveat is that being higher in the company, measured by distance from the CEO, actually seemed to place you at a disadvantage for trading profitably.”
Wow! This observation certainly flies in the face of accepted corporate organizational wisdom. Prediction markets are certainly a trend to keep an eye on.
April 24, 2008
Scientist Gives VC an Edge
In this recent Wall Street Journal article, emanating from their weekly “Theory and Practice” installment on people and ideas influencing managers, we get a glimpse of the potential partnership model of the future.
“Together, Messrs. McGuire and Langer have launched 13 companies over the past 15 years and become a model for other venture capitalists scrambling to commercialize new drug and medical-device research. Dr. Langer, 59 years old, holds more than 600 patents and supplies the science; Mr. McGuire, 52, fine-tunes the business. Some of Mr. McGuire's work with Mr. Langer was described in a 2005 Harvard Business School case study called, "The Langer Lab: Commercializing Science.".”
“One early big hit came in 1997, when they co-founded, with another Langer protege, Advanced Inhalation Research Inc. The company, which devised a novel way to deliver large-molecule drugs via the lungs, was sold for $113 million in stock 18 months later; Polaris made nearly 10 times its money, and Dr. Langer profited as a significant shareholder of AIR. Since then, the two have teamed up on other drug-related start-ups like Pulmatrix Inc., which is developing inhalable aerosols for respiratory disease, and Tempo Pharmaceuticals Inc., which uses nanotechnology to create new drugs. Of the 13 investments, two companies went public and three were acquired.”
These types of arrangements seem to be a match made in bio-tech heaven, and from a business perspective they definitely make a lot of pragmatic sense, in terms of supplying “deal flow” and a reduced risk-premium for the investors involved.
Perhaps we should not be all that surprised that such partnerships are successful, as by its nature this particular partnership is multi-disciplinary, and spans the boundaries of multiple skill-sets.
Is it possible that we may see the increasing popularity of these types of partnerships in other areas of business?
http://online.wsj.com/article/SB120813571182711781.html?mod=djemSB
April 16, 2008
Who Owns Intellectual Property?
Jim Heskett of the
He continues with the following supplementary questions:
“More generally, are views of ownership of intellectual property changing? If so, how will it affect the way intellectual property is valued for financial purposes? Are laws worldwide regarding intellectual property out of date? What do you think?”
In raising these questions, Professor Heskett cites the following qualities of the modern world that necessitate a discussion on Intellectual Property:
“Turning to the Internet itself, and particularly to content-sharing sites, the matter of ownership is challenged in a different way. Content produced by news media as well as individuals acting as professionals or amateurs is being copied, spliced, and represented essentially as something so new and unique that it is often downloaded by hundreds of thousands of viewers who might not have watched the original material. Who owns the result? Does anyone owe others for the use of the content? If so, how much and for what share? Or has the culture of "free" become so deeply imbedded in the minds of a new generation of users that content developers can only hope for partial, occasional, or eventual financial rewards for their efforts?”
He continues…
“This brings to mind some aspects of the way that the Internet facilitates cooperation in the generation of intellectual capital ranging from new product development to research. It helps explain why the Gen Xers we discussed several months ago find it quite natural to work in teams, either in face-to-face contact or online. In some cases, it is producing remarkable results. But whose work is it? Who owns the result?”
Without a doubt Professor Heskett’s questions are legitimate and timely, and are not easily resolved. Much is riding on the outcome.
Perhaps a more encompassing question is:
How does society balance the rights of “root” creators while still unleashing the breathtaking power of the creative cross-pollination of ideas through universal access and use?
April 7, 2008
Microsoft gets ISO go-ahead
It's interesting to see that Microsoft is now an official standard (ISO/IEC DIS 29500), as opposed to playing the role of a de facto standard that it generally occupies.
Microsoft's "Open XML" format beat-out the rival "ODF" (Open Document format) favoured by IBM Corp. and Sun Microsystems Inc., in a recent ISO vote.
According to the IT World Canada article below, the ISO has not experienced lobbying of this nature before. This is not surprising when you consider that the three firms mentioned above all have:
a) Very deep pockets
b) Experience in Washington-DC's advanced lobby-ecosystem
c) World-class technical know-how
It will be interesting to see what effect this has on both Microsoft and the ISO, and indeed what effect, if any, that this ruling has on both enterprise-level, and consumer-level documentation habits.
What do you think might come of the ODF?
http://www.iso.org/iso/iso_catalogue/catalogue_tc/catalogue_detail.htm?csnumber=45515
http://www.itworldcanada.com/Pages/Docbase/ViewArticle.aspx?id=idgml-12e8db44-a77d-474d&Portal=2e5351f3-4ab9-4c24-a496-6b265ffaa88c&sub=1519551
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