Prediction markets are more than a game or a way to make money, says Matt Burgess, chief executive of iPredict.
He was speaking at the recent “Wellington to the World” (W2W) conference, which showcased a number of innovative ideas from start-up companies to potential investors, mentors and others.
A Victoria University spin-off venture, iPredict harnesses the “wisdom of crowds” by offering a way for companies to look into the thoughts of staff operating at the coalface. By getting staff to bet on the success of current or planned projects, managers can tune-in to what people who might hesitate to venture an opinion really think.
IPredict is web-based and works by asking employees to “invest” in the chances of a project succeeding. It quickly becomes clear which projects are in trouble, he says.
Burgess described how iPredict works. Management could, for example, suggest putting another five staff on a project and increasing its budget, and then watch what this does to predictions of its success. If it rises significantly, this indicates such a tactic might be worth pursuing.
IPredict operates by selling stock in the outcome of a future event. This is based on its current market price, which, in turn, represents cumulative opinion as to its chances. Say, an event is reckoned to have a 65% chance of coming about then the price would be 65¢ a unit. If the event happens, stockholders earn $1 a unit.
A company using iPredict internally might use notional money — with payback being in prizes or “bragging rights”, says Burgess.
Employees who trade are simply trying to buy low and sell high, he says. They’re not there to share what they know. They just want to make money. Management, however, wants to know what is in people’s heads. The ruling price reflects this; “so it’s a symbiotic relationship”.
IPredict has one corporate client, Fonterra, says Burgess. The dairy giant uses it to help predict future prices of butter, milk and cheese. “Over the last few months, we have significantly improved their forecasting accuracy,” says Burgess.
However, he stresses that iPredict is not gambling. It has been approved by the Securities Commission as a legitimate futures market. There are highly technical definitions that distinguish one from the other.
Fingertapps feels the pulse
Another company was Fingertapps, which is already well on the way to success. Fingertapps spokesman Ben Wilde says the company is currently working with “a major global bank” in Toronto, Canada.
“We’ve taken the idea of Microsoft Surface [Microsoft’s table-top computer interface] and delivered it to them in a customised fashion — so they can use it with their customers — while Microsoft is just talking about it”.
The interface is being shown in a number of locations.
Fingertapps’ implementation of the interface uses multimedia data, which is accessed via touch and gesture. A user can “move into” a graphical presentation, call up windows with a tap, expand them with a gesture and flick them away when they’ve finished working.
Primary use of the product is for advertising material and kiosk-type transactions, where it comes across as “more sexy” than the standard kiosk with its static display and rows of buttons. It has also been implemented on mobile devices.
Fingertapps currently has few rivals, but similar products are catching up, Wilde acknowledges. There is a lack of talent in this area worldwide, “so, at the moment, we have a window of opportunity,” he says.
Futrix takes intelligent approach
Business intelligence company Futrix has established itself on the Deloitte/Unlimited Fast 50 list of rapidly growing companies — at number 19.
Its web-based intelligence application has already attracted many overseas clients. “We get between 65 and 85 percent of our income from the US,” says CEO Clare Howden.
Most business intelligence tools impose a structure on the data, which Howden compares to skiing a mountain using only the chair-lifts.
“We’re the only software product in the world that uses unconstrained navigation. You can have any dimensions, any measures you like; you can see the information any which way, in real time.”
This means the IT department no longer gets tied up providing analysis to order, and business people can get a fuller picture of what’s happening, why it’s happening and what to do about it, she says. Futrix customers include J P Morgan Chase, which uses the product for risk analysis. “Sadly, Lehmann Brothers didn’t use it,” says Howden.
Insurer AIG Australia uses it for claims analysis, to help reduce premiums. Its Melbourne office threw out a free implementation of Business Objects to pay for Futrix, she says.
The Foundation for Research, Science and Technology has given Futrix a grant to apply for 12 patents on its techniques.
Futrix is now looking for investor interest to help broaden its reseller network and make “important connections with the right people” in overseas markets.
Aptimize cuts web waiting time
Ed Robinson of Aptimize says the internet causes impatience — people who will stand in a bank queue for 20 minutes won’t wait 10 seconds for a web page to load, he says.
Companies don’t realise how slowly a website hosted in New Zealand responds when accessed from the US or Japan, and don’t realise they’re losing business as a result, he says.
Aptimize’s Runtime Page Optimiser (RPO) eliminates the multiple trips between the user’s browser and the server often necessary to fetch each separate element of a web page — something that really aggravates users.
RPO fetches everything at once — just as you would when going to a grocery store to buy ingredients for a cake, he says. It also exploits techniques such as data compression and caching, without, he claims, the user organisation needing to make any conscious changes to its website.
Real backing for start-ups is expected to come from overseas, when videos of the presentations are released to the web shortly.