Your Competitors Are Predictable
By Ben Golden
We recently started working with a
Houston-based client in the Energy sector that wanted to use a prediction
market to help with internal operations, and to create greater transparency and
communication within their company. We spent a couple months meeting with the client to learn about their business and objectives, and used some test questions
(e.g. asking about Houston sports teams) to help participants understand how a prediction market works. We worked with our client to create questions focused on specific operations
issues of interest, many of them highly technical. But along
the way, something unusual happened.
At one point our client was preparing for an upcoming event and really needed to know how its key competitors were going to behave. They decided to use the prediction market, even though this was largely outside its original scope. We helped craft relevant questions and watched to see how it went. When the upcoming event occurred, the prediction market's forecasts proved to be incredibly impactful, and much more accurate than any approaches the client have tried previously. This outcome was a phenomenal win for our client--our client knew what its competitors were doing before they did it, and could execute their own strategy accordingly. Good competitive intelligence can be really expensive--and our client was able to acquire it cheaply, using software that was already in place for another purpose. What's additionally fascinating is that the majority of prediction market users weren't involved in competitive intelligence, so their knowledge likely wouldn't have ever been used had it not been for the prediction market.
Our key takeaways are as follows:
It's vital to identify
forecasting needs across an organization. Every department deals with
unknowns, and gaining insight into future events can be tremendously valuable
to each of them. A prediction market might be initiated or sponsored by one
division and able to provide great value to others.
Asking employees to forecast
questions that fall outside their department or "area of expertise"
can be really valuable. It helps employees understand the organization as a
whole, and there's also a good chance your employees have knowledge that
stretches beyond what their exact title/role suggests.
Competitive intelligence is a really powerful use of prediction markets. It's reasonable to assume that if
you're an energy company in Houston, your employees have friends who work
at other energy companies in Houston, and have some real insight into what
they're up to. Of course, the same can be said for a financial firm in
New York, a political consultancy in DC, or, well, any firm anywhere.
While our client is happy with the prediction market's ability to achieve its intended goals--improving operations and company transparency--the additional competitive intelligence gain has been an incredible boon. If you have a need for good, inexpensive competitive intelligence, contact us to talk about how we might help, or sign up for a free pilot program with Cultivate Labs.Ben Golden/@BenGoldn is an Engineer at Cultivate Labs.
Chris Marshall, Director of Operations, additionally contributed to this post. Contact Chris to learn more about our work in the energy sector.