Crowdsourcing. Research. Stock Market

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Iris Short
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1 Crowdsourcing Research Stock Market ENGAGING WISDOM

2 What is Huunu? Crowdsourcing Research Stock Market Huunu enables companies to create Prediction Markets with panel communities at a low cost with minimal effort. Aggregate knowledge from your community to provide accurate answers without the need for large samples or target market representation. Engage your panel to make better decisions, faster. Huunu improved forecast accuracy by 10% for an online retailer.

communities at a low cost with minimal effort.

3 What is Huunu? Capture & Sort Ideas Test Concepts Market Preference - Product Design - Message/Campaign - Name/Logo Assess Price Forecast Business Intelligence Huunu predicted the 2011 Heisman trophy winner and the correct finishing order four days before the announcement.

4 How can Huunu help you? 95.5% Of participants enjoyed the activity and said that they would participate again I ABSOLUTELY LOVED IT IT WAS FUN I THINK IT S A REALLY COOL WAY TO ANSWER QUESTIONS AND GET POINTS DIDN T TAKE A WHOLE LOT OF TIME INNOVATIVE IDEA Separate good ideas from great ideas Reduce concept & ideation costs Accurate answers with less effort Integrate research earlier in development process Huunu s long-term forecast outperformed the General Mills Operations forecasts and was more accurate earlier in the process.

REALLY COOL WAY TO ANSWER QUESTIONS AND GET POINTS DIDN T TAKE A WHOLE LOT OF TIME INNOVATIVE IDEA Separate good ideas from great

5 What is a Prediction Market? A prediction market is a platform that collects and aggregates the knowledge and judgment of a large, diverse group around a specific event or concept for the purpose of making predictions. The predictions represent the aggregated knowledge of the group and quantify the probability of future outcomes. In some instances, prediction markets may also be referred to as a preference market. Huunu identified the winning business venture for The Ohio State University Center for Entrepreneurship. That venture was funded 7 days after the competition ended.

concept for the purpose of making predictions.

6 Prediction Market VS Preference Market PREDICTION Will Apple sell 30 million ipads before the end of the year? PREFERENCE Would an itunes subscription service be successful in the market place? The main difference between a preference market and a prediction market is the outcome. In a prediction market, the outcome is verifiable and the event actually occurs within the life of the market. In a preference market the outcome may not be verifiable within the life of the market because an actual outcome does not occur. Huunu successfully supports both preference and prediction markets. Huunu accurately predicted slight increases in 2011 holiday sales and travel.

The main difference between a preference market and a prediction market is the outcome.

7 How does it work? Huunu operates like a traditional stock market where participants buy and sell securities based on their preferences. In Huunu, securities are questions or statements. Players invest based on their knowledge and confidence of a given subject. The market is dynamic in that the players are allowed to modify their answer or change their position at any given point in time. Huunu helped GE identify winning ideas and patents in 10 business areas in over 43 countries.

In Huunu, securities are questions or statements.

8 How is Huunu different? Huunu is different from traditional research in that respondents are not asked their opinion, but asked to make a judgment on a future outcome or preference. Positions held by respondents are liquid and can be changed at anytime based on new information. Participants are incentivized and rewarded based on their performance, not just their participation. Participants move the stock price based on their knowledge and confidence in the subject. It is this process of self-selection and investment based on confidence that gives the Huunu its accuracy. Huunu worked with Qualcomm to identify successful new business ideas during their Venture Fest.

Positions held by respondents are liquid and can be changed at anytime based on new information.

9 Is it accurate? Countless studies have shown that Prediction Markets are as accurate, if not more accurate than the alternatives. A high correlation with traditional market research methods, such as survey and conjoint analysis, demonstrate the efficacy of Prediction Markets as a tool for research. A few sample data points regarding Prediction Markets include: Markets have been at least as accurate. More often than not, they prevail. Source: -Insider Trading and Prediction Markets, Journal of Law, Economics, and Policy 4(2): , Spring Dr. Robin Hanson, Associate Professor of Economics, George Mason University, and Chief Scientist, Consensus Point, Inc., A 0.85 correlation versus monadic concept testing in 215 head to head experiments. Source:Kearon, John and Earls, Mark. Me-to-We Research: From Asking Unreliable Witnesses about Themselves to Asking People What They Notice, Believe and Predict about Others. ESOMAR (2009). Outperforms polls 74% of the time just before an election. Increasingly more accurate further out. Source: Joyce E. Berg, Forrest D. Nelson, and Thomas A Rietz, Prediction Market Accuracy in the Long Run, January Huunu helped Logica predict consumer preferences for storing their personal media items in the cloud.

A few sample data points regarding Prediction Markets include: Markets have been at least as accurate. More often than not, they prevail.

10 Is it accurate? (continued) HP used prediction markets to forecast printer sales and found that the market outperformed official forecasts 75% of the time. Source: Kay Yut Chen and Charles R. Plott, Information Aggregation Mechanisms: Concept, Design and Implementation for a Sales Forecasting Problem, March Predicts box office receipts with a.94 correlation vs actual. Source: HSX website and David M. Pennock, Steve Lawrence, C. Lee Giles, and Finn Arup Nielsen, The Power of Play: Efficiency and Forecast Accuracy in Web Market Games, Artificial Markets, February 17, correlation when respondents estimate the preference of others vs themselves. Source: Dahan, Ely, Arina Soukhoroukova, and Martin Spann. New Product Development 2.0: Preference Markets, How Scalable Securities Markets Identify Winning Product Concepts and Attributes. Journal of Product Innovation Management, Huunu accurately predicted the winner of the HD dvd and BluRay format battle.

Source: HSX website and David M. Pennock, Steve Lawrence, C.

11 Case Studies Communispace Huunu is providing market researchers and marketers with new ways to extract knowledge and opinion from their panels. Huunu partnered with market research online community company, Communispace, to offer one of their top consumer packaged goods clients a new, more engaging way to test concepts. More concise than a survey and without the need for large, target market dependent samples, Huunu efficiently helped Communispace and their client identify the most promising new product concepts. In less than 48 hours and with fewer than 300 respondents, consensus was reached and concepts were ranked. The results of this prediction market mirrored the results of a 3700 person target market focused. Huunu is empowering Communispace to drive member engagement and deliver actionable results with fewer respondents more efficiently than ever before. GE Huunu partnered with GE to create the GE Imagination Market, a preference market made up of their global employee base. The objective of the market was to help GE answer tough business questions around technology investment and new product development. The market provided a new method of concept testing within the organization, allowing GE to gather and prioritize concepts and business innovations from across the company in a timely and efficient way. Huunu has helped GE identify winning ideas and patents in 10 business areas in over 43 countries. Motorola When Motorola was faced with the daunting task of determining which of 10,000 product concepts to take to market, they partnered with Huunu to create the Think Tank Idea Exchange. Think Tank was created to identify winning concepts sooner and reduce the time it takes to bring product concepts to market. As a result, Motorola has increased the number of ideas pursued and increased employee engagement in the product development process. Idea disposition time has decreased from an average of 180 days to 80 days, and the pursuit rate of new ideas has increased from 12% to 22%. Best Buy When Best Buy needed a better way to gauge whether a new product or service concept was likely to succeed, they partnered with Huunu. Huunu helped them accomplish their objectives: predicting concept success, monitoring leading business indicators, and engaging their employees. Open to all of their U.S. employees, the Best Buy Prediction Market, Tag Trade, successfully provided predictions about winning concepts, such as Blu-Ray vs HD-DVD, more accurately forecasted sales of various media products, and provided early warning indicators of store opening dates. Logica Futurescope Logica, an international consulting firm based in London, was looking for new ways to source the wisdom of the crowd in order to better understand future trends and add value for their clients. They partnered with Huunu to create Logica FutureScope, a prediction market platform that helps them engage their employees, their customers, leading academics and key decision makers to better understand and predict the technology needs of their customers. Logica FutureScope aggregates the disparate opinions of hundreds of cloud and business experts throughout the world and allows the consultants at Logica to see into the future, anticipate trends, and better understand the impact of world events on the demand for their product. Logica uses the information to provide their clients with clearly targeted recommendations and services.

More concise than a survey and without the need for large, target market dependent samples, Huunu efficiently helped Communispace and their client identify the most promising new product concepts.

12 ENGAGING WISDOM For more information and a live demonstration please contact us: Toll free: Phone: sales@consensuspoint.com

Social Forecasting vs. Market Research When to use a survey, when to use Social Forecasting?

CrowdWorx Berlin Munich Boston Poznan http://www.crowdworx.com White Paper Series Social Forecasting vs. Market Research When to use a survey, when to use Social Forecasting? Abstract Social Forecasting