Do crowds get dumber the larger they get? That’s what Drew Curtis, founder of Fark.com and a previous guest host on Vator Box, said about predictive markets. Because NewsFutures CEO Emile Servan-Schreiber called Drew “clueless,” we decided to take another crack at services that tap into the wisdom of crowds. This time, we set our sites on Emile’s company NewsFutures, a place where you can buy and sell predictions with virtual currency, but win actual cash prizes. Given our focus on aggregating information to predict future outcomes, who better to be the guest host of this show than Paul Martino, whose company Aggregate Knowledge is about predicting behavioral outcomes based on the aggregate actions of crowds. Given Paul's expertise in the area of crowd sourcing, we also had him help us analyze Wize, an aggregator of consumer reviews.
Let's start with NewsFutures, as we said in the last Vator Box on predictive markets, NewsFutures competes with Hubdub as well as Spigit, Inkling markets and to some extent, Younoodle, Pollection or Vizu. My observation was that for this or any predictive market to work, there needs to be a lot of people participating. Well, it looks like NewsFutures has that critical mass of participants. One study comparing outcomes of NewsFutures and TradesSports.com showed that both marketplaces “exhibited significant predictive powers.”
Paul brought up the point that the biggest challenge this company face is the “federal government.” That's because Paul, along with Mark Pincus, thought about creating a company called “Betonnews.com.” In fact, Paul still owns the URL. The problem with these businesses, said Paul is the uncertainty about the regulatory environment. If NewsFutures’ has a good attorney to navigate these waters, then perhaps it has a chance, he suggested. All told, the three of us – myself, Ezra Roizen (Vator Box regular) and Paul liked the company.
We then set our sites on Wize, which competes with Retrevo, Bazaarvoice and as well as the good old fashion Consumer Reports. “I love the Wize number,” said Paul. Ezra and I agreed that Wize was a “clever idea,” but the question was whether the service would actually drive consumption of long-tail items. Paul seemed to think it did. His criticism was that the company may be challenged maintaining a balance between its customers (that Wize creates leads for), and poor reviews of those same customers’ products.
On the upside, Ezra said that the market for contextual and guided shopping services is pretty “hot.” To that end, Wize may be a good acquisition candidate.
Note: As always, I'm not going to give away all the commentary in the video. Please watch and let us know where we were off. Again, Vator Box is more about starting a dialogue than it is about giving you expert analysis - though we try! Also, please let us know which companies you'd like us to review!
Let me start with a disclaimer: Clupedia is in the "Wisdom of Crowds" space, so obviously, my opinion is as bias as it can be.
Having said that, I am not at all convinced of the WISE number. It seems to me that it is quite superficial, subjective, and unreliable. I understand that the number is simply an invitation to either ignore or digg deeper, but so would be a "Weighted Average" of ratings, wouldn't it.
Having worked in my prior life on semantic, linguistic, and computational linguistic analyses, I found it very hard to believe that Wise's algorithm is capable of analysing reviews and deducing a reliable score. Neither the science nor the technology can deliver yet. Thus, my first reaction is that the Wise number is nothing more than hype. But then, I might be wrong, and if I am, then Wise can truly walk on water - very doubtful.
To expand the conversation, the "wisdom of crowds" ought not to be limited to just products. It could be just about anything and everything - from products to politics, and everything in between. As we all know, the web is highly fragmented. A platform capable of extracting the sentiment of the web about any topic or subject would be quite compelling. From that aspect, I don't think much of Wise but I do think highly of Aggregate Knowledge in terms of contributing to the advancement of the "Wisdom of Crowds", even though the former might pull off a more exciting exit than the latter.