Prediction Markets Discussion Question

Is it a good idea to encourage ALL employees to trade in these markets? Should insiders and/or highly uninformed people be allowed to trade? Do they help or hurt the market?

Yes, it certainly is important to encourage all employees to trade in prediction markets. Prediction markets are speculative markets created for making predictions. Prediction market is a tool companies are increasingly using to make better decisions by allowing employees to trade in a mock stock market based on information they have about the business. The advantage of having an open prediction trading system gives employees an incentive to share information they have that may be valuable. Several large companies have started using this tool to help make assessments about all kinds of projections including how customer numbers will grow, assess demand for their products, what changes needs to be made and so forth. Therefore, this tool benefits the company in making informed decisions. So, the higher the number of employees that use prediction markets the better it is for the organization.

Although insiders or highly uninformed people may not have all the information to trade, however they will increase the number of participants. As mentioned earlier, the higher the number the better it is for the company to get an aggregate view. Due to the increased number of uninformed traders and insiders the ‘Law of Large Numbers’ come into play resulting in aggregated views and will work to the benefits of the organization. Sometimes, the social and cultural issues which may have prevented an employee from sharing information are also, kept aside, because all trades are anonymous. Therefore, all employees must be allowed to trade in prediction markets because they actually help the company and the market.

Information about Google from additional research
Source: http://www.consensuspoint.com
Google, the search giant, has been using such markets since 2005 to estimate - among other things - traffic volumes, and when its international offices will open. About 1,500 employees will trade at any one time, and each has 10,000 ‘Goobles’ - a mock currency - to play with per quarter. The markets run for anywhere between two weeks and three months. When they close, successful traders are given cash prizes and specially branded T-shirts which end up being a greater incentive than the money.

Threadless Discussion Question

In what other industries or areas would Threadless’ community-driven product development model work well? And not so well?
Threadless’s community driven business model works well due to two main reasons. (1) Firstly, the business model itself is unique and has created a first mover advantage. (2) Being a small company, it has focused on small scale manufacturing which has enabled the members to continue their contribution to Threadless. Threadless’s business model actively involves customers, which is unlike other apparel companies that release monotonous t-shirt designs. At Threadless members actively participate by critiquing designs, blogging and by posting songs and videos. Threadless has also been profitable by selling the designed t-shirts to its members.

Basically, Threadless business model offers customization of products. This community driven product development model will work well in an industry that focuses on limited or specialized number of product lines. In other words, the model will not work out well in large manufacturing industries such as cars, machinery and parts. In large scale manufacturing industries products are usually designed/manufactured in a monotonous manner due to economies of scale and mass distribution. So it will not work well here. On the other hand, Threadless’s model will work well in the following industries and if implemented right it will also enable the company to make huge profits.

• Furniture industries
• Home Building
• Manufacturing Antique products and designs
  

Social Networks Discussion Questions

Online social networks have become ubiquitous in the past few years. What forms of value do users get from these services and who is most likely to sign up on LinkedIn versus other sites?

In the past 5-10 years, Internet has enabled a communication revolution. Most importantly, it has changed the way we work, connect with people and even the way we live. Social networking has become a fundamental part of the global online experience. Social networking is not just growing rapidly; it's evolving both in terms of a broader audience and compelling new functionality to meet the competition and the increasing needs and expectations of an average user. Examples of few famous online social networks are Face book, Friendster, MySpace, LinkedIn.

Value –
1) Social Networking focuses on building online communities of people. People share interests and activities and connect with other people around the globe.
2) Provides different ways to interact with people such as instant messaging, emails, exchange photos, share blogs and stories.
3) Allows people to find friends who are located in different parts of the world. Most importantly, builds a bridge so that friends can reconnect.
4) Allows individuals to promote their own businesses and sometimes helps with raising initial investments from venture capitalists.

LinkedIn – LinkedIn is an interconnected business oriented social networking site mainly used for professional networking. The purpose of the site is to allow registered users to maintain a list of contact details of people they know and trust in business. (http://en.wikipedia.org/wiki/LinkedIn)

Although the social networking tools offers the above value and benefits, the following individuals are most likely to sign up on LinkedIn versus other sites:
Ø Business Professionals who want to be connected with other experts around the globe.
Ø Recruiters, Hiring managers and Head Hunters
Ø Job Seekers
Ø Executives and Senior Officers
Ø Individuals who own or would like to own a small business like to sign up so they can get connected with venture capitalists.

Wiki Discussion Question

How do Wikipedia’s processes for creating and modifying articles ever lead to high-quality results?

Wikipdia is a free content encyclopedia project. It is written collaboratively by individuals all over the world and anyone can edit any content. Visitors do not need special knowledge or need to be a subject matter expert to contribute to wiki. They can add, edit information, cross references however must comply within Wiki’s edit policies and standards.

Wikipedia produces high quality results, because wiki model is different when compared to other tools such as blogging. Wiki gives its users incentive for their writing. If a user writes high quality articles citing apprpriate references and sources of information then chances are that it will stay in the website. However, if a user writes something inaccurate or something that annoys or disputes with people then there is a high chance it will dissappear from the site. All users to the Wiki site have read, write, edit and delete access which makes it easier to remove inapprpriate content that do not add any value and ensure the site delivers only high quality content.(atleast for the most part).

Quick Statistic (Reference Wikepedia Site) – Due to its high-quality content Wikipedia has grown rapidly into one of the largest reference websites attracting atleast 684 million visitors yearly by 2008.