Crowd Clarity

“Tap into the Collective Intelligence…”
Positioning CrowdClarity

Collective Intelligence
In 1906, James Galton visited a livestock fair and stumbled upon an intriguing contest. An ox was on display, and the villagers were invited to guess the animal's weight after it was slaughtered and dressed. They had to pay £1 to enter the contest and the winner got the meat from the ox.
Nearly 800 gave it a go and, not surprisingly, not one hit the exact mark: 1,198 pounds.
Astonishingly, however, the average of those 800 guesses came close — very close indeed. It was 1,197 pounds.
Additionally, the average of their guesses was much closer than any of the livestock experts’ guesses
© 2009 CrowdPredictions © CrowdClarity

James Galton had stumbled upon a phenomenon known as:
“Wisdom of the Crowds”
Expert
Non-Expert
Better Answer!
Good Answer
We apply this concept of collective intelligence to gather quantitative
information from our customers, a process known as Crowdsourcing

Tapping into the forces that drive the accuracy of Google’s results, the uncanny recommendations of Amazon.com and the collective knowledge of wikipedia.org to support better corporate decision-making.
Benefits:
Solutions to problems can be explored at relatively little cost, and often very quickly
The organization can tap a wider range of talent and insight than may be present in its own organization. While at the same time enhancing its relationship with its customers.
Crowdsourcing
Generate ‘Forward Looking Insight’
4

CrowdSourcing Justification

Consumer spending and confidence
Manufacturing orders
Restructuring, lay offs, financial industry meltdown
Consumer tastes
Competitive moves
Communities and internet: ‘non-experts’ are well informed

Uncertain Economy:
Uncertain Outcomes:
World is changing:
Forecasting based on past performance is likely to be inaccurate; use the knowledge of the crowd by means of prediction markets in your forward looking insight
Consequence:

Supporting your Sales & Operations Planning (S&OP)

S&OP is an integrated business mgmt process to achieve focus, alignment and synchronization across all functions of the organisation
Results in periodically updated plans on:
Sales
Production
Inventory
Customer lead time
New product development
Strategic initiatives
Leading to effective supply chain management
Typically, this is achieved by gathering and analyzing data from the past and trying to combine various forecasts in play across the organisation
Setting this up properly is difficult and costly
Prediction Markets have shown to be at least as accurate*) and can be considered a serious alternative for or addition to your S&OP process

*) MIT thesis ‘Forecasting Consumer Products Using Prediction Markets’

Supporting your Sales & Operations Planning (S&OP)
Add Prediction Markets outcomes from all parts of your organisation to your Sales & Operations Planning
Prediction Markets
Sales Forecasting
Demand Planning
Supply Planning
Pre S&OP: Reconciliation of Plans
Finalize S&OP, link to implementation
S&OP Process:
Periodic (eg. Monthly) process
Gather data on past sales, analyze trends and report forecasts
Finalize the plan and release it to implementation
Match supply and demand plans with financial considerations (impact, constraints)
Validate forecasts, understand sources of demand, account for variability, revise inventory and customer service policies
Assess the ability to meet demand by reviewing available capacity and scheduling required operations

Example:Sales Forecasting & Demand Planning

Internet promotes faster information sharing
Consumers more informed about buying decisions
Faster acceptance/rejection of products
Product lifecycles are much shorter
Economic situation means less cash for inventory that is not moving

New Challenges:
More pressure to launch great products and
accurately forecast their revenue curve
Consequence:

Example:Product Demand Forecast Stages
Problem Area
How high, how soon?
Sales Volume
Pre-Launch
Utilize market research to design product
Initial Growth
Utilize Crowdsourcing to anticipate sales trajectory and fine tune go to market plans
Long Term
Easily modeled with statistical regression

Solution: Utilize input from a diverse set of people to develop a more accurate prediction
INTERNAL
EXTERNAL
MARKETING
R+D
SALES
CUSTOMERS
HOW MUCH WILL WE SELL?
PARTNERS
+
DISTRIBUTORS
CUSTOMER
SERVICE
MANAGEMENT
FINANCE

Leverage CrowdClarity™ to implement an online Loyalty Rewards Gamethat generates superior, forward looking insight
Solution
Value: Reduce the error in forecasts by roughly 50%
(e.g. ±12% ±6%)
Open participation up to all employees, partners and consumers
Create markets to predict launch sales numbers for new releases and the product lines they will affect
Participation fostered via social and loyalty rewards incentives
6

Results
CrowdClarity™ produces a prediction, a measure of confidence in that prediction and insight into the groupings of opinions
12

Results
The history of the prediction gives insight into what drives the prediction and can be correlated to information that was made available to participants or was released by competitors
13

Application examples per Industry

Benefits using CrowdClarity™

Problems can be explored at comparatively little cost, and often very quickly
The organization can tap a wider range of talent than might be present in its own organization
By listening to the crowd, organizations gain first-hand insight on customer desires and expected numbers to purchase
The community may feel a brand-building kinship (loyalty) with the crowdsourcing organization, which is result of an earned sense of ownership through contribution and collaboration
Zero IT footprint
Lot less expensive than a failed marketing campaign or a failed product launch
It’s new, sticky and engaging

Up and Running in 10 days!

Current Process Assessment (2 days)
Understand goals, existing processes & infrastructure, quantify historical inaccuracy and determine how more accurate a/o earlier estimates would be beneficial
Integration Requirements & Goal Definition (1 day)
Integration into other business processes if necessary for maximum impact; define ROI goals
Campaign Design (3 days)
Understand corporate culture, user community, communication methods, brand, and unique business requirements; create success criteria; align key stakeholders
Identify CrowdClarity capabilities and customization needed; review interface with participants; confirm adequacy
Market & participants design, incentive plan design, promotion plan, alignment goals
Manager & User Training (2 days)
Manager training: Community management for engagement, motive and moderate for maximum impact
Participant training: optimal betting behaviour; how to win
Campaign Deployment (2 days)
Soft launch & testing
Full launch (campaign deployment)

Collective Intelligence Pilot
From November 2008 to April 2009 we conducted a pilot to compare the predictiveintelligence of Urban Science Employees to that of GM’s official forecast and Edmunds.com (US influential and authoritative source of automative information)
November 2008 was one of the most unpredictable and volatile months in all of automobile sales history.
On the next two slides, you will find two time-graphs of how the collective prediction developed over the month of November
Vs.

Collective Intelligence more accurate than Management or Consultants
CrowdClarity™
settles on more accurate prediction 12 days into month
GM Management makes prediction at beginning of month
Edmunds.com makes prediction at end of month
Actual Sales For November
Daily Prediction of Sales Volume
Days of the Month
© 2008 Frontier Market 14

Collective Intelligence prediction reaches +5% of actual within 3 days
CrowdClarity™
achieves +5% prediction only 3 days into month
GM Management makes prediction at beginning of month
Edmunds.com makes prediction at end of month
Actual Sales For November
Daily Prediction of Sales Volume
Days of the Month
© 2008 Frontier Market 15

Homepage Placement
20
© 2009 Urban Science

21

Article Placement
Invitation to subscribe

Editorial Placement
Keyword- and Taxonomy-base automatic placement
Demographic placement

22

Integrate into other AN properties
23

Prediction Center Dashboard
24

How markets engage subscribers
Market Claim and Chart(s)
Drive readers back to related AN content
User’s bets
25

Fostering competition
All players get points to start
Players win or lose points
Leader board shows who is leading
26

Fostering competition
Winners tab gives social status to recent winners
Other Incentives
Prizes
Recognition via website and emails (e.g. featured “expert” profile)
27

Promoting participation via AN emails
Provoke participation in markets directly related to news in ALERTS, DAILY and WEEKLY E-mails
28

With only 13 participants, CrowdClarity correctly predicted 12 of 13 Oscars
Oscars Challenge

Other Companies Using Collective Intelligence Software
Number of Companies
Year

Now more than ever, companies need to understand the market demand and what is and what isn't going to sell.
Companies that tap into the collective intelligence of their employees and customers to achieve real-time, forward-looking sales forecasts are sure to gain a competitive advantage.
Hans.vanraaij@Havara.net