Dear facebook user: do it for me. Once again

After complaints over their new Terms of Use, Facebook wants its users to write the new ones. This is how it goes: OK dear users, we got it wrong [ or you didn't let us get away with it ], now tell us how you would like it to be.

Two comments about it:

• Facebook is built on the premise of profuse user generated content on top of the platform the company provides. But, hey, how cool it is when users actually help you develop your product infrastructure!. It is not the first time facebook relies on its users for developing core components of its product. They did an awesome job outsourcing to users the site translation to other languages.

• Facebook can make a mistake and still have the brand power to tell its users to work for them. It looks like it can get away with anything: the product is so relevant to its users, they are so locked-in - due to a massive network effect-, that people would provide feedback and try to change things for lack of any other better alternative.
  

Put your money where your mouth is

Prediction markets are not new. A simple way to describe them could be the following:

yes, I love salesforce.com's Venn diagrams ads too

... or put together an independent crowd of participants, lay out a bunch of hypothesis and tell your participants to invest real or virtual money on whatever hypothesis they deem more likely to happen. Do not forget to incentivize them with some sort of -monetary- prize if they win.

Apparently, results from this collective forecasting tend to be more reliable than individual forecasts and other methods. Applications of this technique range from the mundane "who will win the Oscar this year?" to presidential elections, sophisticated pricing, sales or project completion forecasts. Businessweek.com's article "Workers, Place Your Bets" provides more information on corporate uses (HP, Microsoft, Google, etc.) of this fascinating tool.

Prediction markets do not always work perfectly. Haas professor Tack-Hua Ho has identified four principles for better functioning - I4C or incentive, indicator, improvement, independence, and crowd-. In his paper, co-authored with Kay-Yut Chen , "New Product Blockbusters: The Magic and Science of Prediction Markets" he also points at the most common prediction market pitfalls - lack of participants, little trading, and participants who lack information -, but I am not going to tell you all about it. You can read more here.

Innovation communities

OK, this post is going to be "drafty-ish" but a bad post is better than no post at all, right? Today, I attended a lecture in the Open Innovation Speaker Series at UC Berkeley. Stephen Benson from Innovation Exchange explained, amongst many other interesting things, how innovation can happen around platforms and software, events and communities. He quoted Chris Townsend (Forrester) regarding these three innovation archetypes.

Innovation Exchange and Innocentive are examples of innovation communities. Companies post their innovation challenges in these online innovators' meeting places hoping for someone to "crack" their problem. Alpheus Bingham, from Innocentive, also in this speaker series two weeks ago, gave some clues on why there is a high level of user engagement regardless of the low probability of actually "cracking" the problem. He compared it to a lottery ticket: just a couple of bucks for, yes, only a remote dream, but...we all love to dream if it is that cheap.


Salesforce Ideas, and other providers of software solutions for ideas / innovation, works under the platform archetype although there is something cool about the event you can generate with it (see the myStarbucksIdea execution. Given the strategic turnaround that the company is facing, this initiative received interesting coverage in the media)

I have just bumped into a piece of news about one innovation event, the 2008 IdeaFestival in Louisville, Ky. The festival "brings together creative thinkers from different disciplines to connect ideas in science, the arts, design, business, film, technology and education."

Cross-fertilization seems to be a key ingredient in the innovation magic potion and mixing is one of the premises of this blog. Hopefully I will bring in the diversity of my readers' comments to spice up the mix.