The Grilled Cheese

I found this company on craigslist.org while looking for a job (I have an interview for an internship there tomorrow!), and I think their service is worth writing about. The company's name is Crowdcast, which describes its service well: use the wisdom of the crowd to make better forecasts.

Just like Intrade, BetFair, and a host of other prediction market services, Crowdcast provides software that allows individuals to bet on an outcome, aggregating distributed knowledge into one place. It works using the beautifully simple principle of economics (the same principle that makes capitalism work, according to Hayek) that prices convey information about the market. If a certain outcome seems unlikely to a user, he or she can bet against it. That bet will change the market's predicted outcome, against which other users can bet. This method works really well. In fact, prediction markets are incredibly accurate in picking the winners of elections and other outcomes.

Intrade and BetFair are open to the public. They have markets to predict anything the public wants. Crowdcast, on the other hand, opens prediction markets within companies. Internal prediction markets enable companies to make full use of their employees' knowledge. The software also allows employees to make comments on their bets.

I love this for two reasons. The first is that Crowdcast themselves may be reading this, and they are probably more likely to hire me if I like their service. The second is that I think its an awesome combination of economic and democratic principles that improve company performance. Companies using Crowdcast get access to more information. But perhaps just as important, employees know that their input has value to the company, both because their input influences the prediction process and because they get paid for it.