Ford Taps Cloud-Based Prediction Market
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Ford Motor Company's stock price on the New York Stock Exchange has almost doubled in the past year, but that's not the only stock market the company has interest in. The car maker is also tapping a cloud-based prediction market system to get a better handle on which new ideas to pursue.
The simulated stock market, being used by more than 1,300 Ford (NYSE: F) employees in the United States and Europe, encourages members to comment on various topics and issues through stock market-like trading. Ford is using a cloud-based collaborative prediction platform offered by Inkling, which has a number of other blue-chip clients in its stable, including CNN, Cisco, General Mills and Johnson & Johnson.
Tom Montgomery, a technical expert with Ford's Research & Advanced Engineering group, said Ford first developed its own predictions market software in 2006, but moved to Inkling in 2009. "It's their software and their servers, they host everything, but we brand the interface," Montgomery told InternetNews.com. "The important thing for us is that the information we collect is proprietary and they offered the security and guarantees we wanted."
For example, if traders thought a new type of headlight had a 67 percent chance of garnering the highest rating, its share price would be $67.
"Traditional market research and customer clinics are expensive and you run them when you can run them," Montgomery said. "The nice thing about this is that it's Internet-based, and you can get opinions anytime you need to and leverage the wisdom of the crowd."
Ford claims the system is already paying off. For example, the company has abandoned early development of an in-car vacuum after the market indicated tepid interest. Plans for a Ford-specific bike carrier were also dropped after extremely low trading in the prediction market.
Ford said these decisions let it save time and development costs, and focus on other features that traded higher. In an internal survey, Ford said 93 percent of employees participating in the company's prediction markets said they gained from "lessons learned."
"We're trying to take advantage of all the knowledge all these Ford employees have," Montgomery said. "One of the great things about our current leadership is that they're very data driven."
There's also the "fun" factor.
"It's definitely more compelling than an email survey or other research techniques," Montgomery said. "And because it's fun, we don't have to spend as much time recruiting enough people to get the demographic results we want. When you see all the comments and people arguing back and forth ... that's a rich source of information."