Exago’s platform was built on a market mechanism that resembles a true financial market. Idea Market allows users to submit ideas and then trade on them, “investing” in good ideas and rejecting poor ones.
Companies enjoying the experience of this system can assimilate knowledge over time to improve their markets at later stages. This facilitates more effective and engaging communication to users, creates incentive models that are more appealing, and makes idea validation more straightforward. It results in a learning process, which is translated in more efficient markets.
While participants learn how to use Exago’s platform they are accumulating and sharing their knowledge and expertise. In response to company insights and communication (feedback) they become more aware of their actions and the objectives of the initiative, thus refining their investment decisions. Bo Cowgill from Google’s predictive market team said that, “Two and half years after launch, [trades] were better calibrated than the ones in the beginning. The market as a whole also got smarter.” (Source: The Promise of Prediction Markets: A Roundtable, in McKinsey Quarterly)
The learning process is dynamic and requires the full commitment of company and participants to reach optimal levels. If this dynamism is achieved, the company will reap the rewards!