UsableMarkets

As someone who watches the progression of pretty prediction markets onto the industry walkway (some to stay, some to never be heard from again), something that always impresses me is specificity. While platforms and ideas can be re-produced, being the place to go for one specific thing is enormously attractive.

I am reminded of this again by two things. One, Tim O’Reilly’s statement in his What is Web 2.0 article that “control over unique, hard-to-recreate data sources that get richer as more people use them” is important for any web 2.0 company that wants to succeed.

And, of all things, by a new site called The SimExchange.

This site allows you to buy and sell contracts on upcoming video games, as a way to predict whether the game will be “awesome” or not – a real problem for some people as these games are not cheap, and no one wants to buy a crappy game.

This is not the first market for trading in games and game related items. Yahoo’s Tech Buzz Game also allows players to buy and sell contracts in games (MMORPG’s), game platforms and consoles, but this market is just one of many created by the good folks over at O’Reilly for us to trade.

Now, while it’s unfair to compare a new and relatively unknown site (and company) to a Yahoo site, The SimExchange does have an advantage: its specificity.

A market site that is industry, or topic specific has a whole host of advantages over a broad market site. To name just a few:

- like minded traders, producing more meaningful social networks, and more meaningful content
- more meaningful contracts (traders are there because they care)
- more meaningful price information (because traders care about the outcome)
- platform independence (meaning that the value of the market is not in the platform, but in the content and underlying data. (See CrowdIQ, as an example of a broad market that could never quite get people to care)
- and for those who get it right, greater liquidity, which is itself one of the great attractors of any market (see HSX).

And many people seem to be getting this. As I mentioned before, prediction markets are becoming more and more industry aligned. Farmetrics, just announced this week, is yet another example of a industry specific market.

Now, how’s their usability …?

As always, thanks for listening.
~alex

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