You might have read this morning that the online betting site InTrade is shutting down.
Unlike many of the gambling sites with which you might be familiar, InTrade lets users place wagers on non-sports-related upcoming events. It was a lot of fun to read the site during the election season because you could see the odds of various candidates’ success changing with each news cycle. You can read about why the business is shutting down here or here. We can debate if it’s for legitimate concerns or just because it seemed to be operating outside of the long arm of the law but that’s not really my topic this morning.
What interests me about this site is that it was sometimes criticized for “getting it wrong”, as if the odds it offered were some kind of prediction. That’s as off-base as thinking that a Las Vegas betting line is a prediction of the outcome. Neither of those things are true. InTrade’s odds simply reflected the conventional wisdom – how people saw the outcome and were betting. It was not any sort of analysis of polling and other data to make predictions. The Vegas line is similar. It’s not a prediction – it’s an inducement. It reflects how the conventional wisdom perceives the event’s outcome and is there to induce an equal number of people to bet on either side. That’s why the odds change and the line changes.
We do the same thing in business a lot of the time and it’s often to our detriment. We don’t “bet” on the outcome because we often confuse it with the conventional wisdom. It’s the old expression about no one ever getting fired for buying IBM or ATT back when those services were the “go to” providers. We see it today in media plans – start with TV and see whats left. Even in digital we see it with the “buy Facebook” thinking I run into all the time. “Winning” in my mind means trying new things all the time, measuring them with data, and not worrying a whole lot if the outcomes defy the conventional wisdom. After all, it’s easy to get lost in a herd (or to get trampled).
What do you think?