MITCH & MORGAN PREDICTION MARKETSdfsm9194vna0o.cloudfront.net/888577-0-201505MMDeck.pdf · its...

© 2015 MITCH & MORGAN INC. ALL RIGHTS RESERVED 1

MITCH & MORGAN PREDICTION MARKETS T o m o r r o w , t o d a y


The information contained in this presentation has been researched with due care and any and all evaluations or assessments stated herein represent our personal opinions. We advise that some of the available information has been independently verified and may be based on statements by third people, but no representation or warranty, expressed or implied, is made as to, and no reliance should be place on, the fairness, accuracy, completeness or correctness of this information or opinions contained herein. Certain statements contained herein may be statements of future expectations and other forward-looking statements that are based on our current personal views and assumptions and involve known and unknown risks and uncertainties that cause actual results, performance or events to differ materially from those expressed or implied in such statements. None of our team shall assume any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or the statements contained herein as to unverified third person statements, any statements of future expectations and other forward-looking statements, or the fairness, accuracy, completeness or correctness of statements contained herein, or otherwise arising in connection with this presentation.

This presentation does not constitute an offer or invitation to purchase or subscribe for any investment and neither it nor any part of it shall form the basis of or be relied upon in connection with any commitment or contract whatsoever. No investment decisions should be based on this presentation, which principally constitutes an advertising message, as the main source of information or reliance but personal opinions should be formed solely on the basis of further available information and evaluations and assumptions. The legal documentation held ready for any prospective investor shall be authorised as the sole source of relevant information and neither it nor any part of it shall constitute any representation, warranty or other undertaking, expressed or implied, as to the economic success of the offered investments.

DISCLAIMER


PROBLEM: LACK OF RELIABLE INFORMATION CONCERNING THE FUTURE

big data does not equal big insights

traditional business intelligence is backward-looking instead of forward looking

overwhelming amounts of data make it impossible to separate the signal from the noise

low forecasting accuracy hinders risk identification, evaluation and mitigation

who to listen to for accurate assessments?

the necessary information, experience and intuition is already held by some individuals within every organization

however, there is no way to unlock this information spread across all layers


SOLUTION: UNLOCK PRIVATE INFORMATION THROUGH WISDOM OF THE CROWDS

the wisdom of the crowds

the many together know more than any individual - if there is a structured way for them to share their information

a smart prediction market mechanism unlocks private information by rewarding those with correct assessments

over time, successful experts accumulate more market power, making them even more influential

for any prediction, a real-time price discovery process provides powerful forecasts with full probability distributions


UNDERLYING MAGIC: MARKET MAKER TECHNOLOGY the market maker

regular betting markets require a large number of participants and many trades to keep the market moving

every bet that is placed requires a counter position - someone taking the other side

our proprietary technology places a market maker in the middle of the market that smartly trades with all participants and provides constant liquidity for all bets

with this, we create markets that are amazingly efficient even with few participants and deliver more accurate insights than previously possible


THE DIFFERENT PARTS: THE DNA OF A PREDICTION MARKET

A stock market for information that delivers

the most accurate insights

People divulge private information

when given the right incentive &

format for delivery

The market improves accuracy over time through

its trading mechanism

The early warning system flags all business-critical predictions in the central dashboard

All insights are aggregated and can be drilled down in

the communication center

Put your money where your

mouth is

One dashboard

for all insights at your

fingertips

Anonymous insights, yet, you

commuicate with the

participants

THE MARKET MAKER

VOTES, BETS or TRADES

EARLY WARNING SYSTEM

COMMUNICATION CENTER

EOPLE ARKET ASHBOARD NSIGHTS P M D I


Mitch & Morgan has a fully developed best-in-class prediction market platform ready to be deployed in any SME and enterprise environment

it is a b2b SaaS solution that enables organizations to launch, maintain and gain true value from their own prediction markets – simply by unlocking insights from their teams

OUR MODEL: DEVELOP, DESIGN AND HOST PREDICTION MARKETS


USER INTERFACE “VOTES”

OUTLIERS Significant outliers are

flagged as signals by the early warning system and

application owners are notified in real-time in the

central dashboard RANGE & WAGER Depending on the stake in the market and how precise the prediction is, the potential payout is adjusted accordingly

107% (23,01%) users:171 votes:226 KEY STATS All key statistics for every question are publicly available, detailed stats are only visible to the application owner in the central dashboard

What is our target hit ratio for Q3/2015?

QUESTIONS In every question set there is one key question and several follow-on questions that drill down on critical events and risks

OVERVIEW Users only have limited

access to public tabs: My Assessments, Ranking &

Rewards, and Open Votes. The application owner can access all votes, rankings, the central dashboard and

communication center

My Assessments


RANKINGS The users with the most

accurate predictions rank highest and usually receive

the incentives

PRIZES M&M implements incentive structures according to your company's programs and bonus schemes

USER INTERFACE “RANKING”


INCENTIVES: HOW TO SECURE USER ADOPTION AND ENGAGEMENT

incentive schemes aligned with company values ensure maximum engagement. The most accurate predictions receive the highest payout

AWARDS

PRIZES

SPIFs

PAYROLL

USER ENGAGEMENT

integra(on into payroll structures with cash payouts

monetary incen(ve schemes based on bonus plans

ranging from brand new cars to theater (ckets

with recogni(on, accolades and company-‐wide awards

Global rankings determine the winners based on the accuracy of their predic8ons – The incen8ves align your people with your company goals


HOW TO: 3 STEPS TO GO LIVE WITH PREDICTION MARKETS

1.Market Setup 2. User

Selection & Engagement

3. Monitoring forecasts &

Hedging risks

After an initial discovery meeting you can go live within a few hours and no implementation effort!

•  M&M designs scale & scope - the market mechanics – for you

•  We define question sets and KPIs

•  M&M builds the best incentive structures

•  We deploy the engagement model

•  M&M invites user groups to participate

•  We engage users through a personalized incentive structure

•  You receive notifications on adverse business events/forecasts

•  Critical signals are automatically flagged

•  You have access to all data in a dashboard

•  You can engage with all users through the communication center

•  All engagements are tracked


OUR SOLUTION AT A GLANCE EXISTING DATA We seamlessly integrate with your existing data, information is exchanged via API

RETURN ON INVEST Generating ROI requires metrics. We forecast KPIs to increase fulfillment and decrease risks.

TOTAL COSTS After defining scale and scope our plan is straight forward: a monthly retainer and a user-based fee

IMPLEMENTATION We are fully cloud-based and do not require any installation, unless you want our solution operated on your servers

SCALABILITY We are fully scalable from 15 to 10.000 users – for larger projects we simply add resources

Prediction Markets


APPENDIX IN THE APPENDIX YOU FIND OUR

1.  VALUE PROPOSITION AT A GLANCE

2.  SOME OF OUR BEST PRACTICE CASES

CONTACT OUR SERVICE TEAM WITH YOUR QUESTIONS TODAY: [email protected]

MITCH & MORGAN


VALUE ADDED PREDICTION SCHEMA

Identify events & predict KPIs

Anticipate slippage in business metrics

Mitigate operational, market, and credit risks

The three main value drivers of prediction markets are identification, anticipation and mitigation of business events, KPI under-fulfillment and associated risks


HEDGING BUSINESS RISKS – A FINANCE EXAMPLE

E.g. Will there be claims from

the new product?

1. Binary: Yes/No

Claims & Settlement

2. Range:

What amount do we need to

make provisions

for?

Claim categories

3. Multivariate: Asking why

Prospect liabilities

Consulting liabilities

Technical liabilities

Credit liabilities

A typical cadence would be to ask the market, 1. whether a KPI target will be hit or missed / an event take place or not, then 2. ask for specific ranges & proceed to 3. multivariate options as to why the metrics will be under-fulfilled or outperformed.


BOTTOM-LINE IMPACT: REDUCING CLAIMS FOR NEW PRODUCTS

IDENTIFY PROSPECT & CONSULTANCY RISKS • Financial consultants know the risks that stem from newly created

products •  Identify the potential risks by asking your staff that handles those

products every day in customer meetings

PLAN PROVISIONS AND UPDATE PROSPECTS • Every new product carries certain risks • Prediction markets allow you to plan provisions and identify potential

risks stemming from product prospects and consultancy

MITIGATE RISKS FROM LIABILITIES • By identifying prospectus risks and the potential number of claims,

issuers can plan and mitigate associated risks by understanding them earlier and acting on the insights the market provides

•  Information that is not available anywhere else

This client asked to be confidential: We predicted potential claims, settlements and liabilities from new finance products


MARKET EXPERTS 100+ bitcoin investors

participate in the market to predict the bitcoin prices

for the next three months

INCENTIVES The users with the most

accurate predictions receive bitcoins at the

end of each cycle

VOTES All users place votes weekly and all data

is aggregated against the intended

timeline, here: quarterly

BITCOIN PRICES In order to make hardware

investments that are remunerated in bitcoins – at least in part – investors want to know where the

prices will be in the future

OVERVIEW: BITCOIN USE CASE The bitalo predictions platform is for Bitcoin investors who make large hardware investments and receive bitcoins in return – depending on the bitcoin price movements, they need to time their hardware purchases in order to maximize their returns


OPEN VOTES 100 bitcoin investors place weekly votes which are then aggregated to a 12 week

average, as investors’ hardware investments largely depend on the expected bitcoin prices

PREDICTION PROGRESSION All weekly predictions show the vote development over time, charts can be grouped against any timeline

BITCOIN USE CASE: HOW INVESTORS TIME THEIR HARDWARE PURCHASES

Bitcoin Price at 3/22/15

Prediction Vs. Actual Value:

100,5 Vs. 99


BOTTOM-LINE IMPACT: TIMING HARDWARE INVESTMENTS TO MAXIMIZE RETURNS

FORECASTING PRICES AND PRICE MOVEMENTS • This group of bitcoin investors puts their heads together in order to

have the most accurate price prediction • Price movements pose potential risks as the returns from botcoin-

related hardware purchases depend largely on the bitcoin price

PLANNING HARDWARE INVESTMENTS • Bitcoin investors need to plan their bitcoin-related hardware

purchases/investments depending on bitcoin prices • Proper timing is crucial in order to maximize returns

MAXIMIZING RETURNS FROM HARDWARE PURCHASES • By anticipating price movements investors expedite or defer their

planned hardware purchases/investments • The best timing allows them to maximize their returns from hardware

purchases in terms of bitcoin value

In this Bitcoin case the users benefit from timing their hardware investments properly and thus maximizing bitcoin-related returns


OVERVIEW: EKOMI USE CASE

12. Jan, 9:55 Prediction: 291.695 30th Jan,

291.200 12th Jan, 291.695

A rating agency case: With a VARIANCE OF 0,17% of predicted vs. actual values, the PREDICTION ACCURACY was 99,83%

PREDICTED VALUE On January, 12th the market participants predicted 291.695 incoming ratings for the end of the month.

ACTUAL VALUE The end-result on January, 30th was 291.200 incoming ratings against the predicted 291.695 ratings.

eKomi is the worldwide #2 in Google accredited customer ratings & product reviews. Every review needs to be moderated by a real human being, hence they needed to know exactly how many reviews in what language they will receive every month


EKOMI USE CASE: HOW OCCUPANCY RATE OPTIMIZATION INCREASED ROI

$48k Revenue added through

managing occupancy rates in correct languages and

SLAs effectively

#1 Question: How many

reviews in what language & SLA will we

need to manage?

$261K Annual losses through

under-fulfilled occupancy rates in the feedback

management department

116 Votes to predict the

KPI “incoming reviews”

M & M p r e d i c t e d t h e n u m b e r o f i n c o m i n g r e v i e w s i n s p e c i f i c

l a n g u a g e s a n d S L A s , s o e K o m i c o u l d p l a n c a p a c i t i e s i n t h e i r

d e p a r t m e n t w i t h t h e s p e c i f i c r e q u i r e m e n t s


BOTTOM-LINE IMPACT: PAYROLL SAVINGS

INCOMING REVIEW STREAMS •  Prediction of incoming review streams per month & quarter •  Break-down by positive/negative reviews, time zones/

countries, languages, SLAs, feature requests

WORKFORCE SCHEDULE •  Scheduling customer feedback managers in respective

languages and time zones with feature-related skill-levels •  Safeguard to stay compliant with Service Level Agreements

MAXIMUM OCCUPANCY RATE •  Optimal occupancy in terms of review language, time zone,

SLA and feature requirements •  High payroll savings due to maximum efficient occupancy

We predicted incoming reviews that allowed for maximum occupancy rate planning in respective languages and SLAs


VARIANCE With a variance to median of 90% the

variance of the prediction against the actual value amounts to only 1,52%, which is

highly accurate considering the small sample size of only 19 participants.

PREDICTION Vs. ACTUAL VALUE With a predicted value of 100,5 scheduled BW applications against the actual number of 99 application run the prediction accuracy is 98,48%.

OVERVIEW: BASF USE CASE

1,52%

Number of BW Applications? According to the normal distribution, it becomes evident that private information holders outweighed incorrect forecasts through precise votes with high stakes in the market. Total votes resulted in a most accurate prediction against the median.

Prediction Vs. Actual Value:

100,5 Vs. 99

BASF is one of the largest chemical engineering companies in the world and forecasted several IT metrics with phenomenal results using our solution


BOTTOM-LINE IMPACT: APPLICATION MANAGEMENT EFFICIENCY INCREASED

BW APPLICATIONS • Prediction of anticipated number of run Business Ware (BW)

applications per week • Accurate prediction of total weekly BW applications run helped to

optimize server management

SCHEDULING DOWNTIME AND MAINTAINENCE • Depending on the anticipated number of applications run, BASF

adapted downtime and maintenance schedules • Maintenance sessions were postponed when large projects with

significant application processing required 100% uptime

MAXIMIZING UPTIME • Being able to plan server occupancy, allowed BASF to ensure

application uptime for important projects • By minimizing downtime, BASF generated significant cost savings

by saving time and thus increasing production efficiency

BASF managed to plan data warehouse server occupancies more accurately and schedule maintenance sessions accordingly


MITCH & MORGAN PREDICTION MARKETS

A easy-to-use, one stop solution that is scalable, cost effective, fast to set up and

generates insights for you that are not available anywhere else.

Integrates with your existing data

Easily set up – plug’n’play

Cloud-based

© 2015 MITCH & MORGAN INC. ALL RIGHTS RESERVED 26 26

Christian Heinz CEO, Mitch & Morgan Inc.

MITCH & MORGAN Want to talk directly to our CEO? E: [email protected] W: www.mitch-morgan.com P (US): +1 323 695 8801 P (DE): +49 30 2000 444 219

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