I'm interested in talking to people knowledgeable in decision theory/bayesian statistics about a startup that aims to disrupt the $240,000,000,000 management consulting market. it's based on the idea of prediction polls, but done on the blockchain(the same thing bitcoin uses) in a completely decentralized way.

I'm particularly interested in people who can help me out with understanding/choosing alternative scoring rules besides Brier scoring.

I can't pay you for your time, but I can virtually order you a pizza or buy you a beer :).

edit: Here's the (still very rough) elevator pitch:

For a long time companies relied on a pretty fuzzy metric: People who seemed to be better at making good decisions got to make them. This worked out decently well, but led to one undesirable result: People who were good at making excuses about their decisions ALSO got to make decisions.

The thing was, we didn't really have a better way to do it. That is, until the data revolution. Suddenly, companies had access to tons of data that they could use to ACTUALLY make better decisions. The problem was, they weren't politically set up to make use of this data, because all the people in power were those who could make good excuses.

This is were management consulting companies came in. For really big decisions, the management consulting companies would come in as outsiders, charge a bunch of money, and use their clout to use the data to make big decisions (like how many people to fire). This industry rapidly grew to the 240 billion dollar industry it is today.

But there's a huge problem with the industry - there's no objective way to tell which companies are actually good at making decisions. This leads to a case where the only way to tell which companies are good is their name and reputation - which means a monopolistic signalling market where the very few who got in early and made a name for themselves get to overcharge for their name, and new cheaper players find it very hard to enter the market.

The solution: An objective metric(bayesian scoring rule) that shows how good an organization or individual is at predicting the future. The entire history of how the company got this score is available on the blockchain, so you avoid the signaling problem by making everything auditable and therefore not having to put your trust in any one brand or company.

Not only can this allow us to take over all the big problems that management consulting currently handles, but it opens up a whole class of smaller decisions that were simply cost prohibitive in the management consulting model, and creates a new paradigm for management as a result.

Edit 2: If you're effectively altruist minded, it may be of interest to know that the reason I'm interested in doing this is to drastically reduce the cost of impact assessments.

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Why do you believe that management consulting companies are payed to predict the future?

7Vaniver4yI know about scoring rules and probability assessments. Email me and we'll set up a time to talk. Similar to Viliam in a sibling comment, I think that this is the sort of idea that would work in the ideal world but not the real world. To channel Hanson, "Consulting is not about advice," and thus a product that seeks to disrupt consulting by providing superior advice will simply fail. (Compare to MetaMed, which tried to disrupt medicine by providing superior diagnostics. Medicine is not about healing!)
5Lumifer4yI'm not buying your elevator pitch. Primarily because lots of data is not nearly enough. You need smart people and, occasionally, very smart people. This means that is not true because they lack people smart enough to correctly process the data, interpret it, and arrive at the correct conclusions. And is also not quite true because companies like McKinsey and Bain actually look for and hire very smart people -- again, it's not just data. Besides, in a lot of cases external consultants are used as hatchet men to do things that are politically impossible for the insiders to do, that is, what matters is not their access to data but their status as outsiders. Sure there is -- money. It's not "pure" capitalism around here, but it is capitalism. So, what's wrong with the stock price as the metric? Besides, evaluating forecasting capability is... difficult. Both theoretically (out of many possible futures only one gets realized) and practically (there is no incentive for people to give you hard predictions they make). I don't think that McKinsey's and Bain's business is crunching data. I think it is renting out smart people.

Open Thread, Dec. 28 - Jan. 3, 2016

by [anonymous] 1 min read27th Dec 2015145 comments


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