This Startup Is Predicting the Future by Decoding the Past

When James Shinn was working for the CIA as a senior East Asia expert more than a decade ago, he longed for the tools of a weatherman. He wanted to be able to predict that the chance of North Korea test-firing a missile within a month was, say, 60 percent. It remained a fantasy, he says, until now.

Shinn and his 14-person team at Predata have developed software that numerically describes political volatility and risk. It vacuums up vast quantities of data from online conversations and comments, compares them with past patterns, and spits out a probability. (A version of Predata’s service is accessible on the Bloomberg Professional service.) Shinn likens his product to sabermetrics, the statistics-driven baseball strategy popularized in Michael Lewis’s Moneyball. “By carefully gathering lots and lots of statistics on their past performance from all corners of the Internet, we are predicting how a large number of players on a team will bat or pitch in the future,” Shinn says, by way of analogy.