I didn’t fully appreciate the lessons that I received from Larry Keeley’s Innovation Frontiers class last semester until I started to explore the X-prize model in depth.
Listen to their elevator statement:
“The mission of the X PRIZE Foundation is to bring about radical breakthroughs for the benefit of humanity. The Foundation fosters innovative, high-profile competitions that motivate individuals across all boundaries to solve grand challenges.”
That’s all great and fine, but it is the method by which they do it that is so interesting to me. The actual price money itself is paltry compared to the scores of people who are willing to dedicate time and invest money towards achieving the goal (and subsequently winning the prize).
When I learned about the history of the X-prize, I found out that it was modeled after the famous Orteig prize. Nine teams who attempted to win the Orteig prize together spent nearly $400,000 for a $25K prize. Charles Lindbergh won against all odds in 1927. The rest was history, of course.. and now I’m able to hop on a plane from here to Europe with relative ease.
…By the way, Charles Lindbergh is an amazing man. I love this quote:
What kind of man would live where there is no danger? I don’t believe in taking foolish chances. But nothing can be accomplished by not taking a chance at all.
In any event, the Orteig prize spurred innovation because it changed the public’s expectation about flight– NOT because there were any associated technology breakthroughs. The technology breakthroughs came as a result of a paradigm shift… and an increased level of public confidence and sparked imagination. It was this same imagination that was sparked during the Apollo missions that made Dr. Diamandis want to create the X-prize about commercial space flight.
Now there are multiple X-prizes, as outlined here:
- Ansari X PRIZE (space; won Oct. 4, 2004)
- Archon X PRIZE for Genomics (medicine)
- Progressive Automotive X PRIZE (automotive)
- Google Lunar X PRIZE (space)
Dr. Diamandis’ innovation (or the innovation he borrowed from Orteig) is a financial one: It recognizes fully that the small prizes create unsurpassed leverage. Because of all the positive social and communal externalities that are generated by winning a prize, it can be the most effective tool for venture philanthropy yet.
The most powerful idea is yet to be unleashed by the x-Prize foundation, something they are calling “My X-prize”– which puts the power of spurring innovation into the hands of local communities. Imagine smaller purses of prize money being created to solve a social ill in a smaller setting. The same rules regarding leverage apply — Now, combine this large-purse idea with a networked crowdfunded system, and you might be able to build better governments and communities with fewer elected officials. Or maybe that’s a pipe dream?
What if the platform we created for Design Planning (two semesters ago) could be combined with an X-prize? That would be interesting.
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