The practice of posting rewards for invention goes back centuries, but the California-based X Prize Foundation upped the ante in 1996, when it offered the biggest such reward in history—$10 million—for the first successful private space flight. Today the foundation is developing prizes of up to $30 million for solutions to outsized challenges in space exploration, life sciences, energy, the environment, education, and social entrepreneurship. We spoke with its chairman and CEO, Peter H. Diamandis, about what the model does best, and what’s in it for companies that put up the cash. Will the X Prize model work with challenges beyond personal space flight, especially if they’re less sexy? When you offer $10 million for achieving an audacious, high visibility goal, it attracts teams and sponsors from around the world, and they’re willing to take a lot of risk, sometimes spending more than the reward itself, because they’re not just in it for the money. They’re in it for the thrill of the chase, the fame if they win, and the benefits provided to humanity. I believe that the model will work for less sexy challenges too, especially if people think the problems are important and extremely difficult to solve. We’re addressing those in areas like education, clean water, and poverty. We know the X Prize model can be scaled up. What about down? One concept we’re exploring is called MyXPrize, a mechanism to help individuals create smaller prizes—between $10,000 and $1 million—for tackling local problems. Say you’re concerned about pollution in a nearby lake. You could get together with friends and local companies, raise money for a prize, write a set of rules, and post it on our site. As word gets out, people and companies who care about the lake may add to the purse, and solving the problem becomes more and more attractive. How can the model help tackle big, messy problems? It’s just a matter of defining a clear goal within the messy problem area and making the challenge audacious but achievable. We’re looking at creating X Prizes in the realms of math and reading. Imagine what would happen if we offered $10 million to the first team that created a program for taking kids from a second-grade reading level to a fourth-grade level in six months. I think it can be done. But it can’t be done with incremental approaches. X Prizes inspire game-changing approaches. Look at SpaceShipOne, which won the prize for personal space flight. It’s not a miniature space shuttle. It’s a radically different solution to the problem. X Prizes attract big-company sponsors. What’s in it for them? Two things. The first is PR. The Ansari X Prize won by SpaceShipOne got 5.5 billion media impressions. Sponsoring an X Prize is an efficient way for a company to promote its brand by achieving an important breakthrough in line with that brand. When I was talking with Larry Page and Sergey Brin about sponsorship, they said they didn’t want to just put the Google name on a stadium. They wanted something that would get people excited, inspire education, and generate new approaches to science. The Google Lunar X Prize for putting a robot craft on the moon will do that. Likewise for Progressive Insurance’s prize for creating a new generation of cars that are manufacturable and get more than 100 miles per gallon or its energy equivalent. Progressive is going to get a lot of mileage when that first car rolls off the assembly line. What’s the other attraction? It’s the doing-good part. Think of the global challenges out there in health and education and the environment. If these prizes help find solutions, that’s good in and of itself. Big prizes for innovation can affect where graduate students do their research, how the best minds approach problems, where companies direct their R&D dollars, the conversations that occur over dinner, and what kids believe is possible. We’ve had 1,200 requests from around the world for registration materials for the Google Lunar X Prize. Maybe only 5% of those will yield teams that seriously compete—but, still, in Bangladesh and South Africa and Brazil we got people dreaming about taking a shot at the prize. Who wouldn’t want to be part of that?
