The X Prize Foundation is in the business of big bets.
The non-profit organization, which runs multimillion-dollar prize competitions to address some of the world’s biggest challenges, has spurred the development of truly transformative technologies, like SpaceShipOne, which completed the first private manned spaceflight in 2004.
But for as revolutionary as X Prize winners have been, they’re also incredibly rare. Since it was founded by futurist Peter Diamandis in 1995, X Prize has only completed four competitions. Five are still ongoing, and all of them tackle mind-boggling challenges, like landing a robot on the moon or building sensors that can explore the untouched depths of the world’s oceans. That’s left no room for the smaller scale—but no less serious— problems in this world that could benefit from this model.
Which is why today, X Prize announced the launch of HeroX, a new tech platform that will allow any individual or organization to set up their own prize competitions online. HeroX, which is a for-profit spin off of X Prize, is trying to do for innovation competitions what Kickstarter did for crowdfunding.
Catching Up to a Changing Landscape
In recent years, prizes have become an increasingly important driver of innovation and philanthropy. One 2009 McKinsey study found the total number of prizes greater than $100,000 had more than tripled in value over the previous decade to $375 million. The study also found that these prizes had grown in size, number, and variety, and are increasingly being used to fund specific innovations. This shows that just as inventors and entrepreneurs have taken to the crowd for funding, governments, philanthropists, and corporations have also begun turning to the crowd to solve their biggest challenges.
“Breakthroughs often come from the amateur, the outsider,” says Christian Cotichini, CEO of HeroX. “It very rarely comes from the experts. Those are the guys who tell you how things can’t be done. It’s the amateurs who question the assumptions, and apply technology in new and novel ways.”
HeroX was inspired in large part by the heaps of mail the X Prize development team has received over the years from people all over the world, pitching ideas for their own X Prizes. According to Emily Fowler, vice president of HeroX, who worked on the prize development team, each of these submissions was more worthy than the next. And yet, they rarely fit the mold of what X Prize was looking for. “With the onslaught of all the problems we were designing challenges around, there was no way to give these projects our time and attention,” Fowler says.
With HeroX, the foundation hopes to expose these projects to people who may actually be able to take them on. HeroX has been operating quietly accepting projects over the last year from the likes of The Rockefeller Foundation and the City of San Diego, and so far, has amassed $5 million worth of prizes. Their backers span a range of industries and their purposes run the gamut—from a Canadian consulting firm offering $35,000 for interventions that will improve the health of Aboriginal Canadian communities to an individual looking for solutions to Cairo’s traffic congestion.
A Page From Kickstarter
For people who don’t have the money to offer their own prize, HeroX also doubles as a crowdfunding platform, where people can donate to the prize purse, in addition to entering to win it. Similar to Kickstarter, HeroX takes a percentage fee of every prize posted on the site, ranging from 14 percent for smaller projects to 5 percent for $1 million prizes.
Cotichini hopes that HeroX will produce some of the same network effects as Kickstarter, making it more desirable to run a competition on HeroX than off of it. Still, he admits that not all projects are a good fit for this model. Prizes need to fundamentally excite inventors, enough so that they’re willing to toil away on a given project with only a slim chance of actually winning. “We think that you should look at the 5 to 10 percent of the breakthroughs that would meaningfully change the nature of your challenge and put that in a prize,” Cotichini says. “The beauty of a prize is you only pay for success, and anybody can compete. All crazy ideas are invited.”
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