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David Bradin is a patent attorney with a sizeable law firm in North Carolina's Research Triangle Park. His clients include some of the world's biggest pharmaceutical companies. Yet he paid for his new kitchen floor by playing part-time chemist on the Web site of an Internet startup. One day last year, Bradin checked out InnoCentive.com after hearing about the site from a contact at Eli Lilly (LLY
). A creation of Lilly's e.Lilly Web R&D initiative, InnoCentive launched in mid-2001 to help companies brainstorm solutions to tough scientific questions. The site posts the problems and then offers a bounty to whoever comes up with the best solution.
Bradin, who had been a chemist before going to law school in 1991, figured it was worth a try. So he logged on, and there it was -- an easy question to answer if you had his background. Thanks to his previous work in the lab, the Cary (N.C.) lawyer was able to explain how to synthesize butane tetracarboxylic acid. His reward: $4,000, enough to retile his kitchen floor.
Sweet. But the prize may be even sweeter for Lilly and the other companies that post their problems. Through InnoCentive, corporate "seekers," as they're called, farm out R&D in biology and chemistry to freelancers who, like Bradin, may be experts on esoteric topics. That means the companies' own employees can stay focused on more critical assignments. Plus, "solvers" get paid only if they hit on the right answer. Even temps or outside consultants don't come that cheap, since they get paid no matter how well they work out.
HEAD ACCESS. The site is also translated into Russian, Mandarin Chinese, German, and Spanish, extending its reach to nearly 40,000 registered scientists in 150 countries. Since the site went up, 45 people have received some $600,000 altogether, including four who each got $65,000 or more. Most of these brainiacs are Americans, but successful solvers have come from around the globe. "We dramatically improve access to people's minds," says InnoCentive President and CEO Darren J. Carroll. (See BW, 11/24/03, "The Web Smart 50," for more on Lilly and today's other Internet innovators.)
Two dozen companies use InnoCentive today, including Procter & Gamble (PG
), Dow Chemical (DOW
), BASF (BF
), Syngenta (SYT
), and, of course, Indianapolis-based Lilly. They say they like the forum. Their problems are posted anonymously, making it harder for rivals to suss out what they're researching. As a further safeguard against spying, all InnoCentive solvers must register with the venture. InnoCentive gets only a nominal payment when companies join and receives fees matching each prize awarded.
Companies have gotten answers to some real head-scratchers, such as finding a catalyst for producing distearyl-diketene, an organic chemical used in making pharmaceuticals. "The intent is to go out and see if there is somebody who can solve this problem for us today," says Mark Zettler, manager of new-product development at Dow AgroSciences, which became an InnoCentive poster a year ago. "The likelihood is that we will find somebody."
QUICK RESPONSE. For Lilly, InnoCentive is something of a mixed bag. The wholly owned venture, based in Andover, Mass., has 30 employees and still loses money. On the other hand, Lilly found a new way to mass produce a chemical feedstock, 4-(4-hydroxyphenyl) butanoic acid, just seven months after posting the challenge on the site. Alpheus Bingham, vice-president of e.Lilly and chairman of InnoCentive, figures the work might have taken two years in Lilly's own labs.
Its tab for the feedstock answer came to $50,000 -- half to InnoCentive and half to solver Werner Mueller, a retired chemist from Hoechst and Monsanto (MON
) who now runs a consulting business from his Charlotte (N.C.) home.
By getting an answer that fast, moreover, Lilly avoided the cost of having to put together an amended file to the Food & Drug Administration as it sought approval for its drug-manufacturing process. It also didn't have to add another scientist with a six-figure salary to its 8,235-person R&D payroll. "There are so many of these ripple-out effects," notes Bingham.
DOT-COM ENTHUSIASTS. Even though InnoCentive is far from breaking even, Lilly sees a future in the Internet. In early November, its e.Lilly unit announced its second online business: YourEncore. Launched in partnership with P&G, it aims to link retired scientists and engineers with companies that need expertise on short-term projects.
"We still believe in the potential for business transformation through the Web," Bingham says. "We never suffered the disillusionment of the dot-com collapse." At least in Lilly's case, the Web is still its oyster, yielding pearls of scientific wisdom. By Michael Arndt in Chicago