Cisco Pays Big for New Ideas

Competitions from the likes of Microsoft and Virgin are sparking innovation and drawing thousands of contestants from around the world

by Rachael King

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The Bean Cup, a coffee house on the southern edge of Indianapolis, is about as far as you get from Silicon Valley, culturally speaking. Shoehorned between an Arthur Murray Dance studio and a shuttered beauty salon in a nondescript strip mall, the Bean Cup bears faint resemblance to the storied Palo Alto work-play spaces where coders spend all night building what they hope will be the next big thing in tech. That's not stopping Douglas Karr, a bearded, burly Gulf War vet, from using the Bean Cup to incubate his own big tech dreams.

Karr and a group of friends hunker down weekly amid the Bean Cup's original art work, hung on Tuscan-gold walls, to perfect their software project, picked as a finalist in an innovation contest hosted by networking gear maker Cisco Systems (CSCO). The aim of the competition, the Cisco I-Prize, is to find an idea that could be the basis of a whole new business unit. Karr's is one of 1,100 pitches that poured in from 104 countries on six continents, and 1 of only 12 that made the final cut. "It's an international contest by a corporation, so you think your chances are one in a million," says Karr, 40, a single father of two teenagers who's still astonished he made it this far. The winner will be picked this month.

Idea Sharing

Cisco's innovation contest is one of at least a dozen corporate-sponsored competitions that have cropped up in recent years, all aimed at developing and rewarding innovation. Microsoft (MSFT), for instance, annually awards its $25,000 Imagine Cup to a student team that best uses technology to solve a real-world problem. Using money to reward technological innovation is hardly novel; historians say one of the first innovation prizes dates to 1714, when the British government offered £20,000 to the person who could devise a method for determining a ship's longitude. (The prize was officially awarded 59 years later.)

But the number of innovation prizes has multiplied, and their stature has risen, since 2004, when aerospace designer Burt Rutan and Microsoft co-founder Paul Allen led the team that built SpaceShipOne, the first privately funded human space flight. The team won the $10 million Ansari X Prize, the largest ever awarded by the X Prize Foundation, which specializes in innovation awards. Last year, Virgin Group Chairman Richard Branson upped the award ante with the $25 million Virgin Earth Challenge, encouraging development of a way to eliminate greenhouse gases.

Innovation prizes are no substitute for the expensive, painstaking research and development that's the lifeblood of a high-tech company, but companies find them a relatively low-cost way to generate potentially valuable ideas from around the world. Cisco's I-Prize was borne out of the Cisco I-Zone, an internal Web-based workspace where employees can submit new ideas. David Hsieh, director of marketing at Cisco's emerging technologies group, and Guido Jouret, the group's chief technology officer, pulled the whole thing together in just 30 days on a shoestring budget. The pair enlisted the help of BrightIdea.com, a hosted service where participants could submit ideas, discuss them with other contestants, and even meet potential teammates.

I-Prize finalists hail from all walks of life, from 10 countries on five continents. Jeremy Brown, a 21-year-old steamfitter from Toronto, would come home after 9-hour shifts to hone his team's idea, which focuses on home networking. Another participant, Anna Gosen, 31, lives in Karlsruhe, Germany, where she works as a student assistant.