Incentive Prizes: Shooting for the Stars

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Do you expect that each of these X Prizes will also spawn new industries?

That's the hope. The model that we're hoping to prove is that a $10 million or more prize will garner $100 million or more in team expenditures and drive $1 billion or more in follow-on business and investment.

Do companies like Google support these prizes because they're looking for new industries, or is it a personal interest?

In the case of the Google Lunar X Prize, it was a personal interest for Sergey Brin and Larry Page. Second, it was a very innovative marketing approach. Sergey has said they never saw Google putting its name on a stadium or a traditional sponsorship, but this was the sort of thing that was a very high-leverage sponsorship opportunity. Third, it helped drive the objective of education and inspiration for math, science, and engineering, which is a personal goal.

Can anyone participate in X Prizes?

Yes, that's very important. It's one of my fundamental tenets, which is that true breakthroughs occur when you look at an industry or an area from a completely new point of view. We're so stuck in the way we think. So, really, it doesn't matter where you went to school, what you've ever done before, whether you've ever gotten a government grant. If you do this, and you win, you're immediately rewarded.

Do you think incentive prizes are flourishing now because, as some might say, there's a lack of government support for innovation in the U.S.?

To truly have a breakthrough, we need to be willing to take some big risks because the day before something is truly a breakthrough, it's a crazy idea. So, if a government takes a big risk and fails, you get congressional investigations that follow. And if a large corporation takes a big risk and fails, you have the stock price plummet. So where in today's society do we allow people to take big risks? It's a very difficult thing. I believe that X Prizes become a way to have an off-balance sheet risk-taking. You put up the prize money and if someone does it, everybody wins. If no one does it, no one loses.

What advice would you give a corporation that wanted to start an incentive competition?

That it's not easy, it needs to be done well. There have been many attempts and many of them fail. You have to not pre-guess the solution, you have to remain unconstrained in who can compete.

Are you going to launch more X Prizes?

Yes, we're looking to launch about two to three X Prizes per year. We'll get up to about 10 X Prizes over the course of the next 4 years. As a nonprofit foundation, we are always looking for corporate players who want to get involved in sponsoring our prizes or getting involved in supporting the X Prize Foundation.