Gleanings from X Prize/I2I

The Incentive to Innovate conference hosted by X Prize Foundation and British Telecom was held at the UN headquarters in New York June 8-9, 2009

The Incentive to Innovate conference hosted by X Prize Foundation and British Telecom was held at the UN headquarters in New York June 8-9, 2009

Enjoyed two days of open exchange around the role of inducement prizes to foster innovation, solve problems, and develop new sources of business value. Brought together by X Prize Foundation folks and British Telecom, Incentive to Innovate was packed with excellent panels and interesting folks w/a range of backgrounds – industry, non-profit, gov, academic etc.

Important to say off the bat is that one of the features I enjoyed most were the “break-out” discussions (NTS: need better physical setting), in particular one conversation centered on using prizes to address poverty and other development-related challenges. While the “product” of these conversations was centered on defining new competition space, they did surface interesting tensions and dynamics in approaches. One in our group was how you involve the beneficiaries in these competitions directly, so we break the mold of Northern winners, Southern venues. No solid answers, but I think Grameen offers a good, if “high burden” model of getting people out into the field – in this case to host conversations, sort of bridge the “customer-solver-inventor” gap.

Among those I found most helpful in applying their experiences to the Global Challenge:

  • Peter Diamandis, X Prize: Define the challenge in terms of measurables – specific. Think about not just producing a product, but catalyzing an entire industry.
  • Filippo Passolini, Proctor & Gamble: Don’t orchestrate – create a context for self-organization.
  • Paul Jansen, McKinsey & Co: Be prepared to support winners with follow-up eg getting innovations to market is an entirely different proposition.
  • Rob McEwen, US Gold and Marthin de Beer, CISCO: Have a plan for internal resistance and addressing organization culture.

Here are some other take-aways:

  • Create the context for self-organization. The more you orchestrate, the worse of you’ll be. Today you don’t have to cross the world to collaborate; we have a global platform for collaboration – leverage it!
  • Transaction costs are falling.  New platform means the costs of coordination and collaboration in an open market over, say traditional vertical organization have fallen dramatically. It is more efficient than ever – and becoming more so – to do work outside of companies now.
  • Big lesson is that people do show up. You’ve got to be brave enough to open up, bring in new actors, perspectives, ideas. At the same time, in the new era of openness, if you’re going to be naked you’d better be buff eg solid processes in place.
  • Mind your process.  Its hard to get the DNA of a good challenge right. Be prepared to stand by it for 3-8 years. In setting up a challenge, identify the win-win for everyone involved. Its a new business model, so you’ve got to get the parts right.
  • Failure has its place. Become a platform for innovation and remove in/out dynamic. Key to this is failure (“fail fast”); create a culture that celebrates the failure, and understand why people participate – learning. Celebrate learning.
  • Democratization. There is a tension between being completely open, and creating “ideagoras” – markets for uniquely qualified minds. Both well-defined goals for the competition and a well-defined problem help to identify place along open-closed continuum. Challenge is to understand “how to use closed world innovation in a world that allows you to do open innovation.”
  • Just do it. One of greatest difficulties is to break through internal resistance barriers, getting rest of company to support. Reframe the benefit. Largest gold mine lurks between people’s ears, their ideas; create a platform to connect people to ideas and resources. CISCO had a great example of internal incubator for new $1bn businesses. Prepare to encounter internal resistance of the culture of the organization. 
  • Support follow-up. As important as distributing the purse, if you really want to see impact you have to be prepared to have follow-up support beyond prize – additional investments required to convert a breakthrough to scaleable solution.
  • Prizes as communities. Prize communities are ecosystems in which the driving force is not the cash. Think about the audience who is attracted to a prize as a growing community of peer solvers and doers. This changes how they can interact with both specific challenges, and within the larger context of the prize platform. 

Three insights from prior practice:

  1. Open it up – Make the competition accessible to as many people as you can
  2. Have filtering system – Ensure value by mitigating signal-noise volume
  3. Be open to scrutiny, criticism – Lead by learning and engage in the process

Some attributes of prizes, depending on model (X Prize):

  •  Target market failures
  • Bounded or unbounded time horizon
  • Define a problem, not a solution
  • Proper prize size eg enough to actually get the job done
  • Launch way above norm eg shoot for super credibility
  • Ensure there’s a solid back end business model
  • Make the award telegenic
  • Use deadlines to drive action
  • Sort out ownership of IP and media rights
  • Make heroes of the teams
  • Drive real-world deployment

Additional attributes (DARPA):

  • Identify a problem so hard, it requires new innovation that can’t be done alone.
  • Make the problem precise eg the outcome can be measured
  • Ensure low hurdle for people to get in

The CISCO model for encouraging internal innovtion and collaboration – around the next $1bn business – is interesting. The process is laid out, basically, as: Find, Filter, Start/Incubate, Take to Market and Graduate or repurpose. Using an internal wiki (iZone?) the process has generated around 800 business ideas. Not all are great, but once an idea gets funding, there internal recognition. Once it becomes a billion dollar company there’s lots more recognition.

Additional references:

  • NetFlix prize
  • Mo Ibrahim prize
  • Hertz Fellowship
  • NASA Millennial Challenges
  • DARPA Autonomous Vehicle Challenge
  • Virgin Earth Prize
  • Ideaconnection
  • Passtheball
  • Netgen Education Challenge

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