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This week, XPRIZE officially announced a spinoff company called HeroX (http://www.herox.com).

This is really big, because it’s something you can now use to innovate rapidly:

  • Create new products for your company
  • Solve challenges in your community
  • Leverage your philanthropy 10x or more.

It is a fundamental tool for building an Exponential Organization (an ExO).

In this blog, I’ll explain why prizes work, and walk you through the step-by-step process for launching your own.

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If you want to learn more, I go into great depth about incentive competitions in my new book BOLD, and a rich ‘how to discussion’ in my executive mastermind group Abundance 360.

What are incentive competitions?

Incentive (or prize) competitions offer a prize purse (usually cash) to motivate innovators to solve a specific problem.

They’ve been used throughout history. The Longitude Prize helped reinvent ocean navigation in 1714. The Orteig Prize was won by Charles Lindbergh in 1927 for crossing the Atlantic, and the Ansari XPRIZE (which I launched in 1996) stimulated a new generation of sub-orbital spaceships.

To create an incentive competition, you need to establish a clear, measurable and objective goal (e.g. “fly from NY to Paris”) and offer a prize to the person or team that achieves it.

Incentive competitions are brutally objective. They don’t care where you went to school, how old you are, or what you’ve ever done before.

Billion-dollar corporations compete as equals against two-person startups.

Most importantly, they create an open innovation ecosystem that allows hundreds of solutions to compete, and non-traditional approaches the chance to win. This is in contrast to traditional peer-reviewed innovation, which tends to reward incremental and non-risky approaches.

Why Prizes Work

The success of these competitions stems from a few underlying principles.

  1. Visibility and Momentum: Large incentive prizes raise the visibility of a particular challenge, attracting innovators and nontraditional thinkers from around the globe. (And they also help foster the belief that a given challenge is in fact solvable.)
  2. Prizes Break Bottlenecks: In areas where market failures have hindered investment or entrenched incumbents have prevented progress, prizes break bottlenecks. By creating a race with a large cash payout, these competitions attract new forms of money to the problem area.
  3. Prizes Cast a Wide Net: Everyone from novices to professionals, from sole proprietors to massive corporations, gets involved. Experts in one field jump to another, bringing with them an influx of nontraditional ideas. Outliers can become central players.
  4. Prizes Increase the Appetite for Risk for Competitors: Everyone’s appetite for risk increases during a competition, which drives further innovation and investment.
  5. Prizes Reduce Risk for Prize Creators: On the flip side, prizes REDUCE risk for the organization or person posting the challenge since you only pay upon success.
  6. Prizes Instantiate Industries: Competitions inspire hundreds of different technical approaches, which means that they don’t just give birth to a single- point solution, rather to an entire industry.

Meet HeroX

Over the past decade, the XPRIZE Foundation has launched 2 to 3 large competitions per year – all of them focused on Humanity’s Grand Challenges. Historically, we’ve had to turn down most of those who approached us with smaller efforts – hundreds of philanthropists, companies and governments wanting to solve local challenges.

To address this unmet need, this week XPRIZE officially announced a spin-off company called HeroX.

HeroX is an online platform that allows anyone to launch a challenge in any area he or she cares about, where the crowd can help design, fund, and compete for prizes.

It is a platform able to disrupt we innovate and how we solve problems.

HeroX wants hundreds or thousands of smaller challenges to be launched per year around the globe.

HeroX is now developing dozens of challenges in dozens of cities.

Here’s 7 examples of challenges already on the platform:

  1. Come up with new and creative ways to address the factors that determine student success.
  2. Rapidly process an ever-growing backlog of clinical trials related to cancer research.
  3. Improve the high school graduation rates for students from low-income families in Philadelphia.
  4. $1 Million for the team that increases the accuracy of hospital patient identification and record matching from 80% to 100%.
  5. Create a product that can accurately quantify the nutritional content of any food.
  6. Create a safe and easy-to-use personal flight device.
  7. Create a water purification technology that would run on green energy.

How to Design Your Own Incentive Competition

Launching a powerful and successful challenge on HeroX takes two steps.

  1. Preparation (pre-launch): Gain clarity on what success looks like and what guidelines are needed to get there.
  2. Management (post-launch): The challenge is launched, run, awarded and integrated. The success of the challenge is managed throughout its lifecycle.

Here’s what you can expect:

Challenge Creation is the process of taking your problem and “translating” it into a concrete finish line that innovators are compelled to reach.

What will a winner be required to demonstrate? What must they build? What goal must they exceed?

HeroX helps you shape the guidelines for the challenge, manage the competition, build a community, marketing the prize, and even fundraise the purse (via crowdfunding).

The prizes range between $5,000 and $1,000,000.

Remember, the ideal HeroX challenges meet the following criteria:

  • Address a problem where success can be measured
  • Define the problem, but not the exact solution
  • Have clear, simple rules that competitors understand
  • Have a clear finish-line so competitors know if they’ve won
  • Open to a wide variety of teams
  • Seek to create a better world!

Help me create a world of Abundance

Try it out.

Pick a problem in your community or city, and start to think about ways you could use incentive competitions to find solutions.

Then, head to HeroX and get started:https://herox.com/challenge/create-form/

My Massively Transformative Purpose is to empower entrepreneurs everywhere to create extraordinary wealth while creating a world of Abundance.

HeroX empowers all of us to incentivize innovation and problem-solving across the board.

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P.S. Every weekend I send out a “Tech Blog” like this one. If you want to sign up, go to PeterDiamandis.com and sign up for this and my Abundance blogs.

P.P.S. Please forward this to your best clients, colleagues and friends — especially those who could use some encouragement as they pursue big, bold dreams.

 

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