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What prize for what challenge?


When Charles Lindbergh boarded the Spirit of St. Louis in 1927, headed to Paris in the first non-stop flight from New York, we doubt that his first preoccupation was whether or not the Aeroclub of America was paying him enough to risk his life. This challenge, which would later inspire Peter Diamandis to found the Ansari X-prize some 75 years later, remains today a vivid and tangible example of a 20th incentivized technological challenge. But the Orteig Prize, as it was known, didn’t start in 1927. Surprisingly, it was launched almost a decade earlier, in 1919.


By that time, Raymond Orteig, a native of France, was the proud owner of the famous Lafayette hotel in New York, and a leading figure of the local French community. It was perhaps even more as a duty to improving and securing Franco-American relations after World War I that he decided to write a letter to Alan Ramsay Hawley, the president of the Aeroclub of America: 


“Gentlemen: As a stimulus to the courageous aviators, I desire to offer, through the auspices and regulations of the Aero Club of America, a prize of $25,000 to the first aviator of any Allied Country crossing the Atlantic in one flight, from Paris to New York or New York to Paris, all other details in your care.—Yours very sincerely, Raymond Orteig”


For the five years that the prize was valid, no attempts were made—due in most part to the state of existing technology. When Orteig reissued the prize in 1925, many competed, with a young Lindbergh finally claiming the prize two years later. 


An expenditure of $25,000 ($335,000 today) helped start the commercial airline industry.


Some 75 years later, the $10 million Ansari X-Prize initiated a boom in space tourism and commercial satellite launches ($3 billion/year industry)—think Virgin Galactic and SpaceX—which was recently explored by the Economist. 


If such prizes carry clear and present danger (six people reportedly died for the transatlantic challenge), today’s technological and scientific prizes, especially those found on crowdsourcing platforms like Hypios present little danger to the solver (except maybe a few sleepless nights). Yet estimating a prize for a particular challenge has always been, and remains today a crucial aspect of the overall process and its success. 


The prize says it all?

With considerable experience interacting with solution providers through our platform, we know full well that financial incentive is never the entire part of the story. Some solvers are attracted by the complexity of the problem at stake, some in learning more about current industrial needs, and how to gain experience to become a future hire, some are companies (suppliers) more interested in the lucrative contract if their technology is chosen than by the prize itself (such as our recent challenges on bottle lids or intraocular lenses). Nonetheless, the reward amount for a challenge should immediately qualify the maturity level of the expected solution, and as such, discussions with our clients inevitably center (at least at first) around some form of scale.


Brought to you by NASA

Technology Readiness Level (TRLs) is today the most well-known and common technology development scale and we regularly use it to begin discussing challenge prizes. TRL is a scale from 1 (basic principles observed and reported) to 9 (actual system proven through successful mission operations). It originally ran only to 7 when it was first developed in 1989 by NASA to provide a common grid to assess the maturity of evolving technologies. It is today adopted by the US Department of Defense, the European Space Agency and every industrial client will be familiar with it, or implements its own version (the oil industry, for example, has a scale to 7). 

It is by no means the only parameter we use to estimate a challenge, as the task’s complexity, market relevance, game-changing potential must all be taken into account. What we have observed, however, is that financial incentives will rise with the expected maturity of the solutions 1-8 (the latter bein g a fully operational system) and decrease dramatically at 9, since the technology is already on the market, and licensing fees or acquiring patents will have to be negotiated. In this case, what clients are looking for are existing suppliers or technologies they can use to solve a specific problem. They are by no means interested in developing or manufacturing the technology themselves. 


Of course, not all challenges on crowdsourcing platforms like ours deal with pure R&D, thus for marketing, creative, or specific IT challenges, other options must be explored to determine an adequate financial incentive.


But a systematic question is asked of every project leader who posts a challenge through our platform: “if you had the solution, would you submit it for this prize?” If the answer is “yes,” then we know we're on the right track to having it solved.