Using Innovation Challenges to Drive Engagement, Creativity and Entrepreneurship
PRIZE DESIGN *
Using Prizes to Foster Engagement, Innovation and Entrepreneurship
Lars Hasselblad Torres
Vermont Leadership Institute
May 1, 2014
Why [are] all these highly intelligent, well
educated youngsters not putting their brains
to good use by solving real-world problems.
Instead they’re building technology to solve
@hermioneway on TNW*
Beneﬁts of prize challenges
Establish an important goal without having to choose the
approach or the team that is most likely to succeed;
• Pay only for results;
• Highlight excellence in a particular domain of human endeavor
to motivate, inspire, and guide others;
• Increase number and diversity of the individuals, organizations,
and teams that are addressing a particular problem or challenge
of local, national or international signiﬁcance;
• Improve skills of the participants in the competition;
• Stimulate private sector investment that is many times greater
than the cash value of the prize;
• Advance a mission by attracting more interest and attention to a
deﬁned program, activity, or issue of concern; and
• Capture public imagination and change the public’s perception
of what is possible.
What is an inducement prize?
A rigorously deﬁned competition process that, as
the result of a contest period, makes an award of
cash prizes for the accomplishment of a feat, often
within a limited time-frame.
When to use a prize*
* From McKinsey, “Using prizes to spur innovation” (2009)
Purpose & OutcomePurpose & OutcomePurpose & Outcome
Recognition Stimulation Solution
Winner take all
• Goal is encouragement
• A single winner selected
for past achievement in
a ﬁeld or discipline.
• Goal is ideation and
• A limited sequence of
winners selected based
on design criteria.
• Goal is research and
• A series of winners are
selected for relative
on solution criteria.
Prize Purpose Features Award
Recognize great individual and shared
achievement in a ﬁeld.
Invitation-only nomination process, proposal
selection by respective Nobel committee.
Recognize an inventor who has made
Open ﬁeld, peer nomination, tiered judging
process, patent requirements.
CurryStone Design Prize
Advance and inspire work of emerging “social
design pioneers” improving lives.
Anonymous jury review of Invitation-only
Buckminster Fuller Challenge
Implementation support for integrated
strategy addressing a complex human
Open application process, multidisciplinary
MIT Global Challenge
Challenge young engineers to tackle barriers
to human well-being in underserved
Problem marketplace, solver community,
focus on impact. Judges recommend
Up to $15,000
GE Ecomagination Challenge
Open call for breakthrough ideas for home
energy creation, management, and use.
Judge panel selects among entries for
merit, technical validity, innovation, impact.
Stimulate development of technologies that
harvest marine energy at a large scale.
First-past-the post prize to team
demonstrated speciﬁc results in power
ALS Biomarker Prize4Life
Accelerate the discovery of a disease
biomarker that will beneﬁt medical ﬁeld.
First-past-the-post prize to an individual or
team for achievement based on board vote.
DARPA Grand Challenge
Accelerate the development of a fully
autonomous vehicle for battleﬁeld use.
Open tournament-based prize competition
over four years, with increasing complexity.
Potential Prize Targets
1 2 3 4
The innovation pipeline
Five prize design considerations
1.Specify outcomes. Make the call for participation as clear as possible from the
get go. Use a clear technical description of the desired outcome (not solution)
and know the gaps in current market delivery. Consider participant outcomes.
2.Know your audience. Knowing who you want to reach, how, and with what
“ask” is central to building momentum and an effective discovery process.
3.Build for discovery. Innovation is often about the adjacent possible. Develop a
process that fosters combinations of insights across disciplines to produce
4.Right-size the purse. Make the prize sufﬁcient to reward effort. This isn’t all
about price - it can include prestige, publicity, market creation, and more.
5.Timeframe. A clear sense of timing will motivate and lose actors. Balance the
discovery timeframe against dedicated resources, urgency, and “stickiness”.
Six prize design stages
Stage Purpose Outcome(s)
1. Deﬁne Develop clear and compelling descriptions of the opportunity to solve a
problem. Think about places to parallel process innovation, stack new
approaches against traditional. Deﬁne the market potential for success. Use
this process to deﬁne evaluation indicators.
Brief data-rich statement (3-4 paragraphs) describing
the problem, context, and what success looks like. A
set of evaluation indicators.
2. Validate Engage experts and stakeholders in providing assessment and guidance on the
Revised statement describing the problem, context,
and deﬁnition(s) of success.
3. Design Identify key goals for the prize aka desired outcomes. Generate process
roadmap and accompanying internal and external workﬂows needed to drive
toward success, and timeline.
Statement of key outcomes, process map, key
decision points, workﬂows, and timeline.
4. Build Develop and implement necessary program assets such as partnerships and
MOU’s, stafﬁng structures, online presence and tools, marketing and
Launch infrastructure including key messages,
communication assets, work platforms, stafﬁng
5. Implement Launch prize. Ensure signiﬁcant resources put to key messages, a clear call to
action, and clear pathway to participate. Key pieces include:
a. Recruit appropriate participants through a well-planned outreach and
b. Decide the winner through a fair, transparent, and constructive selection
process that is rewarding for entrants
b.2 Importantly, if there is no winner, implement plan to relaunch the prize or
c. Build traction for process by announcing winner(s) visibly, energetically, and
with an eye toward agency and participant dividend
A well-deﬁned prize process that delivers a fair and
engaging experience for participants.
6. Evaluate Using indicators developed early in the prize design process, carry out an
assessment of how the process worked for key stakeholders and staff. Use for
reports to community and process improvement.
An assessment document that outlines key metrics
and stakeholder evaluations of success for the prize
in meeting its objectives.
Oil Cleanup X Challenge - Typology
Recognition Stimulation Solution
Winner take all
•Speciﬁc focus, relevant problem
•Tiered prize design
•Speciﬁc technical requirements for success
(Clean surface oil at a rate >2500GPM, 70%
•Limited timeframe to achieve success (1YR)
•Motivating prize purse ($1.4M)
•Entrant run-off process
•Signiﬁcant team support
•Full-scale simulation test facility
Oil Cleanup X Challenge - Set up
•10 teams successfully competed
•Performance judged by 8 ﬁeld experts
•$1M winner exceeded requirement
(>4500GPM with 89.5% efﬁciency)
•Single $300k runner up hit requirement
Oil Cleanup X Challenge - Outcome
•Cost about $3M to run
•Typical X PRIZE cost is 1-1.5X purse
Oil Cleanup X Challenge - Food for thought
What is the
problem to be
What is the case
that this problem
will drive toward
Who needs to
know about the
prize, and how
will you reach
How well was the
1 2 3 4 5 6
Carefully assess and lay out the time requirements for
each stage of the prize design process
Carefully assess and lay the resource requirements -
human and ﬁnancial - for each stage of the prize
Prize design sequence
Five operational considerations
•Market uptake. If its a “solution” prize, understand the potential for the
market uptake and dissemination of successful solutions. Plan to put agency
resources and technical assistance toward this end after the prize contest.
•Design for engagement. Consider the enormous potential to create an
innovation marketplace - a place where skills and ideas are naturally shared
and connected - an how that can be leveraged over time, beyond the prize.
•Solver community. Understand range of potential solvers and ensure that
necessary administrative procedures and supports are in place to make an
award for success.
•Caretaking. Prizes can be stiff processes. Agencies can transform them into
robust community building and learning processes through feedback,
mentoring, connection making, celebration.
•Champion results. Regardless of whether the prize was a success or failure,
have a plan to communicate the outcomes, lessons learned, and key insights
- including feedback from participants.
Lars Hasselblad Torres