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As we’ve covered in the past, the cost of engaging and keeping great employees can be high. You can pay an intelligent employee to stay late, or placate them with a posh office environment, but one way to keep an innovator in their chair is to challenge their problem solving skills. Instead of hiring sub-par developers or trusting code to rogue contractors, below are two case studies that may make you consider creating competition to meet aggressive goals.<\/p>\n
Sponsor<\/em> As shown on Stanford University’s ECorner<\/a>, chairman of the X Prize Foundation<\/a>, Peter H. Diamandis first got the idea for the $10 million dollar prize while reading The Spirit of St. Louis<\/a>. Although Diamandis knew that the author Charles Lindbergh was the first man to cross the Atlantic in a single engine plane, he did not realize that the pilot (and many others who attempted the flight) had done so to win a prize. <\/p>\n Exclaims Diamandis, “I’m adding it up and [realize that] $400,000 was spent to win this $25,000 prize. How insanely leveraged is that? It was 16 times the prize money. And this [investor] didn’t spend a penny to back any of the guys most likely to win… Prizes are an efficient way to get 10 or 50 times your money and you only pay the winner.” When the Ansari X was awarded in 2004, it was estimated that $100 million dollars were invested in new technologies in pursuit of the prize.<\/p>\n Netflix saw similar results when it awarded $1 million dollars to a team of developers for improving on the company’s Cinematch predictive technology.<\/a> Similar to Diamandis’ outcomes, the technology discovered during the contest is estimated to be worth considerably more than the initial prize money. The contest was so successful that Netflix is planning a second contest<\/a> for additional product features. <\/p>\n If you’re a startup founder and you’re hoping to leverage the power of third-party developers to build your business, here are some points to consider in launching your own prize: <\/p>\n 1. Creating a challenge<\/b>: Make sure that what you are proposing is actually a challenge worth solving. Few third-party developers or designers will spend their weekends and evenings building a technology that is uninteresting. While your challenge should represent your business interests, it should be something that requires a great deal of intelligence and creativity to solve. <\/p>\n 2. A higher purpose<\/b>: A great challenge doesn’t just contribute to your company’s core technology, it represents a feat of intelligence that will contribute value to the greater programming, scientific or business community. Your contest is meant to inspire a legacy of advancement in education and industry-wide learning. If your challenge is likely to give rise to a truly groundbreaking piece of technology, you may find other companies willing to add to your prize incentive. <\/p>\n 3. Recognition<\/b>: Although it helps to offer a large cash incentive, one of the most important parts of a challenge is recognition amongst peers and in the media. The fact that an untrained amateur can potentially beat esteemed scientists and researchers is a particularly compelling narrative. Meanwhile, those within the academic community may see the prize as a good way to elevate their career prospects. <\/p>\n 4. Supporting innovation<\/b>: You can’t just issue a challenge and expect the first press conference to be your only expense. Developer challenges require a supportive environment where participants can trade findings, get help from staff and submit new documentation. The more support you provide to third-party developers now, the more likely your challenge will yield good results. <\/p>\n Photo Credit: Terren<\/a><\/em><\/p>\n Discuss<\/a><\/strong><\/p>\n<\/a><\/p>\n
The Case for Prizes<\/h2>\n
Creating Your Own Prize<\/h2>\n