X Prize Foundation will crowdfund three new prizes. How it's a game-changer.
The X Prize Foundation announced this week that it will launch three new prize competitions before 2020. All of them, for the first time ever, will be crowdfunded, a possible game-changer in how the foundation's projects are selected.
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That’s because, unlike conventional funding methods, where a government or investor that fronts cash to scientists will lose out on the investment if the invention never comes through, competitions are a no-risk game for the organizer. Prize sponsors don’t have to hand out the prize reward at all, if no competitor comes up with a suitable answer to the problem at hand.Skip to next paragraph
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"You don't have to pay for it unless it works," says Macauley.
So, unburdened from financial risk, X Prize and others are able to propose fabulous goals: space tourism, autonomous robots, and other technologies at lower costs or higher speeds or better efficiencies than had been dreamed possible, says Dr. Macauley. The public rallies to the romantic cause. And, if an invention comes through, investors tumble in to develop it.
“These contests generate a lot excitement from the public about a problem or an opportunity,” she says, “and they’ve spurred a lot of major industries.”
In the US, the late 1800 and early 1900s were flush with numerous individuals and companies promising heaps of cash to the inventors of ever better cars and airplanes – cars that were faster and quieter; planes that could fly higher and longer.
In perhaps the most high profile contest, New York hotel owner Raymond Orteig announced in 1919 that he would award $25,000 to the first person to make a nonstop flight between Paris and New York. Not until 1927 did pilot Charles Lindberg arrive in Paris, via New York, to claim the prize, as well as international fame. His win went on to jumpstart the entire commercial aviation industry.
And so it went, too, in 1996, when X Prize announced a prize similar in tune to the Orteig competition, but loftier in scale: the Ansari X Prize, awarded for a flight 70 miles above the Earth and, critically, a return trip home. Since Scaled Composite’s SpaceShipOne took the prize in 2004, an entire space tourism industry has unfolded out of the prize. Just this week, a new competitor called World View, tossed its hat – or rather, capsule – into the proverbial ring.
With possible outcomes like the advent of whole industries, it’s becoming more important that X Prize consult the public for input, says Bunje.
“There are other experts out there who may be able to tell us where our priorities should be,” he says. “Having more brilliant people helping is always a boon.”
Of course, it’s not clear if crowdfunding will furnish the winnings pots to X Prize's millions and millions of dollars standards, says Bunje.
“This is exciting for us, but it’s also scary,” he says.
If the project is generating obvious interest and enthusiasm, but not enough dollars, the foundation may make up the difference with its normal, sponsored funding scheme, he says. Or, if the dollars just aren’t flowing in, that might be a sign that the project just isn’t right, he said.
Peter Andras, a professor of computer science at The University of Newcastle, agreed that crowdfunding X Prize's awards could be valuable in ensuring that the competitions pursue goals that are important to the public.
“Only truly popular ideas will be able to raise sufficient funding to make the prize work as a catalyser of research,” he said, in an email to the Monitor.
Still, he noted that what the public backs as the most compelling goal is not necessarily the best goal.
“This means that popular beliefs will have an impact on the practical selection of prized research topic,” he says, noting that this is not “necessarily the best way to find the most challenging research topics.”
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