Fourth Street in downtown Santa Monica is an eclectic place—home to, among other concerns, the studio of “Dance Doctor” John Cassese, a chic trade-in clothing shop, and an emporium with the self-explanatory name Magicopolis. Amid such colorful neighbors, the X Prize Foundation presents a facade of anonymity, even, perhaps, of quiet mystery: a mirrored door that reads “Revolution Begins Here” with a stylized and rather cryptic X above, as if to mark the spot but do little else.
The entrance is at once easily overlooked and profoundly misleading. Behind the glass and up a flight of stairs, the X Prize organization is doing plenty. It made history in 2004 when it awarded $10 million to aircraft designer Burt Rutan’s Scaled Composites for twice sending its SpaceShipOne more than 100 kilometers (62 miles) up into space, still the world’s only private manned spaceflights. Since then, X Prize founder Peter Diamandis has worked tirelessly to build a franchise for radical innovation that he says will change the world.
In September 2007 he stood with Google cofounder Larry Page in Los Angeles to unveil the Google Lunar X Prize, promising up to $25 million to the team that successfully lands an unmanned rover on the moon, drives it 500 meters, and sends back photos, video, and data. Two weeks later Diamandis was in New York, sharing the stage with former president Bill Clinton and committing to a dozen more competitions over seven years. Purses totaling $300 million would go to those who tackle “grand challenges” in categories such as global poverty, the environment, public health, and education. The first of these will take place in the fall of 2009, when Diamandis says up to 50 teams will compete for the Progressive Automotive X Prize by racing technologically advanced green cars—which must achieve the equivalent of 100 miles per gallon—in trials around the country. Nobody has yet mass-produced such cars.
Diamandis, though, is aiming for a still bigger breakthrough: a breakthrough in the way we achieve breakthroughs. Ever the evangelist, he spent one evening between the Google and Clinton announcements pitching his vision to a hundred or so Hollywood heavyweights gathered in the home of the socialite, pundit, and Web media entrepreneur Arianna Huffington. “What we try to do is really reach down into the souls of people and say, ‘You have the ability to solve the problems,’” Diamandis said, his voice rising. “It doesn’t take the government, it doesn’t take a large corporation. In fact, most brilliant solutions to problems come from the mind of an individual.
“We believe there’s a new model. It’s putting out a clear set of rules and a large cash challenge and saying, ‘We don’t care where you are, where you’re from, where you’ve gone to school, whatever you’ve done before—you solve this problem, you win.’”
It is a seductive notion—especially in this era of overextended government and corporate cutbacks—and one that is gaining traction in philanthropic circles and the research establishment. The National Academy of Engineering and the National Science Foundation have urged experimenting with so-called inducement prizes to spur research. Within government, NASA has taken small steps into the competition arena and the Defense Advanced Research Projects Agency (DARPA) has sponsored Grand Challenge robotic automobile races. Last year, Republican presidential candidate John McCain made a $300 million prize for improved electric car batteries a plank in his environmental platform.
The audience in Huffington’s living room was a self-made yet largely liberal-minded crowd, so it was not surprising that they might embrace a vision that unites, as Huffington put it, “the instinct of competitiveness that we all have—the instinct to win—with the better angels of our nature, the instinct to make this a better world.” It is a vision that also ought to resonate with millions of Americans, already captivated by reality show competitions like American Idol and The Amazing Race. The only question is, can the X Prize compete?
The X Prize offices in Santa Monica are long and narrow, with a double-high ceiling that has exposed joists and beams. Appropriately, the space somewhat resembles a hangar. One morning while I was visiting, Diamandis sat in his corner office with his assistant at the time, Angel Panlasigui, and waded through potential prize ideas in advance of a board meeting. One possibility, hashed out with James Cameron, director of the movie Titanic, would foster the development of three-man submarines that could dive to the ocean floor. The next idea took the concept to a fantastic level: autonomous robots, cheap enough to mass-produce, that could sink to the bottom of the sea, collect data, and return to the surface to share that data with a central computer. “This is an idea that I kicked around with Larry Page,” Diamandis explained. “If you have thousands of these going down randomly, gathering data, you then can stitch the data all together.”
“Wow,” Panlasigui said.
Five or six years ago, the thought that he would be kicking around ideas about ocean exploration with the likes of Cameron and Page might have had Diamandis saying “wow” too, and not just about the company he now keeps. For three decades Diamandis, 47, was single-mindedly focused on space. He grew up in the Age of Apollo and in fifth grade began “cutting out every news article I could and recording the launches off the television set with my parents’ Super 8 camera.” In junior high school he confessed to his mother a secret desire to be an astronaut. Diamandis chuckles at the memory. “She goes, ‘That’s nice, son, but I think you’re going to be a doctor.’”
Diamandis was undeterred at first—a lot of astronauts have trained as doctors—but a conversation in college with an actual astronaut, Byron Lichtenberg, forced a reconsideration. Even if he defied the odds to become an astronaut, “you have to do what you’re told and be on best behavior all the time to get a chance to fly,” Diamandis recalls being told. “That just wasn’t me.”
Instead, Diamandis’s extraterrestrial experience has been largely vicarious. As an undergraduate at MIT, he established Students for Exploration and Development of Space. In 1987, just four years out of college and still in medical school, he helped organize the International Space University, now located in Strasbourg, France. And he partnered with Lichtenberg to start Zero Gravity Corp. (Zero G), which simulates weightless space travel in a Boeing 727 (G-Force One) flying parabolas.
There’s a new model, Diamandis says. “It’s putting out a clear set of rules and a large cash challenge. We don’t care where you’re from, where you’ve gone to school, whatever you’ve done before—you solve this problem, you win.”
Yet it was the book The Spirit of St. Louis that really inspired the X Prize. To make his nearly 34-hour flight to Paris, Charles Lindbergh battled the elements, exhaustion, and the primitive technology of the day, all recounted in gripping detail by Lindbergh himself, right up to his landing at Le Bourget. Diamandis’s reading of the story was informed by his disgust with NASA, which reached a peak after 1992, the International Space Year. “We were supposed to commit to going back to the moon and Mars,” he recalls. “And then nothing ever happened.”
In the book Diamandis discovered that a competition to collect $25,000 put up by the New York hotelier Raymond Orteig was what motivated Lindbergh’s pathbreaking journey. “He negotiated a contract on one sheet of paper and built the Spirit of St. Louis in 60 days,” Diamandis says. More important, Diamandis saw that nine teams together spent $400,000 to win that $25,000. “I gave up on the government,” he says of NASA. “I didn’t want to fix it; I just wanted to do it on my own. And a competition was a way for me to create leverage beyond my means.”
Diamandis’s frustration with NASA has crystallized into a worldview. Paralysis “is endemic in the government,” he says. “If the government does something risky and fails, there’s a congressional investigation.” Likewise, “if a large corporation does something risky that fails, its stock plummets. I think we’ve become way too risk averse in this country. But the problem is, the real research, the real breakthroughs, require taking significant risk.”
Diamandis launched his first contest in 1996 to a great deal of enthusiasm in the space community but without a sponsor to supply the purse. “We jumped out of the airplane and had to build a parachute on the way down,” he says. “We ran X Prize on about half a million dollars a year for the first few years.” Diamandis estimates that he approached some 200 CEOs before the Ansari family, wealthy space enthusiasts, in 2004 offered their name to the competition and $10 million to fund the prize.
Money is less of a problem today. Among the winners of the Ansari X Prize was the X Prize Foundation itself, which, as handmaiden to Burt Rutan’s accomplishment, has been accorded prestige that in turn has granted it access to the most rarefied levels of the entrepreneurial economy. The Google Lunar X Prize, for instance, was conceived by NASA as a Centennial Challenge to mark 100 years of flight since the Wright brothers; the space agency later decided it was too expensive. “I said forget it, I’ll fund it elsewhere,” says Diamandis, who took the idea to Page in 2007. (Diamandis has a complicated relationship with NASA. For all his criticism, he is not opposed to working with the agency. The X Prize Foundation currently administers the Northrop Grumman Lunar Lander Challenge, a Centennial Challenge for which NASA has put up $2 million. Last October the rocketeer Armadillo Aerospace won the first part of that competition.)
Page has joined the X Prize Foundation’s board of trustees, as have Elon Musk (a founder of PayPal and Space Exploration Technologies), Dean Kamen (inventor of the Segway scooter), and Ratan Tata, chairman of an Indian conglomerate that bears his name. But if tech gurus and visionaries have indulged Diamandis’s appetite for taming various final frontiers, some—Page in particular—have also encouraged him to broaden his thinking of what the X Prize can do and apply the model to more pressing social problems.
In that vein, the next suggested X Prize that Diamandis and Panlasigui reviewed proposed having households across the country compete for $50 million to see which ones could lower their energy consumption the most—a “giant Darwinian experiment,” as Diamandis put it that morning. “Hopefully hundreds or thousands of teams will compete, resulting in millions of homes’ improving their energy efficiency.” Later, he explains, “I was challenging myself on how to create an energy X Prize that would be not about a new widget but about changing the way people think.”
This entrepreneurial sensibility defines the X Prize. If bureaucracy is the problem, then the solution, Diamandis believes, lies with the “unconstrained thinking” of individuals. “The day before something is truly a breakthrough,” he likes to say, “it’s a crazy idea.” Lately he has taken his case directly to the entrepreneurs. The Automotive X Prize calls for production-ready cars, while the Archon X Prize for Genomics requires teams to keep their gene sequencing costs under $10,000 per person—low enough, perhaps, to start a mass industry. (The current cost for sequencing an individual’s genome hovers around $300,000.)
The genome prize was conceived by geneticist J. Craig Venter, a kindred spirit who left the National Institutes of Health (NIH), frustrated by its bureaucracy, and then set up a company to challenge it in a race to decode the genome. This time Venter turned to Diamandis (Page had introduced them) not because of a failure at the NIH but because financiers weren’t supporting companies that did whole-genome sequencing. Individual genetic profiles, decoded cheaply, could help doctors predict patients’ susceptibility to disease and guide proactive care. Low-cost sequencing could radically transform the practice of medicine. But most existing funding was going toward sequencing the handful of genes most likely to lead to profitable drugs and gene therapies. In the absence of a lucrative market, the X Prize’s contest will give companies doing whole-genome sequencing a boost.
“People seek recognition and appreciation, and if there is a prize that’s commonly understood to be important, they’ll go for it,” Musk says. “I mean, why is the America’s Cup so great?” The prize confers legitimacy on the goal; at the very least, it makes raising money in pursuit of the goal easier. This is precisely what has happened in genomics. “There are a lot of new technologies coming up that nobody even thought of or talked about four years ago,” Venter says. “I’m sure the X Prize has helped contribute to it.”
Many who follow developments in research—who study studies, as it were—discount the aspect of inducement prizes that Diamandis prizes most: The payout does not occur until a contestant actually succeeds. From the perspective of the benefactor, be it a government agency or a billionaire’s foundation, a back-end payoff is extremely efficient, but skeptics call that myopic. Pull back, they say, and it is apparent that somebody is paying for all that investment. “As a public policy matter, you’re not doing the nation a favor if you reduce the government’s share, if the total expenditure is coming out of the U.S. economy,” says Lewis Branscomb, an adjunct professor at the University of California at San Diego.
Likewise, many critics see the notion of leverage—taken as an article of faith in the X Prize offices—as overstated. Some of the investment is certainly redundant when competing teams investigate similar approaches. “Economists have long worried about that,” says Molly Macauley, an economist who studies space policy at Resources for the Future, an independent Washington-based think tank. “They view it as possibly negative.” It’s impossible to know how much of the $60 million invested by competitors vying for the Ansari X Prize was duplicative, says Ken Davidian, who monitored contestants when he worked for the foundation. Then again, most of Lindbergh’s competitors invested in variations of the same flight plan: a two- or three-man crew piloting a trimotor plane.
People seek recognition and appreciation, Elon Musk says. “If there is a prize that’s commonly understood to be important, they’ll go for it.”
The critics greatest worry, though, is that Diamandis’s mechanism for bringing in new players excludes the old ones—research institutes that depend on government grants and contracts to pay their operating expenses. “One of the wise things about federal research policy since World War II is that it wasn’t directed solely at conducting research but also at building capacity for research,” science and health policy journalist Daniel Greenberg says. “You trained people and gave money for equipment and financed research in many circumstances over the long term.” A contest, he says, “prices a hell of a lot of people out of the game.”
Unless, that is, they were to follow the example of one William Whittaker. “Red” Whittaker, as he is known (for reasons that are no longer immediately obvious), is a pioneer in field robotics. As a professor at Carnegie Mellon University, he has built test rovers for NASA. On his own, he has fielded teams in each of the three DARPA Grand Challenges: His autonomous vehicles performed best in the first race, grabbed the silver in the second, and won the third. It is as if the Google Lunar X Prize were designed with Whittaker in mind. Sure enough, Whittaker announced his intent to compete the day the prize went public.
“The challenges create cultures that are unachievable by traditional research mechanisms,” Whittaker argues. “The goals pursued by the challenges are the grand leaps that are rarely pursued by traditional incremental research.” Most research, he says, is hobbled by a bureaucratic mind-set that reduces the topic to “gobbledygook.” In a competition, though, “the organizational mind-set is monotonically and unequivocally purpose-driven to the challenge, and everything else operates in the context of that.” And teammates, he says, “achieve effectiveness that has never been revealed before.” As a result, “the gobbledygook moves 10 times faster than it otherwise would.”
Few scientists would deny that funding research through grants and contracts is expensive and cumbersome, as well as risk averse. But few would suggest that contests could supplant it. “The contest model, I think, is superficially attractive, but if you said, ‘We’re going to put up a billion-dollar prize for a cure for cancer’—I mean, people who are knowledgeable about cancer research would say that’s ridiculous,” Greenberg says. “You don’t have people who are withholding their presence from cancer research because there isn’t a big prize at the end of the tunnel.”
No doubt, too, the competition model is ill suited to certain fields of research—for instance, whole swaths of basic science, where results are open to interpretation or even dispute. Contests, which depend on clear rules, goals, and results, appear better suited to technology and other applied fields. Nor is it obvious how grand a grand challenge can be, such as in space exploration: “You can start this kind of activity with small robotic projects, but at some point it doesn’t scale up very well,” says Howard McCurdy, a space historian and public policy professor at American University in Washington, D.C. “Nobody knows where the limit is.” A garage tinkerer might be able to design a space glove, but don’t count on him to send someone to the moon.
Diamandis acknowledges that he does not know where the limits on inducement prizes lie. “I think that prizes are going to be most successful when intelligence makes a big difference,” he says. “The more capital-intensive a prize is, the more difficult it will be.” Still, he has not ruled out a cancer prize. He points to a group of hospitals and labs that are attempting to collaborate on a “unique approach to cancer” but are stymied by infighting. “A prize,” Diamandis says, “could help focus them as a team.” It’s a novel idea: a competition to induce cooperation.
One arresting scene in the story of the X Prize comes at the end of SpaceShipOne’s first foray into space, captured in a Discovery Channel documentary. It has been a nerve-racking journey: Pilot Mike Melvill first wrestles with the ship’s controls, winds up more than 20 miles off course, and just barely reaches the touchstone altitude of 328,000 feet. Then, as he prepares to return to Earth, the trim control on one of the ship’s twin tails fails to return to its proper position, threatening to send the craft into an uncontrollable dive. We watch anxiously as Melvill struggles to fix the trim; “I was very concerned that I couldn’t get back,” he says later. Ultimately he does return, of course, but not before he reaches into a sleeve pocket and, in a gesture of victory, pulls out a handful of M&Ms. The camera shows them floating through the cramped cabin: deep reds, pale blues, lime greens, rich browns spinning and hurtling, until they succumb to Earth’s gravitational pull and drop to the floor.
As Melvill proved, a space race photographs well, and three years after SpaceShipOne, shortly after the Google Lunar X Prize was announced, Diamandis found himself on the phone with executives from a reality show production company, not unlike the one that puts on American Idol. “Good morning, everybody!” a producer began brightly. He appeared to be in a gregarious mood, telling Diamandis that he hoped “to open up a dialogue with you to see if you’d be interested in possibly coming together on some type of program.”
Diamandis wasted no time bursting that bubble. Whatever softness exists in his demeanor disappears altogether when he talks business. There is no small talk, no laughter. He seldom even cracks a smile. Here Diamandis’s tone was polite but even; it betrayed no emotion. “I have started a large number of the companies in this area,” he began. “I’ve seen about...at least a dozen proposed reality TV shows in space come and go, and none of them has closed the business case. They all end up in one way or another coming back either to X Prize or Space Adventures or Zero G.”
A second executive spoke up to focus the discussion on the Google contest. But the production team appeared to be at once too early and too late. “We’ve been in negotiations with Discovery on this now for well over half a year,” Diamandis said, “so a show regarding the Google Lunar X Prize is probably off the table right now until we figure out exactly where we are with that.” In fact, he added, “we’re in the midst right now of a series of media partnership negotiations” for all the prizes the foundation is considering. “Who we’re going to team with to produce them will come after network deals are put in place.”
Diamandis was initially slow to appreciate X Prize’s camera-friendly aspect. The SpaceShipOne footage was coproduced by the Discovery Channel and a company started by Rutan’s backer, Microsoft cofounder Paul Allen; the X Prize Foundation was not involved. Going forward, Diamandis has left nothing to chance, as the reality producers found out. “X Prize,” he assured them, “maintains and owns all media rights around all the teams,” who are further obligated to film their activities “on a regular basis and generate content” on their own time and dime.
“It’s important not just to award a prize purse but also to award fame and celebrity,” explains Cristin Lindsay, the foundation’s vice president of prize management, “because part of what we’re trying to do is move big markets and big industries.” There are other purposes to such storytelling. One is inspiring the public, particularly young people, and igniting enthusiasm for science, technology, and discovery. It also builds the X Prize brand: The prize generates buzz, a competitive advantage for the foundation that a federal agency or philanthropic endowment or angel investor cannot match. And it helps Diamandis raise money from sponsors, who can insert their names and logos into all the coverage. That striking, candy-strewn moment aboard SpaceShipOne was in a sense bought by M&Ms, which cosponsored the competition (although Melvill claims he didn’t discuss the stunt with anyone in advance).
It’s important not just to award a prize purse, Cristin Lindsay says, but also “to award fame and celebrity, because part of what we’re trying to do is move big markets and big industries.”
The Automotive X Prize was conceived as a sales race, to emphasize the importance of designing marketable cars, Lindsay says, but that’s “boring to the media.” Instead, the goal shifted to performance, as measured in an array of time trials and races in “multiple media markets.” (New York City is to kick off the drama this fall.) These should ultimately produce two winners, one in each of two vehicle classes, which will help expand the exposure beyond the winner’s circle. “I’m looking for a new generation of cars to come out of the X Prize,” Lindsay says.
Packaging the genome prize was even more daunting: Ten days in a lab just does not scream blockbuster. So Diamandis took a cue from the magazines at the supermarket checkout. The winning team will have the chance to decode the genomes of 100 celebrities. What genes make an athlete, a genius, a beauty? Inquiring minds, Diamandis is betting, will want to know.
But will they? The X Prize succeeds on Diamandis’s terms only if it institutes —that is to say, normalizes—revolutionary change. But news is by definition novel, and the bar for capturing attention seems to keep rising. It is hard to imagine any feat, no matter how heroic, that might make the world stand still, as Lindbergh’s did 80 years ago; and it is easy to imagine the public’s appetite for heroic feats diminishing as their number increases. When I spoke to Diamandis in 2007, he didn’t seem to have considered the notion of prize fatigue. A year later, though, he allowed that something like that has crossed his mind. “Our thinking is, there should be no more than 10 to 12 prizes at a time,” he now says. “Otherwise it gets a little too confusing.”
The X Prize is often described as a technology contest, but on close inspection, the winning achievements do not seem all that revolutionary, technologically speaking. The hardware required to win the first space prize, Diamandis confided one day, had been around for at least five years. Similarly, while the giant Indian automaker Tata Motors and Elon Musk’s Tesla Motors are both designing cars that may compete for the Automotive X Prize, these are vehicles that would have been built with or without the contest. In genomics, the true breakthrough belongs to Venter and the scientists at the Human Genome Project. “What we’re targeting is something that would happen anyway,” said Michael Lindsay, who helped develop the genomic X Prize (and is Cristin Lindsay’s husband). “I think we’re just really accelerating it.”
The X Prize Foundation’s true impact may be better measured by the markets it opens. That is how Whittaker views it. “The challenge is at or beyond belief state and then it is achieved, and that transforms the view of what the world considers possible,” he says. “But it also seeds this transformational industry. The start-up and the prize pale by comparison with the scale of the wealth of the follow-on enterprise.”
Whittaker points to the gaming industry, which emerged from technology used to develop a computer that could play chess better than a Russian champion; Deep Blue, before it was nurtured by IBM, was Deep Thought, a program developed by Carnegie Mellon researchers in a bid to win the $100,000 Fredkin Prize. “Gaming as an industry is now challenging broadcast television, moviemaking, and industries that you’d guess were absolutely unshakable,” he says.
“This is all about changing paradigms,” Diamandis tells me late one Friday afternoon. “It’s about bringing the players together, it’s about bringing the visibility, it’s about changing consumer expectations and buying habits, it’s about bringing the capital to the markets.” He points out that the number of U.S. airline passengers grew from 6,000 to 180,000 only one year after Lindbergh’s flight. “Lindbergh and the Orteig Prize are credited with creating today’s $300 billion aviation industry,” he says. Similarly, he suggests, the space tourism industry that will arise as a result of the Ansari X Prize could one day be worth up to $1.5 billion a year.
In the meantime, the next generation of X Prizes is taking shape at the foundation’s new headquarters just down the coast in Playa Vista. The foundation has grants from companies, government agencies, and other foundations to develop eight new prizes, including competitions involving health care, tuberculosis, and alternative aviation fuels. Diamandis says he would like to tackle global poverty, education, and cancer, too. But it has been slow going: Over the past couple of years, the organization does not seem to have made much progress refining many of these ideas. On poverty, “we’ve probably tested 30 different ideas,” Diamandis says.
Devising a prize, it turns out, can be as hard as winning one. “It has to be difficult but achievable, and it has to be something where having that prize is going to make a difference,” Musk says. “If you can’t figure out the right rules for the prize, if you can’t get a sponsor for the prize, if you’re not sure you can motivate people to get it done, then it’s not a good candidate.”
Diamandis is undaunted. With $7 million in hand from yet another partner, British Telecommunications Group, he is taking his message global. “We’re going to experiment in these social areas, and we’ll find out what is possible,” he says. “I think we need to be able to fail in prizes. It’s the only way to know if they’ll work.”