And The Winner Is ...
(FORTUNE Magazine) – Want to change the world? Lead the assault on daunting frontiers? Goad your fellow man into achieving greatness? Improve the odds of finding a parking space? It's easy. Even better, it might make you famous. How? Ever ask yourself just what inspired Charles Lindbergh to strap himself into a tiny plane and fly 33 hours straight across the Atlantic? Why people are racing to build a privately owned spaceship? Or a motor a millionth the size of the dot in this question mark?
The lure is money. Prize money, to be exact. An "inducement prize," as the genre is known, is not to be confused with a retrospective prize, like the Nobel, which typically rewards either a lifetime of achievement or some great deed, either past or present, that the doer would have done anyway. Inducement prizes are those in which a benefactor spells out exactly what is to be accomplished and promises a wad of a cash to the first to do it. The idea is to tempt geniuses to come up with breakthrough solutions to thorny problems.
Lucky Lindy didn't make his flight to enjoy the sea breezes. A French hotel owner in New York City named Raymond Orteig, eager to drum up more foreign visitors, created the $25,000 Orteig Prize in 1919 for the first nonstop flight across the Atlantic. That dangling carrot prompted a prodigious effort by scores of aviators and technicians to push the range of their planes. Lindbergh made it first, but several other teams that had been chasing the Orteig Prize flew nonstop in the months that followed. Aircraft technology improved, the transatlantic airline industry was born, and Orteig got his customers and a footnote in the history books.
Napoleon offered a prize to anyone who could preserve food for his troops, which ultimately led to canning. Carl Magee, a journalist in Oklahoma City who was frustrated by the lack of parking, offered a prize in 1933 for a device that would track how long a car was in a space. The result was the parking meter. In 1976, Paul MacCready was deep in debt when he heard about the Kremer Prize, offering £50,000 for the first human-powered airplane to fly a mile-long course around two posts. "I'd had no interest in human-powered flight up until then," MacCready later told interviewers. "Suddenly it seemed important." He developed the Gossamer Condor, a cyclist-powered plane with a 96-foot wingspan, and won the prize in 1977.
The early 20th century was the peak of inducement prizes. There were close to 100 prizes for aviation and nearly as many for automobiles. One reason the number of such prizes has dwindled is that running a prize can be a lot of work. Hans Berliner, a now-retired Carnegie Mellon professor, administered the $100,000 Fredkin Prize for the first computer to beat a grand master at chess, and found it a headache at times. "As computers got better and better," he says, "it was harder to find a grand champion who was willing to risk the embarrassment of losing to a machine." Finally, says Berliner, IBM boosted the jackpot: $700,000 for the winner and $400,000 for the loser. In 1997 world champion Garry Kasparov lost to a machine designed by a team of programmers recruited by IBM.
A handful of inducement prizes are still setting off competitive scrambles. The best known is the X Prize, an award of $10 million for the first privately built craft to carry passengers in suborbital space flight. It was conceived by Peter Diamandis, a California physician-entrepreneur who tried and failed to become an astronaut. The X Prize, whose headquarters is on Spirit of St. Louis Boulevard in St. Louis, has attracted two dozen teams from seven countries, including an entry (see photo) by Burt Rutan, who also built the first plane to fly around the world without refueling.
The Defense Department is offering $1 million for the first vehicle able to guide itself at high speed across the Nevada desert, in a race to be held next year. William "Red" Whittaker, a professor at Carnegie Mellon who built robots that explored the Three Mile Island mess, is among those chasing it. "This is a great challenge," he says. "It's galvanizing and inspiring."
For those not up to speed on robotics or rockets, there is the $250,000 Feynman Prize. It goes to the person or team that devises both a motor 100-billionths of a meter wide, capable of moving atoms around, and a similarly tiny machine capable of adding numbers. Then there is the Methuselah Mouse Prize for therapies that produce the longest-lived laboratory mouse.
You'd think Congress would dangle prizes routinely, but it doesn't. Why? Perhaps because the politicians who have to appropriate prize money can't steer the pork to their home districts. Perhaps because they worry about being ridiculed if the prize is made to look foolish. They prefer doling out grants, says Eric Bloch, who headed a National Academy of Engineering study in 1996 on government use of research prizes. Inducement prizes have a role, says Bloch, "because grant-review committees have a hard time with crazy, original ideas."
If your goal is to improve the human condition, consider devising a prize of your own. Inducement prizes are a "fantastic, low-risk, high-return mechanism," says Diamandis. If no one succeeds, he notes, you don't have to shell out any money. "And if someone does, you've automatically backed the winner."