http://online.wsj.com/article/SB10001424127887323628804578348002211277908.html
Last month 11 scientists were awarded $3 million each as
winners of the first annual Breakthrough Prize in Life Sciences. The
awards—funded by Google's Sergey Brin and his wife, Anne
Wojcicki, Facebook’s Mark Zuckerberg and his wife Priscilla Chan, and Russian
investor Yuri Milner—are intended to recognize "excellence in research
aimed at curing intractable diseases and extending human life" and to
"enhance medical innovation."
This type of prize is commendable, its generosity admirable. But it prompts a question: Will such a prize actually spur innovation or do anything to help society? Or will it be like those given to MacArthur Fellows, who receive $500,000 over five years? Last year the MacArthur winners included a marine ecologist and a stringed-instrument bow maker – in other words, those that are good at giving TED talks. Good for the winners, good for those giving out the money. For the rest of us? Not so much.
But what do you expect from a prize without a contest? Human psyche gets rewarded via vanity (read Nobel, Oscars). Yet economies and entrepreneurs need the incentives of a good old-fashioned contest.
In 1714, after the Royal Navy had lost many ships to running aground, the British Parliament established the Longitude Prize for those who could increase the precision of determining a ship's longitude. Over the years the prize paid out more than £100,000. Clockmaker John Harrison, for instance, won £14,315 between 1737 and 1764 by perfecting a balance wheel and then a temperature-insensitive bimetallic strip now common in all watches. Such inventions allowed the British to rule the seas and expand their empire.
In 1814, Englishman George Stephenson stuck a reciprocating steam engine onto a carriage with flanged wheels that ran up an inclined track and hauled coal out of the Killingworth colliery. In effect, railroads were born, but it took until 1826 for Parliament to authorize a 36-mile rail line between Manchester and Liverpool, the missing link connecting England's industrial center and deep-water ports. Rather than give Stephenson the contract for a locomotive, the government authorized an 1829 contest with a £500 prize for the fastest and most dependable run.
There were five entries. A locomotive named Sans Pereil belched out unburnt coal and cracked a cylinder. Perseverance couldn't break the minimum 10 miles per hour. This left Novelty and Stephenson's Rocket. (The fifth, Cycloped, powered by a horse running on a treadmill, was scratched when the horse fell through its platform.) By the end of the first day, Novelty's bellows broke and its joints froze. On day two, Stephenson cranked up the steam pressure and his Rocket ran at a peak of 30 miles per hour. England had its rail line to replace horse-drawn carriages and, with it, an industrial lead over the rest of Europe by a couple of decades.
New York hotelier Raymond Orteig liked to drink at his bar with French pilots during World War I. In 1919, Orteig announced a $25,000 prize for the first nonstop New York-to-Paris flight. Pilots worked with gung-ho young airline companies to design planes for the task. The Bellanca was tipped to win, but a mail pilot named Charles Lindbergh worked with Ryan Airlines of San Diego on a single-pilot, single-engine plane named the Spirit of St. Louis. He got the job done in 33½ hours.
In more recent times? Well, in 1990, the unlikely duo of the U.S. Department of Energy and the National Institutes of Health launched a 15-year Human Genome Project to identify the 30,000 genes that make up the human DNA. Craig Venter launched his own unofficial competition with the project and succeeded in sequencing his own genes in 13 years. His prize: patents for his company, Celera Genomics, and a jump-start on business with drug makers.
The U.S. government runs some contests today, for example at challenge.gov, but the prize money is small potatoes—$20,000-$80,000 for things like "design a mobile application to help people 'Live Well. Learn How.' "
No, no. Real contests have to be about BHA—Big, Hairy, Audacious goals. Fortunately, the private sector has taken over. The X-Prize Foundation runs a series of contests, the most famous being the $10 million Ansari X-Prize, which saw 26 teams spend a total of more than $100 million attempting to fly three people 100 kilometers (62 miles) into space twice within two weeks.
In October 2004, Burt Rutan and his financier, Microsoft co-founder Paul Allen, won the $10 million for their SpaceShipOne. Did they usher in an era of space tourism? I doubt it. But the X-Prize has plenty of BHA goals, working with Google (the $30 million Google Lunar X-Prize prize for sending a robot to the moon) and Qualcomm (the $10 million Tricorder X-Prize prize to get "Star Trek" devotees interested in developing a hand-held medical-diagnosis device).
Even those amounts seem too modest. I'm not one to tell someone else how to give away money, but . . . let's have a real contest with some serious prize money. Sergey Brin is worth $23 billion and Mark Zuckerberg $13 billion. If they really want to have an impact on society—beyond the societal wealth already created by Google and Facebook—offer a billion-dollar BrinZuck prize to prevent or stop Alzheimer's, or to regenerate spinal cords and organs, or to cure obesity. Instead of small-ball academic researchers vying for grants from the National Institutes of Health, you'd get entrepreneurs coming out of the woodwork trying innovative approaches to win a $1 billion jackpot. Or maybe the challenge could be to create personal jet packs. Or neuron downloads. Whatever—but something BHA.
Thankfully, there already is a series of contests with $1 billion-plus prizes. Some great (and not so great) companies are funded with the prize of billion-dollar valuations in the public markets. It's called the IPO market and entrepreneurs pull all-nighters writing clever code while wearing dark sunglasses with the brightness on their monitors turned up.
Yet even in that realm, much of what we see is incremental. The Big Hairy Audacious stuff still needs and deserves a breakthrough contest.
