The $$$ in Team

The X Prize Foundation and Google have just announced a $20 million prize for the first team who can land a robot on the moon without the support of any government. This is the latest of several prizes offered by the twelve-year-old non-profit foundation, including its first, a $10 million award for the first private suborbital space flight, which was awarded to Mojave Aerospace Ventures in October of last year. There are also currently prizes for advances in genomics and low-emissions automobiles, as well as a prize, co-sponsored by Northrop Grumman, for the private development of a new lunar lander.

The idea of spurring innovation through cash prizes is not a new one. In fact, the X Prize Foundation, which presented its first challenge in 1995, was inspired by the $25,000 cash prize offered by hotelier Raymond Orteig that led to Charles Lindbergh's transcontinental flight in 1927.

The strategy is that by offering a cash prize rather than just funding your own effort, you create competition. And though just one team will win the prize, many others will vie for the prize, essentially creating an industry around the challenge. By offering $20 million in prize money, you spur the investment of much more money than that to try to win the challenge. As the X Prize Foundation succinctly casts the idea on its home page, it is Revolution Through Competition. It worked for Orteig. His $25,000 prize led to a total investment of $400,000 from the nine teams trying to be the first to make the transcontinental flight.

These recent initiatives have attracted attention and support from some of the greatest minds and deepest pockets in the world. Several Google executives, the inventor of the Segway, the producer of the Naked Gun movies, one of the leading minds in genomics, several big names in the commercial space industry and even Sir Richard Branson, the maverick behind the Virgin empire. Who wouldn't want to impress those stakeholders?