Adrian Gore and Barry Swartzberg at Discovery have built an R80bn business by incentivising clients to do what is right for their health. Although their application is revolutionary, the concept has been around for centuries. Human beings react to incentives, and as logic suggests, the bigger the challenge the greater the incentive needs to be. Peter Diamandis, co-founder of Singularity University, drew on the experience of the “Flying Fool” Charles Lindbergh to resuscitate the concept with the first XPrize – leveraging the idea to attack many other big challenges facing mankind. Latest is a $15m prize funded by South African-born and raised Elon Musk to use online tablets to revolutionise education. In this fascinating interview, Eileen Bartholomew of the XPrize Foundation takes us through the history  – and present – of this novel way to unleash human potential. – Alec Hogg
This special podcast is brought to you by Barclays Africa. Eileen Bartholomew is with the XPrize Foundation. Over history, prizes have been used to motivate innovation in many different ways. One that you guys are talking about today goes all the way back to 1714.
Absolutely. Here at this conference, we’re talking about exponentials and innovations and we sometimes fail to remember that a lot of the history of what we know to be about innovation goes way back when. Prizes are a great example of that. Prizes are thousands of years old. They’re represented in Homer and the Bible, but the modern Renaissance prizes finds itself really in the 1700’s when the British Government was struggling and losing many ships at sea. At that time, global meant trans-ocean and the idea of trans-navigation and shipments mattered a lot. At the time, they could tell latitude position, but not longitudinal position. As a result, millions and billions of Dollars of cargo would be lost at sea. They thought that was a big enough problem to try to solve and they put out a prize. It was £20,000 at the time.
What would that have been worth today?
It’s just under $5m to identify the best way to determine longitude at sea. They thought that it would be a ship’s pilot, navigator, or an astronomer that would win it but they never imagined that a lowly clockmaker would be the ultimate winner. In 1975, John Harrison proved that he could get to one nautical mile accuracy by accurately telling time at sea. It revolutionised the shipping industry.
That’s amazing because the people who invented the lightbulb were not candlestick makers either. Is there a tradition of this that breakthrough innovations come from outside the industry?
We certainly think that history proves that point and that’s one of the benefits of Prizes, that it doesn’t matter how many PhD’s you have or how many initials are after your name. It really matters if you have a great idea that can show results. That’s what is so compelling about a Prize and why it’s been turned over and over again by Governments and kings and now, by all of us.
The Napoleon story is an interesting one as well.
Fast-forward a few years to 1975. Napoleon of course, we knew had conquered many nations. One thing about being a conqueror is that you don’t always get a welcome reception when you show up. He had a tremendous army to feed and no way to do it, so he put out a prize. It was 12,000 francs at the time – a little bit over 500,000 – to identify how you could actually preserve food over long distances and time. The prize was not won by a chemist. It was won by a beer-maker, a pickle maker, a brewer who’d learned and actually discovered the modern canning process, which we still use to this very day. He discovered that before the understanding of microbes, etcetera, and in order to prove it, they put it to a taste test and sent out almost 18 ships worth of food over an 18-month period to see if actually worked. Sure enough, the soldiers passed the taste test.
I think somebody must have been very relieved that they had. Again, fast-forward to the early part of the 19th century with the prize that was put up to fly across the Atlantic Ocean. Firstly, where did the prize come from?
Absolutely. Fast-forward to 1919 when a prize was offered by a gentleman, named Ramon Ortega. He was a famous hotel owner. He was originally from France, arrived in the United States – penniless – and built his empire up in hoteling. He always wanted to see France and the United States connected by experimentation outside of physical distances. He put out a $25,000.00 purse for the first person to fly solo from New York to Paris and Paris to New York, without stopping either way. In 1927, that was won by Charles Lindberg. Again, speaking to the stories of the unlikely contender – Lindberg was exactly that. This was a gentleman you would not have put your money on at the time. He had only been flying for three years. He leveraged his house and his personal savings to invest in a brand new type of aircraft that had never before been produced. It was a single engine plane. He knew that if he were flying over the Atlantic and one engine went down, he was pretty much bummed anyway so he put all his energy into designing this new plane. He was also a maniacal advocate of fuel efficiency. He knew that would be the differentiator. He made his seat out of wicker to lighten the load. He trimmed the edges of his maps to shed precious ounces so that he could make it. When he coasted into Paris in 1827 not only was an amazing technological feat accomplished that had never been done, but something else happened then too, which is that the world became smaller. Suddenly, people realised that flying wasn’t just for crazy people or the military. Flying could be for everyone. It spawned the commercial aviation industry that we all know and use often today.
This week, when Silicon Valley came to Johannesburg for a few days, we met Peter Diamandis and he is the inventor of the XPrize, again resuscitating something from almost 100 years ago.
Exactly. Peter was a space nut. He always wanted to grow up to become a NASA astronaut and he did all the right things and got all the right degrees but ultimately, did not become an astronaut. He was inspired by the story of Lindberg, by a book given to him called ‘The Spirit of St Louis’, which spoke of this prize and the pursuit of this goal. He wanted to do the same thing that had been done for commercial aviation – to create a commercial space industry. He knew that if he couldn’t go there with the Government, he could try to build it himself. In 1996, he launched a $10m prize. It was called the Ansari XPrize. Its goal was to build a private spaceship that could go 100kms twice in two week, carrying a passenger payload of three people.
Who funded this $10m?
That’s a great question. Along the way, it was ultimately funded by the Ansari family – hence the name, Ansari XPrize. A little-known fact is that the X in XPrize stood for the donor that was going to fund the original purse. Of course, it was such a crazy new idea that everybody thought it couldn’t be done. As a result, Peter had seen almost four years or 100 ‘no’s’, so the X stuck around and ultimately became part of the organisation and part of our namesake.
Who won it?
In 2004, a company named Scaled Composites won it. This was led by a gentleman named Burt Rutan who was a very famous plane designer and engineer at the time. There was a group of about 30 engineers. They completely redesigned re-entry from space into the earth. The winning technology used kerosene and tyre rubber to actually, fuel the jet. They returned triumphantly in October of 2004, ushering in a new space era. There winning technology is the same underpinnings of Virgin Galactic, which will one day take you and me to space.
Africa has its own XPrize, funded by a son of Africa, Elon Musk.
Absolutely. What we have done for space flight and getting humans off the planet… we’ve actually turned that model to try to address the problems on this planet. One of those is the problem of education. Over one billion people today can’t read or write. Nearly one quarter of those are children and we cannot build enough schools or train enough teachers to fix this problem. We partnered with Elon Musk who’s a member of our Board of Trustees, to try to revolutionise and bring the Prize model to that problem. With his help, along with several other donors, we’ve designed a $15m global literacy XPrize. The goal of this competition is that a winning team will develop a software application that will sit on a tablet and in the course of 18 months, can be given to a student ages 5 to 12 whom today, is illiterate and bring them to a state of functional literacy in reading, writing, and numeracy. In only 18 months, without the intervention of schools or a teacher.
That’s interesting. Elon Musk has made his name through PayPal, through his adventures in space, and now through Tesla (the car), through batteries, and through solar. What turned him on about education?
I think the fact that it is such an underpinning to the achievement of success and innovation throughout the planet and knowing that one billion people still can’t read or write, is one billion minds that we aren’t tapping into, to try to solve the problems that we need to have. Whether that be in energy, agriculture, or space-based travel; we need everybody on the planet’s mind helping us solve these problems. A big part is making sure everybody has equal access to both the information and the ability to use to achieve those goals.
You mentioned energy. Barclays Africa, who put together this whole week with Singularity University have committed to funding an XPrize, which is going to look at energy (and perhaps agriculture). How does the process work from there? Steven van Coller told us they’re going to put up five million. They’re going to get other people to add to the kitty. Where does the X Prize design originate?
That’s a great question. We spent a few months prior to this event and narrowed the field of challenges that we thought were prizeable. We’ve come up with four of them. The two that were highlighted here today – energy and agriculture – will likely be the ones we’ll move forward with. Barclays has underwritten the first part of what it takes to create an XPrize, which is the design. We spent between 6 and 12 months designing the competition, knowing where to set the rules and where to set the goal to make a meaningful impact. With that, we interview hundreds of experts and thought leaders. We get participation and input from the crowd and the world at large and ultimately, design a set of rules and guidelines that can achieve what many people think is impossible today, and make it happen. Over the next several months, we’re working with Barclays as well as a number of the folks that are here at this event, to design a compelling competition that can begin the process of changing many of these intractable problems in energy and agriculture.
What might they be?
We have a couple of areas we think are key. In energy, we know that a key element is capturing renewables, particularly storage – both at grid scale levels, but also at smaller scale levels. We also think distributor generation is a key because building large power plant infrastructures isn’t ideally feasible for the large-scale growth, especially in developing regions. In the field of agriculture, we’re going to be looking at the entire supply chain, whether that be through advanced sea technology, growing crops that can reduce water usage or impact, looking at productivity and yields, as well as nutritional value or even storage and supply chain issues.
You’re therefore going to research this for the next 9 to 12 months and then come up with a Prize – come up with some challenge.
Exactly. It may be one or two but we think we can come up with a compelling first step. Just as the Ansari X Prize opened up private space exploration for all of us, it was a simple first step. One hundred kilometres, twice in two weeks, and a passenger payload of three people for $10m. The rest of it participated with the market and today we have Space X. We have advancements in private, commercial space (Virgin Galactic). We want to do the same for these other fields, but have had intractable or stuck problems. We want a compelling demonstration. That’s the first step in making massive change.
Eileen Bartholomew is with the XPrize Foundation and this special podcast was brought to you by Barclays Africa.
