By Simon Schneider, General Manager, Grand Challenges & Head of EMEA, InnoCentive

In the wake of the global financial crisis and ongoing challenges facing the world economy, companies, government agencies, and non-profits need new ways of funding large prizes. There are many instances where organizations come to us with grand problems, but lack the finances to put up the entirety of the substantial prize money they would need. So can we find a new way to fund Grand Challenges?

We’ve started to explore this question by breaking it down one piece at a time, each of which we’ll explore in a white paper. There are of course many different features of the current funding environment, so our first step has been to narrow it down very specifically. We’ve decided to look at what has happened to one of the traditional financiers of early stage projects: Venture Capitalists (VCs).

Driven by the recession, VCs are increasingly financing later stage (and lower risk) projects. This is going to affect many of the projects that our Grand Challenge clients are looking for – as they often need to be launched from the very early stages of development, and look for the crazy, risky ideas to solve a problem that the usual ideas have not been able to solve. Can we draw VCs back into the earlier stages, and into the projects that our clients are looking for?

The idea, which we’ve explored in a recent white paper, is to make a trade. VCs have initial capital, but are also looking to identify profitable opportunities. Prize competitions are an effective tool for generating a lot of great ideas and picking out the best ones, but might lack the initial capital input required in certain Grand Challenge cases. So our concept, Prize Venture, makes a trade of initial capital for identified ventures.

Our white paper has only been a first step in taking this concept forward. We’re already working with some partners to put this theory into application by combining venture capital and prize competitions. One thing that has already become clear is that it is better suited to some industries than others.

There is clearly a lot of potential for such a  model, but it should not be applied to every problem and every field. Our new white paper series is set to explore other aspects of the investment environment, so that we can keep building up a bigger picture of where new funding ideas can fit together with prize competitions. Take a deeper look at the white paper, and keep an eye out as we share more of our findings.

We’re very excited to announce that UK-based OmniCompete is now part of the InnoCentive family. Best known for its annual Global Security Challenge, OmniCompete has executed nearly two dozen high-profile Challenges throughout its history in the areas of security, energy, healthcare, and cloud computing.  To introduce OmniCompete to the InnoCentive community, we’d like to let you know about the Morph My City Challenge, managed by our new Grand Challenges team (formerly OmniCompete). In the coming months, we’ll be integrating OmniCompete Challenges and processes into the InnoCentive web site.  For now, you’ll need to visit the Challenge landing page and complete a new registration to work on this Challenge.

Urbanization has spread widely in the last decades, as more and more people are moving to cities in pursuit of better career, social and personal opportunities. It is convenient to be closer to work, and to have quick access to all the luxuries, culture and diversity that a city has to offer. At the same time, this massive migration strains the systems that run our cities. Over-crowded transport routes, ancient water systems serving a greater population than could have ever been imagined – with city living, all sorts of problems arise that can have a serious impact on our well being.

Big industry and government organizations have taken action. New cities are being built around the world based on the vision of a clean, liveable and healthy lifestyle, using cutting edge technologies and unique, creative designs. New traffic systems feature well integrated low carbon emitting public options, waste management is focused on recycling and clean disposal and the city is fundamentally designed to make life easy with recreational areas accessible and enjoyable for anyone.

But how do we transform existing cities? (more…)

We are excited to announce the addition of OmniCompete to the InnoCentive family.  Best known for its annual Global Security Challenge, OmniCompete has executed nearly two dozen high profile Challenges throughout its history in the areas of security, energy, healthcare, and cloud computing.  This addition helps create a richer portfolio of offerings for customers and exciting opportunities for both InnoCentive and OmniCompete Solvers.

We asked Dwayne Spradlin, CEO of InnoCentive, and Simon Schneider, CEO of OmniCompete, to share their thoughts on the acquisition and what it means for Seekers, Solvers and the overall open innovation landscape.

Why did InnoCentive acquire OmniCompete?

Dwayne:

OmniCompete has played a significant role in establishing the Grand Challenge category – finding big solutions to daunting, world changing problems.   Under Simon’s leadership, they’ve done very well.  They’ve been aggressively expanding their name and presence in Grand Challenges and building their business in the United States and Europe.  Their heritage in security, the leadership they bring to Grand Challenges, combined with InnoCentive’s Challenge platform; capabilities and experience create substantial value for our customers.  Culturally, the OmniCompete and InnoCentive teams share the same vision of innovation being transformative for organizations.  There’s a tremendous coming together of the minds that is good for companies and customers – it’s good for everyone.  It was an easy decision from our end.
Simon:

Simon:

As the prize industry matures, we’ve noticed that clients are becoming better informed and increasingly requesting specialized services. At OmniCompete, we’re very good at these front-end services: custom consulting, design, marketing and branding, but we need to reach more Solvers. This is where InnoCentive excels, so the joining of our companies will mean a one stop shop for clients.  Our work is about problem-solving, and above all we are client-driven, so with this acquisition our whole team is looking forward to being able to give our clients more. It’s never an easy decision to sell a company that you started from nothing, but we see this as the beginning of a lifelong partnership, rather than an exit.

What does the acquisition mean for Solvers? (more…)

We’re very proud to announce that our customer, Prize4Life, was recognized today as the winner in the Life Sciences category for the 2011 Spike Awards.

According to the sponsor of the awards, Kalypso, the “Spike Awards recognize the best use of social strategies, processes, and supporting technologies to improve innovation, product development, and product management…The Awards celebrate forward-thinking innovators that leverage Social Product Innovation across the product lifecycle, including open innovation, crowdsourcing, expert identification, collaboration platforms, social product development and sentiment analysis.”

Our customer, Prize4Life, is a 501(c)3 nonprofit organization dedicated to accelerating the discovery of treatments and cures for ALS (amyotrophic lateral sclerosis), also known as Lou Gehrig’s disease. The organization was founded by Avi Kremer, a Harvard Business School student diagnosed with ALS at the age of twenty-nine. In 2006, Prize4Life partnered with InnoCentive to launch the $1 million ALS Biomarker Prize. This Grand Challenge focused on finding a biomarker to measure the progression of ALS in patients, thereby facilitating the cost effective development of treatments by pharmaceutical and biotech companies.

The multi-stage Grand Challenge was launched via InnoCentive.com in 2006 and made available to InnoCentive’s Global Solver Community (which today is a quarter-million strong and growing). In 2007, as part of the first two stages of the Challenge, Prize4Life awarded several ‘thought’ prizes to encourage promising concepts. Of particular note, a dermatologist with no prior ALS experience was recognized and rewarded for applying a skin-elasticity method used in the cosmetic industry. This is a prime example of the importance of diversity in solving problem (and in fact, two-thirds of the teams competing for the prize came from outside the traditional ALS field). In total, partial awards totaling $175,000 went to six groups. In 2009, the third stage of the $1 million Grand Challenge was posted to InnoCentive’s Global Solver Community. Two years later (early 2011), the full $1 million amount was awarded to Dr. Seward Rutkove, a neurologist at Beth Israel Deaconess Medical Center, for his biomarker discovery.

Dr. Rutkove developed a non-invasive test that measures the flow of a small electrical current through muscle tissue. Electrical current travels differently through healthy and diseased tissue, and by comparing the size and speed of the current, Dr. Rutkove’s method can accurately measure the progression of ALS. While the Grand Challenge process culminated in the identification of a biomarker, the five-year multi-stage Challenge process inspired many new ideas from new thinkers, some of whom had no prior ALS experience. These ideas may yield future promise both inside and outside the field of ALS. In fact, KineMed, a biotech company that was awarded one of the thought prizes, proposed a biomarker that has potential utility in Parkinson’s disease research. Prize4Life connected the company to the Michael J. Fox Foundation, and they are currently working together to develop the technology. In total, nearly 3,000 Solvers and over 100 solutions from dozens of countries were proposed over the course of the Prize4Life Grand Challenge.

“Participating in the challenge helped to refine my thinking,” said Dr. Rutkove. “It led me to apply my technology research specifically to ALS focusing on both the animal studies and device development. In our case, participation has effectively sped the development of a handheld device to sensitively measure disease progression.”

A wonderful story, and some well-deserved recognition for Prize4Life. Congratulations!

(If you’re interested in learning more about Grand Challenges, register to download our latest white paper, “Solving The World’s Toughest Challenges in Grand Fashion.”)