7 lessons learned from $5 million in open innovation prizes

Sara Holoubek in the Lab Report: “Prize competitions have long been used to accelerate innovation. In the 18th century, Britain offered a significant prize purse for advancements in seafaring navigation, and Napoleon’s investment in a competition led to innovation in food preservation. More recently, DARPA’s Grand Challenge ignited a decade of progress in autonomous vehicle technology.

Challenges are considered a branch of “open innovation,” an idea that has been around for decades but became more popular after the University of California’s Henry Chesbrough published a book on the topic in 2003. Chesbrough describes open innovation as “a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.”…Here’s what we’ve learned…:

1. It’s a long game.

Clients get more out of open innovation when they reject a “one and done” mentality, opting instead to build an open innovation competency, socialize best practices across the broader organization, and determine the best moments to push the innovation envelope. …

2. Start with problem statement definition.

If a company isn’t in agreement on the problem to be solved, its challenge won’t be successful. …

3. Know what would constitute a “big win.”

Many of our clients are tasked with balancing near-term expectations while navigating what it will take for the organization to thrive in the long term. Rather than meeting in the middle, we ask what would constitute a “big win.” …

4. Invest in challenge design.

The market is flooded with platforms that aim to democratize challenges — and better access to tools is great. But in the absence of challenge design, a competition run on the best platform will fail. ….

5. Understand what it takes to close the gap between concept and viability.

…Solvers often tell us this “virtual accelerator” period — which includes education and exercises in empathy-building, subject matter knowledge, rapid prototyping, and business modeling — is of more value to their teams than prize money.

6. Hug the lawyers — as early as possible.

… Faced with unique constraints, we encourage clients to engage counsel early in the process. …

7. Really, really good marketing is essential.

A key selling point for challenge platforms is the size of their database. Some even monetize “communities.” …(More)”