HeroX, the for-profit spin-off of the XPRIZE, is building an online platform for incentive competitions as a means for crowdsourcing complex solutions to the challenges facing corporations, governments, non-profits and individuals.
The XPRIZE Foundation, a non-profit organization led by Peter Diamandis, has for years been the leader in large scale multi-million dollar incentive competitions, including the $30M Google Lunar Prize, $10M Qualcomm Tricorder Prize, $15M Global Learning Prize and the $10M Ansari XPRIZE (which privatized space travel). However, the XPRIZE isn’t designed to service the needs of HeroX’s target market, so Peter and Emily Fowler (who at the time was Director of Strategic Initiatives and Prize Development at XPRIZE) decided to start HeroX in 2013. They were joined by Christian Cotichini (CEO) and Nadav Wilf (Chief Possibility Officer) – serial entrepreneurs with experience founding, building and successfully exiting startups and high growth technology companies.
There is $435 billion in R&D spending and $290 billion in charitable giving each year in the US alone. Rather than using these large budgets to hire or donate to one person or team, HeroX enables organizations to spur innovation and achieve their strategic objectives by launching an incentivized challenge.
These competitions offer a valuable form of leverage to sponsors, with participants often spending 10x or more of the prize amount in aggregate to solve the problem, and the sponsor only pays if the desired result is achieved (and within the desired timeframe). Moreover, the power of the crowd amplifies the amount of time, resources and expertise dedicated to a problem, and research shows it results in more rapid and more innovative solutions.
Fueled by the proliferation of internet use, mobile devices and online communities, there has been a significant recent surge in organizations utilizing prize competitions as the value of this technique is becoming more apparent and well-known. However, the majority of organizations today do not incorporate incentive prizes as part of their strategy due to a lack of awareness, expertise and resources. HeroX is capitalizing on this trend by providing a centralized platform solution for these competitions and is positioned to capture a large share of the existing incentive competition market as well as to be an enabling force in the rapid expansion of the industry.
HeroX leverages its expertise to plan, implement and market challenges to ensure they produce the desired result. HeroX charges its clients a platform fee (10% of the prize value) in addition to offering professional services such as challenge design and marketing solutions for an additional fee. HeroX already has 14 prizes that have launched or are in development, from sponsors such as the Rockefeller Foundation, Smart Tech Foundation and P&G.
HeroX recently closed contracts on 2 new $1 million challenges, bringing the aggregate prize value to $7 million and growing. HeroX also earned a place as one of ten awardees for the NASA Open Innovation Service Contract. Current competitions include a $1 million prize for smart gun technology that has attracted over 250 competitors and that is now being led by a 17-year-old innovator whose video has gotten over 11 million views.
HeroX officially emerged from beta in March 2015 and has seen a 400% increase in qualified leads over the past 5 months; it currently has over $12 million in prizes in the pipeline. HeroX achieved $356,700 in revenues for 2014 and projects revenues to exceed $1 million in 2015.