Stimulus? What Government Should Learn From the X-Prize

29 Jan Stimulus? What Government Should Learn From the X-Prize

Stimulus (stĭm’yə-ləs)

1. Something causing or regarded as causing a response.
2. An agent, action, or condition that elicits or accelerates an activity or response.
3. Something that incites or rouses to action; an incentive.

I am completely NAUSEATED . . . this entire stimulus package is going to be one of the greatest debacles ever witnessed in history of government intervention. I am surprised that President Obama is spending so much of his political capital on ramming through a 100% partisan, pet project, hasty “stimulus package” that has the lobbyist and beltway bandits lined up from DC to CA jousting for trough time.

We should not let the need to just do something, be the excuse for us to do just anything.

The entire approach to this is absurd. I doubt ANY of these congressional people would make this type of financial decision in their personal lives. We are essentially burying the next generation in an insurmountable mountain of debt. This feels like a no huddle “Hail Mary“. Furthermore, where exactly is the “stimulus”? If this is the “Change We Need” than we are in for quite a ride. I guess the last eight years crashing to the floor was just preparatory to crash right on through to the basement. Isn’t there a better way than this?

I would argue that there absolutely is.

I agree the current crisis calls for bold measures, but none of what I see is truly bold in the “bail forward” mode that I believe needs to happen. We need to make virtuous cycle investments that can spin out additional investments and build momentum in the multiples. We cannot make vicious cycle investments that not only throw good money after bad but demoralize in the process.

One of the coolest models for virtuous cycle investments is that of the X PRIZE. From the X PRIZE website:

The  X PRIZE is modeled after the $25,000 Orteig Prize offered in 1919 by wealthy hotelier Raymond Orteig to the first pilot who could fly non-stop between New York and Paris. The prize was finally won in 1927 by an unknown airmail pilot named Charles Lindbergh. Lindbergh won the hearts of a nation, and his world-changing achievement spawned a $300 billion aviation industry (Now that’s stimulus!)

X PRIZE is a $10 million+ award given to the first team to achieve a specific goal, set by the X PRIZE Foundation, which has the potential to benefit humanity. The X PRIZE competitions capture the imagination of the public and speed radical breakthroughs that can ultimately change the way we see ourselves and how we live on this planet. Rather than awarding money to honor past achievements or directly funding research, an X PRIZE incites innovation by tapping into our competitive and entrepreneurial spirits.  The first X PRIZE for private spaceflight received worldwide attention and the winning SpaceShipOne is now hanging in the Smithsonian National Air & Space Museum.

There are many types of competitions and awards around the world, but an X PRIZE is in a class by itself. What sets us apart from other non-profit organizations is our ability to frame a challenge and incentivize a solution in a way that our efforts and funds are multiplied exponentially by the teams who strive to compete and win the prize.

There are three primary benefits of well constructed prizes and media savvy global competitions: they are a high-leverage and efficient investment, a powerful innovation strategy, and an effective change strategy.

Fascinating. Invest in the things that can generate multiple multiples of additional investment (X PRIZE reports 10-40X multiples beyond the prize money). Think of how this can work in the health care IT space, in the health care delivery sector, and in the health care finance arena. What types of investments, what technologies, what new system designs could you create with this type of focus. What if we spent just a fraction of the stimulus to really try to stimulate the economy?

Perhaps we need an X PRIZE in order to create a real “Stimulus” Bill.