A Letter From Our CEO
For the XPRIZE Foundation, 2016 was a pivotal and evolutionary year. As Peter H. Diamandis, Founder and Executive Chairman, describes it: “2016 represents a new epoch in the Foundation’s history, and the beginning of one of XPRIZE’s most significant and exciting transformations.”
In March 2016 I was fortunate enough to have the honor and privilege of joining the XPRIZE organization and team as its new Chief Executive Officer, with my predecessor and dear friend, Peter, continuing in an active role as Founder and Executive Chairman. In a long career spanning industry (Kellogg Company), management consulting (Ernst & Young, Deloitte), and as an entrepreneur running my own business, I knew almost immediately that this role at XPRIZE, a leading nonprofit, would be the most rewarding professional and personal experience of my life. There are three key reasons why this role at XPRIZE was almost instantly my career highlight: First, the people. Second, the support for the revised strategy and shift in focus and philosophy from “Prizes” to “Impact.” And third, what I refer to as the “R.I.P.L. Effect.” These are also the three core reasons why now, perhaps more than ever, the stakeholder community around XPRIZE should be most excited, optimistic, and confident about being part of an innovative and progressive-thinking organization that will drive legitimate and measureable impact and positive change.
The people at XPRIZE are wired like no other group I have ever experienced. For the entire XPRIZE team—from Elke Stoll at the front desk (who started with Peter working out of his apartment in Santa Monica when he was relaunching XPRIZE in California) to Zenia Tata (who recently launched XPRIZE India), Chris Frangione (leader of Prize Development and Execution), Jeff Nerdin leading Business Affairs, Winona Dorris in Finance, Dr. Paul Bunje heading our grand challenge thought leadership, Dr. Jyotika Virmani and Matt Mulrennan leading our Oceans Initiative…and on down to each and every individual team member—the common thread is selflessness and a genuine passion for driving impact. It is a different type of life to wake up each morning and be part of a group of talented and inspiring individuals who are so determined and dedicated to solving the global grand challenges facing humanity. 2016 in that regard has been a true gift for me personally, as I’m fortunate to become part of this unique organization and truly talented XPRIZE team. They welcomed and accepted me, warts and all, and for that I’m grateful.
Beyond the core people driving the day-to-day of the Foundation, the people who comprise XPRIZE’s broader governance and mentoring ecosystem are equally remarkable. From the Board of Directors, the Board of Trustees, the Innovation Board members, and the Vision Circle to the related community and network, the ecosystem of XPRIZE is a truly remarkable asset that has been cultivated for years, and it contains a dedicated and passionate group of leading global philanthropists and industry pioneers, prominent game changers and innovators, and some of the most well-regarded individuals in their respective fields. They have opened their arms and hearts to embrace my entry into this role, offering and providing their full mentorship, coaching, feedback, and support. Because of them, the entire XPRIZE team is well positioned to transform itself and take its game up—not 10% but 10x—and timing could not be more relevant and critical.
Last but not least, there is a network of people that is probably the biggest contributor to the success of XPRIZE and one of the highlights of my first year with the Foundation: the diverse “crowd” of bold innovators, inventors, and entrepreneurs that compete for the XPRIZE across our various competitions. We are mystified by the ingenuity, innovation, passion, and perseverance of the community of teams that make up our XPRIZE competitions. From Oceans to Education, Climate to Space, Women’s Safety to Water, each XPRIZE competition has a unique and diversified community of individuals, each with their own story and history, but all with the same passion to invent the future. They—the STEAM-centric “crowd” of individuals and teams that compete in our XPRIZE competitions—are the true rock stars of our model.
Shift in Focus and Philosophy: From Designing PRIZES to Designing for IMPACT
As mentioned, 2016 was a pivotal and transformational year for XPRIZE. It represented a significant shift in focus and philosophy for the Foundation. Although XPRIZE historically has aspired to achieve and scale impact, it did so indirectly, organically, and to some extent as a byproduct of perfecting its core competency: the design and execution of incentive competitions. This prize-centric focus resulted in innovation breakthroughs and “moonshots,” but scaling the impact from those resulting innovation breakthroughs was predominantly not part of the XPRIZE capability and tool set. As a result, funding and resource allocation was central to designing and executing incentive prizes. 2016 marks the year when XPRIZE started to transition its core focus and mentality from designing prizes to designing and scaling impact. In 2016 this played out far beyond just a sound bite; the foundation spent the majority of its energy and efforts to institutionalize the strategy, which called for a complete recalibration of its organizational structure, including key strategic leadership hires, the introduction of new technological capabilities, and a “4 Pillar” process and methodology for execution of the new strategy and focus.
The R.I.P.L. Effect
As noted above, the people and ecosystem of XPRIZE are critical assets for the Foundation, which continued in 2016 to be the enabler for its evolution from designing prizes to designing for impact and scale. However, for this evolution to occur and for the Foundation to be successful, it will require a truly universal understanding of XPRIZE’s brand identity: the Relevancy, Integrity, Purpose, and Legitimacy of what we actually do to achieve and scale tangible and measurable impact.
The Foundation receives significant appreciation and support from various communities throughout its larger network. However, if you engage with the average person in a particular network—e.g., a university student, a competing team, a sponsoring institution, an advisory panel, or the general public that follows XPRIZE—the R.I.P.L. Effect is not always fully understood, especially within the broader context of our new strategy and focus. Thus, to achieve this universal understanding, in 2016 we started a new brand narrative and identity initiative used to clearly articulate XPRIZE’s R.I.P.L. Effect:
The first element of the R.I.P.L. Effect that is part of the Foundation’s new brand identity is the Relevancy of the method and model in which XPRIZE approaches problem-solving; XPRIZE has been “crowdsourcing” since before crowdsourcing was a thing. Now everywhere you look you see crowdsourcing as an emerging and legitimate capability to do almost anything, whether crowdsourcing creatives to develop content for your next Super Bowl ad, crowdsourcing the world of data scientists to create a complex algorithm to solve a big data challenge, crowdsourcing consumers to develop a new product, or crowdsourcing technical talent to code your next killer app. In my previous role as a Partner in a leading management consulting firm, I witnessed firsthand how large sophisticated commercial organizations started to use this emerging talent asset-class to fundamentally improve their operations and solve large business challenges.
The reason for the significant adoption of the crowdsourcing model across industries is obvious: The human race, at an exponential rate, is getting connected to one another with dramatically more sophisticated communication and collaboration capabilities. When XPRIZE launched its first competition back in 1996, there were only an estimated 36 million people connected to the internet globally. As of 2016, we have just surpassed an estimated 50% of the world’s population connected via the internet. That’s a total of approximately 3 billion people. And all indications see this exponential trend achieving close to 100% of the planet connected to one another within the next 7 to 10 years. Pause and consider the implications of 7 billion to 8 billion people (5 billion more than today) connected to one another with computing technology that only big government and big industry had access to a couple of decades ago. I like to say that with this “Connected Crowd” we are witnessing the emergence of a new human asset-class that the world has never seen: Resources (i.e., a connected diverse global talent pool) with new capabilities (i.e., with “easy” access to AI, 3-D printing, biotech, nanotech, robotics, blockchain) resulting in the “democratization of problem-solving” and a new connected critical mass of individual problem-solvers across the world.
This is what makes XPRIZE today, more than just a few years ago, extremely Relevant. XPRIZE is significantly ahead of the curve when it comes to this new trend of crowdsourcing. For over a decade, XPRIZE has cut its teeth on the crowdsourcing model and optimized its efficiency and effectiveness by combining it with incentive competitions, prize theory, and game mechanics. True innovation. The XPRIZE model essentially “gamifies” innovation in a unique, progressive, and contemporary model to solve the world’s grandest challenges. And this notion of using the Connected Crowd of upwards of 7 billion people across the globe to solve a grand challenge not only is a relevant tool for solving problems, but we truly believe for some grand challenges—if/when it is the right fit—may be the only relevant model for efficiently and effectively solving our most pressing challenges and achieving our highest human potential.
The second element of the R.I.P.L. Effect that is part of XPRIZE’s new brand identity is the Integrity of the Foundation in its pursuit of driving and scaling impact. Fortunately, I am inheriting an organization of very high integrity and credibility, with a culture to match, and this is a byproduct of each individual at XPRIZE, bottom to top. However, a common misperception I hear from people who are somewhat familiar with our Foundation is “Once you give a single team the prize money, what do you do with the Intellectual Property of the team(s)?” I’m surprised how many people do not realize that as a nonprofit our focus is to support the teams that compete, and therefore all the IP remains with the teams; also, we reward them with lucrative sponsor-based prize purses in an effort to enable them to fuel and scale their innovation. Having this pure motive is important to our mission—otherwise we may find conflicts of interest that would dilute the effectiveness and integrity of the model. To this end, XPRIZE will remain very pro-inventor/scientist/innovator and always work to represent their interests and maximize their incentive to compete.
In 2016 we also started to take additional measures to be even more transparent about our allocation of a sponsor’s funding, and in 2017 we plan to launch an app that a sponsor/donor can use to have full visibility into the allocation of funds and return-on-impact metric analysis. Last, for integrity purposes, we will continue to bring as much diversity as possible into the organization, thus including various perspectives and lenses critical for architecting impact. This not only means racial, gender, and geographical diversity but also skills and training; we have one of the most prominent and progressive technology-centric ecosystems, but we also realize that if we are going to truly architect prize road maps to solve the world’s grandest challenges, we will also need a perspective lens from anthropologists, economists, political scientists, sociologists, the creative community, and others represented.
The third element of the R.I.P.L. Effect that is part of XPRIZE’s new brand identity is the Purpose of the Foundation. For this we need a north star at XPRIZE, and thanks to our fearless leader we have found it. Peter Diamandis, our founder, literally wrote the book on Abundance. At XPRIZE we agree with and aspire to the core philosophy of Abundance: Through the exponential trends and innovation in technology, we could conceivably be heading to a world in which we have an abundance of resources that enables every person on the planet to achieve their full human potential—e.g., education and learning, health and well-being, civility, energy and resources, food and nutrition, safety and security, infrastructure, exploration, and a healthy and sustainable planet and environment.
However, we also recognize that this future will require significantly more than just technology innovation breakthroughs to achieve. Thus, we do not think we have the full set of answers or capabilities—to the contrary, we are humbled by the full daunting task at hand—but we strongly feel we have a role to play as part of our contribution to a broader solution set that is required. Finally, most important, we are acutely aware that the bridge to this Abundance philosophy may not initially be accessible to all and that the transition period for global societies could be precarious and potentially introduce humankind to a capricious decade(s) that lies ahead. Therefore, XPRIZE’s efforts, as described as our MTP—Massive Transformative Purpose—is to “Build a Bridge to Abundance for All.” This mission, or MTP, may be misconstrued as a polemical statement, but the context and deeper meaning is important to XPRIZE, and it is what will drive us in this next evolutionary phase of the Foundation.
The fourth and final element of the R.I.P.L. Effect that is part of XPRIZE’s new brand identity is our own Legitimacy, and ensuring that our ecosystem has confidence in our ability to execute. Our Relevancy, Integrity, and Purpose can all be described and demonstrated. People can get behind us with this direction. However, our ability to deliver and scale impact will be atrophied if we do not develop an approach and capabilities to methodically and consistently execute with quality. Talking about impact, or even a strategy for driving impact, is one thing, but actually organizing to execute with success is another. My goal with the organization at XPRIZE is to take proven and tested leading operational practices and disciplines, ameliorated by the professional management consulting industry over decades, and then infuse them with progressive and contemporary entrepreneurial—or “exponential”—thinking (i.e., startup agility and mentality for risk taking) to methodically design a unique and customized XPRIZE process for architecting, designing, and scaling impact. To do so, incentive competition and crowdsourcing will be our instrument of choice within that impact-centric strategy. In 2016 we launched this new organizational strategy and approach, which we call our “4 Pillar Strategic Framework.”
More to come on our new Framework in 2017, but please note a few key points:
- This strategic framework model is supported by a cross-matrixed organizational structure that has been staffed as part of a recalibration exercise initiated in 2016.
- Pillar 3 (Prize Development and Execution), has traditionally been the core focus of XPRIZE, and thus Pillars 1 (Impact Strategy and Architecture), 2 (Impact Design), and 4 (Scaling and Optimizing Impact) did not formally exist. Now that these other strategic imperatives are institutionalized at XPRIZE, we are raising funding and allocating resources to develop our muscle in each of these areas.
- In 2016 we experimented for the first time with Pillar 2, Impact Design. This included the launch of our beta version for VISIONEERS and our Visioneers Summit last fall, which engaged our ecosystem into our Impact Design process in an effort to identify the next global XPRIZE competition launched to the world. See this video Visioneers for a description of the Pillar 2 strategy and Visioneers methodology.
- In 2017 we will experiment with Pillar 1, Impact Strategy and Architecture—which will include the official launch of the XPRIZE Institute—as well as Pillar 4, Scaling and Optimizing Impact, as part of our active XPRIZE competitions, including the awarding and completion of the $10 million Qualcomm Tricorder XPRIZE.
Guiding Principles and an Open Invitation
Looking back on 2016, as you can imagine the most challenging aspect was the change in management of the organization. I give all the credit to the team at XPRIZE for enduring and weathering the change thus far. And even though we are still changing and rapidly expanding (in 2017 we will most likely double our staff size due to the demand for our model), my goal and focus is quality over quantity. We will grow at the pace at which we can sustain our strategy and execute with quality while monitoring the stress being absorbed by the organization. At the same time, we are not afraid to take risks, even if we experience failure (if fast, cheap, and forward), as we believe failure is not the opposite of success but helps us to define the true parameters and bar of what great (versus good) success can be. We believe in experimentation as a method of learning, and full transparency into our strengths and weaknesses so that our partners and ecosystem can collaborate with us more effectively. We expect the normal degree of antipathy to our model and approach for anyone who misconstrues or misinterprets our R.I.P.L. Effect (as described above); however, we plan to keep our head down and stay focused. These are some of our guiding principles for what one can expect from the team at XPRIZE moving forward.
This is not an ephemeral strategy for XPRIZE. It is how we are wiring ourselves for the challenges and opportunities that lie ahead. We welcome any suggestions or feedback from our ecosystem of partners and collaborators. My door is always open. If in next year’s Annual Report update you see this plan and strategy starting to achieve its intended results, rest assured it had everything to do with the amazingly talented team at XPRIZE, and if there are any shortcomings, I will take full ownership. We appreciate the support from our key prize sponsors and foundation partners, including in 2016 the contributions from Deloitte, ANA Airlines, and the Caterpillar Foundation, just to name a few.
On a final note
A final sentiment to share that is quite personal. This role for me, like many at XPRIZE, is about pride, principles, and purpose. However, the core of my motivation, unfortunately, stems in large part from anxiety and indignation, and the frustration with the intransigent nature of our world in solving grand challenges. Like many of us, for some of the grand challenges we are facing—not all—I’ve either lost or am quickly losing confidence and faith in the conventional problem-solvers that society has traditionally relied on and grown accustomed to—public, private, for-profit, and not-for-profit. It’s not that these traditional entities can’t solve problems or grasp opportunities; it’s more that they may not be able to do it in the timeline in which the world really needs it.
Linear thinking, and historical methods and capabilities, to solve exponentially paced future challenges is not an ideal combination. So, when we need a moonshot—10x improvement vs. just 10% innovation breakthrough—in pursuit of solving a grand challenge, and traditional problem-solvers are not able to do it, who can we turn to? The answer: “We” can solve it. “We” is not XPRIZE. XPRIZE, by design, doesn’t have the solution, but XPRIZE can utilize its model to clearly diagnose and define the problem, then “dress it up” like a competition, and design the incentives to get the “we” of the collective world to come up with the solution. Or as Vice Chairman Bob Weiss eloquently puts it, “Incentivize the needle in the haystack to come to us.”
The XPRIZE model is not a guarantee, and not always the ideal fit either, since not everything is “prize-able.” However, as a nonprofit we have the risk profile to permit us to experiment and try. And when “we” are successful, it should be no surprise when you consider the simple fact that the smartest and most innovative people in the world—who can solve our grandest challenges—don’t work for you! They don’t work at XPRIZE, or in our government, our universities, or our organizations. The smartest and most innovative people in the world are somewhere out there in the 7-billion-plus people on the planet. Fact. Thus, the beauty of XPRIZE that I have such passion and confidence for is the critical path for how we design and achieve impact. It ultimately comes down to something that is quite formulaic: a successfully designed XPRIZE instrument (I prefer to use the term “instrument” as opposed to “competition” or “prize” when describing the inherent nature of an XPRIZE) is one that can deliver on the following formula: (1) Generate a qualified critical mass of (2) rapid experimentations (3) with a vast array of diversity. Or in other more layperson words: “If you can crowdsource and incentivize a whole lot of bold innovators and entrepreneurs from across the world, from all diverse walks of life with different takes and lenses on the problem, to use the ‘supercomputers they have in their pockets’ to experiment all at once in pursuit of solving a grand challenge…. Don’t be too surprised if you ultimately crack the code in achieving 10x impact. This is the potential and promise of XPRIZE.
Looking forward to putting in the blood, sweat, tears, laughs, and smiles with you all for years to come.