Wednesday, October 21, 2009

An eBay For Innovation

Here's one crazy crowdsourcing/crowdfunding concept that works as a bulletin board cum research prize. It is a completely merit-based, populist omnibus approach to getting a piece of research put out into the Internet for anyone who is interested to either pose a challenge or, post a solution. The prize money is funded by netizens. The judge is the person who posed the challenge.

If you think this is crazy, you may be correct. But, then again, you may be wrong. Read these swatches from the Forbes piece and think again...

What if you don't have millions of dollars to offer yet have a problem you want solved? A new Web site called ChallengePost aims to fill the gap between the small goals and the lofty ambitions of X Prize Foundation. Started in New York City by 35-year-old former record label owner Brandon Kessler, ChallengePost gives anyone the ability to establish a goal, rally a community around it and raise funds with which to reward winners.

But ChallengePost's Kessler is hoping his site will collect a wider range of challenges and prize-linked innovation goals by simplifying and democratizing the process. Anyone can post a challenge directly on the site, and visitors can give their thumbs-up to a cause or pledge money to build up a prize even if they haven't a clue how to solve the problem. Users can also share their activity on the site with friends through social networking sites.

Kessler sees the site as a great marketing vehicle for brands that want to connect with their customers' altruism. A company such as Dell ( DELL - news - people ) or Starbucks ( SBUX - news - people ) could, for example, issue a challenge to come up with ways to reduce their packaging costs. (Neither have signed up with ChallengePost yet.) ChallengePost is working with several companies and already has a deal with ad agency Deutsch Inc.

ChallengePost plans to make money by charging an 8% fee off the amount of any prize solved, and it negotiates separate, flat fees with companies that post or sponsor a challenge. Any intellectual property generated by the solutions is public domain by default, but challengers can retain property rights if they wish. If someone finds an existing solution to a prize-attached challenge, no one gets any money.

Kessler became interested in the idea of building a Web site to aggregate innovation challenges back in 2006, when he caught wind of a project called Windows on a Mac, which sought to reward anyone who could make the Microsoft Windows operating system run on the new Intel-based ( INTC - news - people ) Apple Macintosh computers. The sponsor of the contest ended up raising $14,000 from strangers sending him money through PayPal. The problem was solved in three weeks, months before Apple released its own software to run Windows. That software solution never became a commercial product, but it "showed how much action and involvement a challenge could inspire," says Kessler.

Visit ChallengePost and start thinking out of the box. You might make some money, too. Great innovation, great model to stimulate innovation and, potentially, a great way to make some money.

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